Comment on Kala Seetharam Sridhar's (1996) "Tax Costs and Employment Benefits of Enterprise Zones"

Abstract

This article is a comment on the evaluation of the Illinois Enterprise Zone program by Kala Seetharam Sridhar published in Economic Development Quarterly in 1996. Sridhar's evaluation method overstates the number of jobs created as a result of the Enterprise Zone program. The methodfails to recognize that many of the jobs created in an enterprise zone would have located in that zone in the absence of the program. For example, it is normalfor a new retail establishment that is replacing one that has moved out to obtain a building permitfor remodeling interior space and to qualifyfor a program subsidy. The jobs created in this new establishment cannot necessarily be attributed to the program.