spatial search migration and regional unemployment the dominant explanation of spatial unemployment in the literature assumes that workers must live in an area in order to be able to access job offers this gives rise to compensating variations in local wages and unemployment however for many occupations search is clearly conducted over longer distances from a home base in the model presented in this paper migration and unemployment are analysed both when the optimal search field is local as in the traditional model and when search is conducted over longer distances i compare equilibria in these two regimes and discuss the implications for regional policy

economic dynamics in the malthusian era evidence from the 1609 spanish expulsion of the moriscos we investigate economic dynamics in the malthusian era using the 1609 expulsion of moriscos from spain sharp population declines in former morisco districts were accompanied by decreased output and increased per capita output while these short run results are consistent with standard malthusian predictions malthusian convergence was delayed up to 1786 in former morisco districts archival sources and historical accounts suggest extractive institutions and cultural differences may have contributed to delayed convergence in population and output per capita this historic episode provides an unusually rich setting to examine malthusian dynamics highlighting the potential for sustained differences in per capita output in the malthusian era

on the consequences of government objectives for economies with mobile populations abstract we compare the efficiency and social welfare properties of equilibria resulting from different governmental objectives in a federal system with a mobile population the objectives considered are total utility average utility representative resident s utility and profit maximization the representative resident approach is unique in that it depends only on utility it yields the best efficient allocation from the perspective of a government s residents average utility yields an efficient allocation that non residents prefer both the profit maximizing and total utility approaches may lead to inefficient allocations we also show that the representative resident approach is socially preferred to a total utility approach

amenity values versus land constraints the spatial effects of natural landscape features on housing values when local amenities are tied to natural land use features that cannot be developed for physical or regulatory reasons the corresponding implicit price estimates from a hedonic housing model may reflect local supply constraints and confound estimation of natural amenity values using a spatial simultaneous equations model of housing values and migration we examine whether local supply constraints from natural or preserved features have influenced the housing market results indicate that constraints associated with the presence of water bodies and some types of open space preservation have contributed to higher housing prices offsetting local demand for these natural amenities jel c31 r23

reap what you sow agricultural technology urbanization and structural change abstract this paper studies how productivity enhancing agricultural technology affects urbanization by provoking structural change we investigate these issues using a natural experiment in the united states the results show that technologies which improve crop productivity lead to a less urbanized economy as economic activity relocates from manufacturing and services towards agriculture the effects are highly persistent and are driven by the technology increasing agricultural labor demand our findings highlight the potentially unintended disruptive force of innovative technologies

the impact of supply constraints on house prices in england we test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 local planning authorities in england between 1974 and 2008 exploiting exogenous variation from a policy reform vote shares and historical density to identify the endogenous constraints measures we find that regulatory constraints have a substantive positive impact on the house price earnings elasticity the effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas and uneven topography has a quantitatively less meaningful impact

migration regional equilibrium and the estimation of compensating differentials in this study we have developed an improved model of net migration that encompasses both equilibrium and disequilibrium components instrumental variables fixed effects estimates of the model with time series data for 51 areas in the united states over the period 1971 1988 support the importance of both equilibrium and disequilibrium factors in migration excerpt

the unequal geographic burden of federal taxation in the united states workers in cities offering above average wages cities with high productivity low quality of life or inefficient housing sectors pay 27 percent more in federal taxes than otherwise identical workers in cities offering below average wages according to simulation results taxes lower long run employment levels in high wage areas by 13 percent and land and housing prices by 21 and 5 percent causing locational inefficiencies costing 0 23 percent of income or 28 billion in 2008 employment is shifted from north to south and from urban to rural areas tax deductions index taxes partially to local cost of living improving locational efficiency

earnings functions when wages and prices vary by location economists generally assume implicitly that the return to schooling is invariant across local labor markets we demonstrate that this outcome pertains if and only if preferences are homothetic a special case that seems unlikely our theory predicts that returns to education will instead be relatively low in expensive high amenity locations our analysis of u s data provides support for this contention returns to college are especially low in such cities as san francisco and seattle our findings call into question standard empirical exercises in labor economics that treat the returns to education as a single parameter

public conservation land and employment growth in the northern forest region we quantify the effect that public conservation lands have on employment growth in the northern forest region of the united states a model of simultaneous employment and net migration growth is estimated with data on non metropolitan counties from 1990 to 1997 exogenous variables include the 1990 share of the land base in public conservation uses we find that net migration rates were higher in counties with more conservation lands but the effects are relatively small no significant effect on employment growth is detected as well variables measuring changes in public timber harvests have no effect on employment growth

quality of life firm productivity and the value of amenities across canadian cities we estimate quality of life and productivity differences across canada s metropolitan areas in a hedonic general equilibrium framework these are based on the estimated willingness to pay of heterogeneous households and firms to locate in various cities which differ in their wage levels housing costs and land values using 2006 canadian census data our metropolitan quality of life estimates are somewhat consistent with popular rankings yet find canadians care more about climate and culture quality of life is highest in victoria for anglophones montreal for francophones and vancouver for allophones and lowest in more remote cities toronto is canada s most productive city vancouver is the overall most valuable city qualite de vie productivite des entreprises et la valeur des avantages dans les diverses villes canadiennes on evalue les differences entre la qualite de vie et la productivite des entreprises entre les zones metropolitaines au canada a l aide d un cadre d analyse d equilibre general hedonique ces metriques sont basees sur l estimation de la volonte de payer de menages et d entreprises heterogenes pour se localiser dans diverses villes qui different tant pour ce qui est des niveaux de salaires des couts de l habitation et des prix des terrains a l aide des donnees du recensement canadien de 2006 on construit des evaluations de la qualite de vie des diverses zones metropolitaines qui s arriment convenablement aux ordonnancements en vogue mais on decouvre que les canadiens portent une attention particuliere au climat et a la culture la qualite de vie est la plus elevee a victoria pour les anglophones a montreal pour les francophones et a vancouver pour les allophones et la plus faible pour les villes eloignees des grands centres toronto est la ville la plus productive vancouver est generalement la plus appreciee

frictional labour mobility we build a dynamic model of migration where in addition to standard relocation costs workers face spatial frictions that decrease their ability to compete for distant job opportunities we estimate the model on a matched employer employee panel dataset describing labour market transitions within and between the 100 largest french cities our identification strategy is based on the premise that frictions affect the frequency of job transitions while mobility costs impact the distribution of accepted wages we find that 1 controlling for spatial frictions reduces mobility cost estimates by one order of magnitude 2 the urban wage premium is driven by better opportunities for local job to job transitions in larger cities 3 migration reduces lifetime inequalities by providing insurance against unsatisfactory initial location draws 4 labour mobility policies based on relocation subsidies are inefficient unlike switching from nationwide to local minimum wages

people places and earnings differentials in scotland abstractpeople places and earnings differentials in scotland regional studies this paper investigates the contribution of people and place effects to earnings differentials in scotland using individual and regional data the main sources of differentials are attributed to workers characteristics people effects particularly academic and vocational qualifications followed by occupational and industrial affiliations on the other hand differences in the attributes of local area labour markets place effects explain only a small part of individual earnings differentials the most relevant spatial attribute is local area human capital the findings suggest that people based policies are likely to be more effective at improving workers earnings prospects than place based policies

a dynamic interregional theory of migration and population growth the authors attempt to bring the theory of regional amenity value determination together with a theoretical framework on migration to form a cohesive theoretical model they build on previous efforts to do this by introducing factors such as the housing market and determination of the equilibrium level of real full income the implied geographical focus is on the united states annotation

the effects of housing prices wages and commuting time on joint residential and job location choices an empiricalmodelof joint decisions of where to l and where to work demonstrates that individuals make residential and job location choices by trading off wages housing prices and commuting costs wages are higher in metropolitan markets but housing prices are also higher in urban areas consumers can live in lower priced nonmetropolitan houses and still earn urban wages but they incur commuting costs that increase with distance from the city improvements in transportation that lower commuting time will increase nonmetropolitan populations and will increase the number of nonmetropolitan commuters to metropolitan markets equal wage growth across labor markets causes a shift in relative population from rural to urban markets while an equiproportional increase in housing prices causes a population shift toward rural areas

the welfare effects of illegal immigration abstract this paper extends the work of ethier on illegal immigration by examining the optimal level of enforcement for the labor importing country in a two country model and by considering the effects of allowing capital mobility we derive a formula for the optimal level of enforcement against firms that hire illegal workers and show that the presence of enforcement costs makes the policy less efficient than a wage tax with capital mobility foreign workers gain from an increase in enforcement in the home country because capital is driven out of the home country

parking transit and employment in a central business district abstract in this paper we present a general equilibrium model to examine the role of parking and transit subsidy policy on the size of a central business district cbd cbd land values and the market shares of cars and transit the three main features of the model are 1 agglomeration economies increase continuously with labor market size 2 congestion arises from auto use only transit is noncongestible and 3 locational equilibrium is maintained in the sense that firms and individuals cannot reduce costs or increase utility by moving given equilibrium prices and city size we derive the conditions under which parking taxes can be levied and used to subsidize transit and increase equilibrium cbd size and land values we compute an optimal parking tax that maximizes cbd size and land values and derive relationships among parking taxes transit use and congestion we find nonmonotonic relationships among parking taxes land values and transit use

bidding for firms recently toyota sought a plant location in the united states the 800 million plant will employ 3000 workers and numerous states offered toyota generous investment incentives hoping this would induce toyota to select their state the commonwealth of kentucky won this competition but the price was high the present value of the payments exceeds 125 million the payment of investment incentives for the toyota plant is not unique in 1976 pennsylvania paid 75 million to attract a volkswagen plan nissan honda and mazda received generous investment incentives when locating plants in the united states and this bidding is not limited to states to attract the headquarters of the presbyterian church usa with its 1300 jobs and 38 million annual payroll civic leaders in louisville kentucky offered the church a warehouse and 6 2 million for renovation of the structure bidding the church away from kansas city missouri in this paper we contend that this competition may result from the average cost pricing of publicly provided goods and services 2 when the marginal cost of providing a firm and its workers with public services is less than the tax revenue they generate a government may offer the firm subsidies that reduce the distortions the average cost pricing of the public service creates thus this competition for industry is not a zero sum game where the subsidies are only transfers from the government to the firm rather these subsidies may facilitate the efficient location of industry

local high tech job multipliers in europe examining employment growth in local labor markets across europe this article finds that each worker in a high skilled occupation creates up to five extra jobs in local less skilled intensive services in the same region however it is also shown that there exist persistent differences in the size of this local high tech job multiplier across regions in particular we find that the multiplier is larger in regions with higher immigration an abundance of less skilled workers and lower gross output per capita at the country level we also show that this results in local high tech job multipliers that are larger in southern european countries than in the rest of europe

relocation of public sector workers evaluating a place based policy this paper investigates the local labor market impact of a uk relocation initiative the 2004 lyons review the review resulted in the dispersal of about 25 000 civil service jobs out of london and the south east towards other uk destinations this study aims to detect whether the inflow of public sector jobs crowded out private sector activity or stimulated the local provision of jobs in the private sector focusing on short term effects i find that the relocation initiative raised private sector employment in receiving areas and changed the sectoral distribution of local employment towards services i also find evidence of displacement i e a tendency for private businesses to locate closer to a relocation site moving out of areas at 1 2km and 2 3km distances into areas at 0 1km distance these agglomeration effects appear highly localized the largest policy impact is found in areas that received the relocated jobs with spillover effects reducing sharply over distance

is there a compensating wage differential for high crime levels first evidence from europe abstract this paper investigates whether high regional crime levels lead to a compensating wage differential paid by firms in the respective region using data from german social security records official police statistics and official statistics for 2003 2006 i consider both violent and non violent crimes and use three way error components estimators to control for individual and regional heterogeneity the findings suggest that wages are practically unrelated to changes in crime rates this result is robust over a wide range of subgroups there is however some evidence that crime rates influence land prices

immigration control and the welfare state abstract we examine a model of a rich country with a redistributive public sector and facing costly immigration control when illegal immigrants have access to the public sector we show that as border control becomes more expensive inequality in the rich country increases redistributive transfers decrease and then may increase some immigration is permitted and foreign aid may be used to reduce the migration pressure because of nonconvexities we also show that a small increase in the poor country s population can lead to the collapse of the redistributive public sector we then consider excluding illegal immigrants from the public sector e g california proposition 187 we find that collapse is no longer possible and that the rich country takes the toughest official stance on immigration but does not enforce it with border controls

spatial agglomeration global value chains and productivity micro evidence from italy and spain abstract we investigate the relationship between spatial agglomeration and firms labor productivity in italy and spain examining firm level heterogeneity in global value chain positioning we analyze a sample of 4025 manufacturing firms during the period from 2010 to 2014 and employ a shift share instrumental variable approach we find that agglomeration has a positive effect on labor productivity for suppliers but not for final firms

the effect of public sector employment on local labour markets this paper considers the impact of public sector employment on local labour markets using english data at the local authority level for 2003 2007 we find that public sector employment has no identifiable effect on total private sector employment however public sector employment does affect the sectoral composition of the private sector specifically each additional public sector job creates 0 5 jobs in the non tradable sector construction and services while crowding out 0 4 jobs in the tradable sector manufacturing when using data for a longer time period 1999 2007 we find no multiplier effect for non tradables stronger crowding out for tradables and consistent with this crowding out for total private sector employment

housing and location choices of retiring households evidence from france in this paper a study is made of the mobility and housing choices of the elderly when retiring using household data collected in france from a theoretical viewpoint individuals are likely to decrease their housing quantity because of an income loss when retiring but they may also increase it to benefit from more housing comfort for leisure using the 1992 trois generations survey it is first shown that housing mobility at retirement is substantial in france with a variety of self reported motives then using the 1994 2001 french europanel survey evidence is found of both upsizing and downsizing for mobile recent retirees in many cases housing adjustments lead to a correction of the initial disequilibrium between the number of rooms and the number of occupants however a significant proportion of mobile recent retirees improve the quality of their dwelling

decentralized income redistribution and immigration abstract we analyze the welfare and other effects of immigration on a system of jurisdictions with a common labor market mobile capital and redistributive tax transfer policies comparative statics analysis of a model of nash non cooperative equilibria in tax transfer policies shows that the welfare effect of immigration depends on whether immigrants are net fiscal contributors or burdens any one jurisdiction s redistribution and immigration policies generate fiscal externalities for others in the system which a central government can internalize by appropriate taxes and subsidies

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

adverse selection moral hazard and wealth effects in the medigap insurance market using data from a longitudinal study of the recently retired we attempt to separate the moral hazard effect of medicare supplementary medigap insurance on health care expenditures from the adverse selection effect of poor health on medigap coverage we find evidence of adverse selection but its magnitude is unlikely to create serious efficiency problems taking adverse selection into account reduces the estimate of the moral hazard effect in addition we find a strong positive wealth effect on the demand for supplementary insurance

native internal migration and the labor market impact of immigration this paper presents a theoretical and empirical study of how immigration influences the joint determination of the wage structure and internal migration behavior for native born workers in local labor markets using data from the 1960 2000 decennial censuses the study shows that immigration is associated with lower in migration rates higher out migration rates and a decline in the growth rate of the native workforce the native migration response attenuates the measured impact of immigration on wages in a local labor market by 40 to 60 per cent depending on whether the labor market is defined at the state or metropolitan area level

local multipliers at work we measure the effects of a substantial place based policy shock on the local labor market systems exploiting as an instrumental variable the peculiar information necessary to apply for capital subsidies in italy during the period 1996 2006 the results show the presence of positive multipliers in the south of italy slightly lower than what was previously found for the us but much higher than those identified for european and asian countries the reasons for this finding lie in the greater accuracy of the data in the relevance of the instrument used and in the widespread underutilization of production factors

relocation relocation relocation assessing the case for public sector dispersal marshall j n bradley d hodgson c alderman n and richardson r 2005 relocation relocation relocation assessing the case for public sector dispersal regional studies 39 767 787 the paper assesses the case for public sector relocation from capital cities using evidence from britain the senior echelons of the british civil service are disproportionately concentrated in london significant reductions in operating costs can be achieved by relocating civil service functions from the capital and these financial savings have been used to justify programmes of dispersal however the paper stresses the strong regional case for relocation relocation contributes directly through employment creation to more balanced regional economic development and simultaneously reduces overheating close to the capital and the under utilization of infrastructure and human resources in other regions the relocation of more senior jobs in the civil service from london strengthens the service base within problem reg

do inter city differences in intra city wage differentials have any interesting implications abstract recent research has related characteristics of cities to differences in the distribution of wages across workers with different skill levels we demonstrate that these differences in wage differentials arise naturally as a compensating variation in rosen s theoretical model of inter city wages for example if the income elasticity of demand for housing services is less than unity cities with higher house prices will have smaller money wage differentials between low and high skill workers this result has no implications for differences in either absolute or relative real productivity or welfare of unskilled workers similarly changes in the amenity of an urban area may result in changes in relative wages of skilled and unskilled workers with no implications for real productivity or welfare differentials empirical tests in which housing cost differentials are added as a determinant of inter city differences in an intra urban wage differential model provide empirical confirmation of the theoretical expectations it appears that intra urban money wage differentials differences in the quality of life and variation in the cost of living in each city are jointly determined variables just as rosen s model of inter city wage differentials predicts

illegal aliens unemployment and immigration policy abstract this paper develops a simple two country model of illegal immigration in an attempt to examine the interaction among variables such as the stock of migrant labor the unemployment rates of the two economies and the rate of spending by the host country on the enforcement of its immigration restrictions the focus of the analysis is on the dynamics of immigration policy and on its role in determining the nature of the mechanism by which disturbances to the labor market of one country are transmitted to that of the other in the short run and in the long run

the effect of low skilled immigration on u s prices evidence from cpi data i exploit the large variation across u s cities and through time in the relative size of the low skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services using an instrumental variables strategy i find that at current immigration levels a 10 percent increase in the share of low skilled immigrants in the labor force decreases the price of immigrant intensive services such as housekeeping and gardening by 2 percent wage equations suggest that lower wages are a likely channel through which these effects take place however wage effects are significantly larger for low skilled immigrants than for low skilled natives implying that the two are imperfect substitutes

rethinking the area approach immigrants and the labor market in california abstract a framework that uses a constant elasticity of substitution ces production function with skill differentiation and integrated national labor markets has predictions for the employment effect of immigrants at the local level the employment rather than wage response to immigration by skill in a state reveals the production substitutability complementarity between native and immigrant labor this in turn reveals the degree to which immigrants stimulate or depress the demand for native labor to estimate this elasticity i use a novel instrument based on demographic characteristics of total central american migrants or of the mexican population to predict immigration by skill level within california looking at immigration to california between 1960 and 2005 these estimates support the assumption of a nationally integrated labor market by skill and they support the hypothesis that natives and immigrants in the same education experience group are not perfectly substitutable this explains the counter intuitive fact that there is a zero correlation between immigration and wage and employment outcomes of natives in the state

u s state and local fiscal policy and economic activity do we know more now early reviews of the academic literature on the economic effects of state and local taxes and expenditures suggested that not enough was known upon which to base policy the reviews called for better data and improvements in empirical methodology this paper reviews studies conducted since the early literature reviews to assess our current state of knowledge the conclusion of the study is that we know more now but our knowledge is unlikely to ever be sufficient to provide universal policy guidance rather we suggest that more research is needed on specific state and local policies for specific circumstances consistent with the general principles that guide place based policy

public employment and labour market performance public employment does it increase unemployment we explore the consequences of public employment for labour market performance theory suggests that public employment may not only crowd out private employment but also increase overall unemployment if by offering attractive working conditions it draws additional individuals into the labour force empirical evidence from a sample of oecd countries in the 1960 2000 period suggests that on average creation of 100 public jobs may have eliminated about 150 private sector jobs slightly decreased labour market participation and increased by about 33 the number of unemployed workers theoretical considerations and empirical evidence however suggest that the crowding out effect of public jobs on private jobs is only significant in countries where public production is highly substitutable to private activities and the public sector offers more attractive wages and or other benefits than the private labour market

estimating welfare in insurance markets using variation in prices we provide a graphical illustration of how standard consumer and producer theory can be used to quantify the welfare loss associated with inefficient pricing in insurance markets with selection we then show how this welfare loss can be estimated empirically using identifying variation in the price of insurance such variation together with quantity data allows us to estimate the demand for insurance the same variation together with cost data allows us to estimate how insurers costs vary as market participants endogenously respond to price the slope of this estimated cost curve provides a direct test for both the existence and the nature of selection and the combination of demand and cost curves can be used to estimate welfare we illustrate our approach by applying it to data on employerprovided health insurance from one specific company we detect adverse selection but estimate that the quantitative welfare implications associated with inefficient pricing in our particular application are small in both absolute and relative terms

multinational enterprises service outsourcing and regional structural change this paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy the aim of the study is to examine the structural transformation of regional economic systems within the uk by focusing on the role played by foreign multinational enterprises mnes in manufacturing in facilitating the development of services from a conceptual perspective this research relies on different strands of literature on the impact of foreign direct investment fdi on recipient economies on outsourcing and regional structural transformation and on the identification of local multipliers the empirical analysis focuses on a specific demand side channel for structural change the forward linkage established by foreign manufacturing mnes with local service providers through outsourcing descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts on this basic premise we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets in order to produce reliable estimates of a local multiplier the methodology adopts an instrumental variable approach our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages

a reexamination of the federal private wage differential in the united states the federal private wage differential is reexamined with recent data using specifications similar to those used in three previous studies i find that the federal private wage differential has narrowed since the 1974 79 period analyzed in those studies in addition i discover that wage differentials based on specifications used in the literature are biased upward because the previous studies did not control for detailed occupational and locational characteristics of workers corrected point estimates of the wage gap are much smaller than previous estimates in the literature differences in the gap across demographic groups occupations and locations are also discussed

redistributive public employment a test for the south of italy abstract this paper proposes an econometric test to verify whether public employment discourages the development of private economic activity in the south of italy our results suggest that this is indeed the case

the determinants and welfare implications of us workers diverging location choices by skill 1980 2000 abstract from 1980 to 2000 the rise in the us college high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage high rent cities this paper estimates a structural spatial equilibrium model to determine causes and welfare consequences of this increased skill sorting while local labor demand changes fundamentally caused the increased skill sorting it was further fueled by endogenous increases in amenities within higher skill cities changes in cities wages rents and endogenous amenities increased inequality between high school and college graduates by more than suggested by the increase in the college wage gap alone jel d31 i26 j24 j31 j61 r23

urban effects on participation and wages are there gender differences abstract this paper estimates participation and wage equations using panel data from the united kingdom to explore gender differences in urban wage and participation premiums the results suggest a small but economically significant urban participation premium for women but none for men results from the wage estimations suggest that after controlling for sample selectivity observed and unobserved heterogeneity the urban premium is larger for women this wage premium is also larger for married or cohabiting women relative to others there is also evidence of higher urban returns to experience for men and lower urban wage depreciation for both men and women

the effects of rate regulation on demand for supplemental health insurance many developed countries have a market for private health insurance that supplements publicly funded universal coverage government regulation of the supplemental market including the extent to which insurers are permitted to adjust premiums based on individual characteristics such as age sex and health status varies across countries oecd 2004 proponents of rate regulation argue that the resulting crosssubsidization from low to high risks is necessary to maintain the affordability of coverage for high risks economic theory however raises the concern that the inability to adjust premiums to reflect individual risk could create adverse selection by driving low risks from the market michael rothschild and joseph stiglitz 1976 little empirical evidence exists to determine the optimal role of rate regulation in private supplemental insurance markets existing studies of the consequences of rating restrictions focus on markets for primary health insurance and find that these laws have had surprisingly little effect on overall rates of coverage simon 2004 in this paper we study the effects of rate regulation in supplemental health insurance markets by examining the market for individually purchased coverage that supplements medicare among the elderly in the united states while the publicly financed medicare program provides nearly universal coverage of a standard set of benefits for those 65 and over beneficiaries are exposed to significant financial risk due to the cost sharing associated with covered services and a lack of coverage for some important services the vast majority of medicare beneficiaries obtain supplemental coverage through a complex system of publicly and privately funded sources state medicaid programs provide publicly financed supplemental coverage for low income and disabled beneficiaries and employers provide highly subsidized retiree supplemental health insurance for other beneficiaries but the remainder rely on highly regulated private insurance markets medicare s part c managed care plans are a voluntary private replacement for traditional medicare while medigap coverage is a private policy bought by about 30 percent of medicare beneficiaries that provides only supplemental benefits franklin j eppig and george s chulis 1997 our study examines the effects of regulations limiting the information on individual characteristics insurers can use in setting premiums for medigap coverage

the wider impacts of high technology employment evidence from u s cities abstract innovative high technology industries are commonly described as drivers of regional development tech workers earn high wages but they are also said to generate knock on effects throughout the local economies that host them spurring growth in jobs and wages in nontradable activities at the same time in iconic high tech agglomerations like the san francisco bay area the home of silicon valley the success of the tech industry creates tensions in part as living costs rise beyond the reach of many non tech workers across a large sample of u s cities this paper explores these issues systematically combining annual data on wages employment and prices from the quarterly census of employment and wages the department of housing and urban development and the consumer price index it estimates how growth in tradable tech employment affects the real living cost deflated wages of local workers in nontradable sectors results indicate that high technology employment has significant positive but modest effects on the real wages of workers in nontradable sectors these effects appear to be spread consistently across different kinds of nontradable activities in terms of substantive wider impacts tech appears benign though fairly ineffectual

crime and economic incentives we explore the role that economic incentives particularly changes in wages at the bottom end of the wage distribution play in determining crime rates we use data on the police force areas of england and wales between 1975 and 1996 and find relative falls in the wages of low wage workers lead to increases in crime we carry out a number of experiments with different wage measures including a wage measure that accounts for the effects of changes in the composition of employment these reinforce the picture of a strong association between the low wage labor market and crime the result that incentives play a central role is reinforced further by the strong impact on crime of deterrence measures and of a measure of the returns to crime

tackling the european migration problem this paper will begin by examining the historical pattern of migration and the empirical dimension of western europes migration problem a next step examines the labor market issues and impacts on natives as western europe perceives them the paper concludes with a discussion of policy issues and options excerpt

land use worker heterogeneity and welfare benefits of public goods we show that investments in public goods change the optimal land use in their vicinity leading to additional welfare benefits this occurs through two sorting mechanisms first availability of public goods leads to higher population densities second population groups sort according to their preferences for public goods we develop a structural spatial general equilibrium model that accounts for these effects the model is estimated using data on transport infrastructure commuting behaviour land use and land rents for some 3000 zip codes in the netherlands and for three levels of education welfare benefits of investments in public transport infrastructure are shown to differ sharply by workers educational attainment welfare gains from changes in land use account for up to 30 of the total benefits of a transport investment

does school district and municipality border congruence matter research on zoning typically assumes that city planners aim to maximise housing prices with their land use decisions either explicitly for public choice reasons or implicitly through the approval of land uses that create local net benefits noncongruence of school district and municipality borders severs the link between costs and benefits in the eyes of the median voter however which could result in excessive residential development and fiscal externalities that lower property values this paper uses a hedonic approach to indirectly observe the presence of these externalities border congruency between school districts and municipalities in ohio is measured using gis data and matched with a data set of 56 717 home sales the hedonic results indicate that noncongruence is associated with lower housing prices while the degree of noncongruence is positively related for most school districts the negative effect of noncongruency dominates my results are robust and consistent across different model spec

assessing inherent model bias an application to native displacement in response to immigration abstract there is a long standing debate among academics about the effect of immigration on native internal migration decisions if immigrants displace natives this may indicate a direct cost of immigration in the form of decreased employment opportunity for native workers moreover displacement would also imply that cross region analyses of wage effects systematically underestimate the consequences of immigration the widespread use of such area studies for the us and other countries makes it especially important to know whether a native internal response to immigration truly occurs this paper introduces a microsimulation methodology to test for inherent bias in regression models that have been used in the literature we show that some specifications have built biases into their models thereby casting doubt on the validity of their results we then provide a brief empirical analysis with a panel of observed us state by skill data together our evidence argues against the existence of native displacement this implies that cross region analyses of immigration s effect on wages are still informative

going home evacuation migration decisions of hurricane katrina survivors in the wake of hurricane katrina many evacuees from the gulf region began the difficult process of deciding whether to rebuild or restart elsewhere we examine pre katrina gulf residents decision to return to the postdisaster gulf region which we call the return migration decision we estimate two separate return migration models first using data from a mail survey of individuals in the affected region and then focusing on self administered questionnaires of evacuees in houston our results indicate that return migration can be affected by household income age education level and employment marital and home ownership status but the results depend on the population under consideration we find no effect of connection to place on the return migration decision although the effect of income is relatively small within subsamples we find a much higher proportion of middle income households planning to return than lower income households when comparing across the subsamples in addition the real wage differential between home and host region influences the likelihood of return larger implicit costs in terms of foregone wages for returning induce a lower likelihood of return exploiting this difference at the individual level we are able to produce estimates of willingness to pay wtp to return home average wtp to return home for a sample of relatively poor households is estimated at 1 94 per hour or 3954 per year

macroeconomic implications of cash limits in the public sector a cash limit is a fixed amount of money available for pay prior to the wage negotiations in the public sector this paper examines the macroeconomic implications of cash limits in a unionized economy with decentralized wage bargaining in both private and public sectors i focus in particular on the linkages between changes in the cash limit wage setting and employment in public and private sectors equilibrium unemployment is independent of the size of the public sector if there are no sectoral differences in the unions relative bargaining power in general unemployment may rise or fall by public sector expansion accomplished by means of an increase in the cash limit unemployment increases if unions are relatively more powerful in the public than in the private sector

riding the wave of urban growth in the countryside spread backwash or stagnation the advisability of an urban centered growth strategy to reap the benefits of urban agglomeration economies is much debated rural areas benefit when the growth spreads to the hinterlands especially within daily commuting distance yet in distant peripheral locations urban growth may create a backwash as households relocate to the urban center this study examines spread vs backwash as separate from long run distance from urban center trend effects using a novel canadian gis database the unique nation wide approach yields a spread and backwash rural growth topography that varies by distance from the urban center by urban population vs income growth and by size of rural community

do immigrant inflows lead to native outflows we use 1980 and 1990 census data for 119 larger metropolitan statistical areas to examine the effect of skill group specific immigrant inflows on the location decisions of natives in the same skill group and on the overall distribution of human capital to control for unobserved skill group specific demand factors our models include lagged mobility flows of natives over the 1970 80 period we also estimate instrumental variables models that use the fraction of mexican immigrants in 1970 to predict skill group specific relative immigrant inflows over the 1980s despite wide variation across cities in the size and relative skill composition of immigrant population changes we find no evidence of selective out migration by natives we conclude that immigrant inflows exert a direct effect on the relative skill composition of cities cities that have received relatively unskilled immigrant flows have experienced proportional rises in the size of their unskilled populations this abstract was borrowed from another version of this item

local amenities and life cycle migration do people move for jobs or fun abstract do households move for jobs or fun and where do they go when they move we address these questions using the 1970 2000 us census based on a panel of quality of life and business environment measures households prefer msas in warm coastal areas and non metropolitan locations while firms prefer large growing cities in addition cities with improving business environments acquire increasing shares of workers especially workers with high levels of human capital cities with improving consumer amenities become relatively more populated by retirees further analysis of individual level migration decisions indicates that regardless of marital status young highly educated households tend to move towards places with higher quality business environments this tendency is especially pronounced among highly educated couples who are more subject to job market co location problems in contrast regardless of education couples near retirement tend to move away from places with favorable business environments and towards places with highly valued consumer amenities these patterns help explain why areas unattractive to both households and business have struggled as with upstate new york while the sun belt and other regions are thriving