Quality of life, firm formation and internal migration: A case study of Poland's Powiats

Three essays in this dissertation look at differences in quality of life (QoL) in Polish counties (powiats) and, the role these differences play in the formation of firms and internal migration. Differences in quality of life or, differences in amenities available in a powiat influence economic activity and productivity in that location. I find differences in QoL explain differences in firm formation and internal migration. The first essay develops a method to measure QoL. Poland is an emerging market economy, where labor and land markets capitalized amenity values. Amenity values are derived from a reduced-form hedonic regression applied separately to the land and labor markets. The summations of the implicit value of all amenities, which are the coefficients of the two hedonic regression estimates, form the Quality of Life Index (QoLI). Differences in QoL are ranked to show the best and worst performing Polish powiats. Rankings illustrate the scale and extent of differences in quality of life. The second essay looks at the role differences in amenity characteristics that form QoL play in the formation of firms. I use a reduced-form model to measure the entry and exit rates of firms, and the gross rate of firm formation, in Polish powiats. I find variables that construct the quality of life index play a significant role in explaining firm formation in Polish powiats. The third essay looks at the role differences of quality of life play in internal in-migration within Polish powiats. A reduced-form human capital model measures internal in-migration into Polish powiats , with quality of life as an explanatory variable. I find quality of life plays a significant role in explaining differences in internal migration in Polish powiats.