Research

Discussion and Working Papers:

(with Marcel Henkel)


Abstract: We examine optimal spatial policies in a model where these policies influence workers’ decisions about employment, residence, and participation in the labour force. These decisions are made in the context of spatial externalities, such as agglomeration and congestion effects. We compare the market outcomes of this model with those of a welfare-maximising social planner. Our findings reveal significant differences between optimal spatial policies in our model and previous research that did not consider local labour force participation. These differences have implications for workers’ sorting, labour supply, and welfare. Using German data, we quantify these effects and find that the optimal policy could increase the (female) labour force by approximately 3% and improve aggregate welfare by 1.3%. If the labour supply margin is neglected, the level of fiscal redistribution across locations and GDP and welfare gains from implementing optimal spatial policies are underestimated.



(with Gabriel M. Ahlfeldt, Duncan Roth and Tobias Seidel)



Abstract: The economics literature on quality of life is rooted in the Rosen-Roback framework, which ignores spatial frictions. Using a quantitative spatial model, we show how mobility and trade frictions affect the measurement of quality of life. We find that the canonical spatial equilibrium framework underestimates spatial quality of life differentials, the urban quality of life premium, and the value of local non-marketed goods in urban environments. A quantification exercise for Germany shows that the quality of life in the top location (Munich) would be 80% higher - almost entirely due to mobility frictions. As this measurement bias extends to the marginal willingness to pay for single amenities, the results imply that the design of public policies, e.g. provision of local public goods or fiscal transfers, will not be optimal if spatial frictions are ignored.


(with Gabriel M. Ahlfeldt, Duncan Roth and Tobias Seidel)



Abstract:  The economics literature on quality of life is rooted in the canonical frictionless spatial equilibrium framework. We show how to measure quality of life and evaluate quality-of-life policies within a dynamic spatial model with heterogeneous, imperfectly mobile, and forward-looking workers. We find that the canonical spatial equilibrium framework understates spatial quality-of-life differentials, the urban quality-of-life premium and the value of local non-marketed goods. Unlike the canonical spatial equilibrium framework, a dynamic spatial model predicts local welfare effects that motivate many place-based policies seeking to improve quality of life.

Work in progress:

Expensive cities: The role of the supply side

(with Felix Weinhardt and Christian Helmers)

Older Papers:

The stationary spatial equilibrium with migration costs

(with Gabriel M. Ahlfeldt, Duncan Roth and Tobias Seidel)

Note: This paper precedes  the paper "Quality of life in a dynamic spatial model".  Its dynamic, spatial model is discussed in detail in the current discussion paper version of "Quality of life in a dynamic spatial model".


The Role of Local Public Goods for Gender Gaps in the Spatial Economy

(with Marcel Henkel)

Note: This paper precedes the current working paper "Beyond Geography: Optimal Spatial Policies and Local Labour Supply".