牛津經(jīng)濟(jì)研究院-雇主投資對當(dāng)?shù)厣鐓^(qū)的社會經(jīng)濟(jì)影響 THE SOCIOECONOMIC IMPACTS OF EMPLOYER INVESTMENTS ON LOCAL COMMUNITIES

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THESOCIOECONOMICIMPACTSOFEMPLOYER

INVESTMENTSON

LOCALCOMMUNITIES

OCTOBER2024

AnekSoowannaphoom/S

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TABLEOFCONTENTS

Foreword4

Executivesummary6

1.Introduction8

1.1Backgroundcontext8

1.2Motivationforandobjectivesofthisstudy8

2.Howweassesstheimpactoflargeinvestments10

2.1Aquickguidetoourapproachinthreesimplesteps10

2.2Whatimpactsdidwetest?10

2.3Howlongdidwetrackthemfor?11

2.4Characteristicsoflargeinvestmentsthat

wehavemodeled12

3.Keyfindingsandinsights16

3.1Largeinvestmentsspursignificantgrowth

inbusinessformation17

3.2Evidenceofasustaineddecreaseinthe

unemploymentrate18

3.3Projectshelptoraiseprosperitybyboosting

averageearnings19

3.4Balanceofevidencesuggestsanincreasein

laborforceparticipation20

3.5Clearsubstitutioneffectsapparentwithinthehealthcare

insurancemarket

24

3.6Areductionintherateofviolentcrime2

6

3.7WhatdoesthisallmeanforSmall-andmedium-sized

businesses?2

7

4.Finalthoughts

28

Appendix1:summaryofliteraturereviewfindings

30

Appendix2:empiricalstrategy

32

Appendix3:dataassembly,formattingandcleaning

34

Appendix4:modelingresultsandsensitivityanalysis

42

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FOREWORD

THESCOPEOFTHISRESEARCH

Thisprojectinvestigatesthesocioeconomicimpactofwhenalargeemployerinvestsinalocalcommunitybyrelocatingoropeninganewestablishment.

Socioeconomicimpactsstudiedrangefromchangestowagesandhealthcarecoveragetocrimerates.

Duetothedatasetsusedandempiricalapproachchoseninthisresearch,therewasnotanopportunitytoexplorethe

positiveimpactsfoundinthisreportasitpertainstospecificcommunities.Additionalresearchshouldbedonetoexploretheseimpactsanddisaggregatethedata,bygender,race,

veteran’sstatus,andotherkeysocioeconomiccategories.

Similarly,wecouldnotquantifythepositiveimpactsmallandmid-sizebusinesses(SMBs)expandinginaregionmighthave.Evaluatingifanumberof

SMBsopeninginagivenregionhasthesame,more,orlessimpactthanalargeinvestmentisanimportantareaoffuturestudy.

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EXECUTIVESUMMARY

OxfordEconomicshasundertakenagroundbreakingresearchprogramthatisdesignedtoshednewlightonthetopicofthesocioeconomic

impactoflargeemployersenteringalocalcommunity.

WHYHAVEWEDONETHIS?

Whenalargeemployerdecidestoinvestinalocalcommunitybyrelocatingoropeninganewspace,itisoftenaccompaniedbysplashheadlinesaboutthenumberofjobsthe

projectwillcreate.Theseinvestmentscantake

manyforms,includingmanufacturingplants,

distributioncenters,andmedicalfacilities.Whileanimmediatedirectincreaseinemploymentis

self-evident,thistypeofinformationdoesnot

helpusunderstandtowhatextenttheseprojectshavelastingimpactsonthelivedexperienceof

thoseinthecommunity.Itnaturallybegsthequestion:whathappensnext?

IntheUnitedStates,thereisaheateddebate

aroundthisquestion.Partiesonbothsidescanholdstrongopinions.Toooften,unfortunately,

theseconvictionsarenotbasedonasober

assessmentofavailablequantitativeevidence

and,instead,arebasedonanecdoteandisolatedexamples.Moreover,asthewell-knownaphorismputsit,“thepluralofanecdoteisnotdata.”

Thisstudyseekstorectifythisissuebyfilling

gapsintheexistingliteraturetoprovidean

objectiveanddata-drivenassessmentofwhat

happenswhenanewlargeemployeropens

inacommunity.Indoingso,wehopethat

ourresearchwillstrengthenthequalityof

discussionaroundnewemployerinvestmentsbyprovidingdatathatreconnectthisdebatewithcommunitiesandeconomicrealities.

HOWDIDWEDOIT?

Insummary,ourresearchmethodologyhasthreekeystepsasfollows:

1.Datacollection:first,wecompileddata

onlargeinvestmentsinUScountiesand

socioeconomicoutcomes—statisticalmeasuresthatcaptureimportantaspectsofcommunitylife.Forthisresearch,wehavedefinedthe

formerasexampleswhereanorganization

createdatleast1,250additionaljobs1on-siteatasingleestablishment.

2.Econometricmodeling:next,weestimatedasetofeconometricmodelsthatcapture

howlargeinvestmentshaveaffected

socioeconomicoutcomes.Insimpleterms,themodelsworkbytestinghowtherelativeperformanceofthecountychangedbeforeandaftertheinvestmentcomparedtoasetofbenchmarkcounties(thatdidnotreceiveinvestments).

3.Resultsapplication:finally,weapplythe

findingsfromourmodeltotraceoutthe

impactsovertimeandtoquantifytheeffectoftheinvestmentsinmoreaccessibleterms.

1Clearly,thereisnoobjectivedefinitionofwhatcharacterizesa“l(fā)argeinvestment.”Althoughthenumberofjobscreatedon-site

6representsahighlyintuitivemetricinthiscontext,theprecisethresholdthatshoulddefineaninvestmentlargeisinherentlysubjective.Ourchoiceof1,250jobshasbeeninformedbyscientificprinciples.ThesearedescribedinmoredetailintheAppendix.

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WHATDIDWEFIND?

Thefindingsfromourresearchindicatethat

investmentsintheformofnewlargebusinessopeningsbringsubstantialbenefitstothehostcommunity.Insummary,theseinvestments

increasesharedprosperityandstrengthenthesocialfabricinlocalcommunities.Moreover,

addressingthe“whathappensnext?”researchmotivation,ourresultsindicatethatthesearesustainedbenefitsand,indeed,buildovertime.

Specifically,afterfiveyearswefindthatcountieswhichexperienceinvestmentsbylargeemployersenjoythefollowingbenefitscomparedtocountieswhichdidnotreceivesuchaninvestment:

?Newbusinessformationgrewby3.6%.

Wefindveryrobustevidencethatlarge

investmentsstimulatebusinessformationwithanaverageincreaseinthenumberofbusinessestablishmentsof3.6%comparedtowhat

otherwisewouldhaveoccurred.Inabsoluteterms,thetypicalimpactoftheselarge

investmentswastoaddnearly100newbusinessestablishments.

?Employeeearningsroseby1.4%onaverage,meaninggreaterprosperityforlocalworkers.Inabsoluteterms,thetypicalimpactwas

toboostworkers’wagesbyalmost$635annually,measuredintoday’sprices.

?Unemploymentrateis0.4percentagepointslower.Wefindthat,onaverage,investmentsbringanimmediateandsustaineddrop

intheunemploymentrate.Inabsolute

terms,thetypicalimpactwastoreducethe

unemploymentheadcountbyover210i.e.,justover210adultswereinworkwhowould

otherwisehavebeenunemployed.

?Participationrateis2.1percentagepoints

higher.Additionaldynamismandprosperity

encourageworkerstoengageinthelabor

forcewhowouldotherwisehavebeen

inactive,equivalenttotypicalincreaseof

1,560working-ageadults.

?Violentcrimerateis8.1%lower.Potentially

linkedtothedeclineintheunemploymentrate,

wefindanaveragereductionintheincidence

ofviolentcrimeof8.1%fiveyearsafterthe

investment.Inabsoluteterms,thiswas

equivalenttoanaveragedropof140recorded

violentcrimes.

?Privateinsurancerateincreases1.3

percentagepoints.Wefoundevidenceof

substitutioneffectswithinthehealthcare

insurancemarket.Onaveragetheshareof

thepopulationonprivateinsuranceincreased

1.3percentagepointswhiletherewasa

correspondingdecreaseinpublicinsurance(e.g.,Medicaid)rates.Inabsoluteterms,thetypicalimpactwastoincreasethenumberofpeoplewithprivatehealthcarebyalmost1,200.Giventhatwefindnoevidenceof

anychangeintheoverallrateofhealthcarecoverage,itcanbeassumedthatthese

individualswillbeswitchingfrompublicinsuranceprogramssuchasMedicaid.

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1.INTRODUCTION

1.1BACKGROUNDCONTEXT

Whenalargeemployer

decidestoinvestinalocal

communitybyexpandingor

openinganewspace,itis

oftenaccompaniedbysplash

headlinesaboutthenumber

ofjobstheprojectwillcreate

on-site.Whileanimmediate

increaseinemploymentisself-evident,thistypeofinformationdoesnothelpusunderstand

towhatextenttheseprojects

havelastingimpactsonthe

livedexperienceofthoseinthecommunity.Itnaturallybegsthequestion:whathappensnext?

IntheUnitedStates,thereisa—sometimesheated—debatearoundthisquestion.Critics

oflargeemployersallegethatthesebusinessesdonotapply

asufficientlyholisticmodel

ofstakeholdercapitalismand

squeezeoutsmall-andmedium-sizedbusinesses(SMBs).As

partofourresearchprogram,wehavereviewedtherelevantliterature.AdetailedsummaryofourfindingscanbefoundinAppendixOneofthisreport.

1.2MOTIVATIONFORANDOBJECTIVESOFTHISSTUDY

Inthiscontext,Oxford

Economicssoughtouttoassessthesocioeconomicimpactof

investmentprojectsontheir

localcommunity.Wedesignedthestudysothatitincorporatedthefollowingfeatures:

?Comprehensive:given

thepriorityonanindustry

inclusiveassessmentoflarge

employers’socioeconomic

impact,itwasessential

thatourapproachcovered

investmentsbybusinesses

acrosstheindustrialspectrumoftheprivatesector.Althoughouranalysiscontainsacase

study,thisisusedtoadd

colortothereport’snarrative.Ontheotherhand,our

quantitativeempiricalstrategyisdesignedtoensurethat

wecaptureinvestmentsbybusinessesinawiderangeofeconomicsectors.

?Investmentsthatmove

thedial:allexamplesof

businessinvestment,large

andsmall,areasignof

economicprogressanda

driveroffutureprosperity.

Inthisstudy,however,we

havesoughttoevaluatetheimpactofinvestmentsthatarequantitatively“l(fā)arge”.

Thischoiceismotivatedbyseekingtobetopical—the

impactoflargerinvestmentsorinvestmentsbylarge

employersiscurrentlythe

sourceofmorecontention—andpracticalissues—

identifyingtheimpactof

smallerinvestmentsempiricallyislikelytobemorechallenging.

?Understandingthe

dynamics:whereempirical

evidencedoesexistit

oftenprovidesasnap-shot

assessmenti.e.,atasingle

pointintime.Itisplausible,

however,thattheimpactof

largeinvestmentprojects

onlocalcommunitiesisnot

stablebutinsteadevolves,

influencedbyacomplexweb

ofinteractingfactors.Our

researchmethodaimstocut

throughthatcomplexityto

helpunderstandhowthese

impactschangeovertime.

?Economicandsocial:much

ofthecurrentliteraturehas

soughttoestablishthelocal

impactsoflargeinvestments

asmeasuredbyeconomic

ratherthansocialoutcomes.

Inmanyrespects,thisis

natural.Theformercanbe

expectedtohavemoredirect

linkageswithinvestment

anddataaretypicallymore

readilyavailable.Ourstudy

seekstoaddressthisgapby

examiningimpactsthrougha

broadsocioeconomiclens.

Overall,wehopethatthe

studywillraisethelevelof

debatearoundnewemployer

investmentsandhighlightto

companiestheimportanceof

understandingtheirinvestmentsintermsoftheirbroaderpotentialcommunityimpacts.Toooften,

currentdiscussionsareframed

aroundanecdoteandasthe

well-knownaphorismputsit,“thepluralofanecdoteisnotdata.”

Thisstudyseekstorectifythisissuebyapplyinganobjectiveanddata-drivenmethodto

answerthesequestions.

dpapicturealliance/AlamyStockPhoto

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2.HOWWEASSESSTHEIMPACTOFLARGEINVESTMENTS

Inthischapter,weprovideahigh-leveldescriptionofourmethodology.Ouraimistointroduceourapproachandexplainkeyconceptsastheyrelatetoourfindingsusingaccessibleandjargon-freelanguagesuitedtoabroadaudience.Thevariousappendicestothisdocumentcontainadetailedtechnicaldescriptionofourmethodologyforinterestedreaders.

2.1AQUICKGUIDETO

OURAPPROACHINTHREESIMPLESTEPS

Insummary,ourresearch

methodologyhasthreekeystepsasfollows:

1.Datacollection:first,we

compileddataonlarge

investmentsinUScounties

andsocioeconomic

outcomes.Forthisresearch,wehavedefinedtheformerasexampleswherean

organizationcreatedatleast1,250additionaljobs2on-siteatasingleestablishment.

2.Econometricmodeling:

next,weestimatedaset

ofeconometricmodels

thatcapturehowlarge

investmentshaveaffected

socioeconomicoutcomes.

Insimpleterms,themodelsworkbytestinghowthe

relativeperformanceofthe

countychangedbefore

andaftertheinvestment

comparedtoasetof

benchmarkcounties(thatdidnotreceiveinvestments).

3.Resultsapplication:finally,weapplythefindingsfromourmodeltotraceout

theimpactsovertimeandtoquantifytheeffectof

theinvestmentsinmoreaccessibleterms.

2.2WHATIMPACTSDIDWETEST?

Todevelopamoreholistic

understandingoftheeffects

oflargeinvestments,wehave

testedtheirimpactonarangeofoutcomevariables.Ourselectionofthepreciseindicatorswas

influencedbyadesiretoachieveagoodbalanceofinvestigatingimpactsthroughbotheconomicandsociallensesandthe

constraintsofavailabledata.Forourpurpose,itwasessentialtobeabletoaccessdatawhich

monitoredselectedindicatorsoveranextensivetimehorizon(ideallybackto1990)and

acrossacomprehensivesetofUScounties.

Thefinalselectedsetof

outcomeindicatorsforourmodelswereasfollows:

?Businessdynamism:the

numberofestablishments.

Acommoncontentionof

criticsisthatwhenfirms

undertakelargeinvestments,

theyforceexistinglocalfirms

outofbusiness.Ontheother

hand,largeinvestments

maywellspurnewbusiness

formationbyboostingthe

levelofeconomicdemandin

thecommunity.

?Laborforceactivity:the

participationrate(%share

ofworking-agedadultswho

areeitherinworkoractively

seekingwork).Agrowing

concernforpolicymakers

sincetheCovid-19pandemic

hasbeentheassociated

slumpinlaboractivity

rates—indeed,atthetimeof

writing,theUSlaborforce

participationrateremained

0.5percentagepointsbelow

itspre-pandemicpeak.3

?Joblessness:the

unemploymentrate(%share

ofthelaborforcethatisnot

inwork).Unemploymentis

ofprimaryconcernforlocal

policymakersbothbecause

ofitsdebilitatingimpact

onaffectedindividualsand

familiesbutalsoduetoits

associationwithvarious

activitiesthatcanhavewider

negativesocialeffectssuch

assubstanceabuse.4

2Clearly,thereisnoobjectivedefinitionofwhatcharacterizesa‘largeinvestment’.Althoughthenumberofjobscreatedon-site

representsahighlyintuitivemetricinthiscontext,theprecisethresholdthatshoulddefineaninvestmentlargeisinherentlysubjective.Ourchoiceof1,250jobshasbeeninformedbyscientificprinciples.ThesearedescribedinmoredetailintheAppendix.

3Specifically,theshareofworking-ageadultsparticipatinginthelaborforcewas63.3%in2019Q4comparedto62.8%inSeptember2023.

10

4AsCaseandDeatonnote,thecausalchannelfromunemploymenttodrug-takingismulti-factorial:“Ourmainargument…isthatthedeathsofdespairreflectalong-termandslowlyunfoldinglossofawayoflifeforthewhite,lesseducatedworkingclass.Unemploymentisapartofthatstory,butonlyapart.”AnneCaseandAngusDeaton,2020.DeathsofDespair,PrincetonUniversityPress.Princeton,NJ,atp.146.

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?Economicprosperity:

averagevalueofannual

earnings.Theprevious

twometricshelpusto

understandhowthese

investmentsmightaffectthe

numberofjobopportunities

createdinthecommunity.

Forpolicymakers,ofwider

interest,iswhetherthese

investmentsboostthe

prosperityoflocalresidents.

?Accesstohealthcare:

healthcareinsurancerates

(%shareofpopulation

coveredbyhealthcare

insurance—privateand

public).Theextentand

compositionofhealthcare

insurancecoverageis

important.Althoughreforms

enactedunderPresident

Obamahavehelpedto

significantlywidenhealthcare

insurancecoverage,

individualsonemployer-

sponsoredschemestypically

benefitfromsuperiorservice.

Inaddition,enlargedpublic

healthcareinsurancerolls,

suchasforMedicaid,require

significantstateandfederal

expenditures.

?Theincidenceofcriminal

activity:numberofviolent

crimesrecordedpercapita.

Crimeistypicallyneartop-of-

mindforlocalpolicymakers

withimplicationsforhow

citizensfeelaboutlivingin

theircommunity.

2.3HOWLONGDIDWETRACKTHEMFOR?

Datafortheseoutcome

variablesthatwehavetested

areavailableoverquitedifferenttimeseriesinsomecases.For

fourofthesixindicators,we

havedataavailableforallyearsbetween1990and2016.Dataonlaborforceparticipation

ratesandhealthcarecoverage

rates,however,areonly

availablestartingfrom2005and2008,respectively.

Moreover,werequireatleast

fouryearsofdataonoutcomesinacountybeforeitreceivesaninvestment.Thismeansthatforhealthcarecoveragerateswe

arelimitedtoinvestmentsthattakeplacefrom2012to2016

andforlaborforceparticipationfrom2009to2016.

Thesemuchmorelimitedeffectivesamplesizeshave

implicationsforhowwe

evaluatethepathoftheimpactoftheseinvestments.Forall

sixvariables,thesampleof

investmentsthatisinvestigatedinyearsonetothreeaftertheinvestmentisidentical.As

showninFig.1,forthefour

indicatorswithlongertime

seriesdata,thesamplechangesverymodestlyinyearsfourtoseven.Indeed,inyearsevenwecanobserveimpactsforover

94%oftheoriginalsample,a

sharethatdropsto47%fortheparticipationratevariableand0%forhealthcarecoverage.

Balancingourinterestin

investigatingimpactsover

longerhorizons—giventhat

theycanbeexpectedto

accumulateovertime—with

themethodologicalissuesthatarecreatedbythesechangesinsamplessizeweoptforthefollowingrules:5

?Forouranalysisofthe

impactoftheseinvestments

ontheunemploymentrate,

thenumberofbusiness

establishments,average

wagesandthecrimerate

wereportfindingsupto

sevenyearsaftertheinitial

investment.

?Forouranalysisoftheimpact

oftheseinvestmentson

healthcarecoverageandthe

participationratewereport

findingsuptofiveyearsafter

theinitialinvestment.

5Forcompleteness,wehavereportedresultsoverlongertimeperiodsintheAppendixofthisdocument.11

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Fig.1:Proportionofinvestmentscoveredbydatasetdependingonpost-eventyearandvariableindicator

Healthcarecoverage

Participationrate

Othervariables

Shareofsingletreatmenteventsinsample100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

123456

7

Source:OxfordEconomicsYearsfrominvestment,0=yearofinvestment

2.4CHARACTERISTICSOFLARGEINVESTMENTSTHATWEHAVEMODELED

Forourmodelingpurposes,wearenotabletoincludecounties

whichreceivedmultiple

investmentsinourmodel.

Similarly,anycountieswhich

investmentthattakesplacein1994,wehave25yearsofpre-Covid-19dataand,attheotherextreme,foronethattakes

placein2016thereisjustthreeyearsofdata.Intheory,we

wouldexpectthattheimpact

oftheseinvestmentsisunlikelytoremainconstantineach

‘post-treatment’yearandakeyobjectiveofourresearchwastounderstandthetypicaldynamictrajectoryoftheimpactof

theseinvestments.Inthislight,thefactthattheinvestmentsinourdatasetarerelatively

back-loaded,i.e.,theymainlytakeplaceinearlieryears,isadvantageous.

countiestotheaforementionedcontrolgroup.Intheremainderofthissection,webriefly

describecharacteristicsoftheseinvestments.

receivedasingleinvestment

before1994havealsobeen

excluded—inthesecountieswedonothavesufficientdataonoutcomesintheyearsleadinguptotheeventtoeffectively

conductour“before-and-after”analysis.

Intotal,wehaveidentified225countieswhichreceivedasinglelargeinvestmentbetween1994and2016.Theimpactresults

inthisreportareestimatedbycomparingoutcomesinthese

Whendidtheytakeplace?

Fig.2illustratesthenumberofinvestmentsthattakeplaceineachyearacrossthesampleatthisthresholdbetween

1994and2016—theeffectivemodelinghorizon.

Theyearoftheinvestment

naturallyaffectsthelengthoftheperiodafterwhichhistoricdataareavailabletoevaluateitsimpact.Forexample,foran

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Fig.2:Distributionofsingletreatmentinvestmentsthatcreatedatleast1,250jobson-site:1994-2016

Numberofinvestmentsthatcreateatleast1,250jobson-site30

25

20

15

10

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

5

0

Source:NETSdata,OxfordEconomicsanalysis

Wheredidtheytakeplace?

Fig.3describesthe

geographicdistributionof

largeinvestmentsinour

datasetusingourpreferred

employmentthreshold.The

countiesthatformpartof

our“singletreatment”groupandare,therefore,thesubjectofourmodelingresults,are

shadedinorange.Asdisplayed,theyarewidelydisbursed

acrossthecountry.

Asexpected,countiesthat

receivedsingleormultiple

investmentsaretypicallylarger.Forexample,accordingtothelatestCensusBureauestimates,in2021the(mean)average

populationofacountyinthe

controlgroupwas54,000

comparedtoanaverageof

125,000forcountiesthat

receivedoneinvestmentand

590,000forthosewhoreceivedtwoormoreinvestments.

Inanotherrespect,thisback-

loadedfeatureispotentially

disadvantageous.Itmight

increasetheriskthattheresultsweestimate—whichreflect

theaverageimpactacross

all225investments—areless

representative(forbetteror

worse)oftheimpactsthatwill

begeneratedbyrecentand

futureinvestments.Toassessthis,wehaveconductedsensitivity

analysiswherewerestrictour

datasettoamorerecentperiod(2005–2016).Ingeneral,our

findingsremainrobusttothis

changeindicatingthatour

broadconclusionsremainvalid.

Furtherdiscussionandtheresultsfromthesensitivitytestingare

presentedinAppendix4.

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Fig.3:Overviewofdistributionofcountiesbyclassificationstatus

NotinNETS

Controlgroup

SingletreatmentMultipletreatment

Source:NETSdatabase,OxfordEconomics

Inwhatindustriesdotheseinvestorsoperatein?

Finally,Fig.4breaksdownthe

singletreatmentinvestments

inoursampleintermsofthe

economicsectoroftheinvestor.Thishighlightsthatourstudy

cutsacrossabroadswatheoftheeconomywithinvestmentsnot

concentratedinanyparticular

industry.Themostpopulous

sectorwasfinancialandbusinessserviceswhichaccountedfor

40ofthe225singletreatmentcases.Approximatelyone-thirdoftheinvestmentswerein

manufacturingspreadacrossaverywiderangeofsub-sectorscoveringbothconsumergoodsandindustrialproduction.

Fig.4:Breakdownofsingletreatmentinvestmentsby

economicsector

Numberofsingletreatmentinvestments

10

29

32

32

36

5

9

40

12

20

Source:NETSdatabase,OxfordEconomicsanalysis

AgricultureandminingB2Cmanufacturing

IndustrialmanufacturingTransportequipment

Transport,communicationsandutilities

Warehousing,storageandretail

Financialandbusinessservices

Hospitalityandleisure

Healthcare

Miscellaneous

JohnGressMediaInc/Shutte

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3.KEYFINDINGSANDINSIGHTS

Theheadlinefindingsfromouranalysisarethatlargeinvestmentsspurlocal

entrepreneurialactivity

andimprovelabormarket

conditions(higherwages,lowerunemployment,andhigher

ratesofparticipation),which

inturnsupportwidersocial

benefits(higherparticipationinprivatehealthcarereducingtheburdenonthestateandlowerratesofviolentcrime):

?Newbusinessformation

grewby3.6%.Wefindveryrobustevidencethatlarge

investmentsstimulate

businessformationwith

anaverageincreasein

thenumberofbusiness

establishmentsof3.6%

comparedtowhatotherwisewouldhaveoccurred.In

absoluteterms,thetypicalimpactoftheselarge

investmentswastoaddnearly100newbusinessestablishments.

?Employeeearningsroseby1.4%onaverage,meanin