The Impact of Colorado's Enterprise Zones Program on Unemployment Rate, per Capita Income and Poverty Rate for Zone Residents

By Lynch, Devon | Indian Journal of Economics and Business, June 2010 | Go to article overview

The Impact of Colorado's Enterprise Zones Program on Unemployment Rate, per Capita Income and Poverty Rate for Zone Residents


Lynch, Devon, Indian Journal of Economics and Business


Abstract

Using GIS techniques to obtain precise boundary definition of enterprise zone areas from non-zone areas this paper examines the impact of Colorado's enterprise zone program on the residents of these areas. The evidence suggests that urban zones increase the unemployment rate of zone residents, while reducing per capita income. Per capita income is also reduced in rural enterprise zones. There is no evidence that the program has any significant effect on poverty rate.

I. INTRODUCTION

The economic development of certain depressed areas within the U.S. has been a matter of concern for policy makers. Over the years, to address these inefficiencies and improve the economic conditions of these areas, various economic-development policies have been crafted and deployed. One such policy is the Enterprise Zone Program (EZP).

Enterprise Zones (EZs) are economically depressed geographic areas where specific tax preferences are allocated to capital and/or labor in an effort to induce investment and by extension enhance employment opportunities. The EZ concept has been attributed to British politicians and academics who were inspired by the performance of this development concept in some East Asian economies in the 1970s. These economies, it was felt, were vibrant because of the heavy involvement of the private sector relative to that of government (Peters and Fisher; 2002 pp. 24). The British government implemented a ten-year EZP in 1981.

In the U.S., EZPs have been used as an economic development tool, since the early 1980s. To date, according to Peters and Fisher (2002), approximately forty states as well as the District of Columbia have implemented an EZP in one form or another. Beck (2001) identified more than 3,500 individual zones. Similar programs have also been adopted by the Federal government, that is, Empowerment Zones and Enterprise Communities.

By specifically targeting geographically depressed areas, EZPs are designed to improve the economic well-being of the residents, particularly minorities, whom it is felt are excluded from buoyant suburban labor markets. Against this background, this paper makes three contributions. First, it investigates the economic impact of Colorado's EZP on the residents of the EZs. Specifically, the paper analyses the effect of the program on the unemployment rate, per capita income, and the rate of poverty in EZ areas relative to non-zones. Second, it uses Geographic Information Systems (GIS) to provide original-precise identification of EZ boundaries. Third, it distinguishes between the effects of different type of zones, that is, .urban and rural.

II. LITERATURE REVIEW

Previous research suggests varied effect of EZPs on employment. Bromley and Rees (1988) offer descriptive evidence of employment increases. Papke (1994) provides evidence of a reduction in unemployment claims. Thus, indicating positive aggregate employment effects within zones. Busso and Kline (2007) also find positive effects at the aggregate level. O'Keefe (2004) and Billings (2007) report positive employment effects at the establishment level.

In contrast, Bromley and Morgan (1985), Boarnet and Bogart (1996), Dowall (1996), Bondonio and Engberg (2000), Greenbaum and Engberg (2000), Lambert and Coomes (2001), Greenbaum and Engberg (2004), Couch, Atkinson and Smith (2005) and Bondonio and Greenbaum (2007) all report that employment levels are no greater within EZs than without.

Examinations of the impact of EZPs on the employment of zone residents reveal varied results. Elvery (2009) and Hanson (2008) found that zone subsidies aimed specifically at increasing the employment level of zone residents had little or no effect. Peters and Fisher (2002) concluded that the majority of jobs were taken by people living outside the zones.

Greenbaum and Enberg (2000) provide further evidence that EZPs are ineffective in improving the economic well being of zones residents. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Impact of Colorado's Enterprise Zones Program on Unemployment Rate, per Capita Income and Poverty Rate for Zone Residents
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.