Enterprise Zones and Job Creation: Linking Evaluation and Practice

Abstract

Although enterprise zones have been a popular economic development tool for several years, there is still a lack of evidence on both zone effectiveness and how to improve existing zone programs. This article discusses several evaluation criteria that should be given more attention. First, the article addresses methodological issues in assessing zone benefits, including the importance of comparing places that received zones with a suitably chosen control group of places that did not get zones. Second, the data requirements for enterprise zone evaluation are examined. The link between evaluation and practice is discussed. Zone evaluations must address not only efficiency criteria such as the measurement of benefits and costs but also the question of how to improve the functioning of existing zones. The conclusion is that zone evaluations should pay closer attention to research methodology and strive to document program implementation information that can improve the practice of enterprise zones.

Empowerment Zones, neighborhood change and owner-occupied housing

“…While many studies have found that enterprise zones have faired well in terms of employment, Boarnet (2001) points to the many methodological pitfalls inherent in straight comparisons of zones to non-zone areas. More rigorous evaluations of the state programs have not been lacking.…”

Measuring the employment effects of the rural renewal tax scheme

“…The ideal experiment that would answer this question would be to take the designated area when the scheme is introduced, observe what happens throughout the life of the scheme, and then go back in time to the same starting date and observe the same area with no tax scheme. Obviously, it is impossible to do this kind of experiment, but it encourages one to think about the kind of design needed for proper policy evaluation (BARTIK and BINGHAM, 1997;BOARNET, 2001). This experimental method is perfectly feasible in clinical drug trials or in evaluating education and training programmes (BARNETT, 1992;BOARDMAN et al, 2001).…”

“…The challenge is how to replicate such experiments in the messy world of rural tax relief policies so that one can be sure that any measured differences in employment/unemployment levels can be accurately attributed to the programme or scheme being evaluated (BOARDMAN et al, 2001). To address this challenge, it is possible to borrow from a rich and growing literature on the evaluation of enterprise zones in the USA (COURANT, 1994;PAPKE, 1994;BOARNET, 2001).…”

Quasi-Experimental Analysis of Targeted Economic Development Programs: Lessons from Florida

“…Recent research has argued that the evaluation of targeted development programs requires analysis at the area level (Boarnet, 2001;Engberg & Greenbaum, 1999;Tao & Feiock, 1999). Although citywide effects are desirable, even a large impact at the area level may not be evident when using a city level of analysis.…”

“…As the first state in the nation to enact state-level EZ legislation in 1980, Florida remains a front-runner in setting development policy (Florida Office of the Auditor General, 1993). The state's implementation of targeted development programs facilitates a quasiexperimental analysis, an approach recommended when endogeneity bias is a concern (Bartik, 1991;Boarnet, 2001). …”