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Abstract

Enterprise zones are a tool of regional development policy, relying on tax incentives. The objective of the paper is to answer the questions : Are enterprise zones efficient? Are they efficient if adopted by high-unemployment areas? The research applies the questions to Ohio’s enterprise zone program because of the policy debate it has generated. The net benefits from employment created in the program are compared to program costs making different assumptions about employment. I find that the net benefits of regional development can be expected to be greater than their costs. However, because of their efficiency implications, I find that it could be beneficial for high unemployment areas to adopt tax incentive policies.

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