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Firm Responses to State Hiring Subsidies: Regression Discontinuity Evidence from a Tax Credit Formula / Benjamin G. Hyman, Matthew Freedman, Shantanu Khanna, David Neumark.
- Format:
- Book
- Author/Creator:
- Hyman, Benjamin G.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30664.
- NBER working paper series no. w30664
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- We examine firm responses to location-based hiring subsidies. We leverage institutional features of the California Competes Tax Credit (CCTC), a large-scale business incentive program that incorporates best practices from prior job creation policies. The CCTC award selection procedure combines formula-based and discretionary components. Leveraging applicant score eligibility cutoffs in a regression discontinuity design and taking advantage of rich longitudinal microdata on establishments and their parent firms, we find that firms expand activity in California in response to CCTC awards, particularly in disadvantaged parts of the state. Our results suggest that targeted and audited hiring subsidies can be effective in promoting local business expansions. We also examine the potential spillovers to other states and do not find strong evidence that the CCTC induces significant cross-state displacement effects.
- Notes:
- Print version record
- November 2022.
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