The Influence of Taxes on Employment and Population Growth: Evidence from the Washington, D.C. Metropolitan Area

Posted: 19 Apr 2000

See all articles by Stephen T. Mark

Stephen T. Mark

Government of New York City, NY - Independent Budget Office

Therese J. McGuire

Northwestern University - Department of Management & Strategy

Leslie E. Papke

Michigan State University - Department of Economics; National Bureau of Economic Research (NBER)

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Abstract

We examine whether personal and business taxes are an important determinant of economic development in a metropolitan area. We estimate determinants of the location of private employment and populations across the D.C. metropolitan area over the period 1969-94. After controlling for jurisdiction and time effects, we find that higher rates of two business taxes ? sales and personal property ? reduce annual employment growth by a significant amount. Higher levels of nonwelfare public service expenditures are estimated to increase employment growth. We do not find local property taxes to be a significant factor.

JEL Classification: H20

Suggested Citation

Mark, Stephen T. and McGuire, Therese J. and Papke, Leslie E., The Influence of Taxes on Employment and Population Growth: Evidence from the Washington, D.C. Metropolitan Area. National Tax Journal, March 2000. Available at SSRN: https://ssrn.com/abstract=222540

Stephen T. Mark

Government of New York City, NY - Independent Budget Office ( email )

110 William Street 14th Floor
New York, NY 10038
United States
212-442-8640 (Phone)

Therese J. McGuire

Northwestern University - Department of Management & Strategy ( email )

Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
United States

Leslie E. Papke (Contact Author)

Michigan State University - Department of Economics ( email )

East Lansing, MI 48824
United States
517-355-3773 (Phone)
517-432-1068 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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