Employment Impacts of the CHIPS Act

Bilge Erten, Joseph Stiglitz and Eric Verhoogen

No 20982, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The CHIPS and Science Act, enacted in August 2022, is a key element of the revival of U.S. industrial policy. We examine the short-term employment effects of the act. Drawing on quarterly industry-by-county data from the Quarterly Census of Employment and Wages (QCEW), we implement two county-level difference-in-difference designs, the first comparing counties with pre-existing semiconductor facilities to other counties with high-tech industries and the second comparing counties with semiconductor fabrication facilities (which were targeted for the bulk of the CHIPS funding) to counties with non-fabrication semiconductor facilities. Using both approaches, we find robust, positive employment impacts in affected counties. The effects began at the time of the passage in the Senate of a precursor bill, in anticipation of the signing of the CHIPS Act. Our preferred estimates suggest an increase of 110 jobs per affected county in the first design and 180 jobs per affected county in the second design. We also find robust positive impacts on local construction employment. Evidence on total employment and GDP at the county level, as well as on employment in upstream input sectors, is mixed. Simple back-of-the-envelope calculations (which come with caveats) suggest national direct employment effects of approximately 15,000-16,000 jobs in the core semiconductor sector and indirect effects of 28,000-35,000 jobs in related sectors.

JEL-codes: J2 L52 L63 (search for similar items in EconPapers)
Date: 2025-12
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