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Place-Based Redistribution

Author

Listed:
  • Cecile Gaubert
  • Patrick M. Kline
  • Danny Yagan

Abstract

Governments around the world redistribute to distressed areas by conditioning taxes and transfers on location. We show that when poor households are spatially concentrated, transfers from one location to another can yield equity gains that outweigh their efficiency costs, even when income-based transfers are set optimally. Expressions for the optimal transfer size depend on the mobility of households, the earnings responses of movers, and sorting patterns. Surveys find support for targeting tax credits to poor Americans who live in distressed places. A calibration exercise finds optimal transfers of the same order of magnitude as prominent American zone policies.

Suggested Citation

  • Cecile Gaubert & Patrick M. Kline & Danny Yagan, 2021. "Place-Based Redistribution," NBER Working Papers 28337, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28337
    Note: DEV ITI LS PE
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    Cited by:

    1. Enghin Atalay & Ali Hortacsu & Mustafa Runyun & Chad Syverson & Mehmet Fatih Ulu, 2023. "Micro- and Macroeconomic Impacts of a Place-Based Industrial Policy," Working Papers 23-12, Federal Reserve Bank of Philadelphia.
    2. Hershbein, Brad & Stuart, Bryan A., 2023. "Place-based consequences of person-based transfers: Evidence from recessions," Journal of Public Economics, Elsevier, vol. 224(C).
    3. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    4. Agrawal David R. & Foremny Dirk, 2022. "Redistribution In A Globalized World," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 242(5-6), pages 551-567, December.
    5. Jung, Philip & Korfmann, Philipp & Preugschat, Edgar, 2023. "Optimal regional labor market policies," European Economic Review, Elsevier, vol. 152(C).
    6. Freedman, Matthew & Khanna, Shantanu & Neumark, David, 2023. "Combining rules and discretion in economic development policy: Evidence on the impacts of the California Competes Tax Credit," Journal of Public Economics, Elsevier, vol. 217(C).
    7. Diaz, Antonia & Jáñez, Álvaro & Wellschmied, Felix, 2023. "Geographic Mobility over the Life-Cycle," IZA Discussion Papers 15896, Institute of Labor Economics (IZA).
    8. Ida Farida Adi Prawira, 2021. "Phenomenology of Employee Income Tax Policies during the Covid-19 in Indonesia," GATR Journals afr199, Global Academy of Training and Research (GATR) Enterprise.
    9. Jeffrey Clemens & Stan Veuger, 2023. "Intergovernmental Grants and Policy Competition: Concepts, Institutions, and Evidence," NBER Chapters, in: Policy Responses to Tax Competition, National Bureau of Economic Research, Inc.
    10. 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.
    11. 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.
    12. Sebastian Siegloch & Nils Wehrhöfer & Tobias Etzel, 2022. "Spillover, Efficiency and Equity Effects of Regional Firm Subsidies," ECONtribute Discussion Papers Series 210, University of Bonn and University of Cologne, Germany.
    13. Giuseppe Albanese & Guglielmo Barone & Guido DeBlasio, 2021. "The impact of place-based policies on income distribution," Discussion Paper series in Regional Science & Economic Geography 2021-04, Gran Sasso Science Institute, Social Sciences, revised Mar 2021.
    14. Yang, Xiaozhong & Zhang, Cheng, 2022. "Spatial investments in the real estate industry: Based on the population flow within the city," Journal of Business Research, Elsevier, vol. 140(C), pages 593-603.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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