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Title: Getting Beneath the Hood of Effective Place-Based Policies: Evidence from the Community Development Block Grant *

Citation Type: Working Paper

Publication Year: 2020

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Abstract: Growing economic disparities across the U.S. have increased the need for effective place-based jobs policies. This paper seeks to uncover determinants of effective policies by analyzing the job impacts of thousands of spatially targeted investments made by local governments to spur economic development in low-income areas, funded by $3-4 billion in annual federal block grants from the Community Development Block Grant. Using a hybrid approach combining synthetic control methods with traditional differences-indifferences , I find that jobs increase by 13% over ten years in census tracts where large CDBG investments occurred, without a corresponding increase in home prices. The increase in jobs is driven by low-income workers living in close proximity. The most effective place-based investments provided direct financial assistance to businesses or subsidized commercial/industrial construction. While the CDBG can only be deployed in lower-income neighborhoods, investments had greater job impacts in comparatively less-disadvantaged tracts. I verify that block grants do not crowd out public spending and estimate that each dollar of block grant generates approximately three dollars of public spending.

Url: http://econweb.umd.edu/~zuo/files/ZuoGeorge_JMP.pdf

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Authors: Zuo, George W

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Institution: University of Maryland

Pages: 1-63

Publisher Location: College Park, MD

Data Collections: IPUMS NHGIS

Topics: Labor Force and Occupational Structure

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