Jobs, Productivity, and Local Economic Development: What Implications Does Economic Research Have for the Role of Government?
Author(s)
Bartik, Timothy J.
Abstract
Economic models describing local economic development programs can be used to assess the part that government, both local and national, should play in business promotion. Local and state governments should limit subsidies to certain areas and should focus efforts in improved productivity. Subsidies to low unemployment areas generally reap less benefit. Regions should avoid competing for jobs by using tax incentives because of the negative externalities that result. At the federal level, guidelines should be developed for assessing the costs and benefits of these programs.
