The Efficiency of Tax Abatement in the Market for Jobs

Abstract

This paper examines the intensity of tax abatement use as a competitive location incentive in the state of Texas. Using a 1nodel depicting the "market for jobs," the study examines the effectiveness of tax abatement subsidies in attracting business to a community. Data from 374 tax abatement projects, provided by the Texas Department of Commerce, are used to estimate the "price" paid for each job attracted by tax abatement