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Do unemployed workers benefit from enterprise zones? The French experience

Listed author(s):
  • Laurent Gobillon

    ()

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, INED - Institut national d'études démographiques)

  • Thierry Magnac

    (TSE - Toulouse School of Economics - Toulouse School of Economics)

  • Harris Selod

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, Banque Mondiale - Banque Mondiale)

This paper presents an impact evaluation of the French enterprise zone program which was initiated in 1997 to help unemployed workers find employment by granting a significant wage-tax exemption (about one third of total labor costs) to firms hiring at least 20% of their labor force locally. Drawing from a unique geo-referenced dataset of unemployment spells in the Paris region over an extensive period of time (1993-2003), we are able to measure the direct effect of the program on unemployment duration, distinguishing between short- and medium-term effects. This is done by implementing an original two-stage empirical strategy using individual data in the first stage and aggregate data and conditional linear matching techniques in the second stage. We show that although the enterprise zone program tended to "pick winners", it is likely to be cost-ineffective. It had a small but significant effect on the rate at which unemployed workers find a job (which is increased by a modest 3%). This effect is localized and significant only in the short run (i.e. at best during the 3 years that follow the start of the policy).

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Paper provided by HAL in its series PSE - Labex "OSE-Ouvrir la Science Economique" with number hal-00812979.

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Length:
Date of creation: Oct 2012
Publication status: Published in Journal of Public Economics, Elsevier, 2012, 96 (9-10), pp.881-892. 〈10.1016/j.jpubeco.2012.06.003〉
Handle: RePEc:hal:pseose:hal-00812979
DOI: 10.1016/j.jpubeco.2012.06.003
Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/hal-00812979
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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