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Do unemployed workers benefit from enterprise zones? The French experience

  • Gobillon, Laurent
  • Magnac, Thierry
  • Selod, Harris

This paper is a statistical evaluation of the 1997 enterprise zone program in France. We investigate whether the program increased the pace at which unemployed workers residing in targeted municipalities and surrounding areas find employment. The work relies on a two- stage analysis of unemployment spells drawn from an exhaustive dataset over the 1993-2003 period in the Paris region. We first estimate a duration model stratified by municipalities in order to recover semester-specific municipality effects net of individual observed heterogeneity. These effects are estimated both before and after the implementation of the program, allowing us to construct variants of difference-in-difference estimators of the impact of the program at the municipality level. Following extensive robustness checks, we conclude that enterprise zones have a very small but significant effect on the rate at which unemployed workers find a job. The effect remains localized and is shown to be significant only in the short run.

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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 645.

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Date of creation: 25 Oct 2010
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Publication status: Published in Journal of Public Economics, vol.�96, n°9-10, octobre 2012, p.�881-892.
Handle: RePEc:ide:wpaper:23476
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  1. Hanson, Andrew, 2009. "Local employment, poverty, and property value effects of geographically-targeted tax incentives: An instrumental variables approach," Regional Science and Urban Economics, Elsevier, vol. 39(6), pages 721-731, November.
  2. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2007. "The Effect of Location on Finding a Job in the Paris Region," IDEI Working Papers 433, Institut d'Économie Industrielle (IDEI), Toulouse, revised Mar 2009.
  3. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
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  10. Blundell, Richard William & Costa Dias, Monica & Meghir, Costas & Van Reenen, John, 2003. "Evaluating the Employment Impact of a Mandatory Job Search Programme," CEPR Discussion Papers 3786, C.E.P.R. Discussion Papers.
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  15. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2010. "Do unemployed workers benefit from enterprise zones? The French experience," IDEI Working Papers 645, Institut d'Économie Industrielle (IDEI), Toulouse.
  16. Busso, Matias & Kline, Patrick, 2008. "Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program," Working Papers 36, Yale University, Department of Economics.
  17. Boarnet, Marlon G. & Bogart, William T., 1996. "Enterprise Zones and Employment: Evidence from New Jersey," Journal of Urban Economics, Elsevier, vol. 40(2), pages 198-215, September.
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  21. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
  22. O'Keefe, Suzanne, 2004. "Job creation in California's enterprise zones: a comparison using a propensity score matching model," Journal of Urban Economics, Elsevier, vol. 55(1), pages 131-150, January.
  23. Peter S. Fisher, 1997. "Tax and spending incentives and enterprise zones," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 109-138.
  24. Raphael W. Bostic & Allen C. Prohofsky, 2006. "Enterprise Zones and Individual Welfare: A Case Study of California," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 175-203.
  25. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
  26. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
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