Full Citation

Title: Local Ties in Spatial Equilibrium

Citation Type: Working Paper

Publication Year: 2019

ISBN:

ISSN:

DOI: 10.17016/FEDS.2019.080

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Abstract: If someone lives in an economically depressed place, they were probably born there. The presence of people with local ties – a preference to live in their birthplace – leads to smaller migration responses. Smaller migration responses to wage declines lead to lower real incomes and make real incomes more sensitive to subsequent demand shocks, a form of hysteresis. Local ties can persist for generations. Place-based policies, like tax subsidies, targeting depressed places cause smaller distortions since few people want to move to depressed places. Place-based policies targeting productive places increase aggregate productivity, since they lead to more migration.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3493626

User Submitted?: No

Authors: Zabek, Michael

Series Title: Finance and Economics Discussion Series Working Paper

Publication Number: 2019-080

Institution: Federal Reserve Board

Pages: 71

Publisher Location:

Data Collections: IPUMS USA

Topics: Housing and Segregation, Labor Force and Occupational Structure, Migration and Immigration, Population Mobility and Spatial Demography, Poverty and Welfare

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