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Understanding the Employment Effects of Opportunity Zones

Author

Listed:
  • Matthew Freedman
  • Noah Arman Kouchekinia
  • David Neumark

Abstract

The Opportunity Zone program was designed to encourage investment in distressed communities across the United States. Early research found no evidence of impacts of the program on employment, earnings, or poverty of zone residents, but some evidence of positive effects on employment among businesses in zones. Using the latest survey-based as well as administrative data, we adopt a longer-run and more comprehensive perspective on the labor market impacts of OZs. We find that OZ designation increases job creation among businesses within zones. However, a large share of the newly created jobs in zones is offset by declines in nearby low-income communities. While we detect gains in OZ resident employment over the longer run, the increase comes from jobs with workplaces outside of OZs that, in light of the changing demographic composition of zones, are likely held by new as opposed to existing residents. Overall, our results suggest that OZs have limited benefits for existing residents of targeted areas and are associated mainly with a spatial reallocation of jobs and households.

Suggested Citation

  • Matthew Freedman & Noah Arman Kouchekinia & David Neumark, 2025. "Understanding the Employment Effects of Opportunity Zones," NBER Working Papers 34589, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34589
    Note: LS PE
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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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