IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10071.html
   My bibliography  Save this paper

Spatial Development and Mobility Frictions in Latin America : Theory-Based Empirical Evidence

Author

Listed:
  • Conte,Bruno
  • Ianchovichina,Elena

Abstract

Using fine-grained spatial data and a dynamic spatial general equilibrium model, this paperassesses the magnitude of mobility frictions in Latin America as well as the effects of their reduction on spatialdevelopment in the region. The results suggest that in most Latin American countries, migration frictions calibratedbased on spatially differentiated initial utility are on average smaller and less dispersed than those obtainedassuming uniform within-country initial utility. A reduction in trade costs due to optimal investments in roadinfrastructure in most Latin American countries increases the present discounted value of real per capita income onaverage in the region by 15.1 percent. This effect is larger than the effects obtained with static quantitative trademodels because of substantial dynamic gains. By contrast, a reduction in migration entry costs in the most productiveand more populous locations in the Latin American countries has a negligible effect on the present discounted value ofthe region’s real per capita income, reflecting the relatively small dispersion in domestic migration frictionsand their relatively low levels in top locations. In both counterfactuals, the welfare increases are significantlylarger than the increases in real per capita output because the reductions in mobility frictions allow people torelocate to areas with better amenities and therefore derive higher utility. These results suggest that trade costs, notmigration barriers, represent a major constraint to theefficient spatial distribution of economic activity and growth in Latin America.

Suggested Citation

  • Conte,Bruno & Ianchovichina,Elena, 2022. "Spatial Development and Mobility Frictions in Latin America : Theory-Based Empirical Evidence," Policy Research Working Paper Series 10071, The World Bank.
  • Handle: RePEc:wbk:wbrwps:10071
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099231306012226724/pdf/IDU040ec395c03220048480a53f05f73d2054bb7.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Betsey Stevenson & Justin Wolfers, 2013. "Subjective Well-Being and Income: Is There Any Evidence of Satiation?," American Economic Review, American Economic Association, vol. 103(3), pages 598-604, May.
    2. Treb Allen & Costas Arkolakis, 2014. "Trade and the Topography of the Spatial Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1085-1140.
    3. Gollin, Douglas & Lagakos, David & Kirchberger, Martina, 2017. "In Search of a Spatial Equilibrium in the Developing World," CEPR Discussion Papers 12114, C.E.P.R. Discussion Papers.
    4. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311, February.
    5. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    7. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
    8. Carlino, Gerald A. & Chatterjee, Satyajit & Hunt, Robert M., 2007. "Urban density and the rate of invention," Journal of Urban Economics, Elsevier, vol. 61(3), pages 389-419, May.
    9. Chauvin, Juan Pablo & Glaeser, Edward & Ma, Yueran & Tobio, Kristina, 2017. "What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States," Journal of Urban Economics, Elsevier, vol. 98(C), pages 17-49.
    10. Daron Acemoglu & Melissa Dell, 2010. "Productivity Differences between and within Countries," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 169-188, January.
    11. Gorton,Nicole Emily & Ianchovichina,Elena, 2021. "Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions," Policy Research Working Paper Series 9843, The World Bank.
    12. Modrego, Félix & Berdegué, Julio A., 2015. "A Large-Scale Mapping of Territorial Development Dynamics in Latin America," World Development, Elsevier, vol. 73(C), pages 11-31.
    13. Michael Waugh & Ina Simonovska, 2012. "Different Trade Models, Different Trade Elasticities?," 2012 Meeting Papers 618, Society for Economic Dynamics.
    14. Gharad Bryan & Melanie Morten, 2019. "The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2229-2268.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Behrens, Kristian & Mion, Giordano & Murata, Yasusada & Suedekum, Jens, 2017. "Spatial frictions," Journal of Urban Economics, Elsevier, vol. 97(C), pages 40-70.
    2. Egger, Peter & Loumeau, Nicole, 2018. "The Economic Geography of Innovation," CEPR Discussion Papers 13338, C.E.P.R. Discussion Papers.
    3. Gharad Bryan & Edward Glaeser & Nick Tsivanidis, 2019. "Cities in the Developing World," NBER Working Papers 26390, National Bureau of Economic Research, Inc.
    4. Stephan Heblich & Stephen J Redding & Daniel M Sturm, 2020. "The Making of the Modern Metropolis: Evidence from London," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2059-2133.
    5. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    6. Klaus Desmet & Robert E. Kopp & Scott A. Kulp & Dávid Krisztián Nagy & Michael Oppenheimer & Esteban Rossi-Hansberg & Benjamin H. Strauss, 2021. "Evaluating the Economic Cost of Coastal Flooding," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(2), pages 444-486, April.
    7. Benny Kleinman & Ernest Liu & Stephen J. Redding, 2023. "Dynamic Spatial General Equilibrium," Econometrica, Econometric Society, vol. 91(2), pages 385-424, March.
    8. Blouri, Yashar & Ehrlich, Maximilian V., 2020. "On the optimal design of place-based policies: A structural evaluation of EU regional transfers," Journal of International Economics, Elsevier, vol. 125(C).
    9. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.
    10. Rodrigo Adão & Costas Arkolakis & Federico Esposito, 2019. "General Equilibrium Effects in Space: Theory and Measurement," NBER Working Papers 25544, National Bureau of Economic Research, Inc.
    11. Dávid Krisztián Nagy, 2021. "Quantitative Economic Geography Meets History: Questions, Answers and Challenges," Working Papers 1249, Barcelona School of Economics.
    12. Marcel Henkel, Eunjee Kwon, Pierre Magontier, 2022. "The Unintended Consequences of Post-Disaster Policies for Spatial Sorting," Diskussionsschriften credresearchpaper37, Universitaet Bern, Departement Volkswirtschaft - CRED.
    13. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    14. Matthew Delventhal, 2019. "The Globe as a Network: Geography and the Origins of the World Income Distribution," 2019 Meeting Papers 840, Society for Economic Dynamics.
    15. repec:esx:essedp:729 is not listed on IDEAS
    16. Rodrigo Ad'o & Costas Arkolakis & Federico Esp'sito, 2019. "Spatial Linkages, Global Shocks, and Local Labor Markets: Theory and Evidence," Cowles Foundation Discussion Papers 2163, Cowles Foundation for Research in Economics, Yale University.
    17. David Krisztián Nagy, 2020. "Quantitative economic geography meets history: Questions, answers and challenges," Economics Working Papers 1774, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2021.
    18. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    19. Farrokhi, Farid & Jinkins, David, 2019. "Wage inequality and the location of cities," Journal of Urban Economics, Elsevier, vol. 111(C), pages 76-92.
    20. Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101(C), pages 148-167.
    21. Li, Bingjing & Ma, Lin, 2022. "JUE insight: Migration, transportation infrastructure, and the spatial transmission of COVID-19 in China," Journal of Urban Economics, Elsevier, vol. 127(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10071. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.