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Place Based Policies with Unemployment

Listed author(s):
  • Patrick Kline
  • Enrico Moretti

We develop a stylized model of frictional local labor markets with the goal of studying the efficiency of unemployment differences across areas. The model adapts the widely used Diamond-Mortensen-Pissarides framework to a local labor market setting with a competitive housing market. The result is a simple search analogue of the classic Roback model that provides a tractable environment for studying the effects of local job creation efforts.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.3.238
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File URL: http://www.aeaweb.org/aer/ds/may2013/P2013_4360_ds.zip
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 103 (2013)
Issue (Month): 3 (May)
Pages: 238-243

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Handle: RePEc:aea:aecrev:v:103:y:2013:i:3:p:238-43
Note: DOI: 10.1257/aer.103.3.238
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  1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877.
  2. M. Deidda & A. Di Liberto & M. Foddi & G. Sulis, 2012. "Employment Subsidies, Informal Economy and Women’s Transition into Work in a Depressed Area: Evidence from a Matching Approach," Working Paper CRENoS 201216, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  3. Gibbons, R. & Katz, L.F., 1989. "Layoffs And Lemons," Working papers 531, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
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  6. Epifani, Paolo & Gancia, Gino A., 2005. "Trade, migration and regional unemployment," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 625-644, November.
  7. Patrick Kline, 2010. "Place Based Policies, Heterogeneity, and Agglomeration," American Economic Review, American Economic Association, vol. 100(2), pages 383-387, May.
  8. Daniel S. Hamermesh, 1988. "Labor Demand and the Structure of Adjustment Costs," NBER Working Papers 2572, National Bureau of Economic Research, Inc.
  9. Robin Boadway & Katherine Cuff & Nicolas Marceau, 2004. "Agglomeration Effects and the Competition for Firms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(5), pages 623-645, 09.
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  11. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, vol. 77(5), pages 1339-1369, 09.
  12. Acemoglu, Daron, 2001. "Good Jobs versus Bad Jobs," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 1-21, January.
  13. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 709-748, December.
  14. Mikael Carlsson & Julián Messina & Oskar Nordström Skans, 2016. "Wage Adjustment and Productivity Shocks," Economic Journal, Royal Economic Society, vol. 126(595), pages 1739-1773, 09.
  15. David Card & Francesco Devicienti & Agata Maida, 2010. "Rent-sharing, Holdup, and Wages: Evidence from Matched Panel Data," NBER Working Papers 16192, National Bureau of Economic Research, Inc.
  16. Patrick M. Kline & Enrico Moretti, 2013. "Local Economic Development, Agglomeration Economies, and the Big Push: 100 Years of Evidence from the Tennessee Valley Authority," NBER Working Papers 19293, National Bureau of Economic Research, Inc.
  17. Ive MARX, 2001. "Job subsidies and cuts in employers' social security contributions: The verdict of empirical evaluation studies," International Labour Review, International Labour Organization, vol. 140(1), pages 69-83, 03.
  18. Ricardo J. Caballero & Eduardo M.R.A. Engel & John Haltiwanger, 1995. "Aggregate Employment Dynamics: Building From Microeconomic Evidence," NBER Working Papers 5042, National Bureau of Economic Research, Inc.
  19. Edward L. Glaeser & Joshua D. Gottlieb, 2008. "The Economics of Place-Making Policies," NBER Working Papers 14373, National Bureau of Economic Research, Inc.
  20. Molho, Ian, 2001. "Spatial Search, Migration and Regional Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 269-283, May.
  21. John M. Abowd & Thomas Lemieux, 1991. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," NBER Working Papers 3808, National Bureau of Economic Research, Inc.
  22. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
  23. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
  24. Kline, Patrick & Moretti, Enrico, 2013. "Place Based Policies with Unemployment," CEPR Discussion Papers 9330, C.E.P.R. Discussion Papers.
  25. Matias Busso & Jesse Gregory & Patrick M. Kline, 2010. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," NBER Working Papers 16096, National Bureau of Economic Research, Inc.
  26. Adriana D. Kugler & Gilles Saint-Paul, 2004. "How Do Firing Costs Affect Worker Flows in a World with Adverse Selection?," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 553-584, July.
  27. Henry G. Overman & Diego Puga, 1999. "Unemployment clusters across European regions and countries," LSE Research Online Documents on Economics 20211, London School of Economics and Political Science, LSE Library.
  28. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 217-227.
  29. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
  30. Robert E. Hall, 1972. "Turnover in the Labor Force," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 3(3), pages 709-764.
  31. Edward P. Lazear, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 699-726.
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