Full Citation

Title: Local Ties in Spatial Equilibrium

Citation Type: Miscellaneous

Publication Year: 2018

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: People who live in declining areas are more likely to have been born nearby, which implies that they have idiosyncratic ties to where they live. Labor demand shocks to places where people have higher levels of these local ties, proxied by their birth places, lead to less migration and larger movements into and out of the labor market. A model of spatial equilibrium that includes a distribution of workers’ preferences for living in their birth places matches these facts and suggests further implications. Declines in local productivity lead to lower migration elasticities and larger declines in real wages after further declines in productivity. Population can take generations to adjust, since ties can only be reallocated slowly. Across a wide class of models, lower migration elasticities make subsidies to local areas more efficient, since they change fewer people’s locations. Local subsidies are more efficient in declining areas, where they are the most common.

Url: https://mikezabek.com/pdf/LocalTies.pdf

User Submitted?: No

Authors: Zabek, Mike

Publisher: University of Michigan

Data Collections: IPUMS USA

Topics: Housing and Segregation, Labor Force and Occupational Structure, Migration and Immigration

Countries: