Place-Based Policies for Neighborhood Improvement: Evidence from Promise Zones

Despite growing evidence that neighborhoods play a critical role in shaping economic mobility and well-being, effective policies to address neighborhood disadvantage remain elusive. This study evaluates the impact of the Promise Zone program, which aims to revitalize disadvantaged neighborhoods through streamlined federal support and grant incentives. I use an event study framework with newly obtained data on the location of failed finalist applications as a comparison group to estimate the effects of the program. The results reveal significant improvements in poverty, household incomes, and employment in Promise Zone neighborhoods, particularly in later-designated zones and initially low-status neighborhoods. I also find that effects are driven partly by changes in residential composition, and that Promise Zones appear to induce positive spillovers in adjacent areas.