Assessing the Incidence and Efficiency of a Prominent Place Based Policy

Matias Busso, Jesse Gregory and Patrick Kline

No 16096, NBER Working Papers from National Bureau of Economic Research, Inc

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. To ground our welfare analysis, we develop a heterogeneous agent general equilibrium model in which the distortions generated by place-based policies depend upon a set of reduced form elasticities which our empirical work centers on estimating. Using rejected and future applicants to the EZ program as controls we find that EZ designation substantially increased employment in zone neighborhoods, particularly for zone residents. The program also generated wage increases for workers from zone neighborhoods worth approximately $320M per year. Based upon estimates of the number of jobs created for zone residents, we find that EZ employment credits generated deadweight costs equal to (at most) seven percent of their flow cost.

JEL-codes: C21 H2 O1 R58 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-geo and nep-ure
Note: LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Published as Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.

Downloads: (external link)
http://www.nber.org/papers/w16096.pdf (application/pdf)

Related works:
Journal Article: Assessing the Incidence and Efficiency of a Prominent Place Based Policy (2013)
Working Paper: Assessing the Incidence and Efficiency of a Prominent Place Based Policy (2011)
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:nbr:nberwo:16096

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w16096

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().