International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Measuring the Efficiency of States to Convert Government and Private Expenditures into Jobs
Christie L. Comunale, Thomas R. Sexton, Stephen C. Gara

We evaluate the efficiency with which the 50 U.S. states convert public and private spending into jobs. We use a Data Envelopment Analysis model in which the states are the decision-making units; federal, state, private sector spending are the inputs; and jobs is the output. We find that 38 percent of states are efficient. However, there is considerable variation in efficiency, suggesting that the effect on job creation depends on where the money is spent. We find that high population states more likely to be efficient than low population states, while states located in the Southeast region are less likely to be efficient relative to states located elsewhere. We find that states with higher proportions of their workforce in the Professional and Business Services, Government, or Education and Health Services super-sectors are less likely to be efficient relative to states with lower proportions of their workforce in these super-sectors.

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