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

See all articles by Timothy Bartik

Timothy Bartik

W.E. Upjohn Institute for Employment Research

George A. Erickcek

W.E. Upjohn Institute for Employment Research

Date Written: June 30, 2012

Abstract

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

Bartik, Timothy and Erickcek, George A., Simulating the Effects of Michigan’s Mega Tax Credit Program on Job Creation and Fiscal Benefits (June 30, 2012). Upjohn Institute for Employment Research Working Paper 12-185, Available at SSRN: https://ssrn.com/abstract=2138249 or http://dx.doi.org/10.2139/ssrn.2138249

Timothy Bartik (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

George A. Erickcek

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

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