Mike Zabek

Economics PhD Candidate
Labor, macro, and urban/regional economics
University of Michigan
Department of Economics

Working papers

The percentage of people who were born near where they live, a proxy for people's local ties, varies greatly across the United States. In areas with higher levels of these local ties, migration is less responsive to changes in local labor demand. Across a wide class of models of spatial equilibrium, lower migration elasticities make subsidies to local areas more efficient, since they change fewer people's locations. These two facts suggest that subsidies to areas with a declining populations are more efficient than subsidies to other areas. A parametric model illustrates how local ties develop in areas with declining populations, and provides a mechanism that reallocates people's local ties to reflect changing economic geography. Areas with declining population house mostly people who were born locally, since these people are willing to endure the lower wages, lower amenities, and higher rents that go along with a declining population. People outside are reluctant to move in after small changes in wages, since real wages are well below national averages. The process of reallocating local ties takes several generations, depending on the size of a shock.

Full text

(With David Albouy)

Inequality in U.S. housing prices and rents both declined in the mid-20th century, even as home-ownership rates rose. Subsequently, housing-price inequality has risen to pre-War levels, while rent inequality has risen less. Combining both measures, we see inequality in housing consumption equivalents mirroring patterns in income across both space and time, according to an income elasticity of housing demand just below one. These patterns occur mainly within cities, and are not explained by observed changes in dwelling characteristics or locations. Instead, recent increases in housing inequality are driven most by changes in the relative value of locations, seen especially through land.

Full text (revision soon)

Press (selected): Washington Post

Work in progress

Parental Proximity and the Earnings Consequences of Job Loss

(With Patrick Coate and Pawel Krolikowski)

Young adults, aged 25 to 35, who live close to their parents experience stronger earnings recoveries after job displacements than those who live farther away. This result is robust to a reweighting exercise that accounts for a number of differences between workers who live near their parents and those who do not. The effect of parental proximity diminishes gradually with distance to one’s parents and appears to be driven by post-displacement wages rather than labor supply. Some evidence suggests that parents’ job networks may help adult children to find local jobs. At older ages, living near one’s parents appears to have no impact.

Cleveland Fed Economic Commentary (working paper soon)

Press (selected): Wall Street Journal, The Atlantic, Time, Business Insider