nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2005‒02‒27
nine papers chosen by
Steve Ross
University of Connecticut

  1. School choice and segregation: evidence from an admission reform By Söderström, Martin; Uusitalo, Roope
  2. Cities with suburbs: Evidence from India By Kala Seetharam Sridhar
  3. Marriage and the City By Gautier, Pieter A.; Svarer, Michael; Teulings, Coen N.
  4. People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups By Borghans, Lex; ter Weel, Bas; Weinberg, Bruce A.
  5. The Impact of Parental Income and Education on the Schooling of Their Children By Chevalier, Arnaud; Harmon, Colm; O’Sullivan, Vincent; Walker, Ian
  6. Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements By Angrist, Joshua D.; Guryan, Jonathan
  7. The Market for Teacher Quality By Eric A. Hanushek; John F. Kain; Daniel M. O'Brien; Steven G. Rivkin
  8. Income Segregation from Local Income Taxation When Households Differ in Both Preferences and Incomes By Kurt Schmidheiny
  9. Knowledge, networks of cities and growth in regional urban systems By Joan Trullén Thomàs; Rafel Boix Domenech

  1. By: Söderström, Martin (Uppsala University); Uusitalo, Roope (Labour Institute for Economic Research)
    Abstract: This paper studies the effects of school choice on segregation. We analyze the effect of a reform in Stockholm that changed the admission system of public upper secondary schools. Before the year 2000, students had priority to the school situated closest to where they lived, but from the fall of 2000 and onwards, admission is based on grades only. We show that the distribution of students over schools changed dramatically as a response to extending school choice. As expected, the new admission policy increased segregation by ability. However, segregation by family background, as well as, segregation between immigrants and natives also increased significantly.
    Keywords: School choice; segregation
    JEL: I21 I28 J24
    Date: 2005–01–28
  2. By: Kala Seetharam Sridhar (National Institute of Public Finance and Policy)
    Abstract: For a country like India that contains a large number of Urban Agglomerations (UAs), suburbanisation has drawn little attention of the literature. I focus on this sparsely studied issue in this work. I calculate population, household and employment density gradients for India's UAs, using Mills' two-point technique. Next, I estimate population, household and employment gradient regressions. I find that the size of UA and lagged value of the population gradient explain population suburbanisation, as we would expect. I find evidence from the employment suburbanisation equation that it is the jobs that follow people, and not vice-versa, consistent with what has been found in the literature. In the employment sub-sector regressions, I find that the skills of the labor force are the most important factor explaining suburbanisation of manufacturing, transport, communications and trade/commerce jobs in India's urban areas. I conclude with policy implications.
    Keywords: India, Suburbanisation, Density Gradient, Mills' two-point technique, Population gradient, Employment gradient, Household gradient, Gradient regressions, Exponential density function
    JEL: R11 R12 R23 O18
    Date: 2004–12
  3. By: Gautier, Pieter A. (Free University of Amsterdam, Tinbergen Institute and IZA Bonn); Svarer, Michael (University of Aarhus); Teulings, Coen N. (SEO, University of Amsterdam and Tinbergen Institute)
    Abstract: Do people move to cities because of marriage market considerations? In cities singles can meet more potential partners than in rural areas. Singles are therefore prepared to pay a premium in terms of higher housing prices. Once married, the marriage market benefits disappear while the housing premium remains. We extend the model of Burdett and Coles (1997) with a distinction between efficient (cities) and less efficient (non-cities) search markets. One implication of the model is that singles are more likely to move from rural areas to cities while married couples are more likely to make the reverse movement. A second prediction of the model is that attractive singles benefit most from a dense market (i.e. from being choosy). Those predictions are tested with a unique Danish dataset.
    Keywords: marriage, search, mobility, city
    JEL: J12 J64
    Date: 2005–02
  4. By: Borghans, Lex (ROA, Maastricht University and IZA Bonn); ter Weel, Bas (MERIT, Maastricht University and IZA Bonn); Weinberg, Bruce A. (Ohio State University and IZA Bonn)
    Abstract: Despite indications that interpersonal interactions are important for understanding individual labor-market outcomes and have become more important over the last decades, there is little analysis by economists. This paper shows that interpersonal interactions are important determinants of labor-market outcomes, including occupations and wages. We show that technological and organizational changes have increased the importance of interpersonal interactions in the workplace. We particularly focus on how the increased importance of interpersonal interactions has affected the labor-market outcomes of underrepresented groups. We show that the acceleration in the rate of increase in the importance of interpersonal interactions between the late 1970s and early 1990s can help explain why women’s wages increased more rapidly, while the wages of blacks grew more slowly over these years relative to earlier years.
    Keywords: interpersonal interactions, wage level and structure, economics of minorities and races and gender, social capital
    JEL: J16 J21 J24 J31
    Date: 2005–02
  5. By: Chevalier, Arnaud (University of Kent, London School of Economics and IZA Bonn); Harmon, Colm (University College Dublin, CEPR and IZA Bonn); O’Sullivan, Vincent (University College London); Walker, Ian (University of Warwick, Institute of Fiscal Studies and IZA Bonn)
    Abstract: This paper addresses the intergeneration transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in permanent income, parental education levels, and shocks to income at this age. Least squares estimation reveals conventional results - stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. Moreover, decomposing the income when the child is 16 between a permanent component and shocks to income at age 16 only the latter is significant. It would appear that education is an important input even when we control for permanent income but that credit constraints at age 16 are also influential. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, we find that the strong effects of parental education become insignificant and permanent income matters much more, while the effects of shocks to household income at 16 remain important. A similar pattern of results are reflected in the main measure of scholastic achievement at age 16. These findings have important implications for the design of policies aimed at encouraging pupils to remain in school longer.
    Keywords: early school leaving, intergenerational transmission
    JEL: I20 J62
    Date: 2005–02
  6. By: Angrist, Joshua D. (MIT, NBER and IZA Bonn); Guryan, Jonathan (University of Chicago and NBER)
    Abstract: The education reform movement includes efforts to raise teacher quality through stricter certification and licensing provisions. Most US states now require public school teachers to pass a standardized test such as the Praxis. Although any barrier to entry is likely to raise wages in the affected occupation, the theoretical effects of such requirements on teacher quality are ambiguous. Teacher testing places a floor on whatever skills are measured by the required test, but testing is also costly for applicants. These costs shift teacher supply to the left and may be especially likely to deter high-quality applicants from teaching in public schools. Moreover, test requirements may disqualify some applicants that schools would otherwise want to hire. We use the Schools and Staffing Survey to estimate the effect of state teacher testing requirements on teacher wages and teacher quality as measured by educational background. The results suggest that state-mandated teacher testing increases teacher wages with no corresponding increase in quality.
    Keywords: occupational licensure, education reform, worker screening
    JEL: I28 J44 J45
    Date: 2005–02
  7. By: Eric A. Hanushek; John F. Kain; Daniel M. O'Brien; Steven G. Rivkin
    Abstract: Much of education policy focuses on improving teacher quality, but most policies lack strong research support. We use student achievement gains to estimate teacher value-added, our measure of teacher quality. The analysis reveals substantial variation in the quality of instruction, most of which occurs within rather than between schools. Although teacher quality appears to be unrelated to advanced degrees or certification, experience does matter -- but only in the first year of teaching. We also find that good teachers tend to be effective with all student ability levels but that there is a positive value of matching students and teachers by race. In the second part of the analysis, we show that teachers staying in our sample of urban schools tend to be as good as or better than those who exit. Thus, the main cost of large turnover is the introduction of more first year teachers. Finally, there is little or no evidence that districts that offer higher salaries and have better working conditions attract the higher quality teachers among those who depart the central city district. The overall results have a variety of direct policy implications for the design of school accountability and the compensation of teachers.
    JEL: I2 J4 H4
    Date: 2005–02
  8. By: Kurt Schmidheiny
    Abstract: This paper presents a model of an urban area with local income taxes used to finance a local public good. Households differ in both incomes and their taste for housing. The existence of a segregated equilibrium is shown in a calibrated two-community model assuming single-peaked distributions for both income and housing taste. The equilibrium features income segregation of the population across the communities. The segregation is, however, imperfect: some rich households can also be found in poor communities and vice-versa. The calibrated model is able to explain the substantial differences in local income tax levels and average incomes across communities as observed in e.g. Switzerland. The numerical investigation reveals that the ordering of community characteristics critically depends on the substitutability between the public and the private good. The numerical investigation also suggests that taste heterogeneity reduces the distributional effects of local tax differences. The numerical investigation furthermore suggests that the rich community is able to set lower taxes when it is small.
    Keywords: Income Segregation, Income Sorting, Fiscal Decentralization, Income Taxation, Local Public Goods
    JEL: H71 H73 R13
  9. By: Joan Trullén Thomàs (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Rafel Boix Domenech (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: The objective of this paper is to measure the impact of different kinds of knowledge and external economies on urban growth in an intraregional context. The main hypothesis is that knowledge leads to growth, and that this knowledge is related to the existence of agglomeration and network externalities in cities. We develop a three-stage methodology: first, we measure the amount and growth of knowledge in cities using the OCDE (2003) classification and employment data; second, we identify the spatial structure of the area of analysis (networks of cities); third, we combine the Glaeser - Henderson - De Lucio models with spatial econometric specifications in order to contrast the existence of spatially static (agglomeration) and spatially dynamic (network) external economies in an urban growth model. Results suggest that higher growth rates are associated to higher levels of technology and knowledge. The growth of the different kinds of knowledge is related to local and spatial factors (agglomeration and network externalities) and each knowledge intensity shows a particular response to these factors. These results have implications for policy design, since we can forecast and intervene on local knowledge development paths.
    Keywords: Knowledge city, networks of cities, urban growth, external economies, spatial econometrics.
    JEL: R11 R12 O3
    Date: 2005–01

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