Feb. 28th, 2019 “THE EFFECT OF STAYING ON MOVING”

Presenter: David Jinkins from Department of Economics, Copenhagen Business School

February 28th, 2019 at 11.00-12.00

Where: Kraks Fond, Frederiksholms Kanal 30, seminar room

 

The effect of staying on moving: Evidence for dynamic amenities from Danish refugees

Much of the economic geography and urban literature treats individual preferences over locations as unrelated to experience.  Location specific investment, learning, or the building of location specific social capital might make drive people to value a location more after spending time there.   We call preferences for a location which deepen over time with experience dynamic amenities.  If preferences are dynamic, there is path dependence in location choice which has implications for government policy.  Dynamic preferences are in general difficult to detect, however, because of selection.  The people who remain in a city for a long time may be different than those that only stay there a short time.  In particular, someone who stays a long time may have a stronger static preference for the city.  In order to identify a causal effect of spending time in a city on the likelihood of remaining there, we use an event study in which there was a change in Danish law relating to new refugees.  Before 1999, Danish refugees were placed in municipalities and encouraged to stay for a year and a half.  From 1999, Danish refugees were required to remain in the municipality they were placed in for three years.  We find preliminary evidence that 8 years after arrival in Denmark, refugees who were required to stay for three years were 2-6 percentage points more likely to still be in their city of placement relative to those who were only encouraged to stay for one and a half years (of whom on average 74% are still in their city of placement).  These results are, however, some what fragile.

 

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