The Effect of Location-Based Tax Incentives on Establishment Location and Employment across Industry Sectors

Andrew Hanson and Shawn Rohlin
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Shawn Rohlin: Department of Economics, University of Akron, Akron, OH, USA

Public Finance Review, 2011, vol. 39, issue 2, 195-225

Abstract: This article examines the potential for location-based employment tax incentives to have a differential effect on establishment location and employment across industry sectors. The authors model the differential effect of the location-based federal Empowerment Zone (EZ) wage tax credit on equilibrium labor and total cost savings across industry sectors. The model guides the empirical work, as the authors test the effect of the program across industry sectors. The empirical analysis shows that location-based tax incentives have a positive effect on firm location in some of the industries their model predicts and a negative effect in industries that could be crowded out.

Keywords: tax incentives; industry location; redevelopment policy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:39:y:2011:i:2:p:195-225

DOI: 10.1177/1091142110389602

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