In its review of proposed legislation by Governor Brown that would repeal California's Enterprise Zone program, the State Senate is calling on the expertise of UCI economics professor David Neumark.

A research associate at the National Bureau of Economics Research and Bren fellow at the Public Policy Institute of California (PPIC), Neumark is an expert on minimum wage and labor policy and will be a member of the five-person speaker panel.

His research on the state's Enterprise Zone (EZ) Program, created in 1984 with the goal of "stimulating business investment in depressed areas of the State and creating job opportunities," has found the program to be largely ineffective with no measurable effect on new job creation for businesses located within zone boundaries. 

Findings are based on comparisons of businesses inside enterprise zones to comparable businesses located either just outside designated enterprise zones, or within areas that subsequently were incorporated into the zones. 

The results of this research, co-authored with Jed Kolko, PPIC, are published in the January 2010 issue of the Journal of Urban Economics and the winter 2010 issue of the Journal of Policy Analysis and Management.

As an alternative, Neumark says in a new study released February 2 by PPIC, subsidies to employers to hire recently unemployed workers would provide a modest boost to the state's labor market as it climbs out of the recent steep recession.  Over the long term, he says that subsidies to encourage workers to enter the job market, in the form of a state Earned Income Tax Credit (EITC), would likely be effective at countering the state’s persistently higher unemployment rate relative to the nation. Read the full report online.

The hearing is being convened by the State Senate Committee on Governance & Finance.  It will be held in State Capitol Room 112, 9:30 a.m.-12:00 p.m. Wednesday, February 16, 2011.  Currently, there are no plans for the hearing to be streamed online or televised.

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