The CHIPS and Science Act of 2022, a landmark initiative aimed at revitalizing U.S. semiconductor manufacturing, has already generated measurable employment effects, according to early research by economists Bilge Erten, Joseph Stiglitz, and Eric Verhoogen. Their analysis suggests that regions hosting semiconductor fabrication facilities have seen job growth compared to similar high-tech areas without such infrastructure.
The study estimates approximately 15,000 to 16,000 new positions in the semiconductor sector, with an additional 28,000 to 35,000 jobs created in associated industries such as construction and equipment supply. These gains emerged even before full disbursement of federal funds, indicating that market anticipation played a key role in driving early hiring.
Using a difference-in-differences methodology, the researchers compared counties with semiconductor plants to those with other advanced technology sectors but no chip production. They also analyzed internal industry variation, contrasting locations with fabrication facilities (fabs) against those with only design or R&D operations. Both approaches yielded consistent results: counties with fabs added roughly 180 jobs on average, while those with general semiconductor activity gained about 100.
Most new roles required skilled labor, with around two-thirds filled by college-educated workers. Men accounted for about two-thirds of hires, and the majority were white and non-Hispanic—reflecting existing workforce demographics in high-tech manufacturing. Wages in these areas rose by an estimated 10% to 15%, suggesting the creation of well-compensated positions.
Although the industry is capital-intensive and not traditionally a major source of mass employment, the observed job growth exceeds initial expectations. The findings challenge skepticism about industrial policy, demonstrating that targeted government investment can stimulate labor markets even in highly automated sectors.
However, the momentum has recently slowed. From mid-2024 onward, employment gains plateaued, possibly due to political uncertainty following changes in administration and questions about the continuity of funding. Many grant agreements remained under negotiation, and some were placed on hold, creating hesitation among firms planning long-term investments.
The research highlights the importance of stable, bipartisan commitment to national industrial goals. Drawing lessons from successful models in East Asia, the authors emphasize that clarity and consistency in policy signaling are critical for private sector confidence. While supply chain resilience was a primary objective of the CHIPS Act, its positive impact on employment adds another dimension to its value.
Looking ahead, the full effects will become clearer as more data becomes available. For now, the evidence suggests that strategic public investment can yield tangible economic benefits, particularly when aligned with long-term technological and industrial priorities.
— news from Brookings Papers on Economic Activity