We exploit a volcanic “experiment" to study the costs and benefits of geographic mobility. We show that moving costs (broadly defined) are very large and labor therefore does not flow to locations where it earns the highest returns. In our experiment, a third of the houses in a town were...

We exploit a volcanic “experiment" to study the costs and benefits of geographic mobility. We show that moving costs (broadly defined) are very large and labor therefore does not flow to locations where it earns the highest returns. In our experiment, a third of the houses in a town were...

People in the Nordic countries of Denmark, Finland, Iceland and Sweden work more than the countries’ high tax rates would lead us to predict. This observation is explained by a shared belief system that emphasises women’s rights to labour market participation.