Changes in political boundaries aimed at devolving power to local governments are common in many countries. We examine the economic consequences of redistricting through the creation of smaller government units. Exploiting reforms that led to sharp variations in the number of government units in...

Historically coal has offered both benefits and costs to urban areas. Benefits include coal's role in fueling industry and thus employment. The primary costs are air pollution and its impact on human health. This paper starts by using a Rosen-Roback style model to examine how differences in...

We study the effect of ethnic diversity on local public spending following fiscal decentralisation in a setting where local institutions are salient. Specifically, the latter affects coordination costs and thereby cooperative behaviour across the constituent ethnic groups. Our theory highlights...

Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general equilibrium model with social capital. The findings are: i) labor market integration has an ambiguous impact on welfare, and raises it if the goods produced...

This paper examines the welfare implications associated with different degrees of diversity or similarity between migrants and natives under both migration and trade. We use a general equilibrium model of migration, human capital and social capital and find that there are three equilibrium...

Despite indications that interpersonal interactions are important for understanding individual labor-market outcomes and have become more important over the last decades, there is little analysis by economists. This paper shows that interpersonal interactions are important determinants of...

We study the self-employed decision and its relation to human and social capital. Human capital is necessary to acquire skills. Social capital dampens the effects of uncertainty about future income. Our data set consists of 1339 respondents from the same age group, who were interviewed three...

This paper examines the effect of income polarisation on individual health. We argue that polarisation captures much better the social tension and conflict that underlie some of the pathways linking income disparities and individual health, and which have been traditionally proxied by...

In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Investing in local ties is rational when workers anticipate that they will not move to another region. Reciprocally, once local social capital is accumulated, incentives to...

European labor markets are characterized by the low geographical mobility of workers. The absence of mobility is a factor behind high unemployment when jobless people prefer to remain in their home region rather than to go prospecting in more dynamic areas. In this paper, we attempt to...