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This paper explores the effect of the Earned Income Tax Credit (EITC) on poor neighborhoods of Los Angeles during the late 1990s. To date, few analyses have empirically examined the impact of people-based policies on the economies of poor neighborhoods. The paper first documents the magnitude of this individual wage subsidy in Los Angeles as an unrecognized investment in poor neighborhoods on par with place-based policies such as Enterprise Zones. The paper then uses IRS and Economic Census data by ZIP Code in test whether increased EITC income has an effect on the neighborhood retail job base. Findings suggest an independent correlation between EITC investments and retail job gain. The conclusion uses these results to suggest better policy coordination and recommend tour productive areas for future research. [ABSTRACT FROM AUTHOR]

The spatial diffusion of poverty and the demographic profile of the “poor” in cities like Los Angeles, where 1.7 million residents of the greater metropolitan area qualify as such, suggest that poverty is neither a socioeconomic exception nor affiliated with a singular sociocultural or racial group. However, our policy discourse and solutions continue to suffer from a modernist/industrial era explanation of poverty and its spatial concentration. In this paper, I will offer an alternative interpretation of economic development in the 20th century and propose that development projects fit comfortably into the political philosophy of nation building and the social construction of citizenship. Under the umbrella of social justice and democracy, many regions of the world, including the inner city, have been envisioned as landscapes of social and political instability and targeted for development as such. Here, the equating of development with stability is examined theoretically to suggest that anti-poverty policies, both in the US and the UK, can be viewed as an extension of the 20th century modernist nation-building agenda. [Copyright &y& Elsevier]