Inequality, Segregation, and Local Labor Markets
Universidad de Los Andes
International Summer School 2019
Professors: David Albouy
Juan Sebastián Muñoz
Lecture: June 18th – June 28th, 10-1:30pm.
1. Class description
This course considers how locations – at the national, metropolitan (labor-market) and neighborhood level – influence economic outcomes. The first half focuses on measurements, long-run trends, spatial equilibrium, and impacts on opportunity. The second half considers the role of local demand shifts, international trade, segregation, public goods, and firms.
The course will also familiarize students to methods that can be applied to a number of contexts, such as in Colombia. The last lecture will consider cutting-edge literature that analyzes the Colombian context.
2. Grading
40% Four empirical applications (4 x 10 points each): We will distribute some questions and data so that students learn how to apply certain techniques covered in class using (but not strictly limited to) STATA.
24% Reading Checks (8 x 3 points each): You must read the assigned paper(s) before each class. These will typically consist of 3 questions and last 15 minutes. They may address facts, content, discussion, or methods. Readings marked with an asterisk “*” will be covered in lecture, and may be needed for the take-home exam, but are not covered in the reading checks.
20% Take-Home exam: This will consist of 2 questions. You will have 48 hours to complete. Answers are expected to be around 500 words each.
16% Participation and Attendance: We will distribute some questions and data so that students learn how to apply certain techniques covered in class using (but not strictly limited to) stata.
3. Readings and Topics by day:
Tuesday, June 18th Global Inequality: Across and Within Nations
World Inequality Lab World Inequality Report, Executive Summary: 2018 or (in Spanish) Informe Sobre La Desigualdad Global: Resumen Ejecutivo, 2018 https://wir2018.wid.world/files/download/wir2018-summary-spanish.pdf
Haughton and Khandker “Chapter 6: Inequality Measures” of Poverty and Inequality Handbook
Milanovic, Branko “Chapter 1: The Rise of the Global Middle Class and Global Plutocrats”
*World Inequality Lab World Inequality Report, Full Report: 2018
*Saez, Emmanuel and Thomas Piketty, (2006), “The Evolution of Top Incomes: A Historical and International Perspective.” American Economic Review, 96(2), pp. 200-205.
*Ravaillon, Martin “Inequality and Globalization: A Review Essay” Journal of of Economic Literature 2018, 56(2), 620–642
Wednesday, June 19th: Local Inequality, Opportunity, and Long-term Trends
Autor, David “Work of the Past, Work of the Future” AEA Papers and Proceedings 2019, 109: 1-32
(Executive Summaries only, available at https://opportunityinsights.org/paper/ )
Chetty, Raj, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez “Executive Summary: Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the U.S.”
Chetty, Raj, and Nathaniel Hendren,” Executive Summary: The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates
Chetty, Raj, Nathaniel Hendren, and Lawrence Katz. “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment”
The full research papers are in the American Economic Review and Quarterly Journal of Economics
*Meng, Xin 2012. “Labor Market Outcomes and Reforms in China” Journal of Economic Perspectives, 26(4), pp. 75-102.
*David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, Jimmy Narang “The Fading American Dream: Trends in Absolute Income Mobility Since 1940”, Science 356 (6336): 398-406, 2017
Thursday, June 20th: Explaining Inequality with Location and Individual Characteristics
Albouy, David. 2008. "The wage gap between Francophones and Anglophones: a Canadian perspective, 1970-2000." Canadian Journal of Economics 1211-1238.
*DiNardo, John, Nicole M. Fortin, and Thomas Lemieux. 1996. “Labor Market Institutions and the Distribution of Wages, 1973–1992: A Semiparametric Approach.” Econometrica 64 (5), pp. 1001–44
*Blinder, Alan S. (1973) “Wage Discrimination: Reduced Form and Structural Estimates” Journal of Human Resources 8(4), pp. 436-473
*Kline, Patrick “Oaxaca-Blinder as a Reweighting Estimator” AEA Papers and Proceedings
Friday, June 21st: Spatial Equilibrium in Wages, Costs-of-Living and Amenities
Roback, Jennifer (1982) “Wages, Rents, and the Quality of Life.” Journal of Political Economy, 90, pp. 1257-1278.
Albouy, David (2016) “What Are Cities Worth? Land Rents, Local Productivity, and the Total Value of Amenities” Review of Economics and Statistics, 98(3), pp. 477-487.
*Albouy, David and Bert Lue (2015) “Driving to Opportunity: Local Rents, Wages, Commuting, and Sub-Metropolitan Quality-of-Life” Journal of Urban Economics, 2015, 89, pp. 74-92.
*Albouy, David (2009) “The Unequal Geographic Burden of Federal Taxation.” Journal of Political Economy, 117(4), pp. 635-667.
*Rosen, Sherwin (1979) “Wages-based Indexes of Urban Quality of Life” P. Mieszkowski and M. Straszheim, eds. Current Issues in Urban Economics, Baltimore: John Hopkins Univ. Press.
Tuesday, June 25th: Local Demand Shocks and Trade
Albouy, David, Alex Chernoff, Chandler Lutz, and Casey Warman 2019 “Local Labor Markets in Canada and the U.S.”
*Autor, David, David Dorn, and Gordon Hanson. 2013. "The China Syndrome: Local labor markets effects of import competion in the United States." American Economic Review 2121-2168.
*Goldsmith-Pinkham, Paul, Isaac Sorkin and Henry Swift 2019 “Bartik Instruments: What, When, Why, and How”
*Borusyak, Kirill, Peter Hull, Xavier Jaravel 2018 “Quasi-Experimental Shift-Share Research Designs”
Wednesday, June 26th: Sorting
Diamond, Rebecca. 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000." American Economic Review 479-524.
*Moretti, Enrico 2014 “Real Wage Inequality” American Economic Journal: Applied Economics 2013, 5(1): 65–103
*Eeckhout, Jan, Roberto Pinheiro and Kurt Schmidheiny 2014 “Spatial Sorting” Journal of Political Economy, 122 (3)
Thursday, June 27th: Local Segregation and Tipping
Card, David, Alezander Mas, and Jesse Rothstein. 2008. "Tipping and the Dynamics of Seggregation." Quarterly Journal of Economics 177-218.
*Schelling, Thomas. 1971. "Dynamic Models of Segregation." Journal of Mathematical Sociology 143-186.
Friday, June 28th The Allocation of Public Goods and Sorting across Firms
Tsivanidis, Nick. 2018. "The Aggregate and Distributional Effects of Urban Transit Infrastracture Evidence from Bogota's Transmilenio." Mimeo.
Card, David, Jorg Heining, and Patrick Kline. 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality." The Quarterly Journal of Economics 967-1015.