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California Enterprise Zone Program: A Review and Analysis. Presentation By: Chuck Swenson Professor and Leventhal Research Fellow, Marshall School of Business, USC. Outline. EZs: The National Landscape Swenson (2009) and Ham, Imrohoroglu, and Swenson(2009) - PowerPoint PPT Presentation
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California Enterprise Zone Program: A Review and Analysis
Presentation By:Chuck Swenson
Professor and Leventhal Research Fellow, Marshall School of Business, USC
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Outline• EZs: The National Landscape
• Swenson (2009) and Ham, Imrohoroglu, and Swenson(2009)
• Kolko and Neumark (2009) vs. Ham et al
• Conclusions
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EZs: The National Landscape• Connecticut had first program in 1983• In 2003, 38 states had EZs• Currently, 43 states have EZs (or EZ type
programs)• By-state benefits vary widely: from modest hiring
credits (AZ, Utah) to comprehensive income, property, and sales/use tax benefits (NY, PA, MN). See my Treatise chapter handout.
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National Landscape (cont’d)
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Swenson (2009)• Hiring credits should:
– Increase employment (decrease unemployment rates)
– Increase wages– Increase capital expenditures– Increase firm after-tax income– Increase business retention
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Ham, Imrohoroglu, and Swenson (2009)• About the authors
• National study (all 43 states with EZs) over 20 years
• Geo-coding of 8000+ EZ census tracts and cohort tracts
• Differences in differences design
• National as well as state specific effects
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Ham et al (cont’d)
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Ham et al (cont’d)• National Results: EZs have statistically
significant– Decrease in unemployment rate (1.6%; Table
2)– Decrease in poverty rate (5.4%; Table 3)– Increase in fraction of households with wage
and salary income (.61%; Table 4)
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Ham et al (cont’d)• CA Results: EZs result in statistically
significant:– Decrease in unemployment rate (2.2%; Table
2)– Decrease in poverty rate (.5%--Table 3;not
significant)– Increase in fraction of households with wage
and salary income (2.0%; Table 4)
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Kolko and Neumark (2009) vs. Ham et al (2009)• Scope:
– Ham et al (national plus specific states; control for national effects)
– Kolko and Neumark (CA only; no control for national effects)
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Kolko vs. Ham (cont’d)• Outcome variables:
– Ham et al: unemployment rates, poverty rates, wage and salary incomes
– Kolko & Neumark: employment levels only
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Kolko vs. Ham (cont’d)• Source data:
– Ham et al: Bureau of Census (available since 1970s)
– Kolko & Neumark: relatively new dataset derived from Standard & Poors surveys sent to businesses->noise in data->high standard errors->lowered power of statistical tests?
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Conclusions• EZs seem to work
• More analysis on business retention, expansion, increased number of firms, capital outlays, etc. would solidify findings
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