Yulia Chhabra, Margaret C. Levenstein, and IRIS PI Jason Owen-Smith use the American Recovery and Reinvestment Act (ARRA), to estimate the effect of R&D and science spending on local employment. Unlike most fiscal stimuli, the R&D and science portion of ARRA did not target counties with poor economic conditions but rather was awarded following a peer review process, or based on innovative potential and research infrastructure. They find that, over the program’s five-year disbursement period, each one million USD in R&D and science spending was associated with twenty-seven additional jobs. The estimated job-year cost is about $15,000.



Chhabra, Yulia and Levenstein, Margaret C. and Owen-Smith, Jason, Local Fiscal Multiplier on R&D and Science Spending: Evidence from the American Recovery and Reinvestment Act (June 1, 2018). Ross School of Business Paper No. 1383. Available at SSRN: https://ssrn.com/abstract=3201136 and http://hdl.handle.net/2027.42/144514.  Under review at American Economic Journal: Economic Policy.


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