ARRA funds led to worker hiring and retention at stimulus-receiving organizations that responded to our voluntary survey (Figure 1). On average an organization that received stimulus funds equal to 10 percent of its annual revenue reported retaining or hiring workers equal to 5 percent to 6 percent of its workforce . ARRA funds did more than just sit in bank accounts or pad company profits. However, our data don’t tell how many of these hires were for were part-time or temporary jobs. Our in-person interviews indicated companies frequently included parttime and temporary jobs in reported job totals.
Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5%) or from outside the labor force (4.1%)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.
Only about half (47 percent) of responding ARRA-receiving organizations said it was easier to hire high-quality workers than before the financial crisis. The rest said hiring good people was either as hard as (41 percent) or harder than (12 percent) before the financial crisis of 2008 (Appendix B).
There was no tendency for stimulus funds to go to organizations that found it easy to hire good people. Under Keynesian theory, government spending has its greatest effect when targeted toward sectors of the economy with slack; by this job-focused measure, stimulus funds were poorly targeted (Tables 3, 4).
http://mercatus.org/publication/did-stimulus-dollars-hire-unemployed