Does the Job Creation Tax Credit Program in Maryland Help Concentrate Employment Growth?

The Job Creation Tax Credit program is one of the five Smart Growth programs initiated by the state of Maryland in 1997. Like other tax credit programs, it is a personbased program intended to create jobs; it is also, however, a place-based program in that eligibility is limited to jobs created in Priority Funding Areas (PFAs). This article examines whether the program has furthered the goals of concentrating job growth with PFAs. The empirical analysis uses a fixed-effects random growth model and examines employment in five economic sectors from 1994 to 1998 at the zip code level. The results show that job growth in transportation, communication, and utilities and services industries has concentrated in PFAs, whereas growth in the primary sector, manufacturing, and finance, insurance, and real estate has been unaffected by the program.