ECONOMIC DEVELOPMENT, OCCUPATIONAL INTERESTS, AND THE AMERICAN STATES: POLICY ADOPTION AND EFFECTIVENESS, 1969-1980

This study examines the effect of occupational interest strength in the states on the adoption of state economic development policies and the effect of those policies on state economic health. Through the use of a set of annual data for each state during the years 1969-1980, two analyses are undertaken. The first analysis tests the hypothesis that states with strong occupational interests will adopt more economic development policies, particularly those which give benefits directly to businesses, than will states with weak occupational interests. Using the 600 unit data set and controlling for other factors in state adoptions, the relationship of occupational interest strength to the number of economic development policies adopted is assessed. The second analysis tests the second hypothesis, that these economic development policies will have no positive effect on state economic health. Measuring state manufacturing value added and state unemployment rates both before and after policy adoption allows the analysis to test this second hypothesis. The results support both hypotheses. States where occupational interests are strong do adopt more economic development policies. This positive relationship is strongest among policies which give benefits directly to businesses, policies such as tax incentives. Additionally, in an analysis over time, the policies evidenced no positive effect on measures of state economic health