Commuting, Migration and Local Employment Elasticities

Monte, Ferdinando; Redding, Stephen J.; Rossi‐Hansberg, Esteban

doi:10.3386/w21706

Cited by 96 publications

(188 citation statements)

References 32 publications

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“…This study relates to quantitative research where labor reallocation plays an important role in order to analyze the spatial distribution of economic activity, such as in Ahlfeldt, Redding, Sturm, and Wolf (2015), Redding and Sturm (2008), Redding (2016), Allen and Arkolakis (2014), Caliendo, Parro, Rossi-Hansberg, and Sarte (2017b), Fajgelbaum, Morales, Serrato, and Zidar (2015), Monte, Redding, and Rossi-Hansberg (2015), Tombe and Zhu (2015). 7 There is a fast-growing literature using spatial dynamic general equilibrium models that we also contribute to.…”

Section: Introductionmentioning

confidence: 99%

Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement

Caliendo¹,

Opromolla²,

Parro³

et al. 2017

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The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equi-librium model with trade in goods and labor mobility across countries to study and quantify the economic effects of trade and labor market integration. In our model trade is costly and features households of different skills and nationalities facing costly forward-looking relocation decisions. We use the EU Labour Force Survey to construct migration flows by skill and na-tionality across 17 countries for the period 2002-2007. We then exploit the timing variation of the 2004 EU enlargement to estimate the elasticity of migration flows to labor mobility costs, and to identify the change in labor mobility costs associated to the actual change in policy. We apply our model and use these estimates, as well as the observed changes in tariffs, to quantify the effects from the EU enlargement. We find that new member state countries are the largest winners from the EU enlargement, and in particular unskilled labor. We find smaller welfare gains for EU-15 countries. However, in the absence of changes to trade policy, the EU-15 would have been worse off after the enlargement. We study even further the interaction effects between trade and migration policies and the role of different mechanisms in shaping our results. Our results highlight the importance of trade for the quantification of the welfare and migration effects from labor market integration.

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Section: Introductionmentioning

confidence: 99%

Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement

Caliendo¹,

Opromolla²,

Parro³

et al. 2017

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“…In addition, agents are allowed to have idiosyncratic preferences for particular residence-work combinations as in Monte et al (2016).…”

Section: Individualsmentioning

confidence: 99%

Rethinking Detroit

Owens¹,

Rossi‐Hansberg²,

Sarte³

2017

Self Cite

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We study the urban structure of the City of Detroit. Following several decades of decline, the city's current urban structure is clearly not optimal for its size, with a business district immediately surrounded by a ring of largely vacant neighborhoods. We propose a model with residential externalities that features multiple equilibria at the neighborhood level. In particular, developing a residential area requires the coordination of developers and residents, without which it may remain vacant even if its fundamentals are sound. We embed this mechanism in a quantitative spatial economics model and use it to rationalize current city allocations. We then use the model to evaluate existing strategic visions to revitalize Detroit, and to design alternative plans that rely on 'development guarantees' to yield better outcomes. The widespread effects of these policies underscore the importance of using a general equilibrium framework to evaluate policy proposals.

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“…Finally, one can assume the presence of local immobile landlords that consume all their land income locally. Then, local consumption will simply add up to total labor income (as in Monte et al 2015). ).…”

Section: (B) General Versus Partial Equilibriummentioning

confidence: 99%

“…To incorporate both sources of linkages, Monte et al (2015) develops a unified quantitative model, in which a system of regions are connected in both goods markets through trade and factor markets through migration and commuting. Within this unified framework, the effect of changes in the local economic environment on employment depends critically on the ability to attract both migrants and commuters.…”

Section: A Quantitative Urban Modelmentioning

confidence: 99%

“…Hence, a key implication of this analysis is that locations are not independent observations in a cross-section regression, but are rather systematically linked to one another through trade, commuting and migrations flows. Not recognizing this inter-dependence in reduced-form empirical analysis can lead to significant biases and substantial heterogeneity in treatment effects that threatens the external validity of the results (as shown for example in Monte et al 2015). Finally, the use of the model's structure makes it possible to compute the counterfactual change in welfare, which is usually unobservable in reduced-form approaches, and yet is typically the object of ultimate interest for the policy intervention.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Quantitative Spatial Economics

Redding¹,

Rossi‐Hansberg²

2016

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The observed uneven distribution of economic activity across space is influenced by variation in exogenous geographical characteristics and endogenous interactions between agents in goods and factor markets. Until recently, the theoretical literature on economic geography had focused on stylized settings that could not easily be taken to the data. This paper reviews more recent research that has developed quantitative models of economic geography. These models are rich enough to speak to first-order features of the data, such as many heterogenous locations and gravity equation relationships for trade and commuting. Yet at the same time these models are sufficiently tractable to undertake realistic counterfactuals exercises to study the effect of changes in amenities, productivity, and public policy interventions such as transport infrastructure investments. We provide an extensive taxonomy of the different building blocks of these quantitative spatial models and discuss their main properties and quantification.

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Commuting, Migration and Local Employment Elasticities

Cited by 96 publications

References 32 publications

Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement

Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement

Rethinking Detroit

Quantitative Spatial Economics

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