ABSTRACT This paper examines the relationship between graduate employment migration and subjective job quality in the UK, using five cohorts of Higher Education Statistics Agency Graduate Outcomes microdata covering the 2018/19 to 2022/23 cohorts. Graduates are classified using a five‐way typology: Stayers (never leave the home region), Late Migrants (study in the home region but migrate for employment), Returners (migrate for study but return home for employment), Migrants (migrate for study and remain in the university city for employment), and Repeat Migrants (migrate at both stages). The primary outcome is a composite job quality index, with log annual salary as a comparison outcome. Estimation uses high‐dimensional institution‐by‐subject fixed effects. Spatial mobility at the employment stage is robustly associated with higher subjective job quality, and this association scales monotonically with the distance traveled, with long‐distance movers reporting larger premia and long‐distance Returners facing larger penalties. Late Migrants and Repeat Migrants report composite scores around 0.14 standard deviations above Stayers and salary premia of 6%–8%. Returners report significantly lower composite job quality than Stayers despite statistically indistinguishable salaries. The pattern is not driven by London and, as Oster (2019) bounds indicate, is unlikely to reflect unobservable selection. Migration premia are systematically larger for men and vary across the four UK nations. The findings are interpreted within a spatial job search framework that distinguishes the price paid for generic graduate human capital and credentials, reflected in wages, from the variety of graduate‐level role matches available locally, reflected in job quality.
ABSTRACT This paper provides a theoretical analysis of the effects of autonomous vehicles (AVs) on the spatial structures of future cities. We consider two types of AVs, private AVs (PAVs) and shared AVs (SAVs). We assume that AVs have a lower marginal travel time cost than human‐driven traditional vehicles (TVs) due to additional utility caused by free activities in AVs, and PAVs have a lower marginal travel time cost than SAVs due to better privacy, convenience, and comfort. Two urban spatial models are presented and compared: one focusing on a city with only TVs and the other on a city with mixed PAVs and SAVs. Both models account for land competition among firm production, household residence, and parking. The optimal residential lot size and the optimal SAV market share are determined, with an objective of maximizing social welfare. The findings show that introducing AVs may lead the city size to expand or shrink, and both the social welfare and the total congestion cost to increase or decrease, depending on the maturity degree of AV technology and the SAV market share.
ABSTRACT This paper investigates the impact of fading urban boundaries on local government efficiency through a unified theoretical and empirical framework. We develop a Walrasian general equilibrium model to derive a dual‐indicator system for internal administrative and external economic efficiency. Empirically, utilizing the 2014 Yangtze River Economic Belt (YREB) development policy as a quasi‐natural experiment, we employ a Difference‐in‐Differences (DiD) methodology. Our findings reveal a profound trade‐off: while regional integration fosters economic growth and welfare advancement, it significantly undermines local governance. This structural decline is primarily driven by surging public debt necessitated by infrastructure expansion—which drastically increases internal administrative friction—and massive population reallocation that causes severe structural mismatches in public service provision. Fundamentally, this study highlights that the growth premium of regional integration is achieved at the substantial cost of a governance burden.
ABSTRACT This paper examines the relationship between firm productivity, market potential, and firm exit over the economic cycle, focusing on the COVID‐19 crisis. Using Spanish firm‐level data (2011–2022), we analyse how market potential shapes the link between productivity and survival. The results show that while being closer to the industry productivity frontier increases survival, this relationship is moderated by market potential, indicating heterogenous selection on productivity across space. In particular, productivity differences translate into smaller survival advantages in high‐market‐potential areas. However, this moderating effect of market potential was reduced during the COVID‐19 pandemic, suggesting that spatial differences in productivity‐based selection diminished during the crisis. This indicates that competitive dynamics were altered, most likely due to the nationwide lockdowns limiting spatial economic interactions and locally implemented support schemes.
ABSTRACT We study Russia's February 2022 full‐scale invasion of Ukraine as a natural experiment to determine how sudden disruptions to international market access reshape sub‐national economic inequalities. Using remotely‐sensed nighttime lights as a proxy for economic activity, we estimate the economic effects of the war at the national and regional levels. We find that Russia experienced an overall economic slowdown after the start of the full‐scale invasion. Regions in Western and North‐Western Russia experienced significantly larger economic contractions, while Southern and Southeastern regions exhibit relative improvements in performance. These findings suggest that sanctions, a shift toward non‐Western markets, and increased military production, have driven significant regional changes in Russia's economy and urban structure.
ABSTRACT This paper examines how state capacity influences the effect of economic shocks on local bank performance in urban and rural areas. Our identification strategy exploits COVID‐19's impact on Indonesia's community credit banks, which can only operate in a single region. Using loan loss provisions to represent credit risk and return on assets for profitability, we find that COVID‐19 provoked more adverse impacts on the rural banking sector compared to urban areas. This heterogeneity is driven by greater state capacity in urban areas, allowing prompt and effective policy responses to mitigate the adverse effects of COVID‐19 on the local economy.
This paper estimates the causal effect of mandatory inter-municipal cooperation on local service provision and housing markets. I examine Italy's 2010 reform, which required small municipalities to jointly manage core administrative functions, and identify its impact using a fuzzy difference-in-discontinuity design. Among municipalities whose cooperation status was shifted by the population threshold, residential property values declined by 4%-6% and commercial values by 11%-18%. These declines coincide with higher current expenditures and deterioration in childcare, policing, street lighting, and waste collection, while property tax rates and housing supply remain unchanged. Municipal population and net migration also fall. Compliance was limited and concentrated among relatively larger, denser, and less rural jurisdictions, suggesting that political and administrative implementation constraints limited the mandate's reach among the smallest municipalities targeted by the policy. The results indicate that coercive enlargement of functional jurisdiction size can generate coordination costs that weaken spending efficiency. More broadly, the findings underscore the importance of institutional design and local implementation constraints in shaping the economic consequences of scale-based reforms.
ABSTRACT The Minneapolis 2040 Plan, which came into effect in January 2020, introduced sweeping reforms to housing regulations. One of the most significant aspects of the Plan is the relaxation of zoning regulations, especially the first single‐family zoning ban in any major US city. The effects of the Plan on house prices remain understudied. Exploiting a rich set of house price data from Zillow.com, we find a significant reduction in house price increases in Minneapolis following the Plan. Our baseline estimates suggest a 15%−23% reduction in mid‐tier house price growth. The credibility of our identification could be compromised by contemporaneous shocks in 2020, including the George Floyd protests and the changes in housing demand driven by the shift to work‐from‐home arrangements. We further adopt falsification tests examining these effects. Combining our results, we demonstrate credible evidence that the Plan improves housing affordability. However, we remain cautious in attributing the entirety of this effect solely to upzoning, as we find mixed evidence on the quantity of new housing construction. The increase in new housing density is ubiquitous, suggesting higher density likely lead to a reduction in housing value growth. Our primary findings are robust to a range of alternative assumptions, including using alternative data, adopting alternative functional forms, varying trend assumptions, and the inclusion of city‐specific time trends.
ABSTRACT Regions face not only direct exposure to economic and physical shocks but also indirect consequences of actions in interconnected regions. This paper examines how socio‐spatial networks shape regional resilience to contagious shocks through dynamic feedback between risk diffusion and adaptation diffusion. In our framework, peer effects generate positive spillovers in risk‐mitigating adaptation across social networks, while evolving cross‐regional physical connections mediate the spatial spread of risks. Calibrated to U.S. regional data, we simulate and compare network‐aware intervention strategies that prioritize regions based on social centrality, spatial centrality, and population scale. The results show that the cost‐effectiveness of interventions depends critically on the population scale of socially or spatially central regions. Strategies that maximize aggregate risk reduction do not always align with those that are the most cost‐effective, revealing fundamental trade‐offs that call for hybrid, model‐informed intervention design. Our findings underscore the importance of interregional linkages and network‐aware policy design in shaping regional resilience to systemic shocks, with broader implications for economic contagion, climate adaptation, and public health.
While the relationship between public infrastructure and crime location choices is well-studied in criminology, the impact of crime as a spillover externality on public-private partnership (PPP) infrastructure financing remains unexplored. Leveraging a data set of 542 Private Finance Initiative (PFI)-funded infrastructures in England and Wales from 2011 to 2018 period, we find evidence that local crime negatively affects government's reimbursement commitment to its PFI's partner, that is, a novel crime-PPP underpayment nexus. We also find evidence that this adverse fiscal resource re-allocation effect is moderated by both contemporaneous local affluence and the predetermined urban proximity of the infrastructure. Specifically, the former (measured by local house price), while exhibiting a direct "crime attractor" effect, reflects the "nondependent on government to provide security" effect, as rich neighborhoods can afford their own private security and therefore less reliant on public police spending. This mitigates the negative effect of crime on PFI underpayment. The latter, which concerns the physical location of the infrastructure built, is hypothesized to exhibit the "guardian angel" effect, that is, its urban proximity means it is less costly for general public surveillance to take place, hence deterring crime. Finally, we provide evidence that the two moderation effects are rivalry, which contribute to the existing literature pertinent to the trade-offs between the "crime attractor" and the "guardian angel" effects associated with public infrastructure in crime deterrence. Our findings reveal an additional fiscal resource re-allocation dimension, even when these concern PFI-financed projects (for which the governments ought to have a lesser stake).
In many areas of regional/spatial economics, we are faced with analyzing discrete dynamic choice problems of economic agents interacting with some network structure through general equilibrium, input-output links, or strategic interaction. Stochastic estimating equations for such problems can be difficult for many practitioners to estimate. This paper proposes MCMC estimation approaches based on control functions for estimating dynamic panel probit models where a large number of cross-sectional units is observed over a short period of time, and cross-sectional units feature network interdependencies. The proposed approaches enable accounting for dynamic adjustment and different types of cross-sectional dependence. These features should make the approaches interesting for applications in many empirical contexts. The paper outlines the estimation approaches, illustrates their suitability by simulation examples, and provides an application to study dynamic multinational-firm participation among regionally connected Chinese firms.
Social capital has long been regarded as a bulwark of democratic life. Yet in the United States-as across much of the democratic world-some of the communities with the densest social ties have proved the most receptive to antisystem politics. Drawing on county-level data for the 2016 and 2020 US presidential elections, this paper shows that the political consequences of social capital depend on its composition rather than its volume. Bonding social capital-the formal and informal ties that hold communities together from within-is robustly connected with higher Trump vote margins. Bridging social capital -ties that connect people across socioeconomic lines-runs the other way. More strikingly, identical trajectories of local economic and demographic change pull antisystem voting in opposite directions depending on the mix of bonding and bridging ties in the area. The structure of local social relations, in short, shapes the political geography of territorial transformation.
In China, the urban-rural income gap has narrowed in relative terms, yet it continues to widen in absolute terms. Beneath this macro-level trend, the green transition may be reshaping the structure of urban-rural incomes and the allocation of production factors. Utilizing data from Chinese prefecture-level cities spanning 2016-2023, this study reveals a U-shaped relationship between the green transition and the urban-rural income gap. In the early stage, green transition reduces the income gap by enhancing the capitalization of green resources and increasing the share of labor income. However, the gap widens due to rising skill premiums, capital deepening, and asymmetries in sectoral productivity changes later. Additionally, this U-shaped relationship exhibits significant heterogeneity across urban agglomerations and is amplified by strict environmental regulations and green knowledge capital. Moreover, the green transition generates spatial spillovers beyond local boundaries. This study provides both theoretical and empirical evidence on the distributive effects of green transition and offers a foundation for designing inclusive green policy frameworks.
Mounting evidence suggests the important role of opening-up policies in stimulating intra-city economic activities, while this study examines how openness shaped inter-city connectivity. Drawing on the background of China's treaty ports opened between the 1840s and 1910s, we find that city pairs where both held treaty ports exhibited significantly stronger inter-city linkages in 1935, as proxied by banking network data. This result holds across various robustness tests and the instrumental variable approach. Finally, we demonstrate that the legacy of treaty ports, transmitted in part through historical inter-city connectivity, continues to reactivate contemporary urban linkages-as reflected not only in banking networks, but also in population flows, airline frequency, high-tech investment, knowledge collaboration, and state-led high-speed rail linkages, indicating the enduring and far-reaching effect of the regional opening-up.
Using panel data for 304 local authorities in the UK from 2014 to 2021, we empirically examine three issues: (a) how booms in house prices affect bank lending to small and medium-sized enterprises (SMEs); (b) whether these effects differ when SMEs hold larger amounts of real estate and buildings and (c) whether a rise in house prices can cause capital flight from the SME loan market to mortgages in the housing sector. We find that (i) a rise in house prices crowds out SME lending; (ii) mortgage lending increases with house prices; (iii) the crowding out effect of rising house prices on SME lending is mitigated when SMEs hold larger amounts of real estate and buildings. The main macroeconomic implication is that a strong housing market exerts negative spillover effects on the SME sector by moving capital away from SME lending towards housing mortgages.
As a major form of urban administrative restructuring in China, city-county mergers dismantle boundaries between municipal districts and surrounding counties, creating more integrated local labor markets. Using longitudinal data from the China Household Finance Survey and a difference-in-differences framework, we examine how this restructuring affects gender disparities in labor market outcomes. We find that the reform significantly widens the gender wage gap. Mechanism analysis shows that this gap is driven by several channels, including increased labor competition from migrant inflows, the expansion of manufacturing activity, improvements in transportation infrastructure, and rising housing values. The effects are highly heterogeneous: rural and less-educated women, as well as women in more developed counties, experience the largest losses relative to men.
This paper studies the impact of extreme heat on the housing market in 26 Chinese cities by analyzing more than 1.5 million second-hand housing transaction records. Empirical results from hedonic regressions show that extreme heat significantly decreases housing prices and transaction volumes. This negative effect is concentrated in warm seasons and is substantially stronger for high-end apartments, top-floor units, and units in high-rise buildings. Green spaces and water bodies are effective in mitigating the negative effect of extreme heat on the housing market. Mechanism analysis demonstrates that extreme heat significantly decreases the number of on-site property visits before a transaction. These findings underscore the important influence of climate change on the housing market.
This study investigates the spatial heterogeneity of land value tax capitalization and its implications for housing affordability in Loja, Ecuador, using a novel dataset of 1419 repeat land sales (2010-2017). Employing instrumental variable approaches within both parametric (Spatial Error Models) and semi-parametric (Generalized Additive Models) frameworks, we document significant spatial variation in tax capitalization effects. Properties located in the urban core experience a 2.5% reduction in land prices for each 1% point increase in the effective tax rate, with this effect diminishing by approximately 0.6% for every additional kilometer from the city center. This gradient reflects differences in land supply elasticity, proxied by proximity to the urban core. Although tax capitalization results in lower nominal prices near the center, it does not necessarily enhance affordability, as buyers face higher long-term tax burdens. Moreover, institutional practices, such as systematic underassessment in rapidly appreciating areas and the shifting of fiscal burdens to slower-growing areas, undermine the intended price-stabilizing effects of the tax and exacerbate equity concerns. The findings emphasize the importance of complementary policies aimed at curbing land market financialization and implementing administrative reforms to better align value capture mechanisms with rapidly rising land values, particularly at the urban fringe. As the first empirical analysis of land tax capitalization in Latin America, this research contributes to the methodological understanding of spatial heterogeneity and provides critical insights for the design of equitable and effective urban fiscal policy.
Recent advances in autonomous and semi-autonomous vehicle technologies promise substantial cost savings for goods shipped by truck. In this study, we quantify the impacts of these transport cost reductions on the US interstate trade using a structural gravity model of domestic trade. Based on projected cost savings from the widespread adoption of self-driving technologies, we estimate significant increases in total interstate trade value. State-level impacts vary from 40.3% of GDP in Mississippi to 5.9% in Florida, while the largest impacts in dollar value are observed in Texas and New York. The sectoral analysis highlights motorized vehicles, mixed freight, and electronics as the industries experiencing the largest trade value growth. Additionally, goods with low value-to-weight ratios-where shipping costs represent a large share of the delivered value-are expected to benefit most in relative terms. These findings underscore the transformative potential of autonomous vehicle technologies in reshaping US trade patterns and sectoral dynamics.
This paper presents a novel revealed-preference approach to estimating the value of travel time (VTT) and calculating consumer surplus for the economic evaluation of transport infrastructure. Departing from traditional stated-preference models, we derive time valuations by linking residential rental transactions in Greater Sydney to employment accessibility. We estimate a hedonic price function that controls for unobserved amenities and spatial sorting, recovering VTT estimates consistent with current cost-benefit analysis practice. Furthermore, we leverage the non-linearity of the price gradient, as well as cross-market variation in the price gradient, to perform a second-stage regression without instrumental variables, recovering the structural demand function for accessibility. This allows us to quantify welfare changes from non-marginal accessibility shocks, demonstrated on the Sydney Metro West project, grounding project appraisal in revealed spatial behavior.
