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Tax Incentive Programs and Unemployment Rate

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  • Sridhar, Kala Seetharam

    (Indian Institute of Management, Prabandh Nagar, Lucknow, India)

Abstract

This paper answers the question: What are the effects of tax incentive programs on an area's unemployment rate? A model is developed that describes the determination of unemployment in an enterprise zone. The estimation of unemployment rate using Census data for Ohio, taking into account the treatment effects problem, shows that such programs have a significant impact in reducing unemployment. The net impact of being an enterprise zone for a duration of one year is approximately a 3 percentage point reduction in area unemployment. The results also suggest that three to five years could be the optimum period for offering incentives.

Suggested Citation

  • Sridhar, Kala Seetharam, 2000. "Tax Incentive Programs and Unemployment Rate," The Review of Regional Studies, Southern Regional Science Association, vol. 30(3), pages 275-298, Winter.
    • Handle: RePEc:rre:publsh:v:30:y:2000:i:3:p:275-298
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    References listed on IDEAS

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    2. Kala Seetharam Sridhar, 1996. "Tax Costs and Employment Benefits of Enterprise Zones," Economic Development Quarterly, , vol. 10(1), pages 69-90, February.
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    Cited by:

    1. Nidhi Chaudhary & Jonathan Potter, 2019. "Evaluation of the local employment impacts of enterprise zones: A critique," Urban Studies, Urban Studies Journal Limited, vol. 56(10), pages 2112-2159, August.
    2. Landers, Jim, 2006. "Why Don't Enterprise Zones Work? Estimates of the Extent that EZ Benefits are Capitalized into Property Values," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(1), pages 1-16.
    3. Kala Seetharam Sridhar, 2006. "Local Employment Impact of Growth Centres: Evidence from India," Urban Studies, Urban Studies Journal Limited, vol. 43(12), pages 2205-2235, November.
    4. Kala Seetharam Sridhar, 2005. "Impact of Growth Centres on Unemployment and Firm Location: Evidence from India," Palgrave Macmillan Books, in: Incentives for Regional Development, chapter 6, pages 117-138, Palgrave Macmillan.
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