Working Paper

Fiscal Policies for Job Creation and Innovation: The Experiences of US States

Abstract: This paper reviews selected fiscal policy initiatives undertaken by US states to encourage job creation and innovation. We begin with a discussion of some general considerations about the design of tax policies summarized in a tax policy design table. Four policies are reviewed: job creation tax credits, research and development tax credits, a set of tax policies targeted to the biotechnology industry, and a broad set of tax policies that attract star scientists. The experiences at the state level are used to evaluate the effectiveness of these employment and knowledge-capital tax incentives in creating jobs and spurring innovation. The paper concludes with four other considerations need to be taken into account in selecting policies.

Keywords: fiscal policies; job creation; tax policy;

https://doi.org/10.24148/wp2023-01

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Working Paper Series

Publication Date: 2023-01-13

Number: 2023-01