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Simulating the Effects of Michigan's MEGA Tax Credit Program on Job Creation and Fiscal Benefits

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Abstract

This paper simulates job and fiscal impacts of Michigan’s MEGA tax credit program for job creation. Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.

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  • Timothy J. Bartik & George A. Erickcek, 2012. "Simulating the Effects of Michigan's MEGA Tax Credit Program on Job Creation and Fiscal Benefits," Upjohn Working Papers and Journal Articles 12-185, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:12-185
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    Cited by:

    1. Sharma, Rishi, 2016. "Taxing and Subsidizing Foreign Investors," Working Papers 2016-03, Department of Economics, Colgate University, revised 25 May 2017.

    More about this item

    Keywords

    State and local economic development policy; tax incentives; fiscal impact analysis; labor market benefits; regional multipliers;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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