Jobs for the Heartland: Place-Based Policies in 21st Century America

Benjamin A. Austin, Edward Glaeser and Lawrence Summers

No 24548, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The economic convergence of American regions has greatly slowed, and rates of long-term non-employment have even been diverging. Simultaneously, the rate of non-employment for working age men has nearly tripled over the last 50 years, generating a terrible social problem that is disproportionately centered in the eastern parts of the American heartland. Should more permanent economic divisions across space lead American economists to rethink their traditional skepticism about place-based policies? We document that increases in labor demand appear to have greater impacts on employment in areas where not working has been historically high, suggesting that subsidizing employment in such places could particularly reduce the not working rate. Pro-employment policies, such as a ramped up Earned Income Tax Credit, that are targeted towards regions with more elastic employment responses, however financed, could plausibly reduce suffering and materially improve economic performance.

JEL-codes: J01 J21 J38 R12 R23 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-geo, nep-lma, nep-ltv and nep-ure
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Citations: View citations in EconPapers (91)

Published as Benjamin Austin & Edward Glaeser & Lawrence Summers, 2018. "Jobs for the Heartland: Place-Based Policies in 21st-Century America," Brookings Papers on Economic Activity, vol 2018(1), pages 151-255.

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Journal Article: Jobs for the Heartland: Place-Based Policies in 21st-Century America (2018)
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