Commuting, Migration and Local Employment Elasticities

Ferdinando Monte, Stephen Redding and Esteban Rossi-Hansberg

No 2017-073, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We provide theory and evidence that the elasticity of local employment to a labor demand shock is heterogeneous depending on the commuting openness of the local labor market. We develop a quantitative general equilibrium model that incorporates spatial linkages in goods markets (trade) and factor markets (commuting and migration). We quantify this model to match the observed gravity equation relationships for trade and commuting. We find that empirically-observed reductions in commuting costs generate welfare gains of around 3.3 percent. We provide separate evidence in support of the model's predictions using decompositions of employment changes, million dollar plants, and trade shocks.

Keywords: labor supply elasticity; shocks; general equilibrium; spatial linkages (search for similar items in EconPapers)
JEL-codes: F12 F14 R13 R23 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-geo, nep-mig, nep-ore and nep-ure
Note: MIP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Monte_ ... ration-local-emp.pdf First version, September 25, 2017 (application/pdf)

Related works:
Journal Article: Commuting, Migration, and Local Employment Elasticities (2018)
Working Paper: Commuting, Migration and Local Employment Elasticities (2015)
Working Paper: Commuting, Migration and Local Employment Elasticities (2015)
Working Paper: Commuting, migration and local employment elasticities (2015)
Working Paper: Commuting, Migration and Local Employment Elasticities (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2017-073

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