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The magnitude of local multipliers is important for regional economic development policies. State and local governments spend considerable amounts of taxpayer money on incentives to attract new businesses to their jurisdictions. Such location-based incentives are pervasive in manufacturing. However, the efficiency of these policies and their actual effects on employment are not fully understood, because there is little systematic evidence on the effects of successfully attracting a new firm on other parts of the local economy. The estimates in this paper help inform this debate. 1

Moreover, assuming that the objective of local economic development policies is to maximize local employment, it is important to know where subsidies should be directed. The multiplier is likely to vary across industries and skill groups. There is little existing evidence on which industries and skill groups have the largest multiplier and …