Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272523 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 15896
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
When mobility between locations is frictional, a person's economic well-being is partially determined by her place of birth. Using a life cycle model of mobility, we find that search frictions are the main impairment to the mobility of young people in Spain, and these frictions are particularly strong in economically distressed locations. As a result, being born in a high-unemployment urban area carries with it a large welfare penalty. Less stable jobs, slower skill accumulation, lower average wages, and fewer possibilities for geographic mobility all contribute to these welfare losses. Paying transfers to people in distressed economic locations decreases these welfare losses without large adverse effects on mobility. In contrast, several policies that encourage people to move to low-unemployment urban areas increase these welfare losses and fail to meaningfully increase mobility towards these more successful locations.
Subjects: 
mobility
local labor markets
search frictions
life cycle
dynamic spatial models
JEL: 
E20
E24
E60
J21
J61
J63
J64
J68
R23
R31
Document Type: 
Working Paper

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