A New Way of Revitalizing Distressed Urban Communities? Assessing the Impact of the Federal Empowerment Zone Program

Abstract

:The Empowerment Zone and Enterprise Community Initiative of 1993 offered targeted funding and tax incentives to distressed urban and rural communities. This initiative required a community-involvement component, setting it apart from more traditional economic development initiatives of the Reagan and Bush administrations. Using reports required by the U.S. Department of Housing and Urban Development (HUD) and census data, this study examines the programmatic emphases of four of the original six urban zones and evaluates the overall impact of zone programs on socioeconomic trends. These trends are evaluated by matching zone-designated census tracts to nonzone tracts through a propensity-score matching model using 1990 census data. Trends in poverty and other socioeconomic outcomes are measured by 1990–2000 change at the census tract level for individual zones, as well as across all zones using a series of fixed-effect models. Findings indicate that community building and involvement initiatives received the least amount of funding. Traditional economic development programs received the most emphasis but this did not translate into positive socioeconomic outcomes. With the exception of a few isolated incidences where individual zones fared better than comparison areas, zone initiatives had little impact.

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