This paper estimates the "jobs multiplier" of fiscal stimulus spending
using the state-level allocations of federal stimulus funds from the American Recovery and Reinvestment Act (ARRA) of 2009. Because the level and timing of stimulus funds that a state receives was potentially endogenous, I exploit the fact that most of these funds were allocated according to exogenous formulary allocation factors such as the number of federal highway miles in a state or its youth share of population. Cross-state IV results indicate that ARRA spending in its first year yielded about eight jobs per million dollars spent, or $125,000 per job. (JEL E24, E62, H72, H75, R23)
"Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act."
American Economic Journal: Economic Policy,
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
State and Local Budget and Expenditures
State and Local Government: Health; Education; Welfare; Public Pensions
Urban, Rural, Regional, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics