Creating Jobs Through Public Subsidies: An Empirical Analysis

Sourafel Girma, Holger Görg, Eric Strobl () and Frank Walsh

No 3168, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyses the impact of government grants on labour demand using plant level data for manufacturing industry in Ireland. Our data consists of a large sample of plants and their complete grant history. We provide evidence that additional employment is created over and above the level that would have prevailed in the absence of grant payments. We also find differences in the employment response to subsidies between domestic and foreign-owned plants, with the former creating more additional jobs per euro of grant payment. Simple cost-benefit analysis reveals that a large part of the costs of grants appears to be recouped in additional wage streams under reasonable assumptions.

Keywords: multinationals; labour demand; grants (search for similar items in EconPapers)
JEL-codes: H25 J23 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-11
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (15)

Published - published in: Labour Economics, 2008, 15(6), 1179-1199

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Journal Article: Creating jobs through public subsidies: An empirical analysis (2008)
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