What is the evidence of the impact of job-creation initiatives on poverty?

Rationale

Job creation can generate additional opportunities for those out of work and in poverty to find employment and reduce their risk of poverty. This can be employment creation that is targeted on particular localities or employment growth more widely.

Evidence base

There is relatively little evidence that directly studies the link between job-creation programmes and poverty. This is because the focus of evaluations is usually on the scale of job creation rather than the distribution of benefits. Evidence from the US using various econometric approaches examines the employment impact for local residents of Enterprise Zone policies (Bondonio and Engberg, 2000; Greenbaum and Engberg; 2000; Hanson, 2000; Neumark and Kolko, 2010). These evaluations argue that EZs do not have a significant impact on local employment. Ham and Swensson (2011) evaluate EZs, as well as Federal Empowerment Zones (EMPZs) and Federal Enterprise Community (ENTC) on local labour markets. They find positive effects from the three policies on the unemployment and poverty rate (with stronger effects from EMPZ and ENTC).

In the UK, there is a relatively good evidence base from evaluations of the employment and economic impact for some of the larger policies that attempt to influence job creation - including the European Structural Funds spending (for example Liverpool Objective 1) and Enterprise Zones. However, this literature is much less strong on the distributional aspects of employment gains and the influence of these programmes on poverty.

There is also a body of evidence which looks at the relationship between national employment growth and poverty reduction. The evidence highlights the importance of the distribution of employment growth (between working and workless households). Relevant studies, which use a range of econometric methods, include: Cantillon (2011), Marx et al (2011), and De Beer (2007).

Gaps

There is a reasonable body of evidence available internationally. Are we missing anything specific on the links between job creation and poverty in the UK?

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