Subsidizing Investment in Poor Neighborhoods: Effects of the New Markets Tax Credits
|Speaker:||Ben Marx, University of Illinois|
|Date: ||Wednesday 2 December 2015|
|Location: ||Streatham Court B|
The New Markets Tax Credit Program has approved subsidies for the investment of $43.5 billion in poor neighborhoods since the year 2000. This paper uses the nature of the neighborhood eligibility criteria to estimate the causal effect of these investment subsidies. The empirical strategy instruments for investment in a ZIP Code using only the other ZIP Codes that have overlapping Census tracts while controlling flexibility for the ZIP Code’s own characteristics. Results indicate that investment subsidies have significantly increased employment, total payroll, the number of business establishments, residents’ incomes, local population, rent, and housing
prices in treated areas.