Working Paper: NBER ID: w14530
Authors: David Neumark; Jed Kolko
Abstract: We use new establishment-level data and geographic mapping methods to improve upon evaluations of the effectiveness of state enterprise zones, focusing on California's program. Because zone boundaries do not follow census tracts or zip codes, we created digitized maps of original zone boundaries and later expansions. We combine these maps with geocoded observations on most businesses located in California. The evidence indicates that enterprise zones do not increase employment. We also find no shift of employment toward the lower-wage workers targeted by enterprise zone incentives. We conclude that the program is ineffective in achieving its primary goals.
Keywords: Enterprise Zones; Job Creation; Economic Development; California
JEL Codes: H25; H73; J23; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| enterprise zones (R38) | employment (J68) |
| enterprise zones (R38) | number of business establishments (L84) |
| enterprise zones (R38) | employment growth (O49) |
| enterprise zones (R38) | shift towards low-wage industries (F66) |