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Empowerment for whom? The impact of community renewal tax incentives on jobs and businesses

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  • Richard Smith

Abstract

Some postulate that spatially targeted grants and tax cuts stimulate jobs and establishment openings, and reduce closures in distressed urban neighbourhoods. The scholarly literature is mixed and mostly argues that at best these programmes have no impact and at worst raise land rents, spurring gentrification. The USA designated three rounds of Renewal Communities, Empowerment Zones or Enterprise Communities (RC/EZ/EC) to receive wage credits or grants. While others have estimated the impact of Round I EZ/ECs, this article estimates the impact of more recent rounds in Tennessee and California on job and businesses using propensity score matching. Data are presented by RC/EZ for retail, very small and minority establishments. Jobs increased in RC/EZs compared with control areas during the wage credit period. In general, establishment openings rose for small establishments but fell for retail. Closures overall fell. Future place-based initiatives should be strategic about industry mix and minority establishments.

Suggested Citation

  • Richard Smith, 2015. "Empowerment for whom? The impact of community renewal tax incentives on jobs and businesses," Urban Studies, Urban Studies Journal Limited, vol. 52(4), pages 702-720, March.
    • Handle: RePEc:sae:urbstu:v:52:y:2015:i:4:p:702-720
    DOI: 10.1177/0042098014528398
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    References listed on IDEAS

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