Who Benefits from Place-Based Policies? Job Growth from Opportunity Zones
33 Pages Posted: 4 Aug 2020
Date Written: July 7, 2020
The Tax Cuts and Jobs Act of 2017 established a new program called “Opportunity Zones” that created tax advantages for investment locating in Census tracts with relatively low income or high poverty. Importantly, only 25% of eligible tracts in each state could be designated as an Opportunity Zone. We use detailed establishment-level data and a difference-in-difference (DiD) approach to identify the designation of a tract as an Opportunity Zone on job creation. We find the Opportunity Zone designation increased employment growth relative to comparable tracts by a statistically significant 2-4 percentage points over the 2017-2019 period. This result holds for many different industries and for a variety of skill levels.
Keywords: Placed-Based Policies, Opportunity Zones, Tax Incentives
JEL Classification: H73, R30, R38, G11, G18
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