How local is local development? Evidence from casinos

One rationale for place-based policy is that local development produces positive productivity spillovers. We examine the employment spillovers from a large local development project: opening a casino. Comparing employment in neighborhoods that won a casino license to runner-up neighborhoods that narrowly lost, we find that casinos create jobs in their immediate vicinity. However, we estimate net job losses overall when considering the broader neighborhood. Employment gains concentrate in the leisure and hospitality industry, suggesting spillovers are industry-specific or are driven by demand-side forces like trip-chaining. We develop theory to show that our estimates imply a rapid spatial decay of productivity spillovers. • Casino openings create hyper-local employment gains that decay sharply with distance. • The quasi-experimental design compares winning casino sites to runner-up locations. • For every casino job, 1.4 jobs created nearby but no net job gains in broader neighborhood. • Employment gains concentrated in leisure/hospitality sector, suggesting industry-specific spillovers. • Theoretical interpretation of results imply rapid spatial decay of productivity spillovers.