Empowerment Zones, Enterprise Communities, and E-Rate Application Rates

Research Report

Empowerment Zones, Enterprise Communities, and E-Rate Application Rates

December 1, 2001

Abstract

The Empowerment Zone (EZ) program is a federal initiative started in 1994 that is designed to improve economic growth in low-income communities through a series of loans, grants, tax breaks, and community partnership development initiatives. One way in which this program may affect long-term outcomes is by catalyzing the use of other resources. In this paper, we investigate whether public schools in EZ communities appear to have taken advantage of an opportunity to improve their long-term economic success. In particular, we analyze their application rates for the E-Rate program, which provides enormous subsidies to improve access to the Internet and related telecommunications technology for schools and libraries nationwide. We analyze administrative data that cover the first and second years of the E-Rate program. We find that schools in EZ communities generally apply for the E-Rate program at a higher rate than schools in other communities that are similar in terms of poverty and geographic location, which determine E-Rate funding eligibility. This suggests that the Empowerment Zone program may be helping communities to take advantage of important opportunities for economic development, including those with long-term payoffs such as the E-Rate program. (Georgetown Public Policy Review 7(1): Fall/Winter 2001.)

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