In Simple Words
Testing a noise reduction ordinance in one apartment unit only works as a self-contained trial if neighboring tenants stay inside their own units rather than constantly moving back and forth between apartments during the study.
Observed annual relocation in Denmark
- Unemployed workers
- 1.0% moved location
- Employed workers
- 1.4% moved location
Observed national mobility figures cited from 2002. Different employment groups; low relocation does not prove counties have no spillovers.
See source →Research question
Regional policy experiments require geographical boundaries that contain labor market spillovers within defined jurisdictions. High worker mobility across administrative borders causes spillover leakage into control regions, leading to severe underestimation of displacement externalities.
Participants
N = 89,466 unemployed benefit applicants across 15 administrative counties in Denmark.
Study Design
Empirical validation of county-level market isolation using national administrative mobility statistics from the Danish Research Council.
Results
Annual geographical relocation rates in Denmark are 1.0% among unemployed workers and 1.4% among employed workers, confirming that administrative counties function as isolated local labor markets with minimal spatial spillover leakage.
Takeaway
Verify that regional mobility rates across experimental administrative borders are sufficiently low before treating local geographic units as self-contained labor markets.