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Targeted Business Incentives and Local Labor Markets

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  • Matthew Freedman

Abstract

This paper uses a regression discontinuity design to examine the effects of geographically targeted business incentives on local labor markets. Unlike elsewhere in the United States, enterprise zone (EZ) designations in Texas are determined in part by a cutoff rule based on census block group poverty rates. Exploiting this discontinuity as a source of quasi-experimental variation in investment and hiring incentives across areas, I find that EZ designation has a positive effect on resident employment, increasing opportunities mainly in lower-paying industries. While business sitings spurred by the program are more geographically diffuse, EZ designation is associated with increases in home values.

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File URL: http://jhr.uwpress.org/cgi/reprint/48/2/311
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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 48 (2013)
Issue (Month): 2 ()
Pages: 311-344

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Handle: RePEc:uwp:jhriss:v:48:y:2013:ii:1:p:311-344

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Web page: http://jhr.uwpress.org/

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Cited by:
  1. Kline, Patrick & Moretti, Enrico, 2013. "People, Places and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9741, C.E.P.R. Discussion Papers.
  2. repec:hal:wpaper:halshs-00695225 is not listed on IDEAS
  3. Briant, Anthony & Lafourcade, Miren & Schmutz, Benoît, 2013. "Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience," CEPREMAP Working Papers (Docweb), CEPREMAP 1316, CEPREMAP.
  4. David Neumark & Helen Simpson, 2014. "Place-Based Policies," NBER Working Papers 20049, National Bureau of Economic Research, Inc.
  5. Tong, Patricia & Zhou, Li, 2014. "The Impact of Place-Based Employment Tax Credits on Local Labor: Evidence from Tax Data," Working Papers, University of Alberta, Department of Economics 2014-6, University of Alberta, Department of Economics.

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