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The Employment Effects of State Hiring Cbkp_redits

Abstract:

State and federal policymakers grappling with the aftermath of the Great Recession sought ways to spur job creation, in many cases adopting hiring cbkp_redits to encourage employers to create new jobs. Virtually no evidence is available, however, on the effects of these kinds of counter-recessionary hiring cbkp_redits, with the only evidence coming from much earlier studies of the federal New Jobs Tax Cbkp_redit in the 1970s. This article provides evidence on the effects of state hiring cbkp_redits on job growth. Some specific types of hiring cbkp_redits—including those targeting the unemployed, those that allow states to recapture cbkp_redits when job creation goals are not met, and refundable hiring cbkp_redits—appear to have succeeded in boosting job growth, particularly during the Great Recession period and perhaps also during recessions in general. At the same time, some evidence suggests that these cbkp_redits can generate much more hiring than net employment growth, consistent with the cbkp_redits encouraging churning of employees that raises the cost of producing jobs through hiring cbkp_redits.