NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Did the Stimulus Stimulate? Real Time Estimates of the Effects of the American Recovery and Reinvestment Act

James Feyrer, Bruce Sacerdote

NBER Working Paper No. 16759
Issued in February 2011
NBER Program(s):   EFG   ME

We use state and county level variation to examine the impact of the American Recovery and Reinvestment Act on employment. A cross state analysis suggests that one additional job was created by each $170,000 in stimulus spending. Time series analysis at the state level suggests a smaller response with a per job cost of about $400,000. These results imply Keynesian multipliers between 0.5 and 1.0, somewhat lower than those assumed by the administration. However, the overall results mask considerable variation for different types of spending. Grants to states for education do not appear to have created any additional jobs. Support programs for low income households and infrastructure spending are found to be highly expansionary. Estimates excluding education spending suggest fiscal policy multipliers of about 2.0 with per job cost of under $100,000.

download in pdf format
   (290 K)

email paper

A non-technical summary of this paper is available in the July 2011 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (290 K) or via email.

This paper was revised on December 5, 2011

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16759

Users who downloaded this paper also downloaded these:
Bloom, Canning, and Fink w16705 Implications of Population Aging for Economic Growth
Parker, Souleles, Johnson, and McClelland w16684 Consumer Spending and the Economic Stimulus Payments of 2008
Drautzburg and Uhlig w17111 Fiscal Stimulus and Distortionary Taxation
Farber w17040 Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010
Aizenman and Pasricha w16779 Net Fiscal Stimulus During the Great Recession
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us