LOCATION AS AN ASSET Bilal, Adrien; Rossi-Hansberg, Esteban
Econometrica,
September 2021, Letnik:
89, Številka:
5
Journal Article
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The location of individuals determines their job and schooling opportunities, amenities, and housing costs. We conceptualize the location choice of individuals as a decision to invest in a “location ...asset.” This asset has a current cost equal to the location’s rent, and a future payoff through better job and schooling opportunities. As with any asset, savers in the location asset transfer resources into the future by going to expensive locations with high future returns. In contrast, borrowers transfer resources to the present by going to cheap locations that offer few other advantages. Holdings of the location asset depend on its comparison to other assets, with the distinction that the location asset is not subject to borrowing constraints. We propose a dynamic location model and derive an agent’s mobility choices after experiencing income shocks. We document the investment dimension of location and confirm the core predictions of our theory using French individual panel data from tax returns.
LEARNING FROM COWORKERS Jarosch, Gregor; Oberfield, Ezra; Rossi-Hansberg, Esteban
Econometrica,
March 2021, Letnik:
89, Številka:
2
Journal Article
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We investigate learning at the workplace. To do so, we use German administrative data that contain information on the entire workforce of a sample of establishments. We document that having ...more-highly-paid coworkers is strongly associated with future wage growth, particularly if those workers earn more. Motivated by this fact, we propose a dynamic theory of a competitive labor market where firms produce using teams of heterogeneous workers that learn from each other. We develop a methodology to structurally estimate knowledge flows using the full-richness of the German employer-employee matched data. The methodology builds on the observation that a competitive labor market prices coworker learning. Our quantitative approach imposes minimal restrictions on firms’ production functions, can be implemented on a very short panel, and allows for potentially rich and flexible coworker learning functions. In line with our reduced-form results, learning from coworkers is significant, particularly from more knowledgeable coworkers. We show that between 4 and 9% of total worker compensation is in the form of learning and that inequality in total compensation is significantly lower than inequality in wages.
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.
Urban Accounting and Welfare Desmet, Klaus; Rossi-Hansberg, Esteban
The American economic review,
10/2013, Letnik:
103, Številka:
6
Journal Article
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We use a simple theory of a system of cities to decompose the determinants of the city size distribution into three main components: efficiency, amenities, and frictions. Higher efficiency and better ...amenities lead to larger cities but also to greater frictions through congestion and other negative effects of agglomeration. Using data on MSAs in the United States, we estimate these city characteristics. Eliminating variation in any of them leads to large population reallocations, but modest welfare effects. We apply the same methodology to Chinese cities and find welfare effects that are many times larger than those in the US.
TASK TRADE BETWEEN SIMILAR COUNTRIES Grossman, Gene M.; Rossi-Hansberg, Esteban
Econometrica,
March 2012, Letnik:
80, Številka:
2
Journal Article
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We propose a theory of task trade between countries that have similar relative factor endowments and technological capabilities, but may differ in size. Firms produce differentiated goods by ...performing a continuum of tasks, each of which generates local spillovers. Tasks can be performed at home or abroad, but offshoring entails costs that vary by task. In equilibrium, the tasks with the highest offshoring costs may not be traded. Among the remainder, those with the relatively higher offshoring costs are performed in the country that has the higher wage and the higher aggregate output. We discuss the relationship between equilibrium wages, equilibrium outputs, and relative country size.
Spatial Development Desmet, Klaus; Rossi-Hansberg, Esteban
The American economic review,
04/2014, Letnik:
104, Številka:
4
Journal Article
Recenzirano
We present a theory of spatial development. Manufacturing and services firms located in a continuous geographic area choose each period how much to innovate. Firms trade subject to transport costs ...and technology diffuses spatially. We apply the model to study the evolution of the US economy in the last half-century and find that it can generate the reduction in the manufacturing employment share, the increased spatial concentration of services, the growth in service productivity starting in the mid-1990s, the rise in the dispersion of land rents in the same period, as well as several other spatial and temporal patterns.
Quantitative Spatial Economics Redding, Stephen J; Rossi-Hansberg, Esteban
Annual review of economics,
01/2017, Letnik:
9, Številka:
1
Journal Article
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The observed uneven distribution of economic activity across space is influenced by variation in exogenous geographical characteristics and endogenous interactions between agents in goods and factor ...markets. Until the past decade, the theoretical literature on economic geography had focused on stylized settings that could not easily be taken to the data. This article reviews more recent research that has developed quantitative models of economic geography. These models are rich enough to speak to first-order features of the data, such as many heterogeneous locations and gravity equation relationships for trade and commuting. At the same time, these models are sufficiently tractable to undertake realistic counterfactual exercises to study the effect of changes in amenities, productivity, and public policy interventions such as transport infrastructure investments. We provide an extensive taxonomy of the different building blocks of these quantitative spatial models and discuss their main properties and quantification.
A firm's productivity depends on how production is organized. To understand this relationship we develop a theory of an economy where firms with heterogeneous demands use labor and knowledge to ...produce. Entrepreneurs decide the number of layers of management and the knowledge and span of control of each agent. As a result, in the theory, heterogeneity in demand leads to heterogeneity in productivity and other firms' outcomes. We use the theory to analyze the impact of international trade on organization and calibrate the model to the U.S. economy. Our results indicate that, as a result of a bilateral trade liberalization, firms that export will increase the number of layers of management. The new organization of the average exporter results in higher productivity, although the responses of productivity are heterogeneous across these firms. Liberalizing trade from autarky to the level of openness in 2002 results in a 1% increase in productivity for the marginal exporter and a 1.8% increase in its revenue productivity. Endogenous organization increases the gains from trade by 41% relative to standard models.
We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade is costly, firms innovate, and technology ...diffuses over space. Emissions from energy used in production contribute to the atmospheric stock of carbon, which increases temperature. Warming differs across latitudes and its effect on productivity varies across sectors. We calibrate the model to analyze how climate change affects the spatial distribution of economic activity, trade, migration, growth, and welfare. We assess quantitatively the impact of migration and trade restrictions, energy taxes, and innovation subsidies.
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