EMPLOYMENT CYCLES AND PROCESS INNOVATION IN REGIONAL STRUCTURAL CHANGE*

Regional employment cycles, the demand for skilled and unskilled labor, and process innovations are analyzed in the context of an industry product cycle. Employment fluctuations caused by endogenous technological change lead to spatial decentralization of production facilities through capital relocation and spatial divisions of labor. A capital investment profile suggested by the product cycle scenario is related to employment cycles. A price system for output is outlined in terms of wages and profits over the product cycle.     

REGIONAL VARIATIONS IN LABOR DEMAND ELASTICITY: EVIDENCE FROM U.S. COUNTIES

We use a large panel dataset covering the period 1988–2010 to estimate county specific own‐wage elasticity of labor demand in the U.S. for four highly aggregated industries: construction, finance/insurance/real‐estate/service, manufacturing, and retail trade. Our estimation of a random parameter panel data model yields significant evidence of spatial variations in wage elasticity of labor demand. We relate the spatial variation in elasticity to differences in county characteristics like industry specialization, industry competition, levels of natural amenity and urbanization. Using a regression discontinuity approach we also find that probusiness states have higher labor demand elasticity.     

Urban bound migration and rural investment: the case of Mexico

The authors investigate an agriculturally based policy for improving rural incomes and for retarding the rural-urban migration flow. The production of agricultural goods is characterized by a production function in which output increases with increases in agricultural labor inputs, capital, public infrastructure, land, and technology. Differences among regions in agricultural technology will reflect regional differences in education, the institutionalized form of productive organization, and differences in access to technological information channeled through more technically advanced cities. To pick up the effect of out-migration changes in state agricultural labor supply and upon agricultural output, the state's agricultural out-migration rate is included together with the agricultural labor force. The gross migrant flow between 2 locations is hypothesized to depend upon a set of variables influencing the individual's perception of the economic rate of return to be gained by moving, a set of variables reflecting the individual's propensity to relocate, the labor displacement effects of investments, and the at risk population at 1 location available to migrate. It is also taken into account that individuals differ in their response to information about origin and destination wage differentials and that individuals may or may not perceive a new ecnomic gain from migration but may base the decision on other considerations. Results of a statistical analysis using data from the Mexican census of population for 1960 and 1970 are: 1) size of the rural labor force was negatively associated with agricultural wages, contrary to expectations; 2) small farmers have benefited from the expansion of irrigation in Mexico; and 3) higher urban wages attract migration, and higher growth rate of agricultural income retards rural-urban migration. With respect to the 1950-60 decade both agricultural income and rural out-migration impacts could have been substantial but both the impact on local urban growth and on the rate of in-migration to the primate city would have been slight.     

ECONOMIC IMPACTS OF CULTURAL DIVERSITY IN THE NETHERLANDS: PRODUCTIVITY,UTILITY, AND SORTING*

ABSTRACT This paper identifies the impact of cultural diversity on local economies, by explaining spatial disparities in wages and housing prices across Dutch cities using unique individual panel data of homeowners during the period 1999 and 2008. We distinguish between the effects of spatial sorting based on individual heterogeneity, interactions‐based productivity effects, and consumer amenities while controlling for interactions between the labor and housing market. In line with previous literature, we find a positive effect of cultural diversity on average housing prices. After controlling for spatial sorting, the effect of cultural diversity on housing prices is negative. The negative impact of cultural diversity on local housing markets is likely driven by a causal effect between the presence of immigrants and neighborhood quality that outweighs a positive effect of immigrant‐induced diversity in consumption goods.     

Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?*

There are several hypotheses why urban scale affects wages. Most focus on agglomeration economies that increase labor demand, especially for high‐skilled workers (e.g., dynamic externalities stress knowledge transfers, and imply the urban wage gap favors skilled workers). Others stress urban amenities that increase labor supply and decrease wages. Amenities should have a stronger influence on affluent households if they are normal goods. By examining whether urban‐scale affects net returns to education, it can be determined whether skilled workers are influenced more by urban productivity or amenities. Empirical results suggest net returns to education decline with urban scale, implying a key role for urban amenities in affecting skilled workers.     

Permanent Migrants and Cross-Border Workers: The Effects on the Host Country

Using a two-factor, two-good model, where only one of the goods is nontraded, I investigate the effects of immigration on the relative price of the two goods, the wage rate, and the rental price. I also demonstrate that the inflow of foreign workers gives rise to an increase in the welfare of the native inhabitants in the host country, and if the nontraded good is capital (labor) intensive, the inflow of permanent migrants is of more (less) benefit to the native inhabitants than the inflow of cross-border workers.     

REGIONAL HETEROGENEITY IN WAGE DISTRIBUTIONS: EVIDENCE FROM SPAIN*

ABSTRACT Regional differences in real wages have been shown to be both large and persistent in the United States and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer–employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.     

GENERAL EQUILIBRIUM OF SPATIAL PRODUCT AND LABOR MARKETS*

ABSTRACT A simple general equilibrium model relates spatial product markets and spatial labor markets. The firm is treated as being a spatial monopolist or as a Löschian competitor in the output market and as a spatial monopsonist in the labor market. Derived free spatial demand and free regional labor supply are defined, and their properties examined. The model provides the framework for analyzing the impact of a technological improvement in labor productivity on the structure of the spatial markets. The impact of entry on spatial labor supply is an important determinant of whether or not entry lowers wages and raises output prices. Unlike the spaceless competitive paradigm, zero-profit long-run equilibrium can occur in a space economy under conditions of increasing returns to scale.     

The minimum wage and seasonal employment: Evidence from the US agricultural sector

Nearly 40% of agricultural workers in the United States earn an hourly wage that is within 10% of the prevailing state-level minimum wage. We evaluate the impact of the minimum wage on farm employment using county-level data from the United States Census of Agriculture. We employ long-differences specifications and find evidence of a dynamic, negative effect of the minimum wage on seasonal agricultural employment, but no effect on year-round agricultural employment. We estimate a long-run elasticity of total agricultural employment with respect to the minimum wage of about −0.40, which is both statistically and economically significant. Employers’ total expenditures on hired agricultural workers are not affected by the minimum wage. Finally, our analysis suggests that increases in minimum wages may lead to higher capital investment as well as the consolidation of farming operations in the agricultural sector.     

The Impact of a Customs Union with the European Union on Internal Migration in Turkey

Abstract The impact of the recent Customs Union (CU) agreement between Turkey and the European Union on internal migration is studied using an intra‐industry trade Computable General Equilibrium (CGE) model with intersectoral capital mobility under two alternative specifications for the labor market: the traditional Harris‐Todaro approach and the existence of a “wage curve” in the urban sector. Under both specifications, the numerical results show that the CU is welfare enhancing and causes a reduction of the urban‐rural wage gap as suggested by theoretical studies. At the same time, it leads to rural‐to‐urban migration and raises the capital rent, results that are counter intuitive with respect to the dual economy literature. Furthermore, the rise in formal labor demand and the migration response to the CU have not resulted in an increase in urban unemployment (i.e. the “Todaro paradox”), but rather to a fall in the unemployment pool. The study also shows that the Bhagwati‐Srinivasan proposal of maximizing welfare by uniformly subsidizing the entire labor market is impracticable, especially if the high wage union sector can negotiate employment conditions.     

POPULATION DISPERSION VS. CONCENTRATION IN A TWO‐REGION MIGRATION MODEL WITH ENDOGENOUS NATURAL AMENITIES*

ABSTRACT Contrary to the predictions of the basic spatial equilibrium model, the long‐run distribution of population across rural U.S. counties with high‐valued natural amenities has become relatively more concentrated versus dispersed. We provide an explanation by developing a two‐region model with mobile labor, production externalities and endogenous natural amenities. We find that strong preferences for natural amenities generally foster population dispersion. However, such preferences can also lead to population concentration when ecological degradation is low and man‐made capital is a relatively scarce input into natural amenity production. Investments that enhance natural amenities are found to reduce the divergence between the steady state and optimal outcomes.     

VALUING ENVIRONMENTAL QUALITY: A SPACE‐BASED STRATEGY*

ABSTRACT This paper develops and applies a space‐based strategy for overcoming the general problem of deriving the implicit demand for nonmarket goods. It focuses specifically on evaluating one form of environmental quality, distance from Environmental Protection Agency designated environmental hazards, via the single‐family housing market in the Puget Sound region of Washington State. A spatial two‐stage hedonic price analysis is used to: (i) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (ii) estimate a series of implicit demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents an important step forward in the valuation of environmental quality, reveals that the information needed to identify second‐stage demand functions is hidden right in plain sight—hanging in the aether of the regional housing market.     

上海市就业市场状况与城市犯罪的空间计量分析

基于2008年上海市经济普查数据和城市犯罪数据,改变以往学者以失业率描述就业市场状况的做法,构建就业市场状况指数,并将其扩展到所有行业;同时,构建空间计量模型,研究上海市就业市场状况与刑事犯罪率之间关系,结果表明:1)就业市场状况对刑事犯罪率影响显著,不同行业的影响并不相同;其中,批发零售业、租赁和商业服务业、居民服务和其他服务业、公共管理和社会组织业就业的集中会引发犯罪活动的发生。2)空间计量模型在解释就业市场状况与刑事犯罪率之间关系时,计量效果良好。3)"空间效应"是影响刑事犯罪率的重要因素,其影响来自"空间邻近效应"和"空间误差效应"。     

A Spatial Price Determination Model for Multi‐Market Heterogeneously Distributed Resources: An Application to Forestry Markets in Sweden

The spatial dimension is a key paradigm in price determination, as attested by recent studies in the literature that highlighted the differential in market behavior between spatial and non‐spatial pricing settings. In this paper, we develop a model of spatial pricing for multi‐market heterogeneously distributed resources, with an application to the Swedish forestry sector. The focus of the model is to estimate the impact of spatial interaction on the demand for resources in terms of resource allocation, competition, and pricing. In its core, the pricing mechanism relies on a supply–demand framework. Using disaggregated data at the gridcell level for forest feedstock supply and harvesting costs in Sweden, we construct regional supply curves for each gridcell assuming a maximum transportation distance to delimit the potential market. Demand nodes are exogenously determined and are adjusted using a distance‐decay model to assess demand pressure across locations. We apply the model empirically to assess the impact on forest feedstock prices of a 20 TWh increase in biofuel production.     

Flood Disasters and Agricultural Wages in Bangladesh

This article examines the effects of abnormal floods on agricultural wages in Bangladesh. Drawing upon the district‐wise monthly real wage data for the period 1979–2000, it shows that wages decline sharply in the regions that are severely inundated for a long period of time. Wages may remain depressed in these regions even in the post‐flood months. However, wages increase in the flood months in the regions that remain submerged for short durations. The article examines the district‐wise crop yield data to explain these results in terms of the impact of flood on agricultural productivity, and therefore the demand for labour.     

MIGRATION,SKILL FORMATION,AND THE WAGE STRUCTURE*

ABSTRACT We analyze the impacts of migration and of labor market integration on the distribution of skills and the wage structure in both the short and the long run. To do so, we develop a framework where workers have heterogeneous skills and where in‐migration expands the range of available skills in the economy. In the short run, this expansion leads to productivity gains, which may more than offset the negative endowment effects of a larger labor supply so that all workers may be better off. In the long run, in‐migration impacts wages further by altering the workers' incentives to acquire skills, thereby affecting the wage structure indirectly by changing the economy's skill composition. Since the short and the long‐run effects of in‐migration on wages may differ, compositional changes may be an important element to take into consideration. A numerical illustration calibrated on U.S. data suggests that the immigration of skilled workers negatively affects the incentives for domestic skill formation, thereby suggesting that endowment effects dominate externalities. We finally extend the model to cope with the simultaneous impacts that migration and skill formation have on the host and the source region, and we show that more migration increases wage disparities and the skill gap across regions.     

山东省泰安市农业空间生产资本化特征及模式研究

农业生产空间是农村基本功能的载体。从资本“三重循环”视角出发,将“空间的生产”理论引入农业研究,提出并构建农业空间生产资本化的作用逻辑及其特征表征,并以山东省泰安市村庄为研究单元,研究其农业空间生产资本化特征、模式表征及空间规律。发现,泰安市农业生产具有资本投入集约化、空间生产集中化、组织分工专业化等特征;农业空间生产资本化模式共有四种,在空间上呈现出以中心城区为圆心,圈层式向外拓展的规律性,农业空间生产资本化度和三重特征都表现出由内向外先增后缓降的格局。在乡村振兴背景下,识别村庄农业发展模式,根据要素条件,分类指导农业种植结构调整,有利于促进农村多功能有机融合,实现乡村农业产业兴旺发展目标。     

MEASURING THE EFFECT OF COST VARIATION ON INDUSTRIAL OUTPUTS*

ABSTRACT. This paper introduces the household interactive variable input-output (HIVIO) model to measure the effect of cost variation on industrial outputs. The model produces a variety of cost elasticities that separate out impacts on industrial prices, imports, and outputs, with “own” and “cross” elasticity components. Like the conventional input-output multipliers, these cost elasticities can be useful parameters to evaluate the substituting behavior of firms and consumers. By using the 1980 Korean input-output transactions table, we find the wage and import price effects on industrial prices, outputs, and import demands.     

MEASURING CONTRIBUTING FACTORS TO INTERREGIONAL AGRICULTURAL LABOR PRODUCTIVITY DIFFERENTIALS: A JOINT PROFIT FORMULATION*

ABSTRACT Using Taylor series approximations of joint profit functions, a methodology is outlined to quantify interregional differentials in the Canadian agriculture sector by region and to quantify the contributing factors to regional labor productivity differences. These contributing factors are output price differentials–both crop and livestock, differentials in “land and buildings” capital deepening, “other” capital deepening, energy prices, other material prices, and efficiency. The joint profit formulation permits the analysis of effects of regional specific output price and output mix differentials.     

TWO-DIMENSIONAL BERTRAND COMPETITION: BLOCK METRIC,EUCLIDEAN METRIC,AND WAVES OF ENTRY*

This paper examines two-dimensional spatial competition, with Bertrand price determination. With a block metric, equilibrium prices are significantly lower when market areas are squares than when they are diamonds (rotated squares) of the same size. If demand density grows, waves of entry occur, and the shapes of market areas change from squares to diamonds and back to squares again. The former change leaves prim unchanged, whereas the latter cuts prices in half. Results are also derived for a Euclidean metric, with square and hexagonal market areas. Optimal waves of entry are examined with the block metric. With either metric, the socially optimal market shape becomes suboptimal if market areas are constrained to be of the zero-profit size.