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on Economic Geography |
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Issue of 2026–10–19
five papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Elisa Giannone; Yuhei Miyauchi; Nuno Paixao; Xinle Pang; Yuta Suzuki |
| Abstract: | How do depopulation and population aging evolve differently across regions within a country, and what are their implications for aggregate economic activity and regional inequality? Using spatially disaggregated data from Japan over the past several decades, we show that rural areas have experienced significantly faster depopulation and aging than urban areas, driven by low fertility and sustained out-migration of young cohorts. Regions undergoing these trends face declining local amenities and rising per-capita public service costs. To study the future evolution and economic consequences of these dynamics, we develop and calibrate a dynamic life-cycle spatial general equilibrium model. The model predicts widening geographic disparities in depopulation, aging, and economic activity in the coming centuries. While subsidies to declining regions can lower regional inequality, they come at the cost of lower aggregate efficiency and higher public service expenditures. |
| JEL: | E62 J11 O18 R12 R13 R23 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35852 |
| By: | Angela Martiradonna |
| Abstract: | Climate policy changes production costs and can reshape the geography of production. We study this spatial channel in a focused model where mobile industrial activity responds to local attractiveness, agglomeration strengthens attractiveness, and carbon policy lowers the profitability of emissions-intensive locations. The model yields an explicit carbon-policy threshold separating spatial instability from stability. When emissions intensity rises with local industrial density, spatial concentration raises aggregate emissions even with unchanged total industrial activity. Embedding these dynamics in a two-jurisdiction policy game creates a wedge between regional and collective incentives: each government values the industrial activity located within its own territory, while aggregate welfare internalizes the effect of policy on economy-wide concentration. With transferable utility, cooperation can select a policy on the stable side of the threshold while the non-cooperative policy lies on the unstable side. A numerical exercise illustrates this regime change. European regional evidence, based on industrial emissions and gross value added at NUTS2 level, documents a positive emissions-activity association and identifies the empirical quantities needed to measure relocation and concentration effects. The analysis links climate cooperation to the spatial organization of production and establishes a benchmark for policy-induced industrial relocation. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.10939 |
| By: | István Boza (ELTE Centre for Economic and Regional Studies); László Czaller (Corvinus University of Budapest; ELTE Centre for Economic and Regional Studies) |
| Abstract: | This paper examines how workers and employers jointly shape spatial wage disparities across Hungarian local labor markets. We combine longitudinal linked employer–employee administrative data for 2012–2022 with functional local labor markets constructed from district-to-district commuting flows in the 2022 Hungarian Census. Our preferred delineation contains 29 commuting zones and raises the share of employed residents working within the same unit above 90 percent, compared with 72 percent for districts and 81 percent for counties. We estimate an additive worker–employer fixed-effect wage model and decompose wage variation at the individual level, between commuting zones, and within commuting zones. Differences in commuting-zone mean wages account for 2.8 percent of national log-wage variance and 1.1 percent when the Budapest commuting zone is excluded. Although the between-zone component is modest, its structure is systematic: zones with higher average worker effects also tend to have higher average employer wage premia, so the spatial alignment of worker and employer components accounts for an important part of spatial wage differences. Wage dispersion and the relative importance of worker heterogeneity, employer premia, and worker–employer sorting within local labor markets also vary substantially across the country. The results indicate that spatial wage disparities in Hungary reflect not only differences in workers’ earnings potential and the employer premia attached to their jobs, but also how these components are combined across local labor markets. |
| Keywords: | commuting zones; regional wage inequality; linked employer–employee data |
| JEL: | J31 R12 R23 C23 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:has:discpr:2615 |
| By: | Andreas Mense; Wolfgang Dauth; Matthias Wrede |
| Abstract: | We investigate the employment effects of job access within cities. To overcome the endogeneity of residential location choices, we exploit the quasi-random allocation of applicants across affordable housing units in five German cities and propose a novel IV strategy. Our job access measure combines proximity to jobs in both geographical and skill space, taking into account potential competition from other workers. We compile a unique administrative dataset comprising the complete labor market biographies of individuals who moved into affordable housing. A one-standard-deviation increase in job access reduces the unemployment hazard of unskilled workers by 3.4 percentage points. We do not find similar effects for skilled workers, who are more likely to own a car and are therefore less geographically constrained. Simulations show that full segregation, with all unskilled allocated to central neighborhoods, would reduce the city-wide unemployment rate of the largest city in our sample, Munich, by 1.3 percentage points. |
| Keywords: | job access, unemployment, urban labor markets, labor supply, affordable housing |
| JEL: | I31 I38 J13 R23 R38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13040 |
| By: | Romero, João Prates |
| Abstract: | Os países da América Latina e do Caribe enfrentam uma crise de desenvolvimento caracterizada por três armadilhas que se reforçam mutuamente: a armadilha da baixa capacidade para crescer; a armadilha da alta desigualdade, baixa mobilidade social e frágil coesão social; e a armadilha da baixa capacidade institucional e governança pouco efetiva. Para romper essas armadilhas e evitar uma nova década perdida na região, é necessário um grande impulso (“big push”) de investimentos transformadores, articulado a políticas de desenvolvimento produtivo que assegurem um futuro mais produtivo, inclusivo e sustentável. No Brasil, desde 2023 vem sendo implementado o programa Nova Indústria Brasil (NIB), a partir de uma abordagem de políticas orientadas por missões, com identificação de cadeias prioritárias. O presente estudo contribui de forma original para os esforços de desconcentração geográfica do desenvolvimento produtivo brasileiro, mapeando a distribuição das cadeias produtivas no território nacional e identificando regiões promissoras para um adensamento tecnológico desconcentrado e inclusivo. |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col127:90193 |