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on Economic Geography |
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Issue of 2025–10–06
thirteen papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Lina Bjerke (Jönköping International Business School); Steven Bond-Smith (University of Hawai‘i at MÄ noa, University of Hawai‘i Economic Research Organization); Philip McCann (The University of Manchester and The Productivity Institute); Charlotta Mellander (Jönköping International Business School) |
| Abstract: | In this paper, we explore new and significant economic geography features of the work-from-home (WFH) revolution. The increased practice of WFH has prompted a redistribution of working populations between urban and rural locations. Using a uniquely detailed and comprehensive individual-level nationwide Swedish micro-dataset, we analyse shifts in commuting distances pre- and post-pandemic and explore their association with teleworkability. Beyond the well-documented centrifugal ‘donut’-type effects within cities, our study finds a significant centripetal ‘shadow’ effect on smaller cities. This phenomenon draws workers relocating from outside metropolitan regions closer to major urban areas, reinforcing urbanization trends contrary to the expectations of geographic decentralization enabled by remote work. These nuanced dynamics—highlighting simultaneous dispersion at the local level and concentration within the urban system—reveal new knowledge into the complex interplay between remote work, urbanization, and regional development. |
| Keywords: | Working from home, agglomeration economies, regional distribution. |
| JEL: | R12 R23 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:hae:wpaper:2025-1 |
| By: | Freitas, Dimitria |
| Abstract: | Regional economic disparities within countries have become increasingly large, often surpassing the disparities observed between countries. To address regional inequality, governments have been turning away from standard subsidies and are experimenting with public employment reallocation as a place-based policy. This paper estimates the causal effect of public employment reallocation on local labor markets. I study the 'Heimatstrategie, ' which relocates around 3, 000 public sector jobs from Munich to economically lagging regions in Bavaria, Germany. Using novel data on 60 agency relocations between 2015 and 2025, I exploit the government's quantitative selection criteria for receiving municipalities and implement a long-differences design comparing treated Bavarian municipalities to Mahalanobis-matched control municipalities in other German states. My estimates show that relocations increased private sector employment shares by up to 2.3%, reduced unemployment rates by up to 11.9%, and increased local population by up to 1.6% without harming sending locations. These results correspond to a public-to-private jobs multiplier of 1.08. To assess general equilibrium effects the relocation program, I implement a quantitative spatial model with a two-sector (public and private) framework showing modest increases in amenities through the relocation counterfactual and negligible welfare effects. |
| JEL: | J21 J45 J68 R23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325457 |
| By: | Sieger, Lisa; Weber, Christoph; Stein, Tobias |
| JEL: | C31 Q28 Q55 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325393 |
| By: | Michel Bierlaire (TRANSP-OR, EPFL); Vincent Dautel (LM, LISER); Frédéric Docquier (UDM, LISER); Silvia Peracchi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This study examines the influence of agglomeration and deglomeration forces on residence-workplace location choices across skill groups. Contrary to the standard approach in economic geography, the focus on skills rather than people is particularly relevant in knowledge-based economies, where core-periphery dynamics are driven by skill disparities. Our case study examines the mobility of French-born workers within the Greater Region surrounding Luxembourg. Between 2005 and 2019, an estimated 38, 445 additional workers aged 20-59 joined the Luxembourg economy, of which 25, 801 were highly educated. We examine how wage differentials and housing costs, among other factors, have influenced migration and commuting patterns across skill groups. Our results show that while higher housing costs in core areas create deglomerative effects for low- and medium-skilled workers, high-skilled workers are more responsive to wage differentials and remain undeterred by rising housing prices. These forces alone have increased the number of tertiary-educated movers by 8, 619 between 2005 and 2019, compared to 3, 091 medium-skilled and 543 low-skilled. They substantially contributed to the doubling of the ”brain drain“ from the periphery to the core (from 12 to 24%) and to the widening of regional skill differentials. Overall, these findings underscore the need to look beyond people and consider skill differentials when modeling core-periphery dynamics or formulating policies to promote inclusive regional development. |
| Keywords: | Regional mobility, Human capital, Core-periphery dynamics |
| JEL: | R23 J61 R12 |
| Date: | 2025–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2025015 |
| By: | Federico Fabio Frattini (Fondazione Eni Enrico Mattei); Francesco Vona (University of Milan and Fondazione Eni Enrico Mattei); Filippo Bontadini (Luiss University and SPRU - University of Sussex); Italo Colantone (Bocconi University, GREEN Research Center, Baffi Research Centre, CESifo and Fondazione Eni Enrico Mattei) |
| Abstract: | What are the job multipliers of the green industrialization? We tackle this question within EU regions over the period 2003-2017, building a novel measure of green manufacturing penetration that combines green production and regional employment data. We estimate local job multipliers of green penetration in a long-difference model, using a shift-share instrument that exploits plausibly exogenous changes in non-EU green innovation. We find that a 3-years change in green penetration per worker increases the employment-to-active population ratio by 0.11 pp. The effect is: persistent both in manufacturing and outside manufacturing; halved by agglomeration effects that increase the labour market tightness; stronger for workers with high and low-education; and present also in regions specialized in polluting industries. When focusing on large shocks in a staggered DiD design, we find ten times larger effects, particularly in earlier periods. |
| Keywords: | Green industrialisation, Local job multipliers, Employment effects of the green transition, Shift-share IV design, Difference-in-differences |
| JEL: | J21 O14 R11 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.13 |
| By: | Dijkstra, Lewis; Kompil, Mert; Proietti, Paola |
| Abstract: | Between 2001 and 2021, capital metro regions had the fastest productivity growth in the EU, followed by non-metro regions, while it was much lower in other metro regions. Capitals reduced their sectoral concentration, while the other regions increased it. Our shift-share analysis confirms that capitals relied entirely on productivity growth within sectors, while the other two types benefitted also from shifting jobs to more productive sectors. Our regression analysis showed that convergence and being a capital boosted productivity growth. Population density also strengthened productivity growth, but not enough to prevent other-metro regions from lagging behind the non-metro regions. |
| Keywords: | growth; productivity; employment; capital; metro; regions; Europe; EU; ARDECO |
| JEL: | E24 O18 O32 P25 R12 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129664 |
| By: | Bieske, Lara; Adam, Hanna; Stadelmann, David; Larch, Mario |
| JEL: | F15 F43 O18 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325414 |
| By: | von Auer, Ludwig; Trede, Mark |
| JEL: | R12 J21 C43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325426 |
| By: | Pierluigi Murro; Valentina Peruzzi |
| Abstract: | This paper examines whether judicial enforcement shapes firms' participation in global value chains (GVCs). Exploiting Italy's 2013 court reorganization as a natural experiment, we combine firm-level survey data with administrative records and implement a spatial discontinuity IV design. We find that longer trials significantly reduce the probability of GVC participation: even delays of just a few weeks in civil proceedings translate into sizeable declines, underscoring the economic value of timely enforcement. The effect is concentrated among downstream firms and in trade with advanced markets, and operates through external finance, product complexity, and firm opacity |
| Keywords: | Global value chains; Judicial enforcement; Regional development; Product complexity |
| JEL: | F10 F61 K41 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp264 |
| By: | Egger, Hartmut; Elke, Jahn; Meier, Philipp |
| JEL: | F23 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325399 |
| By: | Eric Donald; Masao Fukui; Yuhei Miyauchi |
| Abstract: | We study the optimal allocation of population and consumption in a dynamic spatial general equilibrium model with frictional migration, where households' idiosyncratic location preference shocks are private information. We derive a recursive formula for the constrained-efficient allocation, capturing the trade-off between consumption smoothing and efficient migration. In a quantitative model calibrated to the US economy featuring both cross-state migration and risk-free savings, we find that the constrained-efficient allocation features lower population but higher average consumption in less productive states than the status quo, achieving efficiency and spatial redistribution simultaneously through dynamic incentives. In response to local negative productivity shocks, the constrained-efficient allocation features more front-loaded consumption than the status quo, with systematic heterogeneity linked to the location’s pre-shock fundamentals. |
| JEL: | E0 F0 R0 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34290 |
| By: | Steven Bond-Smith (University of Hawai‘i at MÄ noa, University of Hawai‘i Economic Research Organization); Younghan Lee (University of Hawai‘i at MÄ noa, Department of Economics) |
| Abstract: | We use metropolitan area Consumer Price indexes (CPI) and the US CPI to calculate a CPI-based Regional Price Parity index (CPI-based RPP) for the 29 US cities with CPIs published by the Bureau of Labor Statistics. This CPI-based RPP can be used (along with the US CPI) to make fair comparisons of economic performance in US cities (over time) at comparable (and constant) prices for any period with published CPI data. The Bureau of Economic Analysis (BEA) publishes a similar PCE Price Index-based Regional Price Parity Index (BEA RPP), but the BEA RPP is only published annually back to 2008, with a year delay. Prior to our project, there was no suitable price comparison index for adjusting economic data for geographic price differences in periods outside this range or with more frequent observations. We draw on the properties of price parity indexes to estimate our CPI-based RPP. This requires estimating average relative CPI price levels for a known period, re-leveling CPIs to be consistent with average relative levels in the known period, and calculating the CPI-based RPP for any period based on relative re-leveled local and national CPIs. This results in a CPI-based RPP for any period with published CPI data, as far back as 1913 in some cities through to the most recent CPI observations. We demonstrate the index by exploring regional price trends and examining real per capita GDP and real per capita personal income at constant and comparable prices. |
| Keywords: | Regional Price Parity, Geographic price differences, Consumer Price Index, Cost-of-living |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hae:wpaper:2025-2 |
| By: | Luis Espinoza (Texas A&M University); Jose Morales-Arilla (School of Government and Public Transformation, Tecnológico de Monterrey) |
| Abstract: | We examine how geographic proximity can substitute for contract-enforcement institutions in enabling international exports of specialized goods. When ex-porters must meet buyers’ specific product requirements, successful trade de-pends on either strong contract enforcement or close buyer-seller relationships that enable monitoring and trust. We argue that geographic proximity facilitates such relationships by reducing the costs of frequent business travel. Our theoretical framework predicts that institutional quality should primarily affect specialized trade over longer distances, as proximity-based relationship-building becomes prohibitively expensive. Using bilateral, product-specific export data in a gravity model, we find strong empirical support for this prediction. Consistent with our theory, we also show that business travel expenses and passenger flights decline more sharply with distance when destination countries have weak contract enforcement institutions. |
| Keywords: | International trade, Contract enforcement, Relationship-specific trade, specialized goods, Gravity model, Business travel. |
| JEL: | D72 D83 L82 O54 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:gnt:wpaper:10 |