Job creation in California's enterprise zones: A comparison using a propensity score matching model

Abstract

This study examines the impact of California's enterprise zone program on employment growth at the census tract level and at the establishment level. EZ census tracts are matched to non-EZ census tracts using a propensity score matching model. Annual establishment level employment data from 1992 through 1999 are used to estimate the impact of the program on growth in employment and wages. Estimates suggest that the enterprise zone designation raises employment growth about 3 percent each year during the first six years after designation, but this effect does not persist in later years. The number of employees at each business in an enterprise zone also rises more than employment at businesses that do not have the same tax incentives. © 2004 Elsevier Inc. All rights reserved.