THE EFFECTS OF JOBS-TARGETED DEVELOPMENT INCENTIVE PROGRAMS

In recent years, many states have raised the amount of resources they devote to economic development programs, particularly those providing direct monetary assistance to firms. However, scholarly attention to t his topic has not kept pace and, as a result, relatively little is kno wn about such policies' effectiveness. This paper examines the effecti veness of monetary incentives using Ohio's experience with such progra ms in the 1980s. Empirical results show that incentives are significan tly related to employment and income growth at the county level. Grant s are found to be more effective than loans, and capital subsidies to businesses more effective than either labor subsidies to businesses or capital subsidies to communities. Finally, resources given to creatin g jobs are more effective than resources for retaining or training exi sting workers.