In this note, we show that labour market integration can be a double-edged sword. In the presence of local human capital externalities, integration and the ensuing agglomeration of skilled labour can cause a decline in human capital and the total wage sum (net of education costs). In particular,...

Between 1984 and 2003, New Zealand undertook comprehensive market-oriented economic reforms. In this paper, we use Census data to examine how the internal mobility of Māori compares to that of Europeans in New Zealand in the period after these reforms. It is often suggested that Māori are less...

If someone lives in an economically depressed place, they were probably born there. The presence of people with local ties – a preference to live in their birthplace – leads to smaller migration responses. Smaller migration responses to wage declines lead to lower real incomes and make real...

Declining internal migration in the United States is driven by increasing home attachment in locations with initially high rates of population turnover. These 'fast' locations were the population growth destinations of the 20th century, where home attachments were low, but have increased as...

We build a dynamic model of migration where, in addition to classical mobility costs, workers face informational frictions that decrease their ability to compete for distant job opportunities. We structurally estimate the model on a matched employer-employee panel dataset describing labor market...

At least to some extent migration behavior is the outcome of a preference for migration. The pattern of migration as an outcome of a preference for migration depends on two key factors: imitation technology and migration feasibility. We show that these factors jointly determine the outcome of a...

This paper examines how the effects of increased employment growth on a metropolitan area’s employment to population ratio varies with the initial tightness of the metropolitan area’s labor market. This examination is relevant to evaluating the benefits of local economic development policies...

The relationships among geographical mobility, unemployment and the value of owner-occupied housing are studied in an economy with heterogeneous locations and search frictions in the markets for both labour and houses. Differences in labour market conditions between cities affect the speed with...

Recent European legislation on immigration has revealed a particular paradox on migration policies. On the one hand, the trend of recent legislation points to the increasing closure of frontiers (OECD 1999, 2001,2004), trying to limit the immigrants' stock. On the other hand, there is an...

This paper builds a dynamic general equilibrium model of cities and uses it to analyze the role of local housing markets and moving costs in determining the character and extent of labor reallocation in the US economy. Labor reallocation in the model is driven by idiosyncratic city-specific...