Florida's Enterprise Zones: Do They Reduce Poverty?
Saturday, November 14, 2015
Riverfront South/Central (Hyatt Regency Miami)
*Names in bold indicate Presenter
This study uses county level data in Florida to evaluate whether the Enterprise Zone program has reduced poverty rates in targeted areas. Using an independent samples t test, I compare poverty rates between counties with and without enterprise zones at three points in time: 1989, 1999, and 2012. Since enterprise zones were targeted specifically for exhibiting higher levels of poverty, we expect a significant gap in poverty rates between enterprise zone counties and non-enterprise zone counties near the inception of program, circa 1989. The theory of the program suggests that the enterprise zone counties should experience reduction in poverty rates, thus making them more similar to their non enterprise zone counterparts. Therefore, I compare the gap in poverty rates between enterprise zone counties and non-enterprise zone counties at three points in time in order to determine if there has been a reduction in the gap of poverty rates between the two. This method controls for general economic fluctuations by measuring both types of counties at multiple points in time, where both would respectively be subject to the same general economic forces throughout. A measurement of absolute poverty rates in both types of counties could be skewed by economic forces, whereas analyzing the gap between the two gives a more accurate picture of how enterprise zone counties are performing relative to their counterparts when economic conditions varied highly. I assume but do not demonstrate differences in the economy at points in time 1989, 1999, and 2012. This allows for isolation of the presence of enterprise zones as one of the few distinguishing features between the two sets of counties.
The results showed that there was little change in the difference of poverty rates between enterprise zone counties and non-enterprise zone counties. While absolute poverty rates fluctuated for both sets of counties, the gap in poverty rates between enterprise zone and non-enterprise zones remained relatively stable throughout the time period studied, suggesting that the program was ineffective in helping enterprise zone counties move towards poverty rates that are similar to their counterparts.