nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒04‒10
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The complex regional effects of macro-institutional shocks: Evidence from EU economic integration over three decades By Mitze, Timo; Breidenbach, Philipp
  2. The geography of refugee shocks By Glitz, Albrecht; Hörnig, Lukas; Körner, Konstantin; Monras, Joan
  3. From the Manufacturing Belt to the Rust Belt. Spatial Inequalities in the United States: An Interdisciplinary Literature Review By Klein, Alexander
  4. Tackling the UK's Regional Economic Inequality: Binding Constraints and Avenues for Policy Intervention By Stansbury, Anna; Turner, Dan; Balls, Ed
  5. Agglomerations, tasks and wage growth By Perl, Maximilian
  6. A NUTS-2 European Union interregional system of Social Accounting Matrices for the year 2017: The RHOMOLO V4 dataset By Abián García Rodríguez; Nicholas Lazarou; Giovanni Mandras; Simone Salotti; Mark Thissen; Erwin Kalvelagen
  7. Place-Based Policies: Opportunity for Deprived Schools or Zone-and-Shame Effect? By Manon Garrouste; Miren Lafourcade

  1. By: Mitze, Timo; Breidenbach, Philipp
    Abstract: We use four subsequent EU enlargement waves over three decades (1980s, 1990s, 2000s) to assess the regional effects of macro-institutional changes. Our focus is set on EU internal border regions which are specifically exposed to international integration, but it remains unclear how they benefit from this exposure. Treatment effects for different outcomes (per capita GDP, labor productivity, employment, population, night light emissions) are estimated by comparing the performance of EU internal border regions to overall regional development trends in the EU. We find significant border effects that build up over time and decay with spatial distance to the enlargement border. While per capita GDP, labor productivity levels and night light emissions develop positively on average, negative effects are found for the employment rate in border regions. However, effects can be specific to enlargement waves and country groups considered: Border regions in established member countries mainly gain from EU enlargement in terms of increasing their GDP per capita and labor productivity levels but face lower employment rates and population decline. However, border regions in new member countries, particularly in 2004 and 2007, most significantly gain through population and employment increases. This complex pattern of effects makes a straight 'winner-loser' categorization difficult and poses challenges to policy support for EU border regions.
    Keywords: Economic integration, EU enlargement, internal border regions, regional development, treatment effect estimation
    JEL: C23 F15 O47 R11
    Date: 2023
  2. By: Glitz, Albrecht; Hörnig, Lukas; Körner, Konstantin; Monras, Joan
    Abstract: This paper studies how refugee inflows affect receiving communities using highly disaggregated German administrative data at a 1km × 1km resolution. We develop a novel spatial equilibrium model that features two geographic levels, small neighborhoods and more aggregated local labor markets (LLMs). In the model, local displacement effects and impacts on house prices are closely linked to immigration-induced changes in neighborhood-level amenities and LLM-level productivity. Our empirical results show that refugee inflows lead to a less than one-for-one relative population relocation in neighborhoods, indicating that refugees have a positive impact on local amenities. We also find relocation on the LLM-level to be less than one-for-one, suggesting that refugees also positively impact local productivity.
    Keywords: Immigration, refugees, spatial equilibrium
    JEL: J15 R1
    Date: 2023
  3. By: Klein, Alexander (University of Kent and CAGE)
    Abstract: This paper reviews research on spatial inequalities in the United States focusing on the Manufacturing Belt and Rust Belt. It offers a taxonomy of scholarship in this area and assesses its contribution to our understanding of the evolution of U.S. spatial inequalities since the middle of the nineteenth century. This scholarship has shown that the initial location of the Manufacturing Belt was influenced by natural resources, location of initial European settlements and early development of canals. The dominant position of the belt was the result of its large market potential which allowed firms to take advantage of agglomeration economies, supply-chain linkages and low-cost access to the consumers. Its decline and subsequent emergence of the Rust Belt was the result of rising labor costs and diminished location advantage.
    Keywords: manufacturing belt, rust belt, economic geography, spatial inequality JEL Classification: B20, R12, N61, N62, N91, N92
    Date: 2023
  4. By: Stansbury, Anna; Turner, Dan; Balls, Ed
    Abstract: The UK is one of the most regionally unequal industrialised economies. In this paper, we analyze the UK’s regional economic inequality from the perspective of productivity disparities between large regions, focusing on the gap between London/South East vs the rest. We look at four important economic inputs – education, infrastructure, innovation, and access to finance – for each one building up a collage of evidence to gauge the extent to which it is a binding constraint on regions’ productivity growth. We then analyze interregional migration. We find little evidence consistent with the hypotheses (i) that low shares of university graduates remain the primary constraint on growth for the UK’s regions; (ii) that there is a generalized issue with access to finance for firms outside the South East; or (iii) that low or falling regional migration rates are to blame for the persistence of the UK’s regional economic inequalities. Instead, we find evidence consistent with (i) a specific relative shortage of STEM skills; (ii) binding transport infrastructure constraints within major non-London conurbations; (iii) a failure of public innovation policy to support clusters beyond the South East, in particular through the regional distribution of public support for Research and Development (R&D); and (iv) missed opportunities for higher internal mobility due to London’s overheating housing market.
    Date: 2023–03–04
  5. By: Perl, Maximilian
    Abstract: Wage growth is stronger in larger cities, but this relationship holds exclusively for non-manual workers. Using rich German administrative data, I study the heterogeneity in the pecuniary value of big city experience, a measure of dynamic agglomeration economies, and its consequences for the city-size wage gap. After 15 years of work experience in Munich the cumulative earnings premium relative to a median-sized city is 15% for workers in the most manual occupations, 25% for workers in the least manual occupations and 30% for workers in the most analytical occupations. This cumulative wage premium is 3 to 5 times the magnitude of the static city-size wage gap.
    Keywords: Cities, agglomeration, tasks, wages, wage growth, Germany
    JEL: R10 J31 R23
    Date: 2023
  6. By: Abián García Rodríguez (European Commission - JRC); Nicholas Lazarou (European Commission - JRC); Giovanni Mandras (Cassa Depositi e Prestiti); Simone Salotti (European Commission - JRC); Mark Thissen (PBL); Erwin Kalvelagen (Amsterdam Optimization)
    Abstract: We describe the procedure used to construct a set of interregional NUTS-2 European Union Social Accounting Matrices for the year 2017, using official Eurostat national and regional account data, and auxiliary data on business and interregional trade flows derived from transport survey data. This procedure builds on the one presented by Thissen et al. (2019) for the year 2013. The new dataset is described by presenting some relevant features and the results of some characteristic simulations obtained with a new version of the RHOMOLO model, referred to as RHOMOLO V4, based on the new 2017 data.
    Keywords: Regional data, Input-Output, social accounting matrices, trade flows, general equilibrium.
    JEL: C82 E16 R15 F14 F47
    Date: 2023–03
  7. By: Manon Garrouste (Univ. Lille, CNRS, IESEG School of Management); Miren Lafourcade (Université Paris-Saclay (RITM), Universitat de Barcelona - IEB, Paris School of Economics and CEPR)
    Abstract: Even though place-based policies involve large transfers toward low-income neighborhoods, they may also produce territorial stigmatization. This paper appeals to the quasi-experimental discontinuity in a French reform that redrew the zoning map of subsidized neighborhoods on the basis of a sharp poverty cut-off to assess the effect of place-based policies on school enrollment into lower secondary education. Using a difference-in-differences approach, we find strong evidence of stigma from policy designation, as public middle schools in neighbourhoods below the policy cut-off, which qualified for place-based subsidies, saw a significant 3.5pp post-reform drop in pupil enrollment, compared to their counterfactual analogues in unlabeled areas lying just above the poverty threshold. This "zone-and-shame" effect is immediate but does not persist, as it is only found for the first pupil-entry cohort in middle schools immediately after the reform. We show that it was triggered by the behavioral reactions of parents from all socioeconomic backgrounds, who avoided public schools in policy areas and shifted to those in other areas or, only for richer parents, to private schools. We uncover, on the contrary, only weak evidence of stigma reversion after an area loses its designation, suggesting hysteresis in bad reputations.
    Keywords: School choices, Territorial stigmatization, Redlining, Urban segregation, Sorting
    JEL: I24 I28 R23 R58
    Date: 2023

This nep-geo issue is ©2023 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.