Targeted Business Incentives and the Debt Behavior of Households

Wenhua Di and Daniel Millimet

No 9622, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The empirical effects of place-based tax incentive schemes designed to aid low income communities are unclear. While a growing number of studies find beneficial effects on employment, there is little investigation into other behaviors of households affected by such programs. We analyze the impact of the Texas Enterprise Zone Program on household debt and delinquency. Specifically, we utilize detailed information on all household liabilities, delinquencies, and credit scores from the Federal Reserve Bank of New York Consumer Credit Panel/Equifax, a quarterly longitudinal 5% random sample of all individuals in the US with a social security number and a credit report. Identification of the causal effect of the program is achieved using a sharp regression discontinuity approach that exploits the known institutional rules of the program.

Keywords: consumer finance; debt; enterprise zones; regression discontinuity (search for similar items in EconPapers)
JEL-codes: C21 G02 H25 H31 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2016-01
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Forthcoming - published in: Empirical Economics, 2017, 52 (3), 1115-1142

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Related works:
Journal Article: Targeted business incentives and the debt behavior of households (2017)
Working Paper: Targeted business incentives and the debt behavior of households (2016)
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