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UNITED STATES DEPARTMENT OF LABOR

Do state corporate tax incentives create jobs? Quasi-experimental evidence from the entertainment industry (Thom, 2019)

Review Guidelines

Causal Evidence Guidelines

Absence of conflict of interest. 

Citation

Thom, M. (2019). Do state corporate tax incentives create jobs? Quasi-experimental evidence from the entertainment industry. State and Local Government Review, 51(2), 92-103. [Massachusetts]

Highlights

  • The study’s objective was to examine the impact of the motion picture incentive (MPI) program on employment in the motion picture industry. The authors investigated similar research questions for four other states, the profiles of which can be found here:

  • The study used an interrupted time series design to compare changes in employment before and after the MPI program was implemented. Data came from the Quarterly Census of Economics and Wages (QCEW) and the Massachusetts Executive Office for Administration and Finance.  

  • The study suggested there was no relationship between the MPI program and changes in employment in the motion picture industry in Massachusetts. 

  • The quality of causal evidence presented in this report is low because other time-varying factors could have influenced the outcome. This means we could not be confident that any estimated effects would be attributable to the MPI program; other factors are likely to have contributed. However, the study did not find statistically significant effects. 

Intervention Examined

Motion Picture Incentive (MPI) program

Features of the Intervention

  • The study’s objective was to examine the impact of the motion picture incentive (MPI) program on employment in the motion picture industry. The authors investigated similar research questions for four other states, the profiles of which can be found here. 

  • The study used an interrupted time series design to compare changes in employment before and after the MPI program was implemented. Data came from the Quarterly Census of Economics and Wages (QCEW) and the Massachusetts Executive Office for Administration and Finance.  

  • The study suggested there was no relationship between the MPI program and changes in employment in the motion picture industry in Massachusetts. 

  • The quality of causal evidence presented in this report is low because other time-varying factors could have influenced the outcome. This means we could not be confident that any estimated effects would be attributable to the MPI program; other factors are likely to have contributed. However, the study did not find statistically significant effects. 

Features of the Study

The study used an interrupted time series design to compare changes in employment before and after the MPI program was implemented. The intervention time period is 2006–2017, the 12 years following the enactment of Massachusetts’ MPI program. The comparison time period is the 12 years prior to MPI enactment: 1994–2005. 

Data comes from the Quarterly Census of Economics and Wages (QCEW) and the Massachusetts Executive Office for Administration and Finance. The author used a statistical model to compare the annual motion picture industry employment change before and after MPI program implementation, focusing on the immediate change and the average change over time. The statistical model controlled for some changes in state-specific factors like the average wages in the motion picture industry in Massachusetts and some competitive factors like changes in other states’ MPI tax expenditures. 

Findings

Employment

  • The study suggested that there was no relationship between the MPI program and the annual percentage point change in employment in the motion picture industry either the first year after MPI program implementation or over time.   

Considerations for Interpreting the Findings

Since the MPI program was only introduced at one point in time and was not introduced by the study author, we cannot be certain that the timing of the program was unrelated to other contextual factors that might also have affected employment in the motion picture industry. 

Causal Evidence Rating

The quality of causal evidence presented in this report is low because other time-varying factors could have influenced the outcome. This means we could not be confident that any estimated effects would be attributable to the MPI program; other factors are likely to have contributed. However, the study did find statistically significant effects. 

Reviewed by CLEAR

January 2023