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Michael Zabek photo

Impacts of economic inequality on local economies

a PSC Small Fund Research Project

Investigator:   Michael Zabek

I am working on two projects that relate economic inequality with where people live and where they want to live.

The first is a study of migration in growing and declining areas of the US. I find that while growing areas attract workers from outside , declining areas have a higher proportion of residents born locally. Since people can freely move between areas un the US, social welfare policies in already growing areas will attract workers from elsewhere, diluting the effect on workers living there. Policies in declining areas, however, will target workers who would have lived there regardless.

The second is a study of house prices and rents in the US since 1930 using US census data. My co-author and I find that inequality in prices and rents declined after World War II, but we find that both have been rising more recently. We find that housing inequality mirrors patterns in income inequality, which suggests a causal link. In particular, inequality in housing prices and rents seems to be driven by changes in the value of particular locations within cities.

Funding Period: 02/01/2016 to 03/31/2017

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