Commuting, Migration, and Local Employment Elasticities

By F. Monte, Stephen J. Redding, Esteban Rossi-Hansberg. The American Economic Review, 2018

402 citations recorded by the source corpus.

We provide theory and evidence that the elasticity of local employment to a labor demand shock is heterogeneous depending on the commuting openness of the local labor market. We develop a quantitative general equilibrium model that incorporates spatial linkages in goods markets (trade) and factor markets (commuting and migration). We quantify this model to match the observed gravity equation relationships for trade and commuting. We find that empirically-observed reductions in commuting costs generate welfare gains of around 3.3 percent. We provide separate quasi-experimental evidence in support of the model’s predictions using the location decisions of million dollar plants. (JEL J23, J61, R23, R32, R41)

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/dd450c47aeeeb9c6881dd2547aee33c727c16278

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Cecile Gaubert
2. Benjamin Faber
3. Gilles Duranton
4. L. Pascali

In Sociology and Political Science

1. Cecile Gaubert
2. Benjamin Faber

Citations in the corpus

• The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia (2017, neutral): “The model also has similarities with recent work on quantitative economic geography, particularly Allen and Arkolakis (2014), and quantitative urban economics, particularly Monte, Redding, and Rossi-Hansberg (2018) and Ahlfeldt et al. (2015).”
• The birth of edge cities in China: Measuring the effects of industrial parks policy (2017, neutral): “Unlike in the classic monocentric Chinese ity, this means that the new parks lead to sharp improvements in orker quality of life and this should attract talented workers to eek these jobs ( Duranton and Turner, 2011; Monte et al., 2015 ).”
• Tourism and Economic Development: Evidence from Mexico’s Coastline (2019, background): “…literature that develops quantitative spatial equilibrium models to analyze the welfare consequences of aggregate shocks, taking into account the frictions to trade and mobility between regions within countries (e.g. Redding (2015), Galle et al. (2014), Monte et al. (2015), Caliendo et al. (2015)).”
• Optimal Spatial Policies, Geography, and Sorting* (2018, neutral): “(2015) and Monte et al. (2018). We assume only one type of agent.”