Economic Growth in Washington: An Examination of Labor Market and Fiscal Response
2017
Yeo, JunHo | Holland, David W.
This study develops a regional econometric model to extend andcomplement standard local economic impact analysis for Washingtoncounties. Based on a static macroeconomic model, we derive labor supplyequations and fiscal equations. The resulting empirical model isbased on a cross- sectional econometric analysis of all Washington counties.The use of the estimated econometric model is illustrated with 5percent job growth scenario that is simulated for each Washingtoncounty. For some counties, growth scenario actually results in an increasein the number of unemployed. This occurs because most of thenew jobs are taken by either in-commuters or new residents who bringwith them additional entrants into the local labor market some of whombecome unemployed.
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