nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒10‒07
three papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Does Light Touch Cluster Policy Work? Evaluating the Tech City Programme By Nathan, Max
  2. Monopsony in Spatial Equilibrium By Matthew E. Kahn; Joseph Tracy
  3. Commuting between rural and urban areas: evidence from India By Sharma, Ajay

  1. By: Nathan, Max (University College London)
    Abstract: Despite academic scepticism, cluster policies remain popular with policymakers. This paper evaluates the causal impact of a flagship UK technology cluster programme. I build a simple framework and identify effects using difference-in-differences and synthetic controls on rich microdata. I further test for timing, cross-space variation, scaling and churn channels. The policy grew and densified the cluster, but has had more mixed effects on tech firm productivity. I also find most policy 'effects' began before rollout, raising questions about the programme's added value.
    Keywords: cities, clusters, technology, economic development, synthetic controls
    JEL: L53 L86 O31 R30 R50
    Date: 2019–09
  2. By: Matthew E. Kahn; Joseph Tracy
    Abstract: An emerging labor economics literature studies the consequences of firms exercising market power in local labor markets. These monopsony models have implications for trends in earnings inequality. The extent of this market power is likely to vary across local labor markets. In choosing what market to live and work in, workers tradeoff wages, rents and local amenities. Building on the Rosen/Roback spatial equilibrium model, we investigate how the existence of local monopsony power affects the cross-sectional spatial distribution of wages and rents across cities. We find an employment-weighted elasticity of land prices to concentration of –0.034—similar to Rinz (2018) reported elasticity of compensation to concentration. This finding has implications for who bears the economic incidence of labor market power. We present two extensions of the model focusing on the role of migration costs and worker skill heterogeneity.
    JEL: J3 R23
    Date: 2019–09
  3. By: Sharma, Ajay
    Abstract: This paper is an attempt to extend the dialogue on the nature of commuting between rural and urban areas and its implications for labour market outcomes in rural and urban India. We show that over the period 2004–2005 to 2011–2012, the magnitude of commuting workers has not changed but the composition has changed with reduction in rural no fixed place workers and increase in urban-no fixed place workers. We further highlight that rural–urban commuting can be considered mobility for better opportunities on account of diversification of livelihood strategy and underemployment in rural areas.
    Keywords: Commuting, Rural-urban interaction, No fixed place workers, India
    JEL: J61 O18 R0 R23
    Date: 2019–09–27

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