Do Place-Based Industrial Interventions Help "Left-Behind" Workers? Lessons from WWII and Beyond

Andrew Garin

No 33418, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Place-based industrial interventions—policies that promote production and investment in specific regions—are often proposed with the intent of improving economic conditions for residents, particularly "left-behind" workers in distressed local labor markets. This chapter discusses the theoretical rationale for the use of industrial interventions to achieve distributional goals and evidence about their effectiveness to that end. I use government-funded plant construction during World War II (WWII) in the United States as a focal case study, which I then compare and contrast to other industrial interventions studied in the literature. While government plant construction during WWII drove an expansion of high-wage semi-skilled jobs open to local residents, which in turn fueled an increase in upward mobility among local residents, the evidence from more recent interventions suggests that modern plant sitings often fail to yield similar benefits to local workers. The implementation details of industrial interventions matter crucially for their incidence on local workers. Interventions that generate opportunities for up-skilling and occupational advancement accessible to target populations appear to be most likely to generate meaningful distributional benefits. I argue that while core production goals during WWII happened to inherently align with the promotion of upward mobility, such alignment is not guaranteed in general and may be the exception rather than the rule in modern contexts.

JEL-codes: H54 J31 J62 N61 O25 R11 R53 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-geo, nep-his and nep-lma
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