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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.

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  • 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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    2. Scavette, Adam, 2023. "The economic impact of a casino monopoly: Evidence from Atlantic City," Regional Science and Urban Economics, Elsevier, vol. 103(C).
    3. Alexander Bick & Adam Blandin & Karel Mertens & Hannah Rubinton, 2024. "Work from Home and Interstate Migration," Working Papers 2024-012, Federal Reserve Bank of St. Louis.
    4. Antonia Díaz & Álvaro Jáñez & Felix Wellschmied, 2023. "Geographic Mobility Over the Life-cycle," Documentos de Trabajo del ICAE 2023-01, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    5. 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.
    6. 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.
    7. 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.
    8. Farrokhi, Farid & Jinkins, David, 2024. "Root growing and path dependence in location choice: Evidence from Danish refugee placement," Regional Science and Urban Economics, Elsevier, vol. 105(C).
    9. Aliprantis, Dionissi & Carroll, Daniel R. & Young, Eric R., 2024. "What explains neighborhood sorting by income and race?," Journal of Urban Economics, Elsevier, vol. 141(C).
    10. 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.
    11. Diaz, Antonia & Jáñez, Álvaro & Wellschmied, Felix, 2023. "Geographic Mobility over the Life-Cycle," IZA Discussion Papers 15896, Institute of Labor Economics (IZA).
    12. 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.

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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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