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on Urban Economics and Policy |
| By: | Katja Gehr; Linus Kraft; Michael Pflüger |
| Abstract: | This paper establishes a novel city size premium which may be termed the capitalization premium. Real estate investors derive benefits from investing in larger cities, most notably lower housing risk and/or higher expected rent growth. Standard asset valuation implies that, given the level of rents, investors are willing to pay increasingly higher housing prices as city size increases, a capitalization premium. Enabled by fine-grained microgeographic property prices and rents and an estimation strategy combining fixed-effects and instrumental variables, the key contribution of this paper is to identify the relationship between city size and the capitalization rate and to provide an estimate of the magnitude of this capitalization premium. We also spell out key implications of this finding for urban economics and macroeconomics. |
| Keywords: | agglomeration, rents, housing prices, price-rent ratio, capitalization |
| JEL: | R10 R23 R31 R51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12430 |
| By: | Sam Asher; Kritarth Jha; Paul Novosad; Anjali Adukia; Brandon Tan |
| Abstract: | We study residential segregation and access to public services across 1.5 million urban and rural neighborhoods in India. Muslim and Scheduled Caste segregation in India is high by global standards, and only slightly lower than Black-White segregation in the U.S. Within cities, public facilities and infrastructure are systematically less available in Muslim and Scheduled Caste neighborhoods. Nearly all regressive allocation is across neighborhoods within cities at the most informal and least studied form of government. These inequalities are not visible in the aggregate data typically used for research and policy. |
| Keywords: | segregation, neighborhoods, place-based policies, marginalized groups, infrastructure, access to public services, electricity, schools, sanitation, India, Muslims, Scheduled Castes |
| JEL: | H4 H41 I24 J15 O15 R12 R13 R23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12466 |
| By: | Vasiliki Fouka; Theo Serlin |
| Abstract: | When do people identify with their class? Evidence from social psychology shows that individuals are more likely to identify with a group if they are similar to its members. We study early 20th century Britain and show that regional cultural heterogeneity combined with internal migration influenced class identity. We develop and validate a measure of class identity using naming decisions. Exploiting within-household variation, we show that migration patterns that increased the local share of culturally-distant workers reduced working class identification. Where migration increased the cultural distance of the working class, workers were less likely to join unions, voters were less likely to support the nascent Labour Party, and parliamentary candidates were less likely to target working class voters. By 1911, slower in-migration and rising local population growth reduced working class distance in urban areas, which also became strongholds of support for Labour. Migration alters social identity and creates political cleavages. |
| Keywords: | migration, identity, class |
| JEL: | D72 J61 N33 Z10 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12419 |
| By: | Blanco-Arroyo, Omar; Esteve, Vicente; Prats, Maria A. |
| Abstract: | This study investigates the co-explosivity between Spain’s nominal house price index and the housing credit-to-GDP ratio over the period 1971–2024, with particular emphasis on the housing bubble years from 1998 to 2008. Applying the framework proposed by Chen et al. (2017), the analysis reveals an asymmetric relationship: house prices exhibit a stronger sensitivity to credit expansion than credit does to price increases, underscoring the disproportionate influence of credit on housing market dynamics. During the 1998–2008 bubble phase, the relationship becomes more symmetric, suggesting a feedback loop in which relaxed lending standards fueled housing demand, while rising prices reinforced further credit growth. This period is characterized by tighter coupling between the two variables, stronger co-movement, and faster correction dynamics—indicative of speculative lending behavior. The findings highlight the importance of monitoring credit conditions to better understand and manage housing market volatility. |
| Keywords: | co-explosivity; co-moving systems; explosive behavior; house prices; housing credit; housing market |
| JEL: | C22 E31 E44 E51 G21 R31 |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137308 |
| By: | Gabriel Ahlfeldt (HU Berlin); Stephan Heblich (University of Toronto); Tobias Seidel (University of Duisburg-Essen); Fan Yin (HU Berlin, Berlin School of Economics) |
| Abstract: | We construct a new micro-geographic commercial rent index for Germany to study the capitalization of agglomeration economies into floor space prices. In large local labor markets, commercial rents decline by -17% per kilometer from the central business district, compared to 13% for residential rents, reflecting stronger agglomeration benefits at the center. Commercial rents in central business districts increase with local labor market size at an elasticity of 15%, implying that wage responses capture only about half of the agglomeration effect on total factor productivity. |
| Keywords: | floor space; rents; spatial equilibrium; total factor productivity; |
| JEL: | L2 R3 |
| Date: | 2026–02–09 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:563 |
| By: | Duk Gyoo Kim; In Do Hwang |
| Abstract: | Population aging and the sustainability of retirement financing are critical challenges facing many developed economies. In South Korea, elderly poverty remains a critical issue, despite widespread homeownership among older adults. Although the home pension program allows retirees to unlock housing wealth, uptake remains below 2% as of 2024. Using a large-scale survey of adults aged 55–79, we conduct an information provision experiment to assess how policy reforms and belief corrections affect demand. We find that enrollment intention rises by 6 percentage points when monthly pension payments are adjusted with house price changes, and by 5 percentage points when bequest conditions are made more flexible. Notably, merely informing that the fixed monthly payments—often perceived as disadvantageous during housing price increases—do not result in a loss when house prices rise because the amount bequeathed to their children increases accordingly, led to a 7%p increase in enrollment intention. Our results suggest that addressing informational barriers may be as effective as structural reforms in increasing program uptake. |
| Keywords: | home pension, reverse mortgage, survey experiment |
| JEL: | D14 C93 H55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12477 |
| By: | Stefan Leknes (Statistics Norway); Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology); Eric Myran Wee (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | Superior employment matching is considered a key source of agglomeration economies, yet little is known about how urban scale affects matching over workers’ careers. Using full-count Norwegian registry data from 1995-2019, we estimate two-way worker and plant fixed effects to construct a worker-level measure of assortative matching. We find that job matches are more assortative in cities and that city workers progress more rapidly toward increasingly better matches over the career. These gains are concentrated among high-ability workers, while low-ability workers become increasingly mismatched in cities. For migrants, assortative matching initially declines following relocation but improves with subsequent job transitions. |
| Keywords: | Assortative matching, agglomeration economies, career progression, wage decomposition, skills, mobility, AKM-estimation |
| JEL: | J24 J31 J61 R23 |
| Date: | 2026–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:nst:samfok:20626 |
| By: | Maria A. Cattaneo; Stefan C. Wolter; Thea Zöllner |
| Abstract: | Switzerland features strong socio-economic segregation and no formal school choice, making residential relocation the only channel through which parents can access preferred schools. Identifying how parents value school attributes is therefore essential but challenging, given that choices bundle multiple characteristics. We address this by conducting a discrete choice experiment with nearly 2, 700 parents with school-aged children, allowing us to estimate willingness to pay (WTP) for individual and combined school attributes. We find that a substantial minority of parents value academic quality so highly that their preferences are effectively price-insensitive. Among price-sensitive parents, academic quality remains central, but they also exhibit positive WTP for schools with fewer students with special educational needs and fewer non-native-speaking peers. Interaction effects are strong: WTP for reductions in special-needs peers is highest if the school is among the academically strongest. Accounting for attribute interactions further reveals marked heterogeneity, with parents clustering into seven distinct preference types. |
| Keywords: | discrete choice experiment, willingness to pay, special needs education, school quality |
| JEL: | C4 H4 I20 I24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12457 |
| By: | Ali Khodabandeh (University of Tehran); Mojtaba Shahabi Shahmiri (University of Tehran) |
| Abstract: | This study investigates the complex relationship between spatial structure and income inequality across Iran's 31 provinces, aiming to move beyond linear and simplistic analyses. The methodology is based on a two-stage quantitative approach: first, four key indicators—urban primacy, polycentricity, the Gini coefficient, and an expenditure dispersion index—were calculated for each province. Second, K-Means cluster analysis was used to classify provinces based on their spatial economic profiles. The findings reveal that no universal link exists between spatial form and inequality, uncovering several distinct patterns: 1) The Dominant Metropolis model (Tehran and Alborz), where extreme spatial concentration is coupled with acute inequality; 2) The "Polycentricity Paradox, " where a similar spatial form leads to two contrasting outcomes: "efficient polycentricity" with low inequality (e.g., Kurdistan) and "inefficient polycentricity" with high inequality (e.g., Sistan and Baluchestan); and 3) The "Industrial Multi-Polar" model (Khuzestan), where a balanced spatial form coexists with high income inequality. The main conclusion is that physical form alone does not determine socio-economic outcomes; rather, the "functional quality" and "degree of integration" of the urban network are far more decisive. These findings underscore the need for context-specific regional policies focused on strengthening economic linkages between cities instead of merely engineering spatial form. |
| Keywords: | Income Inequality; Spatial Structure; Urban Primacy; Polycentricity; Cluster Analysis; Iran. |
| JEL: | R12 R23 D63 C38 R58 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp74 |
| By: | Sven Heim; Mario Liebensteiner; Félix Michelet |
| Abstract: | Wind turbines offer significant environmental benefits but also create negative local externalities, such as noise and visual pollution, which can lead to local tensions and community resistance against the energy transition. This paper examines negative and positive externalities associated with wind turbine siting in Germany. Utilizing an instrumental variables approach, we find that wind turbine siting decreases house purchase prices by 1.9% in affected municipalities, with this adverse effect being most pronounced for the first turbines installed. Additionally, the siting of wind turbines reduces local tourism, apartment rents, and leads to fewer building permits being issued for apartments and houses, exacerbating existing housing shortages. On the positive side, each installed wind turbine increases a municipality's local tax capacity by 1.8\% through higher commercial tax revenues. Our findings suggest that the negative externalities can be mitigated by investing the increased tax revenue into local amenities and public services, thereby compensating for the adverse effects of wind turbines. |
| Keywords: | wind power, externalities, hedonic pricing, NIMBY, local disamenities |
| JEL: | H2 Q4 Q5 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12478 |
| By: | Matias Busso; Sebastián Montaño (UMB - University of Maryland [Baltimore]); Juan Muñoz-Morales (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - ULCO - Université du Littoral Côte d'Opale - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Nolan Pope (UMB - University of Maryland [Baltimore]) |
| Abstract: | Teacher quality is a key factor in improving student academic achievement. As such, educational policymakers strive to design systems to hire the most effective teachers. This paper examines the effects of a national policy reform in Colombia that established a merit-based teacher-hiring system intended to enhance teacher quality and improve student learning. Implemented in 2005 for all public schools, the policy ties teacher-hiring decisions to candidates' performance on an exam evaluating subject-specific knowledge and teaching aptitude. The implementation of the policy led to many experienced contract teachers being replaced by high exam-performing novice teachers. We find that though the policy sharply increased pre-college test scores of teachers, it also decreased the overall stock of teacher experience and led to sharp decreases in students' exam performance and educational attainment. Using a difference-in-differences strategy to compare the outcomes of students from public and private schools over two decades, we show that the hiring reform decreased students' performance on high school exit exams by 8 percent of a standard deviation, and reduced the likelihood that students enroll in and graduate from college by more than 10 percent. The results underscore that relying exclusively on specific ex ante measures of teacher quality to screen candidates, particularly at the expense of teacher experience, may unintentionally reduce students' learning gains. |
| Keywords: | Teacher screening, Colombia, Test scores, College enrollment, Teaching experience, Teachers |
| Date: | 2024–09–28 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05490584 |
| By: | Daniele Caliari; Valentino Dardanoni; Carla Guerriero; Paola Manzini; Marco Mariotti |
| Abstract: | We study experimentally how children’s ability to avoid choice errors develops over time, focusing on both riskless and risky decisions among primary school children. We identify four types of rationality violations: cycles and menu effects in the riskless domain; and dominance and framing effects compatible with correlation neglect in the risky domain. We find that types of violations are correlated within domains but broadly independent across domains. To interpret our results we build and estimate a structural model of limited consideration. We identify an index of error avoidance and study how it develops with age and socioeconomic background, providing a new tool to understand the development of choice errors. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:26/823 |
| By: | Michael P. Cameron (University of Waikato); Courtenay Baker (University of Waikato) |
| Abstract: | This paper quantifies the demographic drivers of change in New Zealand's working-age population (ages 15-6)) across 66 territorial authorities and 21 Auckland local boards over 1998-2023. Using Stats NZ population estimates and subnational mortality data, we implement a demographic accounting decomposition in five-year intervals that separates working-age population change into cohort turnover (entries aged 15-19 minus exits aged 60-64), working-age deaths, and residual net migration. Nationally, the working-age population expanded in every period, but the dominant component shifted. Positive cohort turnover accounted for most growth through 2013, whereas residual net migration contributed over 90% of growth after 2013. Subnationally, negative cohort turnover spread from being experienced by no areas in 1998-2003, to a substantial minority of areas by 2018-2023. The number of areas with declining working-age populations fluctuated substantially from one period to the next. A four-category typology and analysis of residual migration offset ratios for areas with negative cohort turnover shows that positive migration offsets negative cohort turnover in some places but not consistently, leaving local labour-supply trajectories increasingly contingent on volatile and spatially uneven migration. |
| Keywords: | Working-age population; Cohort turnover; Migration; Population ageing; New Zealand |
| JEL: | J11 J21 J61 R12 R23 |
| Date: | 2026–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:26/02 |
| By: | Xavier Dufour-Simard; Jean-François Gauthier; Pierre-Carl Michaud |
| Abstract: | We study economic integration, intentions, and selection using a new survey of recent high-skilled immigrants to Canada (arrivals 2015–2025), linked to native-conditional earnings percentile ranks. We document five main results. First, high-skilled immigrants experience large earnings gains from migration, with average earnings roughly doubling within one year of arrival. Second, entry status strongly predicts early outcomes: immigrants on closed work permits outperform direct permanent residents, while students and open-permit entrants start lower, with students catching up faster. Third, nonpermanent residents do not, on average, integrate faster than permanent residents relative to natives, except for former students. Fourth, intentions to stay are more closely related to earnings growth than to income levels. Fifth, reweighting current selection criteria to predict earnings improves expected outcomes and shifts selection toward high-performing non-permanent residents, particularly those on closed permits. |
| Keywords: | immigration, temporary immigrants, selection, integration. |
| JEL: | J15 J61 F22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:rsi:cjpcha:06 |
| By: | Francois de Soyres; Simon Fuchs; Illenin O. Kondo; Helene Maghin |
| Abstract: | We develop a framework to assess how economic shocks affect local labor markets and worker welfare, with a focus on city-level economic diversity. Using detailed worker flow data across cities, sectors, and occupations, we construct theory-consistent welfare measures. Our approach combines a dynamic discrete choice model with a dual representation that captures both direct effects and the insurance value of local economic diversity. Applied to French labor markets, we find that diversification dampens the effect of negative shocks: both job-to-job moves and net inflows decline less in diverse cities than in concentrated ones. Overall, we document sizable welfare insurance gains from local economic diversity. |
| Keywords: | sufficient statistic; labor flows; concentration; economic diversity; welfare |
| JEL: | J61 J62 J21 |
| Date: | 2025–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:102438 |
| By: | Matthew A. Kraft; John P. Papay; Jessalynn K. James; Manuel Monti-Nussbaum |
| Abstract: | We examine how performance changes when teachers transfer across very different school contexts. The Talent Transfer Initiative program created a rare natural experiment to study such transfers by randomly assigning low-achieving schools the ability to offer high-performing teachers at higher-achieving schools a $20, 000 transfer stipend. Forecast tests show that these high-performing teachers’ prior value added is only moderately predictive of their effectiveness in low-achieving schools. Using a difference-in-differences framework, we estimate that incentivized-transfer teachers’ value added dropped by 0.12 student standard deviations. This decline appears to be driven by lower match quality, negative indirect school effects, and the loss of student-specific human capital. |
| JEL: | I2 I21 I24 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34845 |
| By: | Jin, Wenchao; Jin, Zhangfeng |
| Abstract: | How do institutional barriers to migration shape fertility in developing economies? We analyze the staggered removal of institutional barriers to rural-to-urban migration across 283 Chinese cities. We find that reducing these frictions led to a significant and persistent increase in fertility in sending rural communities. The average treatment effect is 0.011 newborns per household per year, representing approximately one-third of the sample mean. To interpret this result, we develop a unified household model endogenizing fertility and partial migration. The model identifies a positive income effect (higher expected lifetime earnings) that dominates the substitution effect (opportunity cost of time). Empirically, we show that the fertility response is concentrated in households with available grandparents and prior migration experience. This suggests that informal childcare provision is critical in neutralizing the time costs of migration, allowing rural households to realize the fertility gains from improved economic opportunities. These findings challenge the view that urbanization necessarily reduces fertility, highlighting instead how mobility restrictions acted to suppress fertility. |
| Keywords: | migration barriers, fertility, China |
| JEL: | R23 J13 J22 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1718 |
| By: | Carlo Caporali (Gran Sasso Science Institute); Francesco Scotti (Politecnico di Milano); Giovanni Baiocchetti (Università degli Studi di Milano); Alessandra Faggian (Gran Sasso Science Institute) |
| Abstract: | Ever-changing territorial challenges might require administrative bodies to evolve their boundaries and functions in order to adapt to new conditions. Despite the importance of mergers, the literature on the topic is rather limited and does not provide a clear and comprehensive picture of the effects of municipality mergers for several reasons. Italy is the European country that experienced the lowest number of municipal mergers in recent years, and existing evidence does not provide a complete overview of their impact. We fill this gap by analyzing the causal effects of municipal mergers on the local public expenditure dynamics over 2016-2020. We find that the larger financial capacity was not used to reduce fiscal pressure nor the cost of local services, whereas merged municipalities increased their current expenditures - particularly in education, tourism, and transportation - with high geographical heterogeneity. |
| Keywords: | municipal mergers; administrative boundaries; panel event study; local public expenditures. |
| JEL: | D02 H11 H71 R10 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp64 |
| By: | Mastromarco, Camilla; Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium) |
| Abstract: | This paper proposes a novel nonparametric panel data framework for estimating conditional production frontiers and efficiency measures that explicitly accounts for spatial interdependencies. By integrating recent advances in nonparametric frontier estimation with spatial panel data analysis, the proposed approach offers a flexible and robust framework for assessing productivity and efficiency in the presence of spatial interactions, explicitly accounting for both global and local spatial effects. By extending recently developed tools for estimating Malmquist productivity indices to conditional nonparametric frontier efficiency models, we provide a refined decomposition of productivity growth into technological change, efficiency change, and scale effects within a fully nonparametric framework. Applying this framework to a comprehensive dataset on European regions, we provide new evidence on spatial patterns of productivity growth and efficiency dynamics across the EU. The results reveal marked heterogeneity in regional performance and highlight the crucial role of spatial spillovers in shaping productivity outcomes. Ignoring these interdependencies can lead to mismeasurement of productivity trends, reinforcing the value of our proposed spatial nonparametric frontier approach for policy and performance analysis. |
| Keywords: | Nonparametric Conditional Frontier ; Panel Data Model ; Spatial Dependence ; Productivity Analysis ; Malmquist Productivity Index ; EU Regional Performance |
| JEL: | C14 C13 C33 D24 O47 |
| Date: | 2025–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:aiz:louvad:2025020 |
| By: | Fabiano Compagnucci (Gran Sasso Science Institute); Daria Denti (Gran Sasso Science Institute); Alessandra Faggian (Gran Sasso Science Institute); Arsène Perrot (Gran Sasso Science Institute) |
| Abstract: | The green transition unfolds against a backdrop of widening territorial inequalities driven by the spatial concentration of the knowledge economy. While knowledge-intensive regions with educated, affluent populations might be expected to champion environmental causes, this paper reveals a counter-intuitive pattern. Using novel measures of pro- and anti-environmental activism across Italian provinces (2012-2022) and a Bartik-like instrumental variable, we find that knowledge economy concentration reduces pro-environmental activism nearly twice as much as anti-environmental activism. This asymmetry creates a compositional shift where knowledge-intensive areas exhibit relatively more anti-environmental sentiment in their remaining activism. The findings challenge simplified assumptions about education, affluence, and environmental support, revealing that territorial economic structures fundamentally alter engagement patterns. Green transition policies must account for how different economic contexts generate distinct mobilization patterns, addressing both the reduced collective action in knowledge hubs and resistance in vulnerable territories. |
| Keywords: | green transition, climate crisis, local resentment, knowledge economy, activism, polarisation, local vulnerability |
| JEL: | R11 R12 Q54 Q58 D74 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp75 |
| By: | Giuseppe Di Giacomo |
| Abstract: | This paper studies the long-run effects of foreign tourism on local labor markets and economic development in advanced economies, using Italy as a case study. To isolate plausibly exogenous variation in tourist arrivals, I construct a shift-share measure that interacts changes in outbound tourism by country of origin with historical destination preferences across Italian locations. Higher exposure to tourism reduces employment and labor-force participation rates. It also induces structural transformation by expanding employment rates in hospitality and entertainment while contracting them in manufacturing and in non-tourism-related services. Average per-capita and labor income decline, whereas property income increases. Estimates in log-levels indicate that tourism raises local population, shrinks the manufacturing sector, and expands tourism-related services. Evidence on underlying mechanisms points to two main channels. First, tourism alters the composition of the local labor supply. Population growth is driven by young, low-skilled non-Italians, limiting the ability of productive, non-tourism firms to benefit from agglomeration forces. Second, rising land costs crowd out non-touristic activities. Consistent with this, nearly all net firm entry is accounted for by tourism-related establishments. Overall, results suggest that, in advanced economies, tourism may hinder long-run development by reallocating resources from more to less productive sectors. |
| Keywords: | tourism, structural transformation, local economic shocks, Dutch disease |
| JEL: | D31 E24 J21 L60 L83 O14 O18 R11 Z32 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12434 |
| By: | Michel Beine; Arnaud Bourgain; Elisabeth Kempter; Melissa Tornari |
| Abstract: | This paper investigates the impact of a one-week entrepreneurial coaching program on overall and irregular migration intentions among young adults in the Dakar metropolitan area, Senegal. Using a randomized controlled trial implemented in partnership with an entrepreneurship training center in Dakar, we estimate treatment effects by comparing baseline and follow-up outcomes and address partial compliance using instrumental-variable methods. We find that participation in entrepreneurial coaching reduces emigration intentions by 12–20%, with effects concentrated among individuals connected to the labor market. The program indirectly reduces intended irregular migration by encouraging some individuals to remain in Senegal. We do not find that participation affected the migration mode of those who still intend to migrate. Overall, our findings provide experimental evidence from Senegal that entrepreneurship-based active labor market policies can shape migration aspirations by strengthening local economic attachment among working youth. |
| Keywords: | migration intention, migration deterrence, randomized experiment, entrepreneurship, irregular migration, Sub-saharan Africa |
| JEL: | O15 O55 F22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12486 |
| By: | Johannes Matzat; Axel Dreher; Sarah Langlotz; Christopher Parsons |
| Abstract: | We provide causal evidence that immigration has contributed to the polarization of American politics. Using an ancestry-based shift-share instrument, we study immigration flows into U.S. counties between 1992 and 2016. Counties exposed to larger immigrant inflows become more polarized both in campaign contributions and in political representation: donors increasingly support ideologically extreme candidates for the U.S. House of Representatives, and the candidates who win office are themselves further from the ideological center. These effects are most pronounced in primary elections, where moderate Democrats are more likely to lose and conservative Republicans more likely to win in counties with higher immigration inflows. The rightward shift is strongest in occupations with high immigrant shares but limited interpersonal contact, suggesting that exposure without interaction amplifies perceived threat. We complement these results with original survey evidence that sheds light on the underlying mechanisms. Liberals and conservatives differ less in their economic assessments of immigration than in their cultural interpretations: liberals stress diversity and opportunity, whereas conservatives emphasize risk and social cohesion. Together, these findings indicate that immigration reshapes American politics through the joint forces of salience and contact – heightening polarization where immigrants are visible but unfamiliar, and attenuating it where interaction is routine. |
| Keywords: | migration, polarization, political ideology, United States |
| JEL: | J15 F52 F63 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12377 |
| By: | Richard Lombardo; Elizabeth Frankenberg; Duncan Thomas |
| Abstract: | Little is known about the impact on small-scale enterprises of a large negative shock that destroys assets and disrupts local markets. We document the short- and long-run impacts of the 2004 Indian Ocean tsunami using longitudinal household survey data. We leverage topography-driven variation in exposure to the tsunami in coastal Aceh and North Sumatra, Indonesia. There are large short-run declines in business ownership, real profits, and real business assets among those exposed to the tsunami relative to comparison individuals who were not directly exposed. The gap in ownership rates disappears within two years in the non-agricultural sector but persists for 15 years in the agricultural sector. Profits and business assets of the exposed remain substantially lower through the long-term. Tsunami exposure led to increased short-duration transitions into and out of business ownership. Housing aid is linked to higher rates of non-agricultural business ownership and profits. |
| JEL: | O1 O17 Q54 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34839 |
| By: | Alessandra Faggian (Gran Sasso Science Institute); Alessandra Michelangeli (University of Milan-Bicocca); Kateryna Tkach (Gran Sasso Science Institute) |
| Abstract: | The full-scale invasion of Ukraine has induced a large influx of refugees from Ukraine to the European Union (EU), becoming the largest humanitarian crisis in Europe since the World War II. Despite a growing interest in the topic, little is known about Ukrainian refugees’ skills and their economic integration in the hosting countries. This paper provides novel evidence on this topic by analysing employment patterns and skills of displaced Ukrainians in Italy. Using primary data, our results show that previous employment and proficiency in Italian are essential for refugees’ current employment status. Despite their high educational attainment, professional downgrading seems to be widespread as refugees with tertiary education perceive themselves as overqualified for their jobs. Moreover, regional context, namely the presence of Ukrainian immigrant community, also plays a role in refugees’ employment outcomes and job-related perceptions. Our findings underscore the importance of skill recognition and language training in facilitating economic integration of refugees. |
| Keywords: | forced migration; labour market inclusion; skill profiles; human capital; displaced persons |
| JEL: | F22 J61 R23 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp77 |
| By: | Isabella Damiani (LIMEEP – PS - Laboratoire Interdisciplinaire sur les Mutations des Espaces Économiques et Politiques – Paris Saclay - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - Université Paris-Saclay); Marie Hiliquin (TVES - Territoires, Villes, Environnement & Société - ULR 4477 - ULCO - Université du Littoral Côte d'Opale - Université de Lille) |
| Abstract: | This article examines the role of Khorgos, a special economic zone located on the border between China and Kazakhstan, within the framework of China's Belt and Road Initiative (BRI). In less than a decade, Khorgos has become a strategic hub for rail freight between China and Europe, increasing from 25 trains in 2013 to more than 8, 700 in 2024, reflecting China's efforts to strengthen overland connectivity and establish alternative corridors to maritime trade. This paper, drawing on satellite data and spatial analysis through remote sensing, focuses on three main dimensions. First, it analyses the peripheral urbanisation of the city of Khorgos, which is embedded in China's territorial strategies to connect the western region to the rest of the country through infrastructure development, securitisation, and territorial control. Second, it situates Khorgos within a regional scale, namely the Khorgos-Yining-Qingshuihe economic complex. This analysis highlights the functional division of employment between Yining, the true administrative centre, Qingshuihe as the production core, and Khorgos, which remains primarily a transit point for Chinese exports, thereby illustrating an asymmetry in cross-border exchanges with Kazakhstan. Third, the paper examines territorial production and environmental differentiation. Remote sensing analyses reveal pronounced asymmetries in land use and ecological transformations between the Chinese and Kazakh sides of the border: China has developed a diversified and tightly regulated territorial model, combining urban and agricultural infrastructures, whereas the Kazakh side remains less structured and less developed. Chinese ecological initiatives, such as photovoltaic projects and urban greening policies, further reinforce cross-border territorial asymmetries and raise critical questions about the actual impacts of the BRI and the associated "win-win" cooperation rhetoric. |
| Keywords: | Climate change, Urban planing, Borders, Kazakhstan, China, Belt Road Initiative, Khorgos |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05486194 |
| By: | Vishal R. Patel; Christopher M. Worsham; Michael Liu; Anupam B. Jena |
| Abstract: | Modern smartphones present new threats to road safety beyond talking and texting, but the real-world effects are difficult to study. One way to causally assess the impact of smartphones on road safety is to identify arbitrarily timed events during which smartphone-related distraction may exogenously increase – i.e., a situation that relies not on plausibly random variation in who uses smartphones while driving, but when smartphones are used. We investigated the impact of smartphones on road safety by examining traffic fatalities on days when smartphone use likely surges: the release of major music albums. Using event study analysis, we show that music streaming – an indicator for smartphone use, where streaming most often occurs – sharply increases, by nearly 40%, on dates of major music album releases, while U.S. traffic fatalities increase by nearly 15% on those same days. Mobile device use while driving is a known safety issue, but today’s smartphones present new and greater opportunities for driver distraction. Our study indicates how features of these phones may have important impacts on distracted driving and traffic fatalities. |
| JEL: | I1 I12 R40 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34866 |
| By: | Amy Finkelstein; Matthew J. Notowidigdo; Steven X. Shi |
| Abstract: | We estimate the mortality impact of local labor market exposure to the 1994 North American Free Trade Agreement (NAFTA) as well as to other local area shocks, and provide a parsimonious empirical explanation for differently-signed mortality estimates across different sources of local labor market contractions. Leveraging spatial variation in exposure to Mexican important competition from NAFTA, we find that more exposed areas experienced larger increases in mortality. In the 15 years post-NAFTA, an area with average NAFTA exposure experienced an increase in annual, age-adjusted mortality of 0.68 percent (standard error = 0.19), an increase that more than erases prior estimates of the welfare gains from NAFTA’s nationwide economic benefits. Mortality increases appear across all broad age by sex groups, but are particularly pronounced among working-age men, a demographic that also experienced disproportionate NAFTA-induced declines in (primarily manufacturing) employment. Additional evidence from other local labor market shocks reveals a systematic pattern: declines in local area manufacturing employment increase mortality, while declines in local area non-manufacturing employment decrease mortality. These findings suggest that the sign and magnitude of any mortality impacts of future economic shocks likely depends critically on the extent to which employment declines are concentrated in the manufacturing sector. |
| JEL: | F1 I1 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34855 |
| By: | Bernardo David Romero-Torres; Gerson Javier Pérez-Valbuena; Andrés García-Suaza; Jaime Bonet-Morón |
| Abstract: | Disadvantaged communities worldwide have been the focus of government-sponsored programs aimed at improving living standards and fostering economic development. Decentralization has emerged as a central strategy in this effort, strengthening accountability, and promoting local development, a trend to which Colombia is no exception. This paper examines the effects of a regionally targeted transfer program that designated additional resources to municipalities allocated along the Magdalena River, the longest country’s waterway. To identify causal impacts, we exploit the 2002 reform that significantly reduced these transfers and apply a difference-in-differences approach using panel data for the period 1994-2019. The findings reveal no effects on social outcomes but a slowdown in economic activity, accompanied by reductions in municipal operating expenditures and investment, while revealing an increase in tax revenues. These results highlight the complex interplay between fiscal decentralization and regional development, raising important questions about the effectiveness of targeted transfers in achieving their intended objectives. **** RESUMEN: Las comunidades desfavorecidas en todo el mundo han sido el foco de programas patrocinados por los gobiernos, orientados a mejorar las condiciones de vida y fomentar el desarrollo económico. La descentralización ha surgido como una estrategia central en este esfuerzo para reforzar la rendición de cuentas y promover el desarrollo local, tendencia de la cual Colombia no es la excepción. Este artículo examina los efectos de un programa de transferencias regionalmente focalizado que asignó recursos adicionales a los municipios ubicados a lo largo del río Magdalena, la principal vía fluvial del país. Para identificar impactos causales, se aprovecha la reforma de 2002 que redujo significativamente dichas transferencias y se aplica un enfoque de diferencias en diferencias utilizando datos de panel para el período 1994-2019. Los hallazgos revelan ausencia de efectos sobre los resultados sociales, pero una desaceleración de la actividad económica, acompañada de reducciones en los gastos operativos e inversión municipal, al tiempo que se observa un incremento en los ingresos tributarios. Estos resultados ponen de relieve la compleja interacción entre descentralización fiscal y desarrollo regional, planteando interrogantes relevantes sobre la efectividad de las transferencias focalizadas para alcanzar sus objetivos previstos. |
| Keywords: | decentralization, difference-in-differences, regional development, descentralización, diferencia en diferencias, desarrollo regional |
| JEL: | H77 C3 R58 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:region:340 |
| By: | Alexander Daminger (WIFO); Peter Huber; Klaus Nowotny |
| Abstract: | This paper examines the impact of the European Union's Cohesion Policy 2014-2020 on enterprise dynamics at the NUTS-2 level. Using discrete eligibility thresholds at 75 and 90 percent of EU average GDP per capita, we implement sharp and fuzzy regression discontinuity designs to assess effects on enterprise births and deaths, changes in the number of and employment in enterprises and local units. The analysis draws on ARDECO, DG REGIO, and Eurostat data, and considers both the full period (2014-2020) and a prepandemic subsample (2014-2019). We find no robust evidence of statistically significant discontinuities in treatment intensity at the thresholds, except under restrictive model assumptions. This lack of sharp jumps in funding intensity, combined with low statistical power, prevents credible identification of causal effects on enterprise outcomes. Moreover, diagnostic tests reveal structural breaks in key regional characteristics (e.g., sectoral structure, education, initial enterprise density) at the cutoffs, violating core RDD assumptions and suggesting confounding. We argue that institutional changes – the introduction of "transition regions" category, smoothed eligibility rules, and additional allocation criteria such as unemployment – have weakened the quasi-experimental nature of GDP-based thresholds. Future evaluations should rely on multiperiod designs and alternative identification strategies. |
| Keywords: | Regional Policy, Firm growth and demography, Evaluation |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:720 |
| By: | Marina Tverdostup (The Vienna Institute for International Economic Studies, wiiw); Dora Walter |
| Abstract: | Immigrants across Europe earn less and work in lower-quality jobs than natives, but the mechanisms underlying these disparities remain poorly understood. This paper asks whether immigrant disadvantage reflects barriers to accessing good jobs or skill deficits that persist even within similar positions. Using PIAAC Cycle 2 data (2018-2023) for eight European countries, we compare immigrants and natives working in the same occupation-industry cells and performing the same types of tasks. We find that immigrants score 35 to 40 points lower in literacy and numeracy than natives overall, with 70 to 75 percent of this gap persisting within jobs. Immigrants also perform fewer cognitively demanding tasks than natives in similar jobs. However, these task differences disappear entirely once we account for within-job skill gaps, while manual task use shows no immigrant-native differences at all. The evidence points to a skill-mediated mechanism immigrants perform fewer complex tasks because they have lower cognitive proficiency, not because employers restrict their access to such work. This finding redirects policy attention from workplace discrimination toward skill development and credential recognition as the key margins for improving immigrant labour market integration. |
| Keywords: | Immigration; cognitive skills; job tasks; skill mismatch; labour market integration; PIAAC |
| JEL: | J15 J24 J23 C81 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:271 |