The (Displacement) Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI

Elias Einiö and Henry Overman

No 71, Working Papers from VATT Institute for Economic Research

Abstract: We investigate the impacts of a significant area-based intervention (LEGI) that aimed to increase employment and entrepreneurial activity in 30 disadvantaged areas across England. We examine the spatial pattern of effects at a fine spatial scale using panel data for small geographic units and a regression discontinuity design that exploits the programme eligibility rule. The results indicate considerable local displacement effects. Employment increases in treated areas close to the treatment area boundary at the cost of significant employment losses in untreated localities just across the boundary. These differences vanish quickly when moving away from the boundary and do not persist after the programme is abolished. These findings support the view that area-based interventions may have considerable negative displacement effects on untreated parts of the economy. This displacement can substantially reduce (or in this case eliminate) any net benefits.

Keywords: Place-based policy, Programme evaluation, Displacement, Employment, Economic growth, Taloudellinen kasvu, Labour market, Työmarkkinat, Local public economics, Kunnallistalous, Regional development, Aluekehitys, Labor market and policies promoting economic growth, Työmarkkinat ja kasvua tukeva politiikka, H250 - Business Taxes and Subsidies including sales and value-added (VAT), J200 - Time Allocation; Work Behavior; Employment Determination and Creation; Human Capital, O400 - Economic Growth and Aggregate Productivity: General (includes data sources), R110 - Regional Economic Activity: Growth, Development, and Changes, (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ent, nep-eur, nep-geo, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
https://www.doria.fi/handle/10024/148728

Related works:
Working Paper: The (Displacement) Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI (2016)
Working Paper: The (Displacement) Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI (2016)
Working Paper: The (displacement) effects of spatially targeted enterprise initiatives: evidence from UK LEGI (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fer:wpaper:71

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from VATT Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Anita Niskanen ().