nep-geo New Economics Papers
on Economic Geography
Issue of 2024‒04‒15
six papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. Untangling regional opportunity spaces: The role of narratives and place leadership By Roessler, Max; Grillitsch, Markus; Miörner, Johan; Schiller, Daniel
  2. UK Levelling Up R&D mission effects: A multi-region input-output approach By Huanjia Ma; Raquel Ortega-Argilés; Matthew Lyons
  3. Working from Home Increases Work-Home Distances By Coskun, Sena; Dauth, Wolfgang; Gartner, Hermann; Stops, Michael; Weber, Enzo
  4. Do Commuting Subsidies Drive Workers to Better Firms? By David R. Agrawal; Elke J. Jahn; Eckhard Janeba
  5. Shades of Blue: The Geography of the Ocean Economy in Brazil By Haddad, Eduardo A.; Araujo, Inacio F.
  6. Size Matters: Matching Externalities and the Advantages of Large Labor Markets By Enrico Moretti; Moises Yi

  1. By: Roessler, Max (University of Greifswald); Grillitsch, Markus (CIRCLE, Lund University); Miörner, Johan (CIRCLE, Lund University); Schiller, Daniel (University of Greifswald)
    Abstract: This paper aims to identify micro-level processes shaping the narratives about regional opportunity spaces. A process perspective is applied to investigate how place leaders engage in shaping narratives to influence the perception of regional opportunity spaces. The empirical research is based on a comparative case study of four peripheral regions in Germany including ninety-two interviews with regional stakeholders complemented by two cross-regional focus groups. Our findings emphasize the central role of place leadership in influencing the perception of regional opportunity spaces, show two pathways of changing dominant narratives (outside-in and inside-out) and provide a multiple-phase framework for their analysis.
    Keywords: opportunity spaces; narratives; place leadership; agency; peripheral regions
    JEL: O33 P52 R11 R58
    Date: 2024–03–21
  2. By: Huanjia Ma (City-REDI Institute, The University of Birmingham); Raquel Ortega-Argilés (Manchester Institute of Innovation Research and TPI Institute, The University of Manchester); Matthew Lyons (City-REDI Institute, The University of Birmingham)
    Abstract: This paper examines the UK implications for regional and national growth associated with different geographical investment patterns of publicly-funded R&D, in the light of the recommendations of the 2022 Levelling Up White Paper, aimed at balancing the national economy. The White Paper outlines twelve main "missions" focused on science, technology, and education to achieve this goal. One of these missions aims to increase domestic public Research and Development (R&D) by at least 40% outside the Greater South East (GSE) by 2030. We develop three scenarios based on different assumptions about extra R&D allocation. We use data from UKRI and ONS to determine the current distribution of R&D investment in the UK, and then using the multi-regional Socio-Economic Impact Model for the UK we evaluate our three proposed R&D spending scenarios. Our findings suggest that the regional impact varies significantly across the different proposed scenarios. The scenario that allocates more GERD to areas with previously low funding levels yields the largest effect. On average, output, employment and GVA in regions outside GSE increase by 0.33%, 0.37% and 0.34%, respectively, showing a potentially positive effect on the levelling up of R&D in the country. Our analysis of both internal and external multipliers highlights the importance of investing in regional redistribution. We demonstrate that the GSE is more self-sufficient as it has much higher internal multipliers than the rest of the UK. However, we identified a potential obstacle: the capacity to absorb human capital, which could reduce the expected positive results of a more spatially balanced R&D expenditure across the UK.
    Keywords: Multi-region input-output, R&D, Levelling-up, UK
    Date: 2024–03
  3. By: Coskun, Sena (FAU Erlangen Nuremberg); Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung); Gartner, Hermann (Institute for Employment Research (IAB), Nuremberg); Stops, Michael (Institute for Employment Research (IAB), Nuremberg); Weber, Enzo (Institute for Employment Research (IAB), Nuremberg)
    Abstract: This paper examines how the shift towards working from home during and after the Covid-19 pandemic shapes the way how labor market and locality choices interact. For our analysis, we combine large administrative data on employment biographies in Germany and a new working from home potential indicator based on comprehensive data on working conditions across occupations. We find that in the wake of the Covid-19 pandemic, the distance between workplace and residence has increased more strongly for workers in occupations that can be done from home: The association of working from home potential and work-home distance increased significantly since 2021 as compared to a stable pattern before. The effect is much larger for new jobs, suggesting that people match to jobs with high working from home potential that are further away than before the pandemic. Most of this effect stems from jobs in big cities, which indicates that working from home alleviates constraints by tight housing markets. We find no significant evidence that commuting patterns changed more strongly for women than for men.
    Keywords: working from home, commuting, urban labor markets
    JEL: J61 R23
    Date: 2024–03
  4. By: David R. Agrawal; Elke J. Jahn; Eckhard Janeba
    Abstract: An unappreciated potential benefit of commuting subsidies is that they can expand the choice set of feasible job opportunities in a way that facilitates a better job match quality. Variations in wages and initial commuting distances, combined with major reforms of the commuting subsidy formula in Germany, generate worker-specific variation in commuting subsidy changes. We study the effect of changes in these subsidies on a worker’s position in the wage distribution. Increases in the generosity of commuting subsidies induce workers to switch to higher-paying jobs with longer commutes. Although increases in commuting subsidies generally induce workers to switch to employers that pay higher wages, commuting subsidies also enhance positive assortativity in the labor market by better matching high-ability workers to higher-productivity plants. Greater assortativity induced by commuting subsidies corresponds to greater earnings inequality.
    Keywords: commuting, commuting subsidies, taxes, wage distribution, local labor markets, AKM, assortativity
    JEL: H20 H31 J20 J61 R23 R48
    Date: 2024
  5. By: Haddad, Eduardo A. (Departamento de Economia, Universidade de São Paulo); Araujo, Inacio F. (Departamento de Economia, Universidade de São Paulo)
    Abstract: We quantify blue economy contributions and analyze coast-hinterland economic interdependence through interregional linkages The study advances by adopting a multi-level approach, analyzing municipality and state-level data of ocean-related activities. Using an interstate input-output model, we estimate the blue economy’s value chains, enhancing our understanding of its systemic impacts. We address gaps in national, regional, and local blue economy assessments, providing insights for tailored policies in Brazil’s diverse coastal regions as Brazil aims for UN Sustainable Development Goal 14 by 2030. Our analysis underscores the diverse blue economy structure and regional disparities, advocating for the coordination of sector and region-specific policies. Embracing an integrated regional approach acknowledges the interconnectedness of coastal economies to address shared challenges and capitalize on regional strengths effectively.
    Keywords: Regional Accounts; Ocean Economy; Blue Economy; Ocean-related activities; Local Economic Activity; Input-Output Analysis; Domestic Value Chains
    JEL: C67 D57 E01 R12
    Date: 2024–03–27
  6. By: Enrico Moretti; Moises Yi
    Abstract: Economists have long hypothesized that large and thick labor markets facilitate the matching between workers and firms. We use administrative data from the LEHD to compare the job search outcomes of workers originally in large and small markets who lost their jobs due to a firm closure. We define a labor market as the Commuting Zone×industry pair in the quarter before the closure. To account for the possible sorting of high-quality workers into larger markets, the effect of market size is identified by comparing workers in large and small markets within the same CZ, conditional on workers fixed effects. In the six quarters before their firm’s closure, workers in small and large markets have a similar probability of employment and quarterly earnings. Following the closure, workers in larger markets experience significantly shorter non-employment spells and smaller earning losses than workers in smaller markets, indicating that larger markets partially insure workers against idiosyncratic employment shocks. A 1 percent increase in market size results in a 0.014 and 0.023 percentage points increase in the 1-year re-employment probability of high school and college graduates, respectively. Displaced workers in larger markets also experience a significantly lower need for relocation to a different CZ. Conditional on finding a new job, the quality of the new worker-firm match is higher in larger markets, as proxied by a higher probability that the new match lasts more than one year; the new industry is the same as the old one; and the new industry is a “good fit” for the worker’s college major. Consistent with the notion that market size should be particularly consequential for more specialized workers, we find that the effects are larger in industries where human capital is more specialized and less portable. Our findings may help explain the geographical agglomeration of industries—especially those that make intensive use of highly specialized workers—and validate one of the mechanisms that urban economists have proposed for the existence of agglomeration economies.
    JEL: H0 J0 R0
    Date: 2024–03

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