Papers in Evolutionary Economic Geography

January 28, 2017

# 17.03 Does federal contracting spur development? Federal contracts, income, output, and jobs in US cities

Filed under: 2017 — Tags: , , , , , — mattehartog @ 7:36 pm

Michiel Gerritse and Andrés Rodríguez-Pose

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Government contracts are frequently courted by firms and governments alike as a solution to generate more jobs, income, and economic growth. However, the development impact of government contracts remains controversial. This paper uses georeferenced data on United States (US) federal contracts, distinguishing between the location of the recipient and the location of performance, for the years 2005-2014 in order to assess the extent to which federal government contracting has contributed to job and wealth generation and economic growth in metropolitan areas of the US. The results of the analysis show that individuals living in cities with a higher share of contract spending per capita witnessed improvements in employment. Aggregate GDP per capita also rose in cities hosting the companies receiving the contracts. However, the effects – once reverse causality and spurious trends are controlled for using a fine-scale fixed effect strategy and instrumentation – are very small, raising reasonable questions about the viability of federal contracting as a vehicle for economic development.

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August 3, 2016

# 16.18 Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities

Filed under: 2016 — Tags: , , , , — mattehartog @ 4:37 pm

Neil Lee, Andrés Rodríguez-Pose

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High-technology industries are seen as important in helping urban economies thrive, but at the same time they are often considered as potential drivers of relative poverty and social exclusion. However, little research has assessed how high-tech affects urban poverty and the wages of workers at the bottom of the pyramid. This paper addresses this gap in the literature and investigates the relationship between employment in high-tech industries, poverty and the labor market for non-degree educated workers using a panel of 295 Metropolitan Statistical Areas (MSAs) in the United States between 2005 and 2011. The results of the analysis show no real impact of the presence of high-technology industries on poverty and, especially, extreme poverty. Yet there is strong evidence that tech-employment increases wages for non-degree educated workers and, to a lesser extent, employment for those without degrees. These results suggest that while tech employment has some role in improving welfare for non-degree educated workers, tech-employment alone is not enough to reduce poverty.

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