Trade Shocks and the Provision of Local Public Goods

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Trade Shocks and the Provision of Local Public GoodsIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 10231 September 2016 ABSTRACT Trade Shocks and the Provision of Local Public Goods *We analyze the impact of trade-induced income shocks on the size of local government, and the provision of public services. Areas in the US with declining labor demand and incomes due to increasing import competition from China experience relative declines in housing prices and business activity. Since local governments are disproportionately funded through property and sales taxation, declining property values and a decrease in economic activity translate into less revenue, which constrains the ability of local governments to provide public services. State and federal governments have limited ability to smooth local shocks, and the impact on the provision of public services is compounded when local income shocks are highly correlated with shocks in the rest of the state. The outcome is greater inequality not only in incomes but also in the quality of public services and amenities across US jurisdictions.JEL Classification: F14, F16, H41, H70, R12, R23

Local Ties in Spatial Equilibrium

“…Effects on wages and labor force participation increase with higher ties, in keeping with the limited population response. Each suggests substantial losses for the local population as Chinese firms entered the market in the 1990s and early 2000s, keeping with Autor, Dorn and Hanson (2013) and Feler and Senses (2015). Interestingly, these losses appear to be highly concentrated in areas where workers have higher levels of local ties and were either unwilling or unable to migrate.…”

Losing by Less? Import Competition, Unemployment Insurance Generosity, and Crime

“…Feler and Senses (2017), for instance, estimate that a $1,000 increase in import competition raised CZ property crime rates by approximately 3.5%. Results indicate that a $1,000 increase in imports per worker raised property crime rates by roughly 2.5% and violent crimes by nearly 2%.…”

“…These results are in line with the existing literature. Feler and Senses (2017), for instance, estimate that a $1,000 increase in import competition raised CZ property crime rates by approximately 3.5%.…”

“…See Feler and Senses (2017) for evidence related to public goods provision and crime. See Feler and Senses (2017) for evidence related to public goods provision and crime.…”

“…With respect to the effect on crime, several recent papers have documented a causal link between increases in import competition and increased crime: See Che, Xu, and Zhang (2018), Deiana (2016), and Feler and Senses (2017) for evidence in the United States; Iyer and Topalova (2014) for evidence from India; and Dix-Carneiro, Soares, and Ulyssea (2018) on the experience of Brazil. The existing literature has consistently shown that the consequences of increased import competition are widespread, affecting the entire local labor market Redundant.…”