The impact of French Zones Franches Urbaines on employment and business creation

Roland Rathelot and Patrick Sillard

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: In 2004, 41 Zones Franches Urbaines (ZFU) have replaced less generous Zones de Redynamisation Urbaine (ZRU). ZFUs are particularly generous Enterprise Zones schemes in which establishments are exempted from all taxes and social contributions for 5 years. A first wave of ZFUs was zoned in 1997, followed by a second one in 2004 and a third one in 2006. In spite of the cost of such policies (the net cost of the second-wave ZFUs was around 125 million euros in 2005), the impact has never been assessed by econometricians. In this study, we aim to evaluate the net effect of the ZFU policy on both employment and business creations, using the transformation of less generous ZRUs into ZFUs in 2004. We use micro data on establishments and jobs at an infra-municipal scale. Differences-in-differences as well as standard propensity score matching are used to try to take selection bias into account. We finally identify a significantly positive effect on both business creations and employment. Yet, these effects are weak especially when compared to the magnitude of the costs.

Keywords: local employment; local policies; enterprise zones; evaluation (search for similar items in EconPapers)
JEL-codes: C23 H71 R5 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bnsp.insee.fr/ark:/12148/bc6p06zr0kd/f1.pdf Document de travail de la DESE numéro G2007/11 (application/pdf)

Related works:
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:nse:doctra:g2007-11

Access Statistics for this paper

More papers in Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques Contact information at EDIRC.
Bibliographic data for series maintained by INSEE (doc.trav@insee.fr).