Do local subsidies to firms create jobs? Counterfactual evaluation of an Italian regional experience*. (20th September 2017)

• Record Type: Journal Article
• Authors: Porro, Giuseppe; Salis, Valentina
• Is Part Of: Papers in regional science. Volume 97:Number 4(2018)
• Page Start: 1039
• Page End: 1056
• Publication Date: 2017-09-20
• Subjects: Regional policies -- firm incentives -- job creation -- counterfactual analysis -- matching methods; Regional planning -- Periodicals; City planning -- Periodicals; Urbanization -- Periodicals; Economic geography -- Periodicals; 307.12
• DOI: 10.1111/pirs.12317
• Languages: English
• ISSNs: 1056-8190

Abstract

Abstract: A counterfactual analysis is performed to evaluate the impact on employment of four programmes providing financial incentives to firms in Lombardy (Italy) between 2008 and 2013. While linear estimates suggest that the programmes have positive effects on short‐run employment growth when incentives are sufficiently high, a non‐parametric analysis shows that the policy is, on the whole, ineffective and that the results in linear models are due to small groups of outliers, which received very high subsidies. Data allow for a short run analysis only, but the results cast some doubts on the policy effectiveness also in a medium‐long run perspective.