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American Economic Review: Vol. 103 No. 2 (April 2013)

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Assessing the Incidence and Efficiency of a Prominent Place Based Policy

Article Citation

Busso, Matias, Jesse Gregory, and Patrick Kline. 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy." American Economic Review, 103(2): 897-947.

DOI: 10.1257/aer.103.2.897

Abstract

This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. Using rejected and future applicants to the EZ program as controls, we find that EZ designation substantially increased employment in zone neighborhoods and generated wage increases for local workers without corresponding increases in population or the local cost of living. The results suggest the efficiency costs of first Round EZs were relatively modest. (JEL H26, H77, J31, R23, R58)

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Authors

Busso, Matias (Inter-American Development Bank)
Gregory, Jesse (U WI)
Kline, Patrick (U CA, Berkeley)

JEL Classifications

H26: Tax Evasion
H77: Intergovernmental Relations; Federalism; Secession
J31: Wage Level and Structure; Wage Differentials
R23: Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
R58: Regional Development Planning and Policy


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