Place-Based Policies

91 Pages Posted: 14 Apr 2014 Last revised: 13 Oct 2024

See all articles by David Neumark

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Helen Simpson

CMPO; Institute for Fiscal Studies (IFS)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2014

Abstract

Place-based policies commonly target underperforming areas, such as deteriorating downtown business districts and disadvantaged regions. Principal examples include enterprise zones, European Union Structural Funds, and industrial cluster policies. Place-based policies are rationalized by various hypotheses in urban and labor economics, such as agglomeration economies and spatial mismatch - hypotheses that entail market failures and often predict overlap between poor economic performance and disadvantaged residents. The evidence on enterprise zones is very mixed. We need to know more about what features of enterprise zone policies make them more effective or less effective, who gains and who loses from these policies, and how we can reconcile the existing findings. Some evidence points to positive benefits of infrastructure expenditure, and also investment in higher education and university research - likely because of the public-goods nature of these policies. However, to better guide policy, we need to know more about what policies create self-sustaining longer-run gains.

Suggested Citation

Neumark, David and Simpson, Helen, Place-Based Policies (April 2014). NBER Working Paper No. w20049, Available at SSRN: https://ssrn.com/abstract=2424620

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