The Causal Effect of Place: Evidence from Japanese-American Internment

Abstract

Recent research has stressed the importance of long-run place effects on income and economic mobility, but the literature has struggled to isolate the causal impact of location. This paper provides new evidence on these effects using administrative data on over 100,000 Japanese-Americans who were interned during World War II. Internees were conditionally randomly assigned to camps in seven different states and held for several years. Restitution payments paid in the early 1990s to the universe of surviving internees allow us to measure their locations and outcomes nearly half a century after the camp assignments. Using this unique natural experiment we find, first, that camp assignment had a lasting effect on individuals' long-term locations. Next, using this variation, we find large place effects on individual economic outcomes like income, education, socioeconomic status, house prices, and housing quality. People assigned to richer locations do better on all measures. Random location assignment affected intergenerational economic outcomes as well, with families assigned to more socially mobile areas (as designated by Chetty et al., 2014) displaying lower cross-generational correlation in outcomes. Finally, we provide evidence that assignment to richer places impacted people's values and political views, a new and intriguing mechanism through which place effects operate. Together, this new causal evidence on location effects has broad implications for urban economics, as well as potential policy implications for policymakers struggling to resettle and integrate large refugee or immigrant populations.

Displacement, Diversity, and Mobility: Career Impacts of Japanese American Internment

“…51 Shoag and Carollo (2016) show that place effects impacted the relative fortunes of internees. 52 This would not be the first instance in which a shock forcing individuals to move against their will leads them to re-optimize in a way that improves labor market outcomes; this has been recently shown in settings where a forced move is driven by an Icelandic volcano (Nakamura et al, 2019), Soviet annexation of parts of Finland (Sarvimäki et al, 2019), or Hurricane Katrina (Sacerdote, 2012;Deryugina et al, 2018).…”

“…Nakamura et al, 2019), it is interesting to check whether former internees who moved did so to areas of the country that turned out to experience greater growth than the ones they left behind. Shoag and Carollo (2016) document how geography mattered in determining the relative prospects of different internees.…”

“…In other work he finds that early-childhood internment led to shorter lifespans in the long run (Saavedra, 2013). Shoag and Carollo (2016) use internment as an exogenous geographical shock to study the causal effect of place. They carry out an internee-internee comparison of later outcomes based on place of residence, using the variation driven by the quasi-randomness of camp assignment.…”

The Return to Big City Experience: Evidence from Refugees in Denmark

“…First, we study the 5 We also thank Bente Bondebjerg from Dansk Flygtningehjaelp, who helped run these programs and provided further details in personal communication. 6 Other notable papers in the exogenous placement literature are Aslund et al (2009), Shoag andCarollo (2020), Peters (2019), Chetty et al (2016), Beaman (2011), Edin et al (2003, Gould et al (2004), and Imberman et al (2012). 7 Counties are sub-units of the geographic units (commuting zones) we consider below.…”

Local Ties in Spatial Equilibrium

“…Workers receive some labor market benefits when they live close to their parents (Kaplan, 2012;Kramarz and Skans, 2014;Coate, Krolikowski and Zabek, 2019) and workers also appear to move closer to their birth places after job displacements (Huttunen, Møen and Salvanes, 2018). But young people can also earn more when they move away from their birth places (Shoag and Carollo, 2016;Nakamura, Sigurdsson and Steinsson, 2016), implying that many people have a strong preference to remain. Many recent papers have also found that migration is unusually slow given high returns (Bound and Holzer, 2000;Dao, Furceri and Loungani, 2017;Yagan, 2017;Chetty and Hendren, 2018).…”