Targeted Business Incentives and Local Labor Markets

Matthew Freedman
2013 The Journal of human resources  
This paper uses a regression discontinuity design to examine the effects of geographically targeted business incentives on local labor markets. Unlike elsewhere in the U.S., enterprise zone (EZ) designations in Texas are determined in part by a cutoff rule based on census block group poverty rates. Exploiting this discontinuity as a source of quasi-experimental variation in investment and hiring incentives across areas, I find that EZ designation has a positive, but modest effect on resident
more » ... fect on resident employment, increasing opportunities mainly in lower-paying industries. Consistent with the program's incentive structure, business sitings and expansions spurred by the program are more geographically diffuse.
doi:10.1353/jhr.2013.0008 fatcat:dz6s2ydmbrgs7pne2bjy7utogm