An analysis of the impact of federally-funded investments in science, research and technology across regions and education groups in Arizona

This paper uses the $526.9 million in Research and Development (R&D) support allocated by the federal government to the state of Arizona in 2010 to demonstrate how multi-regional input-output (MRIO) analysis can highlight the spatial and social heterogeneity of its economic returns. While the statewide output multiplier of this event is 2.18, the multiplier effects are between 0.23 and 0.88 point greater in Phoenix than in Tucson, the two largest metro areas in Arizona. The ‘rest of Arizona’ reports an even greater gap w.r.t. Phoenix because of a lack of skilled workers and infrastructure. When it comes to the heterogeneous effect across groups of inhabitants, we find that the main beneficiaries are the workers with the highest levels of education. However, more than 2,000 jobs have also been created for the labour force with a high school degree or less thus indicating the presence of social returns of investments in R&D.