Spatial Misallocation, Informality, and Transit Improvements Evidence from Mexico City

This paper proposes a new mechanism to explain resource misallocation in developing countries: the high commuting costs within cities that prevent workers from accessing formal employment. To test this mechanism, the paper combines a rich collection of microdata and exploits the opening of new subwa...

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Bibliographic Details
Main Author: Zarate, Roman D.
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2022
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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100 1 |a Zarate, Roman D. 
245 0 0 |a Spatial Misallocation, Informality, and Transit Improvements  |h Elektronische Ressource  |b Evidence from Mexico City  |c Roman D. Zarate 
260 |a Washington, D.C  |b The World Bank  |c 2022 
300 |a 87 pages 
653 |a Labor Market Informality 
653 |a Access To Employment 
653 |a Inter-Urban Roads and Passenger Transport 
653 |a Formal Economy 
653 |a Informal Urban Economy 
653 |a Spatial Misallocation 
653 |a Social Protections and Labor 
653 |a Labor Markets 
653 |a Urban Transport Infrastructure 
653 |a Informality 
653 |a Urban Transport 
653 |a Urban Infrastructure 
653 |a Transport 
653 |a Allocative Efficiency 
653 |a Public Transportation 
041 0 7 |a eng  |2 ISO 639-2 
989 |b WOBA  |a World Bank E-Library Archive 
028 5 0 |a 10.1596/1813-9450-9990 
856 4 0 |u http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-9990  |x Verlag  |3 Volltext 
082 0 |a 330 
520 |a This paper proposes a new mechanism to explain resource misallocation in developing countries: the high commuting costs within cities that prevent workers from accessing formal employment. To test this mechanism, the paper combines a rich collection of microdata and exploits the opening of new subway lines in Mexico City. The findings show that transit improvements reduce informality by 7 percent in areas near the new stations. The paper develops a spatial model that accounts for the direct effects of infrastructure in perfectly economies and allocative efficiency. Changes in allocative efficiency driven by workers' reallocation to the formal sector amplify the gains by 20-25 percent