nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2005‒04‒30
eight papers chosen by
Steve Ross
University of Connecticut

  1. Does Educational Tracking Affect Performance and Inequality? Differences-in-Differences Evidence across Countries By Eric A. Hanushek; Ludger Woessmann
  2. Educational Standards in Private and Public Schools By Giorgio Brunello; Lorenzo Rocco
  3. Marriage and the City By Pieter A. Gautier; Michael Svarer; Coenraad N. Teulings
  4. Knowledge-Capital Meets New Economic Geography By Peter Egger; Stefan Gruber; Mario Larch; Michael Pfaffermayr
  5. A Simple Alternative House Price Index Method By Steven C. Bourassa; Martin Hoesli; Jian Sun
  6. External effects of education on earnings: Swedish evidence using matched employee-establishment data By Isacsson, Gunnar
  7. Employment Effects of Spatial Dispersal of Refugees By Anna Piil Damm; Michael Rosholm
  8. Personality, Education and Earnings By Mary A. Silles

  1. By: Eric A. Hanushek; Ludger Woessmann
    Abstract: Even though some countries track students into differing-ability schools by age 10, others keep their entire secondary-school system comprehensive. To estimate the effects of such institutional differences in the face of country heterogeneity, we employ an international differences-in-differences approach. We identify tracking effects by comparing differences in outcome between primary and secondary school across tracked and non-tracked systems. Six international student assessments provide eight pairs of achievement contrasts for between 18 and 26 cross-country comparisons. The results suggest that early tracking increases educational inequality. While less clear, there is also a tendency for early tracking to reduce mean performance. Therefore, there does not appear to be any equity-efficiency trade-off.
    Keywords: tracking, streaming, ability grouping, selectivity, comprehensive school system, educational performance, inequality, international student achievement test, TIMSS, PISA, PIRLS
    JEL: I20
    Date: 2005
  2. By: Giorgio Brunello; Lorenzo Rocco
    Abstract: We show that, when school quality is measured by the educational standard and attaining the standard requires costly effort, secondary education needs not be a hierarchy with private schools offering better quality than public schools, as in Epple and Romano, 1998. An alternative configuration, with public schools offering a higher educational standard than private schools, is also possible, in spite of the fact that tuition levied by private schools is strictly positive. In our model, private schools can offer a lower educational standard at a positive price because they attract students with a relatively high cost of effort, who would find the high standards of the public school excessively demanding. With the key parameters calibrated on the available micro-econometric evidence from the US, our model predicts that majority voting in the US supports a system with high quality private schools and low quality public schools, as assumed by Epple and Romano, 1998. This system, however, is not the one that would be selected by the social planner, who prefers high quality public schools combined with low quality private schools.
    Keywords: private schools, public schools, majority voting
    JEL: H42 J24
    Date: 2005
  3. By: Pieter A. Gautier; Michael Svarer; Coenraad N. Teulings
    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
  4. By: Peter Egger; Stefan Gruber; Mario Larch; Michael Pfaffermayr
    Abstract: We incorporate the now standard knowledge-capital model of multinational firms in a new economic geography setting. The theoretical predictions of our model suggest that unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with empirical evidence that agglomeration of production among European nations is less pronounced than among US regions. Our model shows that the different patterns in labor mobility can explain actual differences in the spreading of industries. According to our welfare analysis, trade liberalization is likely Pareto-improving for a larger (smaller) country with mobile unskilled (skilled) labor. In the supplement, we investigate the sensitivity of our results in several respects. In the first section, we provide the figures of real factor rewards for the trade liberalization scenarios discussed in and underlying Figures 7 and 8 of the paper. Second, in Figures 3(n) - 5(v) (6(n) - 6b(v)) we infer the existence, or non-existence, of each firm type separately in the ? - ?L-space (? - ?S-space) for country i firms and all four scenarios of firm regimes. Third, we illustrate how changes in the parameters ?, ? and ? affect the outcome. Finally, we analyze how the asymmetric endowment with the immobile factor influences the core-periphery patterns.
    Keywords: knowledge-capital model, new economic geography, unskilled labor mobility, skilled labor mobility
    JEL: F12 F23 R12 R13
    Date: 2005
  5. By: Steven C. Bourassa (School of Urban and Public Affairs, University of Louisville); Martin Hoesli (HEC, University of Geneva, FAME and University of Aberdeen); Jian Sun (School of Urban and Public Affairs, University of Louisville)
    Abstract: This paper presents the Sale Price Appraisal Ratio (SPAR) method for constructing house price indexes. The method, which uses ratios of transaction prices and previous appraised values to build up an index, has been applied since the early 1960s to produce semi-annual price indexes for regions and cities in New Zealand. We compare the official New Zealand indexes for three urban areas with repeat sales and hedonic indexes created from the same transactions data, and observe that the SPAR method produces an index very much like those produced by hedonic methods. Given the number of advantages and few disadvantages that we find for the SPAR method relative to the more traditional methods, we maintain that it should be considered by government agencies elsewhere when developing house price indexes.
    Keywords: house price indexes
    JEL: R31
    Date: 2004–11
  6. By: Isacsson, Gunnar (National Road and Transportations Research Institute)
    Abstract: This paper provides an empirical investigation of externalities from education in Sweden in an earnings equation framework. The empirical models are estimated on a large sample of matched employees and establishments. External effects of education are identified from the average educational attainment of workers outside the individual’s establishment. The paper also investigates the coherence of the evidence with respect to the idea that educational externalities arise through face-to-face interaction between individuals. A set of different specifications and fixed effects models is used to investigate the robustness of the basic cross-sectional model. The cross-sectional models suggest, in general, that externalities are positive and significantly different from zero. The cross-sectional evidence is also broadly coherent with the idea that externalities are declining in spatial transaction costs, such as the Euclidean distance between establishments. However, after accounting for individual fixed effects and dummy variables for the county in which the individual works the results indicate no statistically significant external effects of education on earnings in Sweden.
    Keywords: Education; earnings
    JEL: I20
    Date: 2005–04–15
  7. By: Anna Piil Damm (Institute of Economics, University of Copenhagen); Michael Rosholm (Department of Economics, University of Aarhus)
    Abstract: Spatial dispersal policies may influence labour market integration of refugees through two mechanisms. First, it may affect the local job offer arrival rate, and second, it may affect place utility. We investigate the second mechanism theoretically by formulating a partial search model in which an individual searches simultaneously for a job and for a new residential location. The model predicts that the reservation wage for local jobs is decreasing in place utility. We argue that spatial dispersal policies decrease average place utility of refugees which decrease the transition rate into first job due to large local reservation wage effects. We investigate both mechanisms empirically and test the predictions of the theoretical model by evaluating the employment effects of the Danish spatial dispersal policy carried out 1986-1998.
    Keywords: spatial dispersal policy; job search; residential search; employment; migration
    JEL: J64 J61 J68 J15
    Date: 2005–04
  8. By: Mary A. Silles (Institute of Economics, University of Copenhagen)
    Abstract: This paper examines the effects of social maladjustment in childhood on schooling and earnings using the NCDS. Net of differences in family background and cognitive ability, estimates suggest that early social maladjustment scores are associated with lower labor market earnings and schooling. These results suggest that there are substantial returns to fostering positive social development in childhood.
    Keywords: educational economics; social maladjustment
    JEL: I21 J31
    Date: 2005–04

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