Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act

Federal Reserve Bank of San Francisco Working Paper:

http://www.frbsf.org/publications/economics/papers/2010/wp10-17bk.pdf

The estimated jobs multiplier for total nonfarm employment is large and statistically significant for ARRA spending (as measured by announced funds) through March
2010, but falls considerably and is statistically insignificant beyond March. The implied number of jobs created or saved by the spending is about 2.0 million as of March, but drops to near zero as of August.


Lastly, I find that spending on infrastructure and other general purposes had a large positive impact, while aid to state government to support Medicaid may have actually reduced state and local government employment.