Essays in Low-Income Community Development

Abstract

Over the last several decades the federal government has taken a variety of approaches to promote investment in low-income communities. This dissertation examines three different federal place-based policies designed to encourage private investment in statutorily defined low-income communities: the Community Reinvestment Act, the New Markets Tax Credit, and the Opportunity Zone Program. In the second chapter, a novel shock to credit supply is proposed to investigate bank responses to fair lending standards. Results show a modest effect of regulatory assessment areas on aggregate small business lending at the county level. In the third chapter, a regression discontinuity design suggests that federally-subsidized investment projects have little effect on individual tracts. This essay also offers critiques of a popular quasi-experiment and proposals for more precise identification of treatment effects. The fourth chapter turns to a description of the most recent federal development program. The paper, co-authored with Ofer Eldar, argues that while economic distress played a role in designation, political favoritism was also a critical factor in the selection of the Opportunity Zones.