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When Is the Mover-Design Event Study Coefficient a Place-Effect Share?

Author

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  • Vahid Moghani

    (Erasmus University Rotterdam)

Abstract

Mover-design event studies are a leading approach to separating place effects from sorting. The coefficient is often interpreted as the share of cross-sectional variation in location means due to places. I show the coefficient depends on how movers connect locations: two economies can be identical in place effects, sorting, and location means, yet deliver different mover coefficients. Only under directional isotropy, a testable condition, does the coefficient permit a cross-sectional reading: it averages the variance share of place effects and the share that equalizing them removes. An illustration in Dutch employer–employee wage data rejects the condition.

Suggested Citation

  • Vahid Moghani, 2026. "When Is the Mover-Design Event Study Coefficient a Place-Effect Share?," Tinbergen Institute Discussion Papers 26-056/III, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20260056
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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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