Local employment multipliers for large publicly subsidized firms: Evidence from a synthetic control approach

Andrew Hanson and Shawn Rohlin

Journal of Regional Science, 2024, vol. 64, issue 2, 491-526

Abstract: This paper provides estimates of local employment multipliers from large, publicly subsidized firms. We use a synthetic control weighted difference‐in‐difference estimation procedure that matches treated areas with comparison areas to generate local employment multiplier estimates. We show that local employment multiplier estimates have a high degree of uncertainty, with a wide range of point estimates (both positive and negative) and varying degrees of statistical significance. There is a concentration of positive employment multipliers from manufacturing facilities, but little correlation between estimated multipliers and subsidy value. We demonstrate that our approach produces drastically different results than a traditional difference‐in‐difference approach.

Date: 2024
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