CFCM Seminar: Mike Elsby (University of Edinburgh)

Location
A01 Highfield House
Date(s)
Thursday 26th October 2023 (14:00-15:15)
Description

This is an in-person event

Title:  Spatial hysteresis

Abstract:  We devise a tractable model of persistent heterogeneity in the propensity to move. The model admits analytical solutions for household values, migration flows, and the distribution of mobility types across space, a fundamental challenge posed by the environment. Equilibrium mobility is ordered: locations facing adverse (favorable) shocks shrink (grow) via population flows in order of mobility type, starting with the most mobile. Spatial gaps emerge not only in labor market outcomes, but also in the composition of mobility types. Spatial convergence involves closing both gaps, and generically takes longer. Labor market outcomes display endogenous history dependence whereby locations with greater shares of mobile types exhibit greater resilience to adverse shocks. Auspicious locations are heterogeneous and feature high population churn; inauspicious locations become increasingly homogeneous and sclerotic. Confronting the model with data on population flows dating back to the 1960s, we find support for these predictions.

Host:  Jake Bradley

Centre for Finance, Credit and Macroeconomics

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

Enquiries: hilary.hughes@nottingham.ac.uk