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Solving the Many Problems with Inner City Jobs

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Inner-city business development is often proposed as a solution to inner-city poverty. However, research evidence suggests that creating new jobs in the inner city is unlikely by itself to significantly increase the employment or earnings of the inner city poor. Public subsidies for inner city business development may be justified by greater environmental, congestion, and fiscal benefits of inner city vs. suburban business location decisions. The research evidence suggests that some boost in inner city business development may be provided by a combination of economic development incentives with enhanced public services. A different set of policies must be used to increase the earnings of the inner city poor. These employment solutions to inner city poverty should include two components; (1) creating more effective labor market intermediaries to make it easier for inner-city residents to find good jobs and for employers throughout the metropolitan area to find good inner city workers; (2) enhancing the job skills of the inner-city poor, particularly their "soft skills", by training programs that have closer ties to employers and incorporate subsidized employment experience. Given the magnitude of the poverty problem, any realistic policy to significantly reduce inner-city poverty through enhanced earnings will require tens of billions of dollars of annual government spending.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 00-66.

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Date of creation: Oct 2000
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Handle: RePEc:upj:weupjo:00-66

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Keywords: wages; inner city; earnings; poverty; welfare; labor demand; Bartik;

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  1. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
  2. Timothy J. Bartik, 2001. "Jobs for the Poor: Can Labor Demand Policies Help?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number tjb2001, December.
  3. Daniel Immergluck, 1996. "What employers want: Job prospects for less-educated workers," The Review of Black Political Economy, Springer, vol. 24(4), pages 135-143, June.
  4. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, December.
  5. Timothy J. Bartik, 2003. "Local Economic Development Policies," Upjohn Working Papers and Journal Articles 03-91, W.E. Upjohn Institute for Employment Research.
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Cited by:
  1. Daniele Bondonio, 2003. "Do Tax Incentives Affect Local Economic Growth? What Mean Impacts Miss in the Analysis of Enterprise Zone Policies," Working Papers 03-17, Center for Economic Studies, U.S. Census Bureau.
  2. Daniele Bondonio & Robert T. Greenbaum, 2003. "A comparative evaluation of spacially targeted economic revitalization programs in the European Union and the United States," ICER Working Papers 03-2003, ICER - International Centre for Economic Research.

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