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City size, diversification, and income smoothing

Published online by Cambridge University Press:  26 March 2020

Andrea Lamorgese
Andrea Lamorgese*
Affiliation:
ECARE, Université Libre de Bruxelles and Ente “L. Einaudi” per gli Studi Monetan Bancari e Finanziari, Via Due Macelli 73, 00187Roma, Italy
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Abstract

This article investigates the mechanisms by which the cities of the United States smooth out fluctuations in their income. Contributions for social security and government transfers (the government channel) take the bulk of smoothing (17 per cent), and intercity mobility ranks high: about 6 per cent of income shocks are smoothed via the choice of working in a city different from the place of residence. The empirical analysis also shows that the various channels of income smoothing operate differently according to the size and the degree of diversification of the city.

Type
Articles
Information
National Institute Economic Review , Volume 170 , October 1999 , pp. 99 - 105
Copyright
Copyright © 1999 National Institute of Economic and Social Research

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Footnotes

I wish to thank Gianmarco Ottaviano, Jorge Rodrigues, Bent Sørensen, Oved Yosha and the two referees from NIESR for their valuable advice.

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