nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒09‒18
four papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. Temperature and Local Industry Concentration By Jacopo Ponticelli; Qiping Xu; Stefan Zeume
  2. Location, Location, Location By David Card; Jesse Rothstein; Moises Yi
  3. Fires and Local Labor Markets By Raphaelle G. Coulombe; Akhil Rao
  4. Reforma Tributária no Brasil: Impactos Regionais da PEC 45/2019 By Haddad, Eduardo A.; Araújo, Inácio F.; Sacco, João Gabriel

  1. By: Jacopo Ponticelli; Qiping Xu; Stefan Zeume
    Abstract: We use plant-level data from the US Census of Manufacturers to study the short and long run effects of temperature on manufacturing activity. We document that temperature shocks significantly increase energy costs and lower the productivity of small manufacturing plants, while large plants are mostly unaffected. In US counties that experienced higher increases in average temperatures between the 1980s and the 2010s, these heterogeneous effects have led to higher concentration of manufacturing activity within large plants, and a reallocation of labor from small to large manufacturing establishments. We offer a preliminary discussion of potential mechanisms explaining why large manufacturing firms might be better equipped for long-run adaptation to climate change, including their ability to hedge across locations, easier access to finance, and higher managerial skills.
    JEL: G3 L11 O14 Q54
    Date: 2023–08
  2. By: David Card; Jesse Rothstein; Moises Yi
    Abstract: We use data from the Longitudinal Employer-Household Dynamics program to study the causal effects of location on earnings. Starting from a model with employer and employee fixed effects, we estimate the average earnings premiums associated with jobs in different commuting zones (CZs) and different CZ-industry pairs. About half of the variation in mean wages across CZs is attributable to differences in worker ability (as measured by their fixed effects); the other half is attributable to place effects. We show that the place effects from a richly specified cross sectional wage model overstate the causal effects of place (due to unobserved worker ability), while those from a model that simply adds person fixed effects understate the causal effects (due to unobserved heterogeneity in the premiums paid by different firms in the same CZ). Local industry agglomerations are associated with higher wages, but overall differences in industry composition and in CZ-specific returns to industries explain only a small fraction of average place effects. Estimating separate place effects for college and non-college workers, we find that the college wage gap is bigger in larger and higher-wage places, but that two-thirds of this variation is attributable to differences in the relative skills of the two groups in different places. Most of the remaining variation reflects the enhanced sorting of more educated workers to higher-paying industries in larger and higher-wage CZs. Finally, we find that local housing costs at least fully offset local pay premiums, implying that workers who move to larger CZs have no higher net-of-housing consumption.
    JEL: J31 J61 R23
    Date: 2023–08
  3. By: Raphaelle G. Coulombe; Akhil Rao
    Abstract: We study the dynamic effects of fires on county labor markets in the US using a novel geophysical measure of fire exposure based on satellite imagery. We find increased fire exposure causes lower employment growth in the short and medium run, with medium-run effects being linked to migration. We also document heterogeneous effects across counties by education and industrial concentration levels, states of the business cycle, and fire size. By overcoming challenges in measuring fire impacts, we identify vulnerable places and economic states, offering guidance on tailoring relief efforts and contributing to a broader understanding of natural disasters' economic impacts.
    Date: 2023–08
  4. By: Haddad, Eduardo A. (Professor Titular do Departamento de Economia da FEAUSP e Senior Fellow do Policy Center for the New South); Araújo, Inácio F. (Pesquisador Sênior do Núcleo de Economia Regional e Urbana da USP (NEREUS) e Visiting Scholar na Universidade de Cornell); Sacco, João Gabriel (Pesquisador Júnior do Núcleo de Economia Regional e Urbana da USP (NEREUS))
    Abstract: Esta nota técnica apresenta resultados de exercícios de simulação com um modelo inter-regional de equilíbrio geral computável para avaliação ex-ante dos impactos regionais da reforma tributária. A discussão considera os novos parâmetros tributários contidos na PEC 45/2019. Os resultados sugerem um trade-off entre eficiência e desigualdade regional. Se, por um lado, haveria ganhos potencias de crescimento do PIB capitaneados pelo aumento da eficiência alocativa dos recursos, por outro lado a reforma atuaria de forma a concentrar a produção e acentuar sua desigualdade ao longo do território nacional. Finalmente, em termos de arrecadação tributária do IBS, na ausência de um fundo compensatório, Amazonas, Bahia, São Paulo, Paraná, Santa Catarina, Rio Grande do Sul, Mato Grosso e Goiás seriam os estados que tenderiam a perder arrecadação com a reforma.
    Keywords: Reforma Tributária; Estrutura Tributária; Tributação; Impostos; Impactos Regionais; Modelo Inter-regional de Equilíbrio Geral Computável; PEC 45/2019; Brasil
    JEL: D58 H20 R12
    Date: 2023–09–02

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