Local Ties in Spatial Equilibrium

Mike Zabek

American Economic Journal: Macroeconomics, 2024, vol. 16, issue 2, 287-317

Abstract: Someone who lives in an economically depressed place was probably born there. And having workers with local ties who prefer to live in their birthplaces leads to smaller migration responses in depressed places. Smaller migration responses lead to lower real incomes and make incomes more volatile, a form of hysteresis. Local ties can also persist for generations. Subsidies to economically depressed places cause smaller distortions, because few people want to move to depressed places. Finally, subsidies to productive places increase aggregate productivity, as they induce more migration.

JEL-codes: J22 J23 J31 J61 R23 Z13 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Local Ties in Spatial Equilibrium (2019)
Working Paper: Local Ties in Spatial Equilibrium (2018)
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DOI: 10.1257/mac.20210326

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