Impact of State Incentives on Unemployment Rates

States are experiencing increasing pressure to attract businesses. Competition among states is done largely through business incentives. The common goal of these incentives is to convey a sense of a good business climate, enticing new or existing companies to create new facilities and hire local workers to reduce unemployment. This paper looks at the impact that state business incentives have on unemployment rates. Incentives that will be tested include the number of tax credits, tax exemptions, grants, and the top business tax bracket by state. I predict that there will be no correlation between unemployment and the tested incentives, and that the increasing number of incentive programs stem from a competitive pressure between states