Do Unemployed Workers Benefit from Enterprise Zones? The French Experience

By L. Gobillon, T. Magnac, H. Selod. Social Science Research Network, 2012

147 citations recorded by the source corpus.

This paper presents an impact evaluation of the French enterprise zone program which was initiated in 1997 to help unemployed workers find employment by granting a significant wage-tax exemption (about one third of total labor costs) to firms hiring at least 20% of their labor force locally. Drawing from a unique geo-referenced dataset of unemployment spells in the Paris region over an extensive period of time (1993-2003), we are able to measure the direct effect of the program on unemployment duration, distinguishing between short- and medium-term effects. This is done by implementing an original two-stage empirical strategy using individual data in the first stage and aggregate data and conditional linear matching techniques in the second stage. We show that although the enterprise zone program tended to "pick winners", it is likely to be cost-ineffective. It had a small but significant effect on the rate at which unemployed workers find a job (which is increased by a modest 3%). This effect is localized and significant only in the short run (i.e. at best during the 3 years that follow the start of the policy).

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/5bfe963196d24aceb5a2fc52f4d15e6571643c5a

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Citations in the corpus

Regional Policy Evaluation: Interactive Fixed Effects and Synthetic Controls (2016, methodology): “This extends our results in Gobillon et al. (2012) in which we were using conditional difference-in-differences methods.”
People, Places and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs (2014, unknown): “…policies in that it has primarily focused on assessing the impact of subsidies on job creation (e.g., Papke 1993, 1994; Boarnet & Bogart 1996; Greenbaum & Engberg 2004; Elvery 2009;Neumark&Kolko 2010;Hamet al. 2011; Lynch&Zax2011;Criscuolo et al. 2012; Gobillon et al. 2012; Mayer et al. 2012).”
Causal Inference in Urban and Regional Economics (2014, unknown): “Gobillon et al. (2012) employ a standard propensity score reweighting estimator to evaluate the effects of the French enterprise zone program, which provides wage subsidies for firms to hire local workers.”
Transport Policies and Development (2015, background): “Using a panel of 138 cities around the world, Gonzalez-Navarro and Turner (2014) confirm the role played by subways in decentralisation.”
Sunshine as Disinfectant: The Effect of State Freedom of Information Act Laws on Public Corruption (2014, background): “Recent examples include Bergemann et al. (2009) Gobillon et al. (2012) and Millard-Ball (2012).”
Analysis of the bias of Matching and Difference-in-Difference under alternative earnings and selection processes (2015, methodology): “Bayesian updating closely follows Guvenen (2007)’s Kalman filter approach and is described in appendix C. The starting values for the prior distribution of (μi, βi, Ui,0) are the same as in Guvenen (2007): it is a normal distribution centered at (0, β i , 0) with variance (σ2 μ, (1 − λ)σ2 β, σ). The”
Mismatch Unemployment and the Geography of Job Search (2018, background): “, 2010), or the impact of place-based policies (Neumark and Kolko, 2010; Ham et al., 2011; Gobillon et al., 2012; Givord et al., 2013; Busso et al., 2013).”
Place-Based Policies and Spatial Disparities across European Cities (2020, unknown): “…summary, see Neumark and Simpson 2015), but a small literature considers the effect of European schemes, particularly the French Franches Urbaines (for example, Briant, Lafourcade, and Schmutz 2013; Mayer, Mayneris, and Py 2017; Givord, Rathelot, and Sillard 2013; Gobillon, Magnac, and Selod 2012).”