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on Urban Economics and Policy |
| 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: | 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: | Sardo, Alessio; Arlia, Daniela; Cerruti, Gianluca |
| Abstract: | Purpose This paper aims to explore the interaction between labor market reforms and housing policies in Italy, Spain and the UK. Design/methodology/approach By providing a comparative legal analysis of significant policy changes at the macro level and a descriptive overview of the evolution of their main economic determinants – wages and housing prices – at the micro level, the study highlights the socioeconomic impact of these reforms and their contribution to urban disparities. Findings The analysis suggests that the implementation of labor market reforms aimed at increasing flexibility and competitiveness coincided with heightened precarity, particularly for low-wage and nonstandard workers across all countries. Research limitations/implications The analysis does not address causality. Practical implications The paper suggests that stratified labor policy and work deregulation have an impact on urban inequality and wage distribution at sub-city level. Social implications The study argues that these reforms, coupled with macro-events such as the increase in global trades and the advent of ICT, might have exacerbated the socioeconomic inequalities at both national and local levels over the last decades by disfavoring less skilled workers, particularly in large cities. Originality/value The originality of the paper lies in its integrated analysis of labor-market reforms and housing policies as jointly producing urban disparities. Rather than treating wage stagnation, employment precarity and housing unaffordability as separate phenomena, the paper connects them through a comparative framework covering Italy, Spain and the UK. Its contribution is also empirical and spatial: it combines national regulatory trajectories with city-level evidence from Milan, London and Madrid, showing how macro-level reforms translate into uneven urban outcomes. This multi-scalar approach offers a distinctive perspective on the legal, economic and territorial roots of contemporary inequality. |
| Keywords: | European Cities;housing affordability;housing market analysis;housing prices;reforms;wage disparities |
| JEL: | R14 J01 N0 |
| Date: | 2026–12–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141253 |
| By: | Yuting Chen; Xuancheng Qin |
| Abstract: | Administrative boundary reforms in China alter the assignment of local authority and growth incentives without changing physical geography. We study two reforms with opposite institutional content---county-to-district (centralization: a county absorbed into a municipality as an urban district) and county-to-city (empowerment: a county upgraded to a county-level city)---using a firm-year pollution panel (1998--2013) and a border-pair research design that compares firms on opposite sides of the same county border. Centralizing reform lowers local NOx intensity by 14.8% through cleaner production, without shrinking output or employment; empowering reform raises COD, dust, and wastewater levels by 87--95\% through dirty growth. The local abatement is not net abatement: NOx rises in same-prefecture neighbor counties (+0.77, p |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.06374 |
| By: | Claudia Allende; Francisco Gallego; Christopher Neilson |
| Abstract: | We study how information about school quality affects families’ choices and how scaling up the intervention changes its impact. In a randomized trial in Chile, we offer families a short video and a personalized school report card before they enroll their children. Treated families choose schools with higher test scores and value added. Among families reached before enrollment, treated children score about 0.2 standard deviations higher in fourth grade, with positive but less precise estimates on later assessments. We embed the experimentally identified demand shift in a structural model of school choice and competition to study equilibrium effects at scale. Capacity constraints and centralized assignment attenuate the demand-side gains, but the same shift in demand strengthens schools’ incentives to improve quality, and the supply response roughly offsets the congestion effect. More generally, equilibrium scaling can alter experimental effects in either direction because congestion and endogenous quality responses work against each other. We use the model to guide the design of a follow-up cluster-randomized experiment, focusing on the tradeoff between precision and contamination from equilibrium spillovers. |
| JEL: | L10 L15 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35837 |
| By: | Adam Guren |
| Abstract: | What caused the 2000s housing cycle? This article synthesizes two decades of research, including reduced-form empirics and structural models. Although often contentious, the literature coheres once one accounts for each study’s timing, place, methodology, and measurement. The cycle was a perfect storm that occurred in distinct stages. Starting in the late 1990s, fundamentals improved, and credit supply increased across the income distribution due to automated underwriting and financial deregulation. In the early 2000s, a decline in interest rates was followed by a further expansion in securitized and subprime credit, the origin of which remains controversial. This sequence of shocks produced a persistent boom that triggered two shifts in beliefs: average expectations became overly optimistic, pushing prices higher, and expectations diverged, fueling speculation. In the bust, prices overshot primarily due to mortgage defaults, which removed buyers and contracted credit supply. How these forces interact and how expectations form require further research. |
| JEL: | E32 G21 R21 R31 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35863 |
| 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 |