nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2007‒01‒06
five papers chosen by
Steve Ross
University of Connecticut

  1. Do local authorities set local fiscal variables to influence population flows? By Fredrik Carlsen
  2. Using survey data to study capitalization of local public services By Fredrik Carlsen; Jørn Rattsø; Bjørg Langset; Lasse Stambøl
  3. School Drop-Out and Push-Out Factors in Brazil: The Role of Early Parenthood, Child Labor, and Poverty By Ana Rute Cardoso; Dorte Verner
  4. Parental Education and Child Health: Evidence from a Schooling Reform By Maarten Lindeboom; Ana Llena-Nozal; Bas van der Klaauw
  5. On the Efficiency Costs of De-tracking Secondary Schools By Kenn Ariga; Giorgio Brunello; Roki Iwahashi; Lorenzo Rocco

  1. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology)
    Abstract: The paper presents an empirical test of local fiscal competition in Norway based on the observation that interregional migration during the business cycle creates very different incentives for rural and urban municipalities to influence population movements. Panel-data evidence is presented suggesting that municipalities indeed attempt to control population flows. The sensitivity of municipal spending and revenue decisions to population movements varies between municipalities in a way that is consistent with the municipalities' incentives to influence location decisions of households.
    Keywords: Fiscal competition; Local government
    JEL: H73 R51
    Date: 2006–09–01
  2. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology); Bjørg Langset (Research Department, Statistics Norway); Lasse Stambøl (Research Department, Statistics Norway)
    Abstract: We use surveys in which respondents evaluate local amenities in Norway to compute proxy variables for the quality of local public services as well as other local amenities relevant to location decisions. Average satisfaction reported by the respondents is computed for each amenity and each municipality, adjusted for sample variation in personal characteristics and included as explanatory variables in a cross-section study of house prices. We find that house prices are increasing in satisfaction with health care, cultural activities and public transportation, suggesting that the quality of local public services indeed affects the attractiveness of a residential site. When the analysis is repeated with input measures of service levels instead of satisfaction variables, we find no effects of local public services on house prices, indicating that traditional Tiebout studies based on input measures may have underestimated the importance of local public services for location decisions.
    Keywords: Capitalization; Local public services; Survey data
    JEL: R23
    Date: 2006–05–18
  3. By: Ana Rute Cardoso (IZA Bonn and University of Minho); Dorte Verner (World Bank)
    Abstract: This paper aims at identifying the major drop-out and push-out factors that lead to school abandonment in an urban surrounding, the shantytowns of Fortaleza, Northeast Brazil. We use an extensive survey addressing risk factors faced by the population in these neighborhoods, which covered both in-school and out-of-school youth, of both genders. The role of early parenthood, child labor, and poverty in pushing teenagers out of school is subject to particular attention. The potential endogeneity of some of the determinants is dealt with in the empirical analysis. We take advantage of the rich set of variables available and apply an instrumental variables approach. Early parenthood is instrumented with the age declared by the youngsters as the ideal age to start having sexual relationships; work is instrumented using the declared reservation wage (minimum salary acceptable to work). Results indicate that early parenthood has a strong impact driving teenagers out of school. Extreme poverty is another factor lowering school attendance, as children who have suffered hunger at some point in their lives are less likely to attend school. In this particular urban context, working does not necessarily have a detrimental effect on school attendance, which could be linked to the fact that dropping out of school leads most often to inactivity, and not to work.
    Keywords: school drop-out, investment in human capital, education, development, Latin America, Brazil
    JEL: I21 O15 D1
    Date: 2006–12
  4. By: Maarten Lindeboom (Free University Amsterdam, Tinbergen Institute, HEB, Netspar and IZA Bonn); Ana Llena-Nozal (Free University Amsterdam and Tinbergen Institute); Bas van der Klaauw (Free University Amsterdam, Tinbergen Institute, CEPR and IZA Bonn)
    Abstract: This paper investigates the impact of parental education on child health outcomes. To identify the causal effect we explore exogenous variation in parental education induced by a schooling reform in 1947, which raised the minimum school leaving age in the UK. Findings based on data from the National Child Development Study suggest that postponing the school leaving age by one year had little effect on the health of their offspring. Schooling did however improve economic opportunities by reducing financial difficulties among households. We conclude from this that the effects of parental income on child health are at most modest.
    Keywords: returns to education, intergenerational mobility, health, regression-discontinuity
    JEL: I12 I28
    Date: 2006–12
  5. By: Kenn Ariga (Kyoto University); Giorgio Brunello (Padova University, Kyoto University, CESifo and IZA); Roki Iwahashi (University of the Ryukyus, Okinawa); Lorenzo Rocco (Padova University)
    Abstract: During the postwar period, many countries have de-tracked their secondary schools, based on the view that early tracking was unfair. What are the efficiency costs, if any, of de-tracking schools? To answer this question, we develop a two skills - two jobs model with a frictional labour market, where new school graduates need to actively search for their best match. We compute optimal tracking length and the output gain/loss associated to the gap between actual and optimal tracking length. Using a sample of 18 countries, we find that: a) actual tracking length is often longer than optimal, which might call for some efficient de-tracking; b) the output loss of having a tracking length longer or shorter than optimal is sizeable, and close to 2 percent of total net output.
    Keywords: mismatch, school tracking
    JEL: I2 J6
    Date: 2006–12

This nep-ure issue is ©2007 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.