Do Enterprise Zones Work? An Analysis at the Borders
Public Finance Review, Forthcoming
26 Pages Posted: 11 Nov 2007 Last revised: 13 Mar 2009
Date Written: November 5, 2007
Abstract
This paper analyzes Enterprise Zones in Colorado in order to study the relationship between geographically targeted tax credits and the location of new businesses and jobs. Enterprise Zone (EZ) programs provide tax incentives for investment and job creation in economically lagging regions. While most states have EZ programs, past program evaluations have found a mixture of effectiveness. This research improves upon existing literature by utilizing both establishment-level data and a border effects methodology to: 1) control for unobservables that influence the self-selection of EZ regions and 2) highlight EZ impacts across different industries. Results find that while EZ fiscal incentives have no impact on where new establishments locate in Colorado, they do increase the number of employees hired. Industry results highlight the heterogeneity of tax credit impacts within the EZ Program. Results are robust to a variety of specifications for land use controls and in comparison to a propensity score matching model.
Keywords: Enterprise Zones, State and Local Economic Development, Taxes and Location of Economic Activity
JEL Classification: H25, H71, R12
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Tax Policy and Urban Development: Evidence from the Indiana Enterprise Zone Program
-
Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?
By Michael Greenstone and Enrico Moretti
-
Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program
By Matias Busso and Patrick Kline
-
Increasing the Economic Development Benefits of Higher Education in Michigan
-
Do Enterprise Zones Create Jobs? Evidence from California's Enterprise Zone Program
By David Neumark and Jed Kolko
-
Assessing the Incidence and Efficiency of a Prominent Place Based Policy
By Matias Busso, Jesse Gregory, ...