Careful funding and targeting of tax incentives helps, report finds, and other business services provide even greater local returns
As state and local governments have assembled lavish incentive packages to lure business such as Foxconn and Amazon, many have questioned whether these incentives are a good deal. In a new report from the Upjohn Institute, Senior Economist Timothy Bartik shows that the typical incentive package has only modest benefits for local jobs and incomes. Carefully targeted incentives can provide much larger local benefits, but those that draw money from public services such as education can significantly harm local economies.
Read the report's Policy Brief or Executive Summary, or read the entire report,
"Who Benefits From Economic Development Incentives? How Incentive Effects on Local Incomes and the Income Distribution Vary With Different Assumptions About Incentive Policy and the Local Economy"