Data and Code for "Using Place-Based Jobs Policies to Help Distressed Communities"

Place-based jobs policies seek to create jobs in particular local labor markets. Such policies are currently most widely used by state and local governments, which current devote almost $50 billion in annual resources to encouraging individual businesses to create jobs by tax incentives, cash grants, and customized public services. The most persuasive rationale for such policies is that they can advance equity goals and economic efficiency by increasing employment rates in distressed local labor markets, which currently have high rates of nonemployment. Local job creation in such distressed local labor markets can have large, long-term benefits for increasing employment rates and earnings per capita of local residents. The net benefits of place-based jobs policies also depend on the costs of job creation. Tax incentives have relatively high costs, while public services to business show some potential for having much lower costs per job created. Reforms in place-based jobs policies should aim at: targeting distressed local labor markets; focusing more on businesses with high local job multipliers; relying less on incentives, and more on public services that enhance business inputs; designing policies so that they can be better evaluated, via better comparison groups. These reforms can be pursued by state and local governments, acting in the best interests of their residents. But the right kind of federal intervention can also advance equity goals and efficiency by discouraging excessive use of tax incentives, and helping distressed local labor markets with block grants which allow the flexibility to respond to local circumstances.