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Local Ties in Spatial Equilibrium

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  • Mike Zabek

Abstract

Someone who lives in an economically depressed place was probably born there. And having workers with local ties who prefer to live in their birthplaces leads to smaller migration responses in depressed places. Smaller migration responses lead to lower real incomes and make incomes more volatile, a form of hysteresis. Local ties can also persist for generations. Subsidies to economically depressed places cause smaller distortions, because few people want to move to depressed places. Finally, subsidies to productive places increase aggregate productivity, as they induce more migration.

Suggested Citation

  • Mike Zabek, 2024. "Local Ties in Spatial Equilibrium," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(2), pages 287-317, April.
    • Handle: RePEc:aea:aejmac:v:16:y:2024:i:2:p:287-317
    DOI: 10.1257/mac.20210326
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    3. Yifan Gong & Todd Stinebrickner & Ralph Stinebrickner & Yuxi Yao, 2025. "The Role of Nonpecuniary Considerations: Location Decisions of College Graduates From Low‐Income Backgrounds," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(2), pages 903-931, May.
    4. David Autor & David Dorn & Gordon Hanson & Maggie R. Jones & Bradley Setzler, 2024. "Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization," Working Papers 24-78, Center for Economic Studies, U.S. Census Bureau.
    5. Diaz, Antonia & Jáñez, Álvaro & Wellschmied, Felix, 2023. "Geographic Mobility over the Life-Cycle," IZA Discussion Papers 15896, Institute of Labor Economics (IZA).
    6. Benjamin Austin & Edward Glaeser & Lawrence Summers, 2018. "Jobs for the Heartland: Place-Based Policies in 21st-Century America," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 151-255.
    7. Timothy J. Bartik, 2020. "Using Place-Based Jobs Policies to Help Distressed Communities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 99-127, Summer.
    8. Oudom Hean & Nattanicha Chairassamee & Mark D. Partridge, 2024. "Migration, education, technological change and growing urban inequality," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(2), pages 435-472, February.
    9. Coen-Pirani, Daniele, 2025. "Tax progressivity and mobility costs," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    10. Rich Ryan, 2024. "Unemployment volatility: When workers pay costs upon accepting jobs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(3), pages 303-333, September.
    11. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.
    12. Brian J. Asquith & Evan Mast, 2024. "Birth Dearth and Local Population Decline," Upjohn Working Papers 24-406, W.E. Upjohn Institute for Employment Research.
    13. Scavette, Adam, 2023. "The economic impact of a casino monopoly: Evidence from Atlantic City," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    14. Garrett Anstreicher & Joanna Venator, 2022. "To Grandmother’s House We Go: Childcare Time Transfers and Female Labor Mobility," Boston College Working Papers in Economics 1051, Boston College Department of Economics.
    15. Bick, Alexander & Blandin, Adam & Mertens, Karel & Rubinton, Hannah, 2024. "Work from Home and Interstate Migration," CEPR Discussion Papers 19101, C.E.P.R. Discussion Papers.
    16. Ariel J. Binder & John Bound, 2019. "The Declining Labor Market Prospects of Less-Educated Men," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 163-190, Spring.
    17. Henderson, J. Vernon & Thisse, Jacques-François, 2024. "Urban and spatial economics after 50 years," Journal of Urban Economics, Elsevier, vol. 144(C).
    18. Isabella Agnes & Ellie Dries & Jessica Liu & Zofsha Merchant & Fatimah Shaalan & Michelle Tran & Anna Tranfaglia & Erin Troland & Douglas A. Webber, 2025. "Suitability of a County-Level Income Definition for Analysis of Lower-Income Communities," Finance and Economics Discussion Series 2025-039, Board of Governors of the Federal Reserve System (U.S.).

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    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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