State-Level Business Tax Credits, Relocation Subsidies, and Job-Creation Grants

What the evidence says

The claims available for this topic split into two loosely connected strands: general evidence on state and local economic development policy and job growth, and firm-level evidence on R&D subsidies and corporate tax rates. Bartik (1991) reviews evidence on whether state and local policies produce job growth, without stating a direction or magnitude in the retrieved excerpt (medium confidence in direction, low in magnitude). The same source claims that job growth, once it occurs, produces a cluster of downstream effects: lower unemployment, higher labor force participation, and higher real estate values, plus a distributional claim that earnings gains to disadvantaged groups from job growth exceed the increased real estate values captured by property owners. None of these downstream figures carry a stated magnitude.

On R&D-specific instruments, Lenihan (2024) finds that both R&D grants and R&D tax credits increase policy-induced R&D expenditure in foreign-owned subsidiaries, and reports that the two instrument types produce similar effects on subsidiary R&D and on downstream performance outcomes — no measured difference between grant-based and credit-based support in this study. The same paper links government-supported R&D to improved firm performance — turnover, exports, and gross value added — specifically in subsidiaries located in the host country (Ireland) rather than as a spillover elsewhere.

On corporate tax rates and location decisions, Suárez Serrato (2016) reports two separate results: tax competition with other states is the main factor related to state decisions to change corporate tax policy (direction of the relationship stated, no magnitude given), and tax-shifting effects created by formula apportionment are small relative to the other components of establishment profitability, again without a quantified figure. Devereux (2002) reports that Ireland's 10% statutory corporate tax rate on manufacturing activity, in place since the early 1980s, is associated with an increase in inward foreign direct investment, described as large but not quantified in the excerpt; the same source notes that part of that increase may reflect the shifting of corporate income into Ireland rather than new real investment, and that other factors (EU membership, location, other policies) are not controlled for.

None of the retrieved claims measure a state-level relocation subsidy or tax credit program directly against a jobs outcome — the tax-related claims cover statutory corporate rate levels, R&D-specific credits, and apportionment formulas, not location or relocation subsidies as such. That gap is worth naming plainly: this page has evidence on job growth's downstream effects and on R&D incentive instruments, but no claim here measures what a relocation subsidy or general business tax credit does to job counts, job quality, or cost per job.

Where the evidence splits

No contradictions in the current sources.

Thresholds and dose-response

No threshold established in the current sources.

Open empirical questions

• No source measures a state-level relocation subsidy or general business tax credit program directly against job counts, job quality, or job duration.
• No source gives a cost-per-job figure for any of the incentive types covered here (R&D grants, R&D tax credits, corporate rate cuts).
• No source establishes how R&D-subsidy or corporate-rate findings from Ireland (Lenihan 2024, Devereux 2002) generalize to U.S. state-level policy design.
• No source measures whether the earnings gains to disadvantaged groups from job growth (Bartik 1991) hold specifically when the job growth is subsidy-induced rather than organic.