AN EVALUATION OF CALIFORNIA ENTERPRISE ZONE PROGRAMS

In 1984, California joined the growing list of states adopting enterpr ise zone legislation in an attempt to stimulate targeted business deve lopment and employment growth within economically distressed areas. Th is article reports on a first-ever assessment of whether California's two enterprise zone programs have stimulated employment. The existing Enterprise Zone and Economic Incentive Area programs (referred to in t he article collectively as enterprise zone programs) have produced ver y modest economic benefits, and there is little evidence to suggest th at they have strengthened the economic advantages of California's zone s. Shift-share analysis indicated that employment growth was lower tha n predicted in 11 of 13 areas. A survey of businesses indicates that i n only 23 cases did zone program incentives influence plant location o r expansion decisions. In and of themselves, zone incentives and resou rces have apparently done little to boost job creation and business in vestment.