Increasing returns and spatial unemployment disparities

Abstract.  Recent trade and location theories (e.g., the "new economic geography") deal with regional disparities in production and income, but assume full employment and are thus ill equipped to study regional unemployment disparities. The wage curve-approach, which explicitly shows how disparities in real wages and unemployment rates are interrelated, can not endogenously explain the origin of these asymmetries. In the article we derive a theoretical model that combines these two strings in the literature. We show that a core-periphery in real wages is associated with and magnified by regional unemployment disparities. This wage curve relation is stable over time with an increasing returns technology. That is, the wage curve does not vanish as workers move from the periphery to the core, but it is rather reinforced by migration. These theoretical predictions are consistent with stylised empirical facts from the EU.     

Analyzing spatial variations in farm income distributions—a multivariate approach

Many studies have explored the size distribution of income, but empirical analysis has usually involved the examination of statistics which, in effect, summarize characteristics of the distribution, or the relation of a statistic (usually average income) to a set of explanatory variables.The present study differs from previous empirical work by relating observations in specified income intervals to a set of explanatory variables. This multiple equation model appears to be an innovation in income distribution studies.Census data on family unit income distributions by county were taken as observations on a set of dependent variables. Each income class interval is associated with a corresponding dependent variable. The dependent variable consists of the proportionate number or frequency of income units measured in percentage terms. For each dependent variable, then, there will be as many observations as counties reported.Each of the dependent variables is related to a given set of independent variables using multivariate analysis. Observations on these variables are the same for all cases; that is, each dependent variable is related to the same set of independent variables.The multivariate approach employed here allows an investigation of the behavior of a coefficient in each income class in turn. A good deal of additional information (relative to work with income class averages and economic development) is thereby generated. The model was estimated for two time points on California data. The paper includes an interpretation of the results for several independent variables including education and location, and also some comparisons of the results over time.     

Use and misuse of the allocation rate in models of population migration

In empirical work on population migration, researchers have utilized many different measures of migration. 1 measure that is used periodically is an "an allocation rate", most commonly defined as the number of persons moving from origin i to destination j during the period. While an allocation rate is a valid and interesting measure, it has been misunderstood in several instances, leading to some empirical results that are difficult to interpret. In this paper, previous work on allocation rates is discussed, and 1 study is replicated for the 1975 to 1980 period. It is demonstrated that inclusion of origin variables in such models is theoretically incorrect and results in substantial biases in empirical work. Inclusion of ratios of destination-to-origin variables is valid only with a very narrow interpretation.     

Undivided Cities in the Netherlands: Present Situation and Political Rhetoric

In various countries we observe governments aiming to produce mixed income areas to reduce or prevent spatial segregation. This almost always implies a redifferentiation, or restructuring of the housing stock of low-income areas. This strategy has its advantages and disadvantages. Redifferentiation and restructuring are based on the idea that solutions to the problems of spatial segregation and concentration can be found in the housing stock. This is also the case in the Netherlands. Since 1997, the Dutch Government has advocated a housing policy promoting a restructuring of urban neighbourhoods by building more expensive dwellings in traditionally low-income areas in order to influence the income mix in these neighbourhoods, thereby implying that this is a positive and feasible development. This paper will focus on the goals of the undivided cities formulated by the Dutch Government and the arguments concerning the relation between segregation and restructuring of the urban housing stock. The paper will also examine the income mix and income segregation in Dutch urban areas itself. Is there any reason to aim at a larger spatial differentiation of income?     

对房价与收入衡量指标的探析

针对房价收入比指标衡量商品住宅价格与居民收入水平关系的不足,提出了住房单价月收入比的概念,阐述了该指标的优点与应用,并以南京为例进行了实证分析,指出该指标最适用于对不同收入群体的住房支付能力进行分类研究,以优化配置住房政策及住房金融资源。并建议将房价月收入比纳入各个城市房地产指标体系,从而探讨了我国房地产指标体系的新思路。     

Factors influencing unemployment duration with a special emphasis on migration: An investigation using SIPP data and event history methods

The length of time that individuals are unemployed has considerable political and policy significance. Important questions about the factors influencing the duration of unemployment remain to be answered. The purpose of this paper is to carry out an empirical investigation of the factors that cause unemployment to be of a longer or shorter duration. Such factors are identified within a micro-economic framework drawn from human capital and job search theories. Event history methods and panel data are used to model unemployment duration. The data come from the Survey of Income and Program Participation (SIPP) which contains weekly information on labor force status over about a two and a half year period, as well as data on a number of individual and locational attributes. Evidence from the empirical investigation suggests that migration, temporary layoff and income during unemployment combine with individual characteristics to influence the duration of unemployment spells.An earlier version of this paper was presented at the 38th North American Meetings of the RSAI, New Orleans, LA, November 1991.     

The effects of regional migration on gross income of labour in Sweden

In this article we study the effect of interregional migration on gross income of labour. The empirical analysis is based on Swedish household data for the period 1994 to 1995. We are primarily concerned with the allocation effect of migration on economic growth in an economy where the incentives for migration may be hampered by relatively high income taxes and transfers. A treatment-effect model for migration and income is estimated. The results indicate significant income gains from migration for the unemployed as well as for those who were employed prior to migration. The estimation results also indicate negative correlation between errors in the migration function and the income function. The hypothesis of no self-selection can be rejected.Received: 26 March 2003, Accepted: 29 October 2003, JEL Classification: J61, R23We acknowledge helpful comments by Karl-Gustaf Löfgren, Department of Economics, Umeå University, Kent Eliasson, Swedish Institute for Growth Policy Studies (ITPS), and three anonymous referees. Assistance by Roger Jacobsson, the Computer Centre of the University of Umeå (UMDAC) is appreciated.     

Area-specific subsidies and population dynamics: Evidence from the Australian zone tax offset

This paper studies the effect of the zone tax offset (ZTO), a place based income subsidy implemented in rural Australia since 1945. The policy was intended to improve the welfare of inhabitants and provide an incentive for settlement. Our empirical approach exploits the geographical discontinuity in the eligibility for the subsidy to identify its causal effect on population growth. Using data on population by locality from the historical censuses we find that the ZTO had a positive but only temporary effect on population growth in the targeted areas.     

Migration in the urban-rural hierarchy of China: insights from the microdata of the 1987 National Survey

Microdata from the 1987 National Population Survey are used to analyze internal migration in China in the 1980s. The focus is on the impact of migration policies on rural-urban migration. "There are two main findings. First, although the migration policy resulted in a very low migration level and systematic distortions in migration schedules, its encouragement of downward migrations was very ineffective, whereas its control on rural-to-urban migrations was partially weakened by the strong upward aspirations of rural families awakened by recent economic reform. Consequently, net in-migration contributed substantially to the growth both of city and of town populations. Second, although the level of education had a strong positive effect on the migration propensities both of males and of females in general, it had a strong negative effect on the migration propensities of females at the time of marriage, a finding which suggests that the families at subsistence income level tended to marry their daughters to grooms in other communities in order to reduce the risk of familial income shortfalls."     

Examining homelessness in Germany: The impact of regional housing market conditions on homelessness in North Rhine‐Westphalia,Germany

This paper proposes a simple model of the housing market and homelessness by taking into consideration both flat size and quality. A critical income ensuring positive housing consumption can be determined. The empirical analysis of districts in North Rhine‐Westphalia suggests that conditions on the housing market, income levels and several variables depicting a district's social environment are important drivers of homelessness: high rents and relatively few vacant small flats lead to an increase in homelessness. The condition of vacant flats significantly affects homelessness levels too. Homelessness also increases when the share of those with a very low income is higher, since this makes it more difficult to reach the critical income.     

The long- and short-run influences of housing prices on migration

A change in housing prices has a profound impact on households' housing equity and future moving decisions. While most previous studies focus on discussing the mobility lock-in effect due to housing price depreciation, revealing that there is a positive relationship between housing prices and migration, this study reexamines their relationship by using the panel cointegration method and city-level panel data for Taiwan during the 1994–2016 period. The empirical results reveal that migration and housing prices are cointegrated, and the influence of housing prices on migration is significantly positive in the long run. However, the influence of housing price changes on migration is not as significant as expected in the short run. To further examine their short-run relationships, we use quantile regression and the results show that the influence of housing price changes on migration is significantly negative below the 0.5 quantile, but it turns out to be significantly positive in the 0.9 quantile. The influence of housing price changes on migration is not significant between the 0.5 and 0.8 quantiles. We conclude that the influence of housing price changes on migration might be asymmetric in the short run.     

Regional investment incentives in Germany: Impacts on factor demand and growth

The aim of this paper is to analyse the effects of regional investment incentives – a main component of regional policy in West Germany – on regional factor demand (investment and labor), growth and convergence of per capita income for the period 1978 to 1989. Demand for investment and labor arise from a model of cost minimization at given output with a putty-clay production function. The production function allows for regional technical efficiency. To model the output effect on factor demand an auxiliary output function is specified. In estimating the functions attention is given to the short-run dynamics and the long-run behaviour of factor demand by error-correction models. The empirical long-run relationships are then used to simulate the effects of regional investment incentives. In contrast to most studies for other countries the empirical results provide evidence that regional policy in Germany induces not only additional investment but also creates positive employment effects. However, the effects of regional investment incentives on growth and convergence of labor productivity are negligible. Received: October 1996/Accepted: May 1999     

The determinants of elderly migration in France

The aim of this paper is to study elderly migration in France. First, it analyses whether the decision to migrate relies upon individual characteristics. Second, it examines the ways in which the economic, social and environmental characteristics of the French territories determine the retirees' choice of localization. The paper draws upon a unique database of 12.67 million French inhabitants, with information about their personal attributes and locational choices from 2003 to 2008. It also uses an original database with locational characteristics for the French territories at the level of the 364 zones d'emploi. This is the only study on regional migration in France which builds upon such a thin spatial level of analysis. The paper builds empirical probit and Heckman models dealing with selection bias and endogeneity bias issues. The paper shows that retirees usually leave large agglomerations and old industrial areas in Northern France and the Paris agglomeration and relocate to socially and environmentally attractive zones with preferable climates. When studying the migration patterns within the zones d'emploi, it appears that the most vulnerable zones, which display a lower quality of collective services as well as higher income disparities and crime rates, feature lower elderly residential mobility.     

Mobility,education and labor market outcomes for U.S. graduates: Is selectivity important?

The literature on human capital, and its positive effects on individuals and regional economies, is now vast. The linkages between human capital and migration have also found a fertile ground in recent years especially in Europe where many studies have focused on interregional migration of graduates and highly skilled individuals. However, the literature on this phenomenon in the USA is less developed. Using the SESTAT database from NSF, this paper aims at contributing to the understanding of inter-state migration behavior of graduates in the USA and its effects on their career outcomes. It builds on the existing literature not only by focusing specifically on the US context, but also incorporating into the empirical model a correction for the possible selection bias that arises from the dual relationship between migration propensity and human capital endowment. Our estimated Mincerian earning equations, corrected for migrant self-selectivity, show that indeed repeat migration is associated with higher average salaries, while late migration is associated with a salary penalty. As for the other control variables, our results are consistent with what has been found in the labor economics literature. Female workers suffer from a salary penalty, while experience, level of education and employer size are all associated with higher average salaries. The labor market also rewards different fields of study differently.     

The role of age in the decision to migrate

The consistent negative relationship between migration frequency and age is consistently verified by empirical data, but theoretical explanations have been lacking. The purpose of this paper is to articulate a formal theoretical model that predicts this relationship. The model is not intended to completely describe the migration process but focuses only on the fundamentals of the decision. The argument can be summarized as follows: because work-life expectancy is a declining function of age of family head, the older individual has a shorter time period to capture a positive utility differential at an alternative location. This implies that the present value of the utility differential stream will also fall with age. As it is probable that moving costs are either constant or an increasing function of age, the probability that the present value of the utility stream will exceed moving costs will also decline. Thus, the migration rate, implicitly defined as the probability of migrating multiplied by the number of people in a given age cohort, will vary inversely with age.     

The cost of living,labor market opportunities,and the migration decision: A case of misspecification?

A large literature has emerged dealing with the economic and non-economic determinants of migration. Among the economic determinants of migration are income levels and rates of change in income in different areas. These variables are designed to measure labor market opportunities both currently and in the future. Invariably, studies which attempt to explain migration utilizenominal measures of income and change in income, notreal measures. Yet assuming that individuals are not subject to money illusion, they would be interested in cost of living information as well as in information regarding nominal income and change in income. This paper examines this issue empirically. We demonstrate that some cost of living variables, when included in a migration equation, enter with the expected sign and are statistically significant. We also demonstrate the failure to include such variables in a regression results in misspecification and bias involving some of the variables in the regression.They wish to thank Professor Mark Fabrycy for helpful suggestions. They also thank their graduate research assistants, Bobbie Sheperd, Alison Zatik and John Breivogel, for data collection and computational assistance. They authors alone are responsible for any remaining shortcomings.     

Sustainability and migration: experiments from the Senegalese peanut basin

Many experts have concluded that migration and regional diversification are necessary steps to combat soil degradation and income erosion in the Sahel. Through observation and experiments conducted with two Senegalese village Social Accounting Matrices, the socioeconomic and environmental impact of migration and diversification out of agriculture is examined. Economically, it is found that migration can result in substantial increases in village income. These increases are accompanied by a shift in inter-compound income distribution and a shift in intra-compound access to agricultural income. Socially, the cost to the family of increased migration could be high due to the emergence of single parent households. Environmentally, the impact of migration and diversification out of agriculture need not be positive. Stress on the environment might be reduced through curtailing peanut production, but reductions in the agricultural labor force could actually reduce the possibility for labor intensive soil conservation, increase the possibility for millet mono-cropping, and increase the incidence of extensive but sparsely cultivated land because of land-tenure insecurity due to current usufruct laws.The data used for this study was collected as part of a project on land tenure and agricultural productivity in Africa which was funded by USAID and the Land Tenure Center at the University of Wisconsin. I would like to thank these institutions for their support. I would also like to thank Mordechai Shechter, Irma Adelman, Amos Golan, and an anonymous referee for comments and helpful suggestions.     

Building retrofit in shrinking and ageing cities: a case-based investigation

Thermal renovation (retrofit) of residential buildings is one of the major issues in the transition to a low-carbon energy system. This paper argues that the specific conditions in shrinking middle-size cities create an especially difficult environment for energy renovations. Using empirical data from the shrinking City of Delitzsch, Germany, it is hypothesized that buildings with poor energy efficiency are often inhabited by tenants or owners who impede retrofit activities due to their socio-economic conditions. The research analyzes the relation between buildings with a high potential for final energy reduction and a concentration of low-income, older or empty-nest households. The analysis examines this relation not only on an aggregated city level but also on the level of the city's districts to identify renovation ‘hot spots’ in the city. Specific challenges are identified for building renovations in shrinking cities due to a high concentration of possible barriers in the relevant housing stock. As a further consequence, those households with a low net-equivalent income are also at risk of energy poverty. In order to achieve a low-carbon and just society, possible actions are suggested for buildings with elevated barriers to energy renovation in shrinking cities.     

Do natural amenities influence undergraduate student migration decisions?

The primary objective of this paper is to examine the influence of natural amenities on student migration decisions using institution-level data from the National Center for Education Statistics’ Integrated Postsecondary Education Data System. We surpass the scope of previous studies focused on natural amenities, which rely on a limited selection of state-level measures, by matching interpolated weather station- and county-level climate data to each post-secondary institution. Results suggest that students consider natural amenities in their migration to college decision and, in a number of cases, preferences for natural amenities vary based on origin state amenity conditions. Nonetheless, migration decisions are dominated by origin state educational opportunities and by proximity of the student’s origin state to the state of college attendance.     

Inequality and city size: An analysis for OECD functional urban areas

As cities grow, both the productivity of their inhabitants and the income distribution among them is expected to change. While the empirical literature has widely shown how productivity (and income) changes with city size, the empirical evidence on the effects on income inequality remains very limited. The few papers that study the relationship between city size and city-level inequality focus on a single country and do not provide international comparative evidence. In this paper, we study the relationship between city size and income inequality at city level for a sample of 153 functional urban areas (FUAs) across 11 OECD countries.