PUBLIC INFRASTRUCTURE - PORK OR JOBS CREATOR

Past studies of the impact of public capital on state economic well-be ing have often focused on estimates of production functions, yet such an approach overlooks some important economic relationships. This arti cle presents estimates designed to carefully measure the impact of pub lic capital on state employment by using a model that incorporates inf rastructure impacts from several different sources. Controlling fr dif ferences in states' industrial structure, demand conditions, productio n costs, demographics, and noninfrastructure amenities and state fixed effects, the authors find that infrastructure is a significant variab le in determining state employment. Moreover surrounding state highway public capital apparently has positive spillover impacts. Finally, a simulation is conducted to examine whether a government policy of rais ing taxes to fund an increase in public infrastructure increases emplo yment.