President-elect Barack Obama wants to end this economic slump with massive new spending, hoping that the federal government can spur job creation and growth by spending on alternative energy, education, health care and infrastructure. While everyone is clamoring for this money, one key question is where is the highest job bang for the federal buck?
In a report published in 2007, UMass Amherst researchers looked at the effects on job creation of government spending in various broad economic sectors. Surprisingly, though spending in education ultimately had a greater impact in terms of total wages and benefits added to the economy, the greatest number of jobs created was with investment in transit.
Below is a portion of the researcher’s table of the effects of spending $1 billion on various priorities:
