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- Going back to the work of Olivier Blanchard and Lawrence Katz (1992), a strong case can be made that labor mobility is a key mechanism that pushes toward regional equalization. My recent rereading of the literature on this subject suggests that it may even be the only real driver of regional convergence (Duranton and Venables 2018). The steep decline Brookings Papers on Economic Activity, Spring 2018 of labor mobility in the United States during the last 20 years is certainly worrisome. Whether this margin can be fixed at a reasonable cost should be high on our priority list.
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- In an older essay published in the Brookings Papers, Glaeser and Joshua Gottlieb (2008) also conclude negatively. They argue that the efficiency case for relocating economic activity relies on assumptions for which empirical support is lacking, while equity objectives could be achieved at much lower costs, using more direct instruments.
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- The paper again performs very well on this key aspect. The valuation formula proposed by Austin, Glaeser, and Summers is in the Baily–Chetty tradition (Baily 1978; Chetty 2006). It contains five fundamental terms: (i) a fiscal value of employment, (ii) a social value of employment, (iii) a value of nonemployment, (iv) an elasticity of labor supply, and (v) a coefficient of relative risk aversion. Although I wish they had connected their empirical analysis more strongly to this valuation formula, the authors do exemplary work. Some of these parameters, like the coefficient of relative risk aversion, are the subject of a large body of literature (and also have much uncertainty, unfortunately). There, the authors do their best to find what they think are the most relevant available estimates, and they are very transparent about the relevant range that needs to be considered.
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- The vast majority of economists hold negative views about placebased policies. For instance, in their review chapter in the recent Handbook of Regional and Urban Economics, David Neumark and Helen Simpson (2015, p. 1279) reach a mostly negative conclusion: In our view, a major shortcoming of the research on place-based policies is that even the most positive evidence on their effectiveness does not establish that they create self-sustaining economic gains. That is, at best, the evidence (sometimes) says that when place-based incentives are in effect, there are increases in economic activity and perhaps welfare.
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- Zabek, Mike. 2018. “Local Ties in Spatial Equilibrium.†Job market paper, University of Michigan. https://mikezabek.com/pdf/LocalTies.pdf Comments and Discussion COMMENT BY GILLES DURANTON  To appreciate the contribution of this paper by Benjamin Austin, Edward Glaeser, and Larry Summers and some of its strengths and limitations, it is useful to start with a bit of intellectual history.
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