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Working Paper No. 04-15

An Evaluation of Colorado's Enterprise Zone Program: Measuring the Impact on Establishment-Level Employment and Earnings per Worker
Devon Lynch and Jeffrey Zax
October 2004


Since the early 1980s, most states have implemented enterprise zones. This paper examines the impact of the Colorado enterprise zone program on employment and earnings per worker for 73,008 establishments, controlling for establishment and county characteristics. Tobits reveal that enterprise zone designation has positive effects on employment and earnings. Perhaps surprisingly, these effects occur only in rural areas. Consistent with previous research, enterprise zones appear to have no impact in the manufacturing industry. Moreover, the only significant effect observed in urban areas is a negative impact in the Denver County enterprise zone. This is of interest since the urban areas contain most of the target populations.

Keywords: Enterprise Zone (EZ)