Preliminary Draft as of December 17 , 2018

This paper examines the e ect of property rights on economic development within local labor markets, including how property rights change the equilibrium response to place-based policies. It does so in the context of federally recognized American Indian reservations, where a fraction of the land is held in trust by the US federal government and associated with restrictions on transactions. I nd that incomplete property rights on reservations are responsible for lower wages and higher levels of unemployment. The direction of these ndings is robust to an instrumental variables approach to dealing with the endogeneity of property rights. Next I shed light on the the extent to which place-based policies can improve economic outcomes on reservations. I use a spatial equilibrium framework to study the incidence of casino adoption, a place-based policy ∗Contact: laurel.wheeler@duke.edu. I would like to acknowledge the researchers who agreed to share their data, often after undergoing their own time-intensive data collection activities: Nick Parker, Terry Anderson, and Tony Cookson for their 2003 land ownership data; Brad Humphreys, Bill Evans, Michael Mathes, Barabara Wolfe, and Jessica Jakubowski for their casino gaming datasets; Tony Cookson for his casino gaming instruments; Valentina Dimitrova-Grajzl, Randy Akee, and Dick Todd for their list of mandatory PL280 states; Randy Akee and Miriam Jorgensen for their data on tribal constitutions; and Bryan Rice, Beth Wenstrom, and their colleagues at the Bureau of Indian A airs for the 2018 data on land ownership. I would additionally like to acknowledge those working on Indian Country topics who have provided me with invaluable guidance and feedback, including Cris Stainbrook at the Indian Land Tenure Foundation and Terry Beckwith of ICC Indian Enterprises. I greatly appreciate the important comments from Randy Akee, Joseph Brewer, Patrick Button, Larry Chavis, Stephen Egbert, Valentina DimitrovaGrajzl, Joseph Guse, Miriam Jorgensen, Joe Kalt, Patrice Kunesh, Juan Carlos Suarez Serrato, Laura Davido Taylor, Dick Todd, Ebonya Washington, and members of my dissertation committee Peter Arcidiacono, Robert Garlick, and Seth Sanders. Also gratefully acknowledged are the comments from participants of the NBER Conference on the Economics of Indigenous Peoples and Institutions, the Association for Public Policy Analysis and Management conference, the Midwest Economics Association conference, and seminars and workshops at Duke University. Support for this research at the Triangle Research Data Center from NSF(ITR-0427889) is also gratefully acknowledged. unique to reservations. The key insight from the model is that incomplete property rights impose frictions in the housing market that lower the migration response to casino adoption, improving the likelihood that the local population bene ts. Consistent with the model's predictions, I nd that casino adoption raises average wages and that the wage e ect is greater on reservations with more land in trust. My estimates suggest that wage increases correspond to welfare improvements. This paper provides insights into how place-based policies and property rights jointly shape economic outcomes through changes in the labor market, the housing market, and the mobility of workers. Disclaimer: Any opinions and conclusions expressed herein are those of the author and do not necessarily represent the views of the US Census Bureau. All results have been reviewed to ensure that no con dential information is disclosed.