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Incidence and Substitution in Enterprise Zone Programs: The Case of Colorado

Author

Listed:
  • Devon Lynch

    (Department of Economics, University of Massachusetts Dartmouth, North Dartmouth, MA, USA)

  • Jeffrey S. Zax

    (Department of Economics, University of Colorado at Boulder, Boulder, CO, USA, zax@colorado.edu)

Abstract

Among 53,334 urban Colorado establishments, geographic information systems (GIS) techniques identify those that are and are not in enterprise zones (EZs). EZs have no effect on payroll per worker. Therefore, subsidy incidence is not on labor. Urban EZs do not increase employment per establishment, implying that subsidies induce net substitution effects for capital that counteract scale effects on labor. Rural EZs increase employment in the smallest of 13,278 establishments, implying that capital is less substitutable for labor with rural production functions and subsidy mixes. Employment effects differ across EZs. Equilibrium incidence of subsidies is probably on immobile factors such as commercial real estate.

Suggested Citation

  • Devon Lynch & Jeffrey S. Zax, 2011. "Incidence and Substitution in Enterprise Zone Programs: The Case of Colorado," Public Finance Review, , vol. 39(2), pages 226-255, March.
    • Handle: RePEc:sae:pubfin:v:39:y:2011:i:2:p:226-255
    DOI: 10.1177/1091142110386210
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    References listed on IDEAS

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    Cited by:

    1. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    2. Christopher Coyne & Lotta Moberg, 2015. "The political economy of state-provided targeted benefits," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 337-356, September.
    3. Felipe Berrutti, 2016. "Subsidios a la oferta y decisiones de localización: El caso de la Ley de Vivienda de Interés Social," Documentos de Investigación Estudiantil (students working papers) 16-02, Instituto de Economía - IECON.
    4. Pauline Charnoz, 2014. "Do place-based policies help people ? Evidence from French enterprise zones," Working Papers 2014-44, Center for Research in Economics and Statistics.
    5. Neumark, David & Simpson, Helen, 2015. "Place-Based Policies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1197-1287, Elsevier.
    6. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    7. Florian MAYNERIS & Loriane PY, 2013. "The Efficiency Of Enterprise Zone Programs Some Conflicting Results?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 209-224.
    8. Zheng, Guo & Barbieri, Elisa & Di Tommaso, Marco R. & Zhang, Lei, 2016. "Development zones and local economic growth: zooming in on the Chinese case," China Economic Review, Elsevier, vol. 38(C), pages 238-249.
    9. Jia Wang & Stephen E. Ellis & Cynthia Rogers, 2018. "Income Inequality and Economic Development Incentives in US States: Robin Hood in Reverse?," The Review of Regional Studies, Southern Regional Science Association, vol. 48(1), pages 93-117, Spring.
    10. repec:hal:spmain:info:hdl:2441/3l4arseauo82kr3cm0qr8uihmg is not listed on IDEAS
    11. Thierry Mayer & Florian Mayneris & Loriane Py, 2017. "The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France," Journal of Economic Geography, Oxford University Press, vol. 17(4), pages 709-752.
    12. Tong, Patricia & Zhou, Li, 2014. "The Impact of Place-Based Employment Tax Credits on Local Labor: Evidence from Tax Data," Working Papers 2014-6, University of Alberta, Department of Economics.
    13. repec:hal:spmain:info:hdl:2441/1nfkh9tn2m87ko6gb634e2ufgl is not listed on IDEAS
    14. Miren Lafourcade & Florian Mayneris, 2017. "En Finir avec les ghettos urbains ?," PSE-Ecole d'économie de Paris (Postprint) halshs-01884340, HAL.
    15. repec:hal:spmain:info:hdl:2441/125h4fg7e89gi95ui3ml6ggod9 is not listed on IDEAS
    16. Monica Andini & Guido de Blasio, 2013. "Local development that money can�t buy: Italy�s Contratti di Programma," Temi di discussione (Economic working papers) 915, Bank of Italy, Economic Research and International Relations Area.

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