A new peer reviewed study co-authored by a Ball State University researcher found that data centers in Texas produced a brief bump in construction jobs but no lasting gains in local employment. The findings come as Indiana has disclosed more than $655 million in data center sales tax exemptions.
The study, “Data Centers and Local Labor Markets: Evidence from the Texas Experience,” appears in the Journal of Regional Analysis & Policy. Its authors are Dagney Faulk of Ball State, Michael Hicks of Shenandoah University, and McKenzie Boyce and Brian Whitacre of Oklahoma State University.
The researchers tracked employment in all 254 Texas counties from 2000 through 2024. They compared counties that received any of 64 tax-exempt data centers with counties that did not.
According to the study, construction employment rose for roughly a year to a year and a half after a project began, then tapered off. The authors found no statistically significant long-term growth in construction, information, or professional and technical services jobs. A small initial effect on total employment disappeared under a more rigorous statistical method.
The authors also found no evidence that data centers, large or small, anchored technology clusters, and no spillover into neighboring counties. In Taylor County, home of Abilene, where four data centers arrived in 2021 or later, the sectors most tied to data centers added about 320 jobs from late 2020 to late 2024. That was less than 5% of the roughly 6,700 jobs the county added.
The paper contrasts those results with input-output studies, often sponsored by developers or interest groups, that project large job gains. Among them is a 2026 Northwest Indiana analysis modeling hypothetical hyperscale campuses with 463 to 1,388 direct operational jobs. The authors wrote that such models measure gross rather than net effects, in effect counting every data center job as a gain for the region.
Indiana’s 2019 data center law exempts qualifying projects from the state’s 7% sales tax on equipment and electricity. According to the Indiana Economic Development Corp., the exemption runs up to 25 years, or up to 50 years for investments over $750 million.
The state had not published the program’s cost until this year. Following inquiries from WTHR and the watchdog group Good Jobs First, it disclosed more than $655 million in exemptions, about $561 million of it claimed by Amazon in 2025. The IEDC said some 2025 reports were still outstanding.
Indiana’s largest projects promise far more construction work than permanent jobs. Meta’s $10 billion campus in Lebanon is expected to support more than 4,000 construction jobs at peak and about 300 operational jobs, according to Gov. Mike Braun’s office.
The Texas Comptroller projects that state’s data center exemptions will cost $9 billion from 2025 to 2030. The authors concluded the cost per job of such incentives is “extraordinarily high and, in many jurisdictions, potentially infinite,” and that location decisions appear driven by land, power and fiber rather than tax breaks.
The authors cautioned that the industry is in its early days and that a roughly 2-million-square-foot Abilene project could differ from earlier facilities. They acknowledged federal employment data may miss short-term construction crews and said they did not measure effects on property taxes or land values.
Other recent research has reached different conclusions. A National Bureau of Economic Research working paper cited in the study reported total employment rising 3.9% in U.S. counties with data centers, and a Brookings Institution paper reported gains of up to 5% over about six years.
Locally, the Indianapolis Metropolitan Development Commission voted 6-0 in August to adopt 2026-AO-001, a data center moratorium running through Dec. 31, 2027.
