THE BUILDUP AND DURATION OF SUBSIDY-INDUCED EMPLOYMENT - EVIDENCE FROM UK REGIONAL POLICY

The paper takes microlevel data on U.K. regional policy instruments an d other financial assistance payments to industry to examine the time profile of assisted employment up to five years after the date of assi stance. The theoretical analysis indicates factors bearing on the empl oyment effect of industrial assistance and highlights the possibly key role played by the firm's access to private funds. The results from t he regression analysis indicate that both the build-up and duration of subsidy-induced jobs vary between assistance form and firm, and that assistance is generally ineffective in large firms. Elsewhere, assiste d jobs accumulate over a period of three years, but then are lost to p olicy at high rates.