Research

2024

1. Churning in Cities: The Volatility Advantages of Large Labor Markets

   Maddalena Conte, Isabelle Mejean, Tomasz Michalski , and Benoit Schmutz

   CEPR Discussion Paper, 2024

   (Submitted)

   Abstract Link

   Firms’ labor demand is more volatile in larger cities. We propose and test a novel explanation for this finding. Faster hiring conditions attract productive firms with more volatile activity to denser locations where they can swiftly downsize or expand. We estimate a model of firm location choice using French data and show that (i) firm volatility is almost as predictive of location choice as productivity; (ii) both dimensions reinforce each other. This mechanism reduces the productivity-density gradient among volatile firms. Imperfectly correlated firm-level shocks, combined with higher operating costs induced by density, generate matching economies.

2. Moving to opportunity? Networks, information and skill-biased migration

   Maddalena Conte

   2024

   (Draft available upon request)

   Abstract

   This paper studies the role of information frictions in workers’ regional migration. I exploit a strategy that isolates changes in workers’ information on migration opportunities based on their network of former coworkers. Using matched employer-employee data from France, I find that increases in information on migration opportunities lead to higher labor market transitions to other cities, but this effect is significantly weaker for low-skilled workers, who also tend to be less mobile and have more spatially concentrated networks. I then estimate a quantitative model of migration to assess the role of information frictions on the skill mobility gap. Results suggest that this channel contributes substantially to differences in migration propensities between low- and high-skilled workers and to the resulting wage inequality between these two skill groups. Moreover, information frictions magnify the misallocation across space of low-skilled workers, who, due to a weaker network and scarce information on their outside options, are less mobile and less likely to move to high-wage cities.

3. Affordable housing and the labor market: evidence from the city of Copenhagen

   Maddalena Conte, Ismir Mulalic , and Jos van Ommeren

   2024

   Abstract

   This paper investigates the impact of affordable housing policies on long-run labor market outcomes in a quasi-natural experimental setting for Copenhagen. We compare two key affordable housing policies - home purchase subsidies and public rental housing - both directed towards low-income households. We find that subsidized home-buying has a negative effect on labor market participation, compared to subsidized rental, as home-buyers experience large wealth increases, which reduce work incentives. Comparing children of home-buyers and renters in public housing, we find limited effects on their adult labor market participation. However, we show that public housing privatisation can in the long run increase housing inequalities, due to the high inter-generational persistence of home-ownership.

2023

1. The CEPII Gravity database

   Maddalena Conte, Pierre Cotterlaz , and Thierry Mayer

   CEPII Working Paper, 2023

   Link