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Robbing Peter to Pay Paul: The Employment Effects of the Missouri Quality Jobs Program

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  • Wall, Howard

Abstract

This paper is an assessment of the employment effects of the Missouri Quality Jobs Program, which awards tax credits to businesses so as to spur state job creation. According to the Missouri Department of Economic Development, which adminsters the program, the tax credits rewarded under the program have, created more than 10,000 new jobs, so far, and will generate a net increase of more than 50,000 jobs by 2020. My estimates indicate, however, that the program simply transfers jobs to subsidized projects from the rest of the economy, while also creating labor-market distortions. My baseline estimates indicate that there were about 5,000 fewer private-sector jobs in Missouri in 2011 because of the program. Alternative estimates suggest even larger job losses. The most-likely best-case scenario for the long run is that the hundreds of millions of dollars transferred to businesses under the program will have led to no net change in state employment.

Suggested Citation

  • Wall, Howard, 2013. "Robbing Peter to Pay Paul: The Employment Effects of the Missouri Quality Jobs Program," MPRA Paper 50605, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50605
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    References listed on IDEAS

    as
    1. Timothy J. Bartik & George Erickcek, 2010. "The Employment and Fiscal Effects of Michigan's MEGA Tax Credit Program," Upjohn Working Papers 10-164, W.E. Upjohn Institute for Employment Research.
    2. Faulk, Dagney, 2002. "Do State Economic Development Incentives Create Jobs? An Analysis of State Employment Tax Credits," National Tax Journal, National Tax Association, vol. 55(N. 2), pages 263-280, June.
    3. Henry Hyatt & Erika McEntarfer, 2012. "Job-to-Job Flows and the Business Cycle," Working Papers 12-04, Center for Economic Studies, U.S. Census Bureau.
    4. Faulk, Dagney, 2002. "Do State Economic Development Incentives Create Jobs? An Analysis of State Employment Tax Credits," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(2), pages 263-280, June.
    5. Michael J. Hicks & Michael LaFaive, 2011. "The Influence of Targeted Economic Development Tax Incentives on County Economic Growth: Evidence From Michigan’s MEGA Credits," Economic Development Quarterly, , vol. 25(2), pages 193-205, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    state tax credits; missouri quality jobs program;

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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