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Place Based Economic Development and Tribal Casinos
April 2025
Working Paper Number:
CES-25-24
Tribal lands in the U.S. have historically experienced some of the worst economic conditions in the nation. We review some existing research on the effect of American Indian tribal casinos on various measures of local economic development. This is an industry that began in the early 1990s and currently generates more than $40 billion annually. We also review the state of the literature on the effects of casino operations on communities in or adjacent to tribal areas. Using a new dataset linking individual and enterprise-level data longitudinally, this study examines the industry- and location-specific impacts of tribal casino operations. We focus in particular on the employment of American Indians. We document positive flows from unemployment and non-casino geographies to work in sectors related to casino operations. Tribal casinos differ from other standard place-based economic development projects in that they are focused on a single industry; we discuss these differences and note that some of the positive spillover effects may be similar to other, more standard place-based policies. Finally, we discuss additional and open-ended questions for future research on this topic.
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Applying Current Core Based Statistical Area Standards to Historical Census Data, 1940-2020
January 2025
Working Paper Number:
CES-25-10
In the middle of the twentieth century, the Bureau of the Budget, in conjunction with the Census Bureau and other federal statistical agencies, introduced a widely used unit of statistical geography, the county-based Standard Metropolitan Area. Metropolitan definitions since then have been generally regarded as comparable, but methodological changes have resulted in comparability issues, particularly among the largest and most complex metro areas. With the 2000 census came an effort to simplify the rules for defining metro areas. This study attempts to gather all available historical geographic and commuting data to apply the current rules for defining metro areas to create comparable statistical geography covering the period from 1940 to 2020. The changes that accompanied the 2000 census also brought a new category, "Micropolitan Statistical Areas," which established a metro hierarchy. This research expands on this approach, using a more elaborate hierarchy based on the size of urban cores. The areas as delineated in this paper provide a consistent set of statistical geography that can be used in a wide variety of applications.
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Output Market Power and Spatial Misallocation
November 2023
Working Paper Number:
CES-23-57
Most product industries are local. In the U.S., firms selling goods and services to local consumers account for half of total sales and generate more than sixty percent of the nation's jobs. Competition in these industries occurs in local product markets: cities. I propose a theory of such competition in which firms have output market power. Spatial differences in local competition arise endogenously due to the spatial sorting of heterogeneous firms. The ability to charge higher markups induces more productive firms to overvalue locating in larger cities, leading to a misallocation of firms across space. The optimal policy incen tivizes productive firms to relocate to smaller cities, providing a rationale for commonly used place-based policies. I use U.S. Census establishment-level data to estimate markups and to structurally estimate the model. I document a significant heterogeneity in markups for local industries across U.S. cities. Cities in the top decile of the city-size distribution have a fifty percent lower markup than cities in the bottom decile. I use the estimated model to quantify the general equilibrium effects of place-based policies. Policies that remove markups and relocate firms to smaller cities yield sizable aggregate welfare gains.
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Propagation and Amplification of Local Productivity Spillovers
August 2022
Working Paper Number:
CES-22-32
This paper shows that local productivity spillovers can propagate throughout the economy through the plant-level networks of multi-region firms. Using confidential Census plant-level data, we find that large manufacturing plant openings not only raise the productivity of local plants but also of distant plants hundreds of miles away, which belong to multi-region firms that are exposed to the local productivity spillover through one of their plants. To quantify the significance of plant-level networks for the propagation and amplification of local productivity shocks, we develop and estimate a quantitative spatial model in which plants of multi-region firms are linked through shared knowledge. Counterfactual exercises show that while knowledge sharing through plant-level networks amplifies the aggregate effects of local productivity shocks, it can widen economic disparities between workers and regions in the economy.
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The Impacts of Opportunity Zones on Zone Residents
June 2021
Working Paper Number:
CES-21-12
Created by the Tax Cuts and Jobs Act in 2017, the Opportunity Zone program was designed to encourage investment in distressed communities across the U.S. We examine the early impacts of the Opportunity Zone program on residents of targeted areas. We leverage restricted-access microdata from the American Community Survey and employ difference-in-differences and matching approaches to estimate causal reduced-form effects of the program. Our results point to modest, if any, positive effects of the Opportunity Zone program on the employment, earnings, or poverty of zone residents.
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Correctional Facility and Inmate Locations: Urban and Rural Status Patterns
July 2017
Working Paper Number:
carra-2017-08
As the incarcerated population grew from the 1980s through the late 2000s, so too did the number of correctional facilities. An increasing number of these facilities have been constructed in rural areas. While research has shown there has been growth in prisons and prisoners in rural areas, there are no recent national-level statistics regarding the urban-rural status of correctional facilities and inmates, the urban-rural status of inmates prior to prison, or an accounting of how many inmates from urban or rural areas are incarcerated in urban and rural facilities. Using 2010 decennial census and Bureau of Justice Statistics' 2004 Survey of Prison Inmates data we describe these patterns. We find that a disproportionate share of prisons and inmates are located in rural areas, while a disproportionate share of inmates are from urban areas. Our research could inform discussions about the potential consequences of Census Bureau residence criteria for inmates.
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Recalculating... : How Uncertainty in Local Labor Market Definitions Affects Empirical Findings
January 2017
Working Paper Number:
CES-17-49R
This paper evaluates the use of commuting zones as a local labor market definition. We revisit Tolbert and Sizer (1996) and demonstrate the sensitivity of definitions to two features of the methodology: a cluster dissimilarity cutoff, or the count of clusters, and uncertainty in the input data. We show how these features impact empirical estimates using a standard application of commuting zones and an example from related literature. We conclude with advice to researchers on how to demonstrate the robustness of empirical findings to uncertainty in the definition of commuting zones
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Geography in Reduced Form
January 2017
Working Paper Number:
CES-17-10
Geography models have introduced and estimated a set of competing explanations for the persistent relationships between firm and location characteristics, but cannot identify these forces. I introduce a solution method for models in arbitrary geographies that generates reduced-form predictions and tests to identify forces acting through geographic linkages. This theoretical approach creates a new strategy for spatial empirics. Using the correct observables, the model shows that geographic forces can be taken into account without being directly estimated; establishment and employment density emerge as sufficient statistics for all geographic forces. I present two applications. First, the model can be used to evaluate whether geographic linkages matter and when simplified models suffice: the mono-centric model is a good fit for business services firms but cannot capture the geography of manufactures. Second, the model generates reduced-form tests that distinguish between spillovers and firm sorting and finds evidence of sorting.
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Redistribution of Local Labor Market Shocks through Firms' Internal Networks
January 2017
Working Paper Number:
CES-17-03
Local labor market shocks are difficult to insure against. Using confidential micro data from the U.S. Census Bureau's Longitudinal Business Database, we document that firms redistribute the employment impacts of local demand shocks across regions through their internal networks of establishments. During the Great Recession, the massive decline in house prices caused a sharp drop in consumer demand, leading to large employment losses in the non-tradable sector. Consistent with firms smoothing out the impacts of these shocks across regions, we find large elasticities of non-tradable establishment-level employment with respect to house prices in other counties in which the firm has establishments. At the same time, establishments of firms with larger regional networks exhibit lower employment elasticities with respect to local house prices in the establishment's own county. To account for general equilibrium adjustments, we aggregate non-tradable employment at the county level. Similar to what we found at the establishment level, we find that non-tradable county-level employment responds strongly to local demand shocks in other counties linked through firms' internal networks. These results are not driven by direct demand spillovers from nearby counties, common shocks to house prices, or local demand shocks affecting non-tradable employment in distant counties indirectly via the trade channel. Our results suggest that firms play an important role in the extent to which local labor market risks areshared across regions.
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State and Local Determinants of Employment Outcomes among Individuals with Disabilities
March 2016
Working Paper Number:
CES-16-21
In the United States, employment rates among individuals with disabilities are persistently low but vary substantially. In this study, we examine the relationship between employment outcomes and features of the state and county physical, economic, and policy environment among a national sample of individuals with disabilities. To do so, we merge a set of state- and county-level environmental variables with data from the 2009'2011 American Community Survey accessed in a U.S. Census Research Data Center. We estimate regression models of employment, work hours, and earnings as a function of health conditions, personal characteristics, and these environmental features. We find that certain environmental variables are significantly associated with employment outcomes. Although the estimated importance of environmental variables is small relative to individual health and personal characteristics, our results suggest that these variables may present barriers or facilitators to employment that can explain some geographic variation in employment outcomes across the United States.
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