Date of Award

Summer 7-1-2022

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Rothenberg, Alexander

Subject Categories

Economics | Social and Behavioral Sciences

Abstract

This dissertation comprises two papers studying economic geography in a developing country context. Chapter 1 quantifies the effects of cultural barriers on internal migration and welfare in Indonesia. I estimate internal migration gravity using linguistic distances as a proxy for cultural barriers and instrument for current linguistic differences using data from the 1930 colonial census. I find inverted U-shaped effects of linguistic distance on migration, which are more prominent for unskilled and older populations. To quantify welfare and distributional implications of linguistic barriers, I further develop a quantitative spatial model with heterogeneous skill groups, incorporating linguistic distance as migration and trade barriers. I find that a simulated reduction in linguistic distances by extrapolating the historical migration trend generates smaller welfare gains but improve equity more than a similar reduction in geographic barriers.

In Chapter 2, we use detailed data from Indonesian cities to study how variation in density within urban areas affects social capital. For identification, we instrument density with soil characteristics, and control for community averages of observed characteristics. Under plausible assumptions, these controls address sorting on observables and unobservables. We find that lower density increases trust in neighbors and community participation. We also find that lower density is associated with lower interethnic tolerance, but this relationship is explained by sorting. Heterogeneity analysis suggests that crime in dense areas undermines community trust and participation, intensifying the negative impact of density.

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