Document Type

Cal State Document

Publication Date



Enterprise zones are California's second most important tool for attempting to resuscitate urban areas (after redevelopment). Businesses get generous tax benefits for locating and hiring in these areas. There are now 40 enterprise zones in the state, from Eureka to Calexico in North-South space, and from Central Los Angeles to Porterville, Delano, and Thermal in urban size hierarchy. The legislature regularly considers bills proposing to expand the number of zones. This experience costs the taxpayers over $70 million per year.

So, do they work? A reasonable test would be whether there was more job growth in enterprise zones than in comparable areas, and whether worker incomes went up. To make this comparison, we collected data about the economic and demographic characteristics of census tracts in enterprise zones, and then matched those tracts with census tracts with very similar characteristics that were not in enterprise zones.