nep-geo New Economics Papers
on Economic Geography
Issue of 2024‒04‒08
seven papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. The geography of EU discontent and the regional development trap By Andrés Rodríguez-Pose; Lewis Dijkstra; Hugo Poelman
  2. Climate change and migration: the case of Africa By Bruno Conte
  3. Urban-Biased Structural Change By Chen, Natalie; Novy, Dennis; Perroni, Carlo; Chern Wong, Horng
  4. Distinguishing the Urban Wage Premium from Human Capital Externalities: Evidence from Mexico By Keisuke Kondo
  5. Spatial Search By Cai, Xiaoming; Gautier, Pieter A.; Wolthoff, Ronald P.
  6. Spatial labour market inequality and social protection in the UK By Lee, Neil; Fransham, Mark; Bukowski, Pawel
  7. Räumliche Mobilität der Beschäftigten in Deutschland: Frauen pendeln kürzer als Männer (Spatial mobility of workers in Germany: Women commute for a shorter time than men) By Fuchs, Michaela; Jost, Ramona; Weyh, Antje

  1. By: Andrés Rodríguez-Pose; Lewis Dijkstra; Hugo Poelman
    Abstract: While in recent times many regions have flourished, many others are stuck —or are at risk of becoming stuck— in a development trap. Such regions experience decline in economic growth, employment, and productivity relative to their neighbours and to their own past trajectories. Prolonged periods in development traps are leading to political dissatisfaction and unrest. Such discontent is often translated into support for anti-system parties at the ballot box. In this paper we study the link between the risk, intensity, and duration of regional development traps and the rise of discontent in the European Union (EU) —proxied by the support for Eurosceptic parties in national elections between 2013 and 2022— using an econometric analysis at a regional level. The results highlight the strong connection between being stuck in a development trap, often in middle- or high-income regions, and support for Eurosceptic parties. They also suggest that the longer the period of stagnation, the stronger the support for parties opposed to European integration. This relationship is also robust to considering only the most extreme Eurosceptic parties or to including parties that display more moderate levels of Euroscepticism.
    Keywords: discontent, Euroscepticism, development trap, economic growth, employment, productivity, regions, EU
    JEL: D72 R11 R58
    Date: 2024–03
  2. By: Bruno Conte
    Abstract: How will future climate change affect rural economies like sub-Saharan Africa (SSA) in terms of migration and welfare losses? How can policy enhance SSA’s capacity to adapt to this process? I answer these questions with a quantitative framework that, coupled with rich spatial data and forecasts for the future, estimates millions of climate migrants and sizeable and unequal welfare losses in SSA. Investigating migration and trade policies as mitigating tools, I find a tradeoff associated with the former: reducing SSA migration barriers to the European Union (EU) standards eliminates aggregate welfare losses at the cost of more climate migration and high regional inequality. Reducing tariffs to the EU levels attenuates this cost.
    Keywords: climate change, migration, economic geography
    JEL: O15 Q54 R12
    Date: 2023–10
  3. By: Chen, Natalie (University of Warwick, CEPR and CESifo); Novy, Dennis (University of Warwick, CEPR, CEP/LSE and CESifo); Perroni, Carlo (University of Warwick and CEFiso); Chern Wong, Horng (Stockholm University)
    Abstract: Using firm-level data from France, we document that the shift of economic activity from manufacturing to services over the last few decades has been urban-biased: structural change has been more pronounced in areas with higher population density. This bias can be accounted for by the location choices of large services firms that sort into big cities and large manufacturing firms that increasingly locate in suburban and rural areas. Motivated by these findings, we estimate a structural model of city formation with heterogeneous firms and international trade. We find that agglomeration economies have strengthened for services but weakened for manufacturing. This divergence is a key driver of the urban bias but it dampens aggregate structural change. Rising manufacturing productivity and falling international trade costs further contribute to the growth of large services firms in the densest urban areas, boosting services productivity and services exports, but also land prices.
    Keywords: Agglomeration, Cities, Export, Firm Sorting, Manufacturing, Productivity, Services, Trade Costs JEL Classification: F15, F61, R12, R14
    Date: 2023
  4. By: Keisuke Kondo (Research Institute of Economy, Trade and Industry and Research Institute for Economics and Business Administration, Kobe University, JAPAN)
    Abstract: This study bridges the gap between the urban wage premium and human capital externalities. Merging the worker-level microdata with the geographical data in Mexico and taking the two-step approach of the Mincer wage equation, this study finds that the spatial sorting and human capital externalities entirely explain the urban wage premium in Mexico. This study finds heterogeneous effects of human capital externalities on wages between high- and low-skilled workers. Low-skilled workers benefit from human capital externalities, whereas high-skilled workers do not. Instead, high-skilled workers get more than twice as high private return to education anywhere they work as low-skilled workers.
    Keywords: Urban wage premium; Human capital externalities; Spatial sorting; Social returns to education
    JEL: J31 R12 R23
    Date: 2024–03
  5. By: Cai, Xiaoming (Peking University); Gautier, Pieter A. (Vrije Universiteit Amsterdam); Wolthoff, Ronald P. (University of Toronto)
    Abstract: This paper considers a random search model where some locations provide sellers with better chances of meeting many buyers than other locations (for example popular shopping streets or the first page of a search engine). When sellers are heterogeneous in terms of the quality of their product and/or the probability that a given buyer likes their product, it is desirable that sellers of high-quality niche products sort into the best locations. We show that this does not always happen in a decentralized market. Finally, we allow for endogenous location distributions and show that more trades are realized when locations are similar (in which case the aggregate matching function is urn-ball) but that quality weighted trade can be higher when locations are heterogeneous.
    Keywords: search frictions, spatial equilibrium, sorting
    JEL: C78 D44 D83
    Date: 2024–02
  6. By: Lee, Neil; Fransham, Mark; Bukowski, Pawel
    Abstract: Spatial inequality in economic outcomes is increasingly seen as a problem for national economies. This paper considers spatial inequality in the UK labour market, its causes, and potential policy solutions. Relative to other European countries, the UK is highly spatially uneven, but it is not as unequal as the United States. The most common explanations for growing spatial inequality are economic, in particular the linked processes of manufacturing decline, the rise in knowledge-based services, and London’s growth as an international service hub. However, these explanations ignore the importance of spatial labour market institutions on different local economies. In this paper we argue that labour market institutions are one of the key missing explanations for the changing patterns of spatial inequality in the UK, and that the impact of labour market policy is likely to dwarf the limited funding provided for local economic development policy. We conclude with some suggestions for how policy might better address spatial labour market inequality in the UK and start to create good jobs across the country.
    Keywords: public policy; labour markets; inequality; regions; ES/V013548/1
    JEL: J08 N90 R00
    Date: 2024–03–01
  7. By: Fuchs, Michaela (Institute for Employment Research (IAB), Nuremberg, Germany); Jost, Ramona (Institute for Employment Research (IAB), Nuremberg, Germany); Weyh, Antje (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "In the year 2017, women needed an average of 11.6 minutes to commute from their place of residence to their place of work, whereas men needed an average of 13.4 minutes. Based on detailed geo-referenced data, we discuss selected dimensions underlying gender-specific differences in commuting behaviour. They cover socio-demographic characteristics, occupations, wages, and commuting patterns between and within urban and rural areas." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Berufsgruppe ; Einkommenseffekte ; erwerbstätige Frauen ; erwerbstätige Männer ; IAB-Beschäftigtenhistorik ; ländlicher Raum ; Lohnhöhe ; Pendler ; regionale Mobilität ; Stadt ; Zeitverwendung ; Arbeitsweg ; 2000-2017
    Date: 2024–02–26

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