nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒07‒27
four papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Effect of Internal Migration on Local Labor Markets: American Cities During the Great Depression By Leah Platt Boustan; Price V. Fishback; Shawn E. Kantor
  2. Local Governments in the Wake of Demographic Change: Efficiency and Economies of Scale in German Municipalities By Geys, Benny; Heinemann, Friedrich; Kalb, Alexander
  3. The Impact of Entrepreneurship Capital on Spanish's Labor Productivity and Economic Growth By Massón Guerra, José Luis
  4. The Effects of Low Income Housing Developments on Neighborhoods By Nathaniel Baum-Snow; Justin Marion

  1. By: Leah Platt Boustan; Price V. Fishback; Shawn E. Kantor
    Abstract: During the Great Depression, as in the modern era, in-migrants were accused of taking jobs and crowding relief rolls. Unlike today, the targets of protest during the Depression were typically American citizens from other parts of the country, rather than the foreign born. Using aggregate data on internal migration flows matched to individual records from the 1940 Census, we analyze the impact of internal migration on various labor market outcomes. To control for the likely endogeneity bias that would arise if migrants were attracted to areas with high wages or plentiful work opportunities, we instrument for migration flows. The instrument predicts out-migration from local areas using extreme weather events and variations in the generosity of New Deal programs and assigns these flows to destinations based on geographic distance. As in many contemporary studies of immigration, our results indicate that residents of metropolitan areas with high in-migration rates did not experience a drop in hourly earnings. Instead, longer term residents of high in-migration areas experienced three types of economic dislocation. A significant number moved away. Many of those who stayed experienced either a drop in annual weeks of work and/or reductions in access to work relief jobs. During a Depression with extraordinary unemployment and an extensive amount of job sharing, these lost work opportunities were costly to existing residents.
    JEL: J61 N32 R23
    Date: 2007–07
  2. By: Geys, Benny; Heinemann, Friedrich; Kalb, Alexander
    Abstract: German municipalities are expected to suffer from (often significant) population losses in the upcoming decades. We assess these local governments’ vulnerability to the fiscal consequences of this demographic decline through two means (using a sample of 1021 municipalities in the state of Baden-Württemberg). First, we consider local government cost efficiency. This indicates that there is a substantial divergence in efficiency despite a homogeneous institutional setting, leaving at least some – mainly smaller – municipalities vulnerable to adverse demographic/financial shocks. Secondly, we estimate the elasticity of local government cost functions to population size. We find that costs rise (fall) underproportionally with population size for small municipalities, whereas this is less the case for larger municipalities. This implies that especially small municipalities are vulnerable to increasing cost pressures under declining population. The overall implication is that large German municipalities (over 10.000 inhabitants) will more easily be able to cope with the expected population decline than smaller ones, supporting a case for boundary reviews or more extensive inter-communal cooperation.
    Keywords: Demographic change, Efficiency, Local government performance, Stochastic frontier analysis, Economies of scale, Cost elasticity
    JEL: D61 H40
    Date: 2007
  3. By: Massón Guerra, José Luis
    Abstract: This paper analyzes the role of entrepreneurship capital as a new explanatory factor of Spanish Labor Productivity of Economic Sectors. Based on the Audretsch and Keilbach’s Model (2004a) that measure the capacity of generating new enterprises, the methodology incorporates this capacity as a new “capital” into a Cobb-Douglas Production Function (1928). Using secondary data from 75 Spanish economic sectors and supported by Resource Based View, Dynamic Capacities, and Endogenous Growth Theories, the results reveals that the creation of small enterprises shows a strong impact in the productivity and the sectorial Spanish growth.
    Keywords: Entrepreneurship Capital; Economic Growth; Economic Development; Knowledge Capital
    JEL: R11 M13 O47
    Date: 2007–07–06
  4. By: Nathaniel Baum-Snow; Justin Marion
    Date: 2007

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