Rethinking the State-Local Relationship: Local Economic Development

Examines issues involved in shifting responsibility for redevelopment and enterprise zones from the state to localities, including relaxing local funding constraints to give localities more authority and incentives to support the most effective programs

Business Relocation and Homegrown Jobs, 1992-2006

Based on updated data, confirms findings from a 2007 study that the relocation of businesses into and out of California accounts for a very small share of the state's job gains and losses. Includes comparisons with other states and with in-state moves

Dialing While Fishtailing: How Mobile Phones, Hands-Free Laws, and Driving Conditions Interact to Affect Traffic Fatalities

Most rich countries in the world and four US states require drivers talking on mobile phones to use hands-free devices. However, previous research has failed to arrive at a consensus on the effect of mobile phones on traffic accidents yet has concluded that the effect of hands-free and hand-held phones on accidents is similar. This paper uses state-level data from 1997-2005 on mobile phone ownership, traffic fatalities, and hands-free laws and finds that (1) mobile phones contribute to traffic fatalities and (2) hands-free laws appear to reduce fatalities. Specifically, mobile phone ownership results in a large and statistically significant increase in traffic fatalities in bad weather or wet road conditions, with no effect in good weather or dry road conditions. Laws requiring drivers to use hands-free technologies while talking reduce traffic fatalities in adverse conditions, and the effect grows stronger and becomes statistically significant the longer the law is in effect, although these longer-term effects are based solely on New York, which in 2001 became the first state to have a hands-free law. The analysis relies on microdata from the Fatality Analysis Reporting System to estimate effects for traffic fatalities in different conditions and to isolate fatalities unlikely to be affected by confounding changes in alcohol policies or graduated licensing laws.mobile phones; cell phones; traffic fatalities; hands-free laws; driving; safety; accidents

Do California's Enterprise Zones Create Jobs?

Examines how the state's enterprise zone program, which offered incentives in economically distressed areas, affected job and business creation in 1992-2004. Considers elements of relative success such as marketing and outreach and suggests improvements

Does Local Business Ownership Insulate Cities from Economic Shocks?

We assess a prominent argument for local economic policies that favor locally-owned businesses – namely, that locally-owned firms are more likely to internalize the costs to the community of decisions to reduce employment and hence help to insulate cities from adverse economic shocks. We test this argument by examining how establishment-level employment responses to economic shocks are affected by establishment ownership. We find evidence hat some types of local ownership do insulate regions from economic shocks, although the clearest benefits do not come from small, independent businesses, but instead from corporate headquarters and, to a lesser extent, from small, locally-owned chains.employment stability, employment shocks, local ownership

Driving Change: Reducing Vehicle Miles Traveled in California

Assesses benefits and challenges of a 2008 strategy to integrate higher-density development, investments in alternatives to solo driving, and pricing incentives, as well as the state's experience with implementing it. Includes policy recommendations

Why Should Governments Support Broadband Adoption?

Governments justify support of Internet diffusion on two grounds: (1) to overcome a persistent digital divide in broadband availability and (2) to facilitate online activities that are socially or economically desirable. This paper assesses both these claims. Using individual-level data from Forrester Research, the analysis finds significantly lower residential broadband adoption in lower-income and lower-density zip codes, controlling for individual characteristics. Further tests show that lower adoption in these areas is evidence of a persistent digital divide in availability. The analysis then assesses how broadband adoption changes individuals’ usage of online activities. Broadband adoption increases individuals’ frequency of researching health information online, but there is no evidence that broadband adoption increases usage of online job sites or online government services. Localities currently considering municipal wireless (Wi-Fi) initiatives should focus on digital divide justifications rather than expecting to raise usage of a wide range of online activities perceived to be socially desirable.broadband; Internet; digital divide; online; consumer behavior

Agglomeration and Co-Agglomeration of Services Industries

Economic research on industry location and agglomeration has focused nearly exclusively on manufacturing. This paper shows that services are prominent among the most agglomerated industries, especially at the county level. Because traditional measures of knowledge spillovers, natural resource inputs, and labor pooling explain little of agglomeration in services industries, this paper takes an alternative approach and looks at co-agglomeration to assess why industries cluster together. By considering the location patterns of pairs of industries instead of individual industries, the traditional agglomeration explanations can be measured more richly, and additional measures – like the need to locate near suppliers or customers – can be incorporated. The results show that co-agglomeration between pairs of services industries is driven by knowledge spillovers and the direct trading relationship between the industries, especially at the zip code level. Information technology weakens the need for services industries to co-agglomerate at the state level, perhaps because electronic transport of services outputs lowers the value of longer-distance proximity. These results are in sharp contrast to results for manufacturing, for which labor pooling contributes most to co-agglomeration, and the direct-trading relationship contributes more to state-level co-agglomeration. These differences between services and manufacturing are consistent with simple models of transport costs.agglomeration; economic geography; services; technology; internet; co-agglomeration; firm location; transport costs

Business Climate Rankings and the California Economy

Examines California's varied rankings across business climate indices and the links between economic, wage, and employment growth and the factors measured in the indices, such as productivity, taxes and costs, welfare and transfer policies, and geography