Simulating the Effects of Michigan’s Mega Tax Credit Program on Job Creation and Fiscal Benefits
Upjohn Institute for Employment Research Working Paper 12-185
35 Pages Posted: 30 Aug 2012
Date Written: June 30, 2012
This paper simulates job and fiscal impacts of Michigan’s MEGA tax credit program for job creation. Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.
Keywords: State and local economic development policy, tax incentives, fiscal impact analysis, labor market benefits, regional multipliers
JEL Classification: R11, R23, R28, R30, R58, H70
Suggested Citation: Suggested Citation