nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒01‒03
forty-four papers chosen by
Steve Ross
University of Connecticut

  1. Spatial Frictions By Kristian Behrens; Giordano Mion; Yasusada Murata; Jens Südekum
  2. Ethnic Networks and the Location Choice of Migrants in Europe By Klaus Nowotny; Dieter Pennerstorfer
  3. Walkability Planning in Jakarta By Lo, Ria S. Hutabarat
  4. The Impact of Alternative Grade Configurations on Student Outcomes through Middle and High School By Schwerdt, Guido; West, Martin R.
  5. Sectoral Shifts, Diversification and Regional Unemployment: Evidence from Local Labour Systems in Italy By Basile, Roberto; Girardi, Alessandro; Mantuano, Marianna; Pastore, Francesco
  6. Rural Labor Absorption Efficiency in Urban Areas under Different Urbanization Patterns and Industrial Structures: The Case of China By Liwen, Chen; Zeng, Xiangquan; Yumei, Yang
  7. Well-Being at School: Does Infrastructure Matter? By Katrien Cuyvers; Gio De Weerd; Sanne Dupont; Sophie Mols; Chantal Nuytten
  9. Does grade retention affect achievement? Some evidence from PISA By J. Ignacio García-Pérez; Marisa Hidalgo-Hidalgo; J. Antonio Robles-Zurita
  10. City and Countryside Revisited. Comparative rent movements in London and the South-East, 1580-1914 By David Ormrod; James M. Gibson; Owen Lyne
  11. The Evaluation of English Education Policies By Stephen Machin; Sandra McNally
  12. The Future of the Government Sponsored Enterprises: The Role for Government in the U.S. Mortgage Market By Dwight Jaffee; John M. Quigley
  13. Peer effects identified through social networks. Evidence from Uruguayan schools By Gioia De Melo
  14. Productivity Improvement in the Specialized Industrial Clusters: The Case of the Japanese Silk-Reeling Industry By Arimoto, Yutaka; Nakajima, Kentaro; Okazaki, Tetsuji
  15. Ethnic Residential Segregation and Immigrants' Perceptions of Discrimination in West Germany By Verena Dill; Uwe Jirjahn
  16. How immigrant children affect the academic achievement of native Dutch children By Ohinata, Asako; van Ours, Jan C
  17. Does academic research affect the local growth pattern? Empirical evidence based on Swedish data By Lundberg, Johan
  18. Complex Methods in Economics: An Example of Behavioral Heterogeneity in House Prices By Wilko Bolt; Maria Demertzis; Cees Diks; Marco van der Leij
  19. Growth in a Cross-Section of Cities: Location, Increasing Returns or Random Growth? By Rafael González-Val; Jose Olmo
  20. A relational approach to knowledge spillovers in biotech. Network structures as drivers of inter-organizational citation patterns By Ron Boschma; Pierre-Alexandre Balland; Dieter Kogler
  21. The Future of the Physical Learning Environment: School Facilities that Support the User By Marko Kuuskorpi; Nuria Cabellos González
  22. Grade Inflation, Students’ Social Background and String-Pulling By A. Tampieri
  23. Self-Employment and Geographical Mobility in Germany By Darja Reuschke
  24. How Important are School Principals in the Production of Student Achievement? By Dhuey, Elizabeth; Smith, Justin
  25. Do Borrower Rights Improve Borrower Outcomes? Evidence from the Foreclosure Process By Kristopher Gerardi; Lauren Lambie-Hanson; Paul S. Willen
  26. The tempest: Using a natural disaster to evaluate the link between wealth and child development By Felfe, Christina; Deuchert. Eva
  27. Do EU structural funds promote regional employment? Evidence from dynamic panel data models By Philipp Mohl; Tobias Hagen
  28. Internet Appendix: The tempest: Using a natural disaster to evaluate the link between wealth and child development By Felfe, Christina; Deuchert. Eva
  29. Forecasting House Prices in Germany By Philipp an de Meulen; Martin Micheli
  30. Immigrant Enclaves and Crime By Bell, Brian; Machin, Stephen
  31. California Dreaming? Cross-Cluster Embeddedness and the Systematic Non-Emergence of the 'Next Silicon Valley' By Dan Breznitz; Mollie Taylor
  33. Skill Polarization in Local Labour Markets under Share-Altering Technical Change By Antonio accetturo; Alberto Dalmazzo; Guido De Blasio
  34. The effect of mafia on public transfers By Guglielmo Barone; Gaia Narciso
  35. Assimilation in multilingual cities By Ortega, Javier
  36. Network mechanisms and social ties in markets for low- and unskilled jobs: (theory and) evidence from North-India By Iversen, Vegard Iversen; Torsvik, Gaute
  37. After “Raising the Bar”: applied maximum likelihood estimation of families of models in spatial econometrics. By Bivand, Roger
  38. When strong ties are strong Networks and youth labor market entry By Kramarz, Francis; Nordström Skans, Oskar
  39. Education policy and early fertility: lessons from an expansion of upper secondary schooling By Grönqvist, Hans; Hall, Caroline
  40. Are covered bonds a substitute for mortgage-backed securities? By Santiago Carbó-Valverde; Francisco Rodríguez Fernández; Richard J. Rosen
  41. A ‘de Soto Effect’ in Industry? Evidence from the Russian Federation By Pyle, William; Schoors, Koen
  42. Quasi-Experimental Impact Estimates of Immigrant Labor Supply Shocks: The Role of Treatment and Comparison Group Matching and Relative Skill Composition By Abdurrahman Aydemir; Murat G. Kirdar
  43. Can implied forward mortgage rates predict future mortgage rates - recent New Zealand experience By Tripe, David; Xia, Bingru; Roberts, Leigh
  44. Unemployment, commuting, and search intensity By Wrede, Matthias

  1. By: Kristian Behrens; Giordano Mion; Yasusada Murata; Jens Südekum
    Abstract: The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the nature of competition in cities? The short answers are: no, yes, and it depends.
    Keywords: trade frictions, urban frictions, productivity, city-size distribution, markups
    JEL: F12 R12
    Date: 2011–12
  2. By: Klaus Nowotny (WIFO); Dieter Pennerstorfer (WIFO)
    Abstract: In this paper we analyse the role of ethnic networks in the location decision of migrants to the EU 15 at the regional level. Using a random parameters logit specification we find a substantially positive effect of ethnic networks on the location decision of migrants. The effect is, however, decreasing in network size. Furthermore, we find evidence of spatial spillovers in the effect of ethnic networks: ethnic networks in neighbouring regions significantly help to explain migrants' choice of target regions. The positive effects of ethnic networks thus also extend beyond regional and national borders. Analysing the trade-off between potential income and network size, we find that migrants would require a sizeable compensation for living in a region with a smaller ethnic network, especially when considering regions where only few previous migrants from the same country of origin are located.
    Keywords: network migration, ethnic networks, random parameters
    Date: 2011–12–19
  3. By: Lo, Ria S. Hutabarat
    Abstract: Walking is the main mode of transportation for many of the world’s people, particularly those in cities of the majority world. In the metropolitan region of Jakarta, walking in the public realm constitutes the main transportation mode for almost 40 percent of trips—a massive contribution to urban mobility. On the other hand, there is no comprehensive planning for pedestrians in an analogous manner to other modes of transportation. Pedestrian facilities are often dilapidated, damaged, dangerous, or missing completely. Additionally, there is no process for assessing the inventory of pedestrian facilities, planning pedestrian facilities at a region-wide level, or even identifying the location of vernacular pedestrian routes in low-income and informal areas. Provincial pedestrian planning focuses on piecemeal, symbolic spaces such as monumental plazas that serve the nation-building project, but overlooks the functional network of routes that address the daily needs of the city’s residents. This dissertation examines the issue of walkability planning in Jakarta by investigating what matters to pedestrians and how pedestrian space is produced. The research employs mixed methods, including pedestrian network groundtruthing, structured streetscape observations, multimodal traffic counts, pedestrian activity mapping, pedestrian surveys and interviews with policy-makers. Data is analyzed through a combination of in-depth qualitative analysis as well as quantitative and statistical analysis. Based on this research, six key elements of walkability planning are proposed for Jakarta: multidisciplinarity, ethnography, accessibility, legibility, integrated activity, and shared streets. A literature review of walkability metrics reveals that walking is a highly multidisciplinary activity, with very different metrics emerging from different fields. In order to effectively encourage pedestrian activity, new multidisciplinary metrics should integrate the perspectives of all of these related disciplines and pedestrian planning should occur through inter-agency coordination. In Jakarta, interviews with policy-makers suggested that pedestrian planning is hindered by the fact that there is no lead agency for pedestrian planning, and there is a lack of cooperation between the different agencies that plan and produce urban public space. Pedestrian planning is also hindered by a discursive framework that is both modally and geographically biased—favoring motorized, long-distance modes of transportation and employing method derived from a Western research and planning norms. In order to overcome this discursive bias, ethnography should become a standard part of urban research, planning and design. The need for ethnography and qualitative analysis was made visible by the mismatch between standard transportation terminology, and prevailing practices observed in pedestrian mapping exercises and raised by pedestrians in on-the street interviews. For example, standard survey categories do not account for informal or integrated activity patterns like mobile street vending. From surveys conducted with mobile street vendors, it was difficult to separate their pedestrian activities into categories of travel from home to work, business-related travel, and visiting friends and relatives. In fact, it was difficult to even separate their travel from their activities since many vendors carried out business as they made their way through the neighborhood. With a large portion of the population engaged in the informal sector, the discrepancy between assumed and actual behavior severely compromises the quality of transportation-related research that is conducted in Jakarta and many other majority world cities. Ethnographic and qualitative research methods may therefore assist in producing more context-sensitive planning data and outcomes. These context-sensitive methods could include new analytical methods that focus on integrated activity, rather than trip-based or activity-based analysis. In relation to pedestrian activity, context-sensitive planning encompasses new approaches to accessibility that combine the notion of transportation accessibility with disabled access and universal access standards. The need for such an approach was revealed during interviews with policy-makers, who described accessibility in terms of market goods rather than human rights. Within the market for urban public space, ordinary pedestrians were unable to compete with other modes of transportation; within the market for urban impressions, ordinary pedestrian spaces were outcompeted by prominent, symbolic spaces; and within the market for cultural capital, ordinary pedestrians were excluded from planning processes because even the discourse of pedestrian planning was inaccessible to regular residents. In response to this problem of exclusion, integrated accessibility may facilitate inclusion in both planning processes and urban spaces within the city. In particular, integrated accessibility would aim to provide comprehensive routes of travel for all pedestrians, rather than isolated pockets of so-called accessible (yet unreachable) facilities. More context sensitive planning would also be facilitated through greater legibility of fine-grained and vernacular pedestrian networks that were missing from standard planning maps. These fine-grained networks represent highly connected facilities that serve much of Jakarta’s pedestrian transportation task. While the current synoptic illegibility of these areas may conveniently allow some communities to avoid state intrusion, it also means that low-income populations are chronically under-served with respect to basic urban planning and services. Increased legibility therefore allows for improvement and maintenance of urban systems like safe, functional pedestrian networks, and it may also play a role in increasing tenure security for Jakarta’s significant floating population. In many of these vernacular spaces, new street design approaches would also benefit pedestrians, who tend to use the streets as shared spaces, rather than spaces that are rigidly segregated by mode. Pedestrian activity mapping revealed that only an overwhelming majority of pedestrians used streets as hybrid spaces, with activity types falling into the categories of surface sensitive, risk-averse, distance-minimizing and stationary pedestrians. More realistic shared street designs would therefore accommodate —rather than ignore—the types of activities that occur along Jakartan streets. Design standards for “great streets†in Jakarta would also emphasize the safe sharing of streets through self-enforcing approaches to speed limits, and the integration of various urban elements like drainage, mobility and public-private interaction. While walkability planning in Jakarta displays many “wicked problem†features, there is much that can be done to improve, if not resolve, conditions for pedestrians within the region. Recommended strategies for walkability planning in Jakarta include a regional walkability plan and environmental policy developed using participatory planning, reformed governance and institutional arrangements, and a constituency building approach. The strategies also include expansion of road designations and an integrated accessibility strategy that draws upon new data sources from a WikiPlaces network map, an integrated activity study and pedestrian network cost-benefit analysis. In addition to Jakarta specific proposals, a number of proposals are made to advance discourse on walkability more generally. These approaches include decentered analysis of integrated activity, informal economic activity analysis, vernacular placemaking and Asian shared street design. Pedestrians and pedestrian plans traverse diverse physical, administrative and disciplinary spaces in cities of the world. Integrated and multidisciplinary approaches are therefore required to understand and accommodate these key users of public space. In Jakarta, walkability planning has potential to improve urban transportation efficiency while contributing to traffic safety, economic vitality, environmental quality and democratic governance. Successful walkability planning in Jakarta may also provide a model for planning in other cities where Western models of planning are unrealistic, inequitable and inappropriate. Jakartan lessons on walkability planning are particularly relevant, and improvements in walkability are particularly powerful, for cities characterized by relatively low median incomes, high land use densities, a substantial informal sector, rapid urbanization and rapid motorization. By improving walkability planning in Jakarta and other cities of the majority world, policy-makers and planners can move toward more sustainable, socially equitable and efficient cities.
    Keywords: Urban Studies and Planning
    Date: 2011–09–01
  4. By: Schwerdt, Guido (Ifo Institute for Economic Research); West, Martin R. (Harvard Graduate School of Education)
    Abstract: We use statewide administrative data from Florida to estimate the impact of attending public schools with different grade configurations on student achievement through grade 10. Based on an instrumental variable estimation strategy, we find that students moving from elementary to middle school suffer a sharp drop in student achievement in the transition year. These achievement drops persist through grade 10. We also find that middle school entry increases student absences and is associated with higher grade 10 dropout rates. Transitions to high school in grade nine cause a smaller one-time drop in achievement but do not alter students' performance trajectories.
    Keywords: educational production, public schools, grade configuration, middle schools, high schools
    JEL: H52 I21 I28
    Date: 2011–12
  5. By: Basile, Roberto (University of Naples II); Girardi, Alessandro (ISTAT, Rome); Mantuano, Marianna (ISTAT, Rome); Pastore, Francesco (University of Naples II)
    Abstract: Using Local Labour Systems (LLSs) data, this work aims at assessing the effects of sectoral shifts and industry specialization patterns on regional unemployment in Italy over the years 2004-2008, when huge worker reallocation caused by changes in the international division of labour occurred. Italy represents an interesting case study because of the high degree of spatial heterogeneity in local labour market performance and the well-known North-South divide. Furthermore, the presence of strongly specialized LLSs (Industrial Districts, IDs) allows us to test whether IDs perform better than highly diversified urban areas thanks to the effect of agglomeration economies, or vice versa. Building on a semiparametric spatial auto-regressive framework, our empirical investigation documents that sectoral shifts and the degree of specialization exert a negative role on unemployment dynamics. By contrast, highly diversified areas turn out to be characterized by better labour market performances.
    Keywords: unemployment, sectoral shift, diversification, spatial dependence, nonparametrics
    JEL: C14 C21 L16 R23
    Date: 2011–12
  6. By: Liwen, Chen (Renmin University of China); Zeng, Xiangquan (Renmin University of China); Yumei, Yang (Renmin University of China)
    Abstract: In this paper, we use Data Envelopment Analysis (DEA) to estimate how well China’s urban areas absorb migrant workers under the interaction of urbanization and industrialization. We applied an output-oriented BCC model to evaluate provincial and regional rural labor absorption efficiency in mainland China. It appears that 4 out of 31 provinces and municipals are efficient, and 2 out of 8 economic regions are efficient in absorbing migrant workers. In the southern and eastern parts of China, urban labor absorption efficiency is higher compared with the western and northern parts of China. Different urbanization patterns and industrial development strategies should be adopted in different economic areas to enhance labor absorption ability in these areas. Urban areas in many parts of China still have potential to accommodate rural migrant workers. The inter-regional flow of production factors would affect urban labor absorption efficiency.
    Keywords: rural labor absorption in urban areas, urbanization, industry structure, DEA
    JEL: J61 R23
    Date: 2011–12
  7. By: Katrien Cuyvers; Gio De Weerd; Sanne Dupont; Sophie Mols; Chantal Nuytten
    Abstract: What is the impact of school infrastructure on the well-being of students in Flemish secondary schools? A study, commissioned by AGIOn (the Flemish agency that subsidises school buildings), investigated the impact of educational spaces on their users and set out to identify empirical evidence supporting the importance of school infrastructure on the well-being of students in secondary schools.
    Keywords: infrastructure, well-being, quality indicators, satisfaction levels
    Date: 2011–12–02
  8. By: Marie Ferru (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers); Olivier Bouba-Olga (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers); Dominique Pepin (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: The aim of this paper is to provide explanatory elements of the geography of collaboration by testing various potential factors related to the partners' features (sector of activity, location, affiliation to a parent firm, ...) and to the pair of regions involved in the partnership (economic and scientific endowment of regions and proximities that separate them). Based on a database collecting around 15 000 Science‐Industry agreements signed in France between 1981 and 2006, we first realized a probit model that focus on the local dimension of science-industry collaborations on an inter-individual level. We then test a gravity model (sample selection model) in order to explain the probability and the intensity of interregional collaborations.
    Keywords: geography; partnerships; endowment; proximities
    Date: 2011
  9. By: J. Ignacio García-Pérez (Department of Economics, Universidad Pablo de Olavide); Marisa Hidalgo-Hidalgo (Department of Economics, Universidad Pablo de Olavide); J. Antonio Robles-Zurita (Department of Economics, Universidad Pablo de Olavide)
    Abstract: Grade retention practices are at the forefront of the educational debate. In this paper, we use PISA 2009 data for Spain to measure the effect of grade retention on students’ achievement. One important problem when analyzing this question is that school outcomes and the propensity to repeat a grade are likely to be determined simultaneously. We address this problem by estimating a Switching Regression Model. We find that grade retention has a negative impact on educational outcomes, but we confirm the importance of endogenous selection, which makes observed differences between repeaters and non-repeaters appear 14.6% lower than they actually are. The effect on PISA scores of repeating is much smaller (-10% of non-repeaters’ average) than the counterfactual reduction that non-repeaters would suffer had they been retained as repeaters (-24% of their average). Furthermore, those who repeated a grade during primary education suffered more than those who repeated a grade of secondary school, although the effect of repeating at both times is, as expected, much larger.
    Keywords: Grade retention, educational scores, PISA
    JEL: D63 I28 J24
    Date: 2011–11
  10. By: David Ormrod; James M. Gibson; Owen Lyne
    Abstract: Economic historians have traditionally argued that urban growth in England was driven primarily by prior improvements in agricultural supply in the two centuries before the industrial revolution. Recent revisionist scholarship by writers such as Jan Luiten van Zanden and Robert Allen has suggested that 'the city drove the countryside, not the reverse'. This paper assembles new serial data on urban and agricultural rent movements in Kent, Essex and London, from 1580-1914, which enables us to provide a tentative estimate of the strength of the urban variable and the productivity of land across the rural-urban continuum. Our initial findings support the revisionist view, and throw new light on London's position within the wider metropolitan region. Comparative rent movements suggests a greater continuity between town and countryside than has often been assumed, with sharp increases in rental values occurring on the rural-urban fringes of London and the lower Medway valley.
    Keywords: Europe; pre-1913; agriculture; land-use; tenure; rural-urban relations; spatial competition; urban history
    JEL: N53 N93 Q15 R12 R14 Y1
    Date: 2011–11
  11. By: Stephen Machin; Sandra McNally
    Abstract: Educational inequalities are evident even before children start school. Those connected to disadvantage widen out as children progress through the education system and into the labour market. We document various forms of educational inequality. We then review available evidence for England about the impact of school-level policies on achievement and their potential for reducing the socio-economic gap. We discuss evaluation evidence under four main themes: school resources; market incentives; school autonomy; and pedagogical approaches.
    Keywords: Educational inequality, evaluation, school policies
    JEL: I2
    Date: 2011–12
  12. By: Dwight Jaffee; John M. Quigley
    Abstract: This paper analyzes options for reforming the U.S. housing finance system in view of the failure of Fannie Mae and Freddie Mac as government sponsored enterprises (GSEs). The options considered include GSE reform, a range of possible new governmental mortgage guarantee plans, and greater reliance on private mortgage markets. The analysis also considers the likely consequences of adopting alternative roles for government in the U.S. housing and mortgage markets. We start by reviewing the history of the GSEs and their contributions to the operation of U.S. housing and mortgage markets, including the actions that led to their failure in conjunction with the recent mortgage market crisis. The reform options we consider include those proposed in a 2011 U.S. Treasury White Paper, plans for new government mortgage guarantees from various researchers and organizations, and the evidence from Western European countries for the efficacy of private mortgages markets.
    JEL: G01 G2 G28 H81 R21 R3
    Date: 2011–12
  13. By: Gioia De Melo
    Abstract: This paper provides evidence on peer effects in educational achievement exploiting for the first time a unique data set on social networks within primary schools in Uruguay. The relevance of peer effects in education is still largely debated due to the identification challenges that the study of social interactions poses. I adopt a recently developed identification method that exploits detailed information on social networks, i.e. individual-specific peer groups. This method enables me to disentangle endogenous effects from contextual effects via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled, to some extent, by classroom fixed effects. I find significant endogenous effects in standardized tests for reading and math. A one standard deviation increase in peers’ test score increases the individual’s test score by 40% of a standard deviation. This magnitude is comparable to the effect of having a mother that completed college. By means of a simulation I illustrate that when schools are stratified by socioeconomic status peer effects may operate as amplifiers of educational inequalities.
    JEL: I21 I24 O1
    Date: 2011–11
  14. By: Arimoto, Yutaka; Nakajima, Kentaro; Okazaki, Tetsuji
    Abstract: We examine two sources of productivity improvement in the specialized industrial clusters. Agglomeration improves the roductivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through competition, truncating distribution on the left. By analyzing the data of the early twentieth century Japanese silk-reeling industry, we find no evidence confirming a right shift in the distribution in clusters or that gglomeration promotes faster productivity growth. These findings imply that the plant-selection effect was the source of higher productivity in the Japanese silk-reeling clusters.
    Keywords: Economic geography, Heterogeneous firms, Selection, Productivity
    JEL: R12 O18 L10
    Date: 2011–12
  15. By: Verena Dill; Uwe Jirjahn
    Abstract: Using survey data from the German Socio-Economic Panel, this study shows that immigrants living in segregated residential areas are more likely to report discrimination because of their ethnic background. This applies to both segregated areas where most neighbors are immigrants from the same country of origin as the surveyed person and segregated areas where most neighbors are immigrants from other countries of origin. The results suggest that housing discrimination rather than self-selection plays an important role in immigrant residential segregation.
    Keywords: Segregation, immigrants, housing discrimination, self-selection
    JEL: J15 J61 R23 R30
    Date: 2011
  16. By: Ohinata, Asako; van Ours, Jan C
    Abstract: In this paper, we analyze how the share of immigrant children in the classroom affects the educational attainment of native Dutch children. Our analysis uses data from various sources, which allow us to characterize educational attainment in terms of reading literacy, mathematical skills and science skills. We do not find strong evidence of negative spill-over effects from immigrant children to native Dutch children. Immigrant children themselves experience negative language spill-over effects from a high share of immigrant children in the classroom but no spill-over effects on maths and science skills.
    Keywords: educational attainment; immigrant children; peer effects
    JEL: I21 J15
    Date: 2011–12
  17. By: Lundberg, Johan (Department of Economics, Umeå University)
    Abstract: The main issue in this paper is to analyze to what extend academic research at universities and university colleges have any effects on the regional growth pattern. In particular, we analyze the dynamic effects of research activities at universities and university colleges by including the number of dissertations at each university or university college in a Barro and Sala-i-Martin type (Barro and Sala-i-Martin (1992)) of empirical growth model. Moreover, we control for other potentially important determinants of local growth such as local income taxes, local labor market conditions and demographic factors. Based on a data set covering the Swedish municipalities during the period 1990-2007, our results suggests that academic research only have minor effects on the regional growth pattern. One potential explanation for this result is that even though academic research might have a positive effect on economic growth at the national level, the in many respects small municipalities in Sweden where the main part of the universities and university colleges are located do not have the resources in terms of infrastructure needed to fully benefit from academic research.
    Keywords: Net migration; income; convergence; academic research; human capital; spatial effects
    JEL: I23 I25 I28 O15 O38 R11
    Date: 2011–12–22
  18. By: Wilko Bolt; Maria Demertzis; Cees Diks; Marco van der Leij
    Abstract: We show how simple statistical techniques for capturing critical transitions used in natural sciences, fail to capture economic regime shifts. This implies that we need to use model-based approaches to identify critical transitions. We apply a heterogenous agents model in a standard housing market model to show that these family of models generate non-linear responses that can capture such transitions. We estimate this model for the United States and the Netherlands and find that first, the data does capture the heterogeneity in expectations and, second, that the qualitative predictions of such nonlinear models are very different to standard linear benchmarks. It would be important to identify which approach can serve best as an early warning indicator.
    Keywords: critical transitions; heterogenous agents model; bounded rationality; housing prices
    JEL: C53 R21 R31
    Date: 2011–12
  19. By: Rafael González-Val (Barcelona Institute of Economics - University of Barcelona, Barcelona); Jose Olmo (Jose Olmo, Centro Universitario de la Defensa & City University London)
    Abstract: This article analyzes empirically the main existing theories on income and population city growth: increasing returns to scale, locational fundamentals and random growth. To do this we implement a threshold nonlinearity test that extends standard linear growth regression models to a dataset on urban, climatological and macroeconomic variables on 1,175 U.S. cities. Our analysis reveals the existence of increasing returns when per-capita income levels are beyond $19; 264. Despite this, income growth is mostly explained by social and locational fundamentals. Population growth also exhibits two distinct equilibria determined by a threshold value of 116,300 inhabitants beyond which city population grows at a higher rate. Income and population growth do not go hand in hand, implying an optimal level of population beyond which income growth stagnates or deteriorates
    Keywords: threshold nonlinearity test, locational fundamentals, multiple equilibria, random growth
    JEL: C12 C13 C33 O1 R0 R11
    Date: 2011–12
  20. By: Ron Boschma; Pierre-Alexandre Balland; Dieter Kogler
    Abstract: In this paper, we analyze the geography of knowledge spillovers in biotech by investigating the way in which knowledge ties are organized. Following a relational account on knowledge spillovers, we depict knowledge networks as complex evolving structures that build on pre-existing knowledge and previously formed ties. In economic geography, there is still little understanding of how structural network forces (like preferential attachment and closure) shape the structure and formation of knowledge spillover networks in space. Our study investigates the knowledge spillover networks of biotech firms by means of inter-organizational citation patterns based on USPTO biotech patents in the years 2008-2010. Using a Stochastic Actor-Oriented Model (SAOM), we explain the driving forces behind the decision of actors to cite patents produced by other actors. Doing so, we address directly the endogenous forces of knowledge dynamics.
    Keywords: knowledge spillovers, network structure, patent citations, biotech, proximity
    JEL: B15 R11 R12
    Date: 2011–12
  21. By: Marko Kuuskorpi; Nuria Cabellos González
    Abstract: This paper presents the conclusions of a study, carried out in collaboration with schools in six European countries, which focused on tomorrow’s physical learning environments. It resulted in the creation of a learning space model that is flexible, modifiable and sustainable while supporting the teaching and learning processes.
    Keywords: future, learning environment, qualitative factors, user-oriented, design features
    Date: 2011–12
  22. By: A. Tampieri
    Abstract: In this paper I analyse grade inflation when students differ both in ability and social background. I consider a signalling game where a school may inflate the grade of low-ability students and a company decides whether ot hiring or not the students, and observes their grades. In the one-shot (repeated) version of the game, the company is aware (unaware) of the school strategy and the distribution of ability. The results suggest that a school can inflate grades in order to smooth down class differences in the job market. The results in the repeated game can explain how string-pulling can emerge as a job hiring strategy in the presence of grade inflation and school low reputation.
    JEL: I21
    Date: 2011–12
  23. By: Darja Reuschke
    Abstract: Little is known about the individual location behaviour of self-employed entrepreneurs. This paper investigates the geographical mobility behaviour of self-employed entrepreneurs, as compared to employees, thereby shedding new light onto the place embeddedness of self-employment. It examines whether self-employed entrepreneurs are `rooted¿ in place and also whether those who are more rooted in place are more likely to enter self-employment. The paper draws on large-scale panel data covering the years 1996¿2009 from the German Socio-Economic Panel Study (SOEP). It shows that self-employed entrepreneurs as compared to employees are not more `rooted¿ in their place of residence and that those who are more rooted in their place of residence are not more likely to become self-employed. However, in contrast to expectations drawn from previous literature, flows into self-employment are positively associated with inter-regional moves. It concludes that a longitudinal perspective on individual employment careers provides an important methodological advance. In addition, it emphasises the importance of mobility and immobility and individual and household constraints and preferences for understanding who becomes self-employed.
    Keywords: Self-employment, migration, moves, panel data, SOEP, Germany
    JEL: C23 J21 J61 J62 R23
    Date: 2011
  24. By: Dhuey, Elizabeth; Smith, Justin
    Abstract: As school leaders, principals can influence student achievement in a number of ways, such as: hiring and firing teachers, monitoring instruction, and maintaining student discipline, among others. We measure the effect of individual principals on gains in student math and reading achievement between grades four and seven. We estimate that a one standard deviation improvement in principal quality can boost student performance by approximately 0.2 standard deviations in both math and reading. We also show that principal experience does not exert a significant influence on student performance. Our results imply that isolating the most effective principals and allocating them accordingly between schools can have a significant positive effect on reducing achievement gaps.
    Keywords: Economics of education, principals, education
    JEL: I20 I21
    Date: 2011–12–22
  25. By: Kristopher Gerardi; Lauren Lambie-Hanson; Paul S. Willen
    Abstract: We evaluate laws designed to protect borrowers from foreclosure. We find that these laws delay but do not prevent foreclosures. We first compare states that require lenders to seek judicial permission to foreclose with states that do not. Borrowers in judicial states are no more likely to cure and no more likely to renegotiate their loans, but the delays lead to a build-up in these states of persistently delinquent borrowers, the vast majority of whom eventually lose their homes. We next analyze a “right-to-cure” law instituted in Massachusetts on May 1, 2008. Using a difference-in-differences approach to evaluate the effect of the policy, we compare Massachusetts with neighboring states that did not adopt similar laws. We find that the right-to-cure law lengthens the foreclosure timeline but does not lead to better outcomes for borrowers.
    JEL: G11 K11 R31
    Date: 2011–12
  26. By: Felfe, Christina; Deuchert. Eva
    Abstract: How does family wealth affect children's development in the short- and long-run? We address this question by exploiting a shock occurred to family’s real estate, i.e. housing damages caused by a super typhoon. Our identification strategy is based on a comparison of children, who all lived in the same local area and thus were confronted with the same macro-economic shock, but only some experienced housing damages. We present evidence in favor of housing damages being essentially a severe wealth shock, with no effects on other observable channels which might directly harm children’s development. The shock results in a decline of educa-tional investments, but not of health-related investments. We observe a deterioration of chil-dren’s educational achievements in the short-run and even more pronounced in the long-run. Our findings are mainly driven by children whose families are at the bottom of the wealth distribution or lack the support of a strong family network.
    Keywords: Child development, wealth effects, natural disaster
    JEL: I14 I24 Q54
    Date: 2011–12
  27. By: Philipp Mohl (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Tobias Hagen (Frankfurt University of Applied Sciences, Nibelungenplatz 1, D-60318 Frankfurt am Main, Germany.)
    Abstract: Despite its rather broad goal of promoting “economic, social and territorial cohesion”, the existing literature has mainly focused on investigating the Cohesion Policy’s growth effects. This ignores the fact that part of the EU expenditures is directly aimed at reducing disparities in the employment sector. Against this background, the paper analyses the impact of EU structural funds on employment drawing on a panel dataset of 130 European NUTS regions over the time period 1999-2007. Compared to previous studies we (i) explicitly take into account the unambiguous theoretical propositions by testing the conditional impact of structural funds on the educational attainment of the regional labour supply, (ii) use more precise measures of structural funds for an extended time horizon and (iii) examine the robustness of our results by comparing different dynamic panel econometric approaches to control for heteroscedasticity, serial and spatial correlation as well as for endogeneity. Our results indicate that high-skilled population in particular benefits from EU structural funds. JEL Classification: R11, R12, C23, J20.
    Keywords: EU structural funds, dynamic panel models, spatial panel econometrics, regional employment effects.
    Date: 2011–12
  28. By: Felfe, Christina; Deuchert. Eva
    Abstract: How does family wealth affect children's development in the short- and long-run? We address this question by exploiting a shock occurred to family’s real estate, i.e. housing damages caused by a super typhoon. Our identification strategy is based on a comparison of children, who all lived in the same local area and thus were confronted with the same macro-economic shock, but only some experienced housing damages. We present evidence in favor of housing damages being essentially a severe wealth shock, with no effects on other observable channels which might directly harm children’s development. The shock results in a decline of educa-tional investments, but not of health-related investments. We observe a deterioration of chil-dren’s educational achievements in the short-run and even more pronounced in the long-run. Our findings are mainly driven by children whose families are at the bottom of the wealth distribution or lack the support of a strong family network.
    Keywords: Child development, wealth effects, natural disaster
    JEL: I14 I24 Q54
    Date: 2011–12
  29. By: Philipp an de Meulen; Martin Micheli
    Abstract: In the academic debate there is a broad consensus that house price fluctuations have a substantial impact on financial stability and real economic activity. Therefore, it is important to have timely information on actual and expected house price developments. The aim of this paper is to measure the latest price movements in different real estate markets in Germany and forecast near-term price developments. Therefore we construct hedonic house price indices based on real estate advertisements on the internet platform ImmobilienScout24. Then, starting with a naive AR(p) model as a benchmark, we investigate whether VAR and ARDL models using additional macroeconomic information can improve the forecasting performance as measured by the mean squared forecast error (MSFE). While these models reduce the forecast error only slightly, forecast combination approaches enhance the predictive power considerably..
    Keywords: House price forecasts; forecast combination; hedonic price index
    JEL: C43 C53 R31
    Date: 2011–12
  30. By: Bell, Brian (London School of Economics); Machin, Stephen (University College London)
    Abstract: There is conflicting evidence on the consequences of immigrant neighbourhood segregation for individual outcomes, with various studies finding positive, negative or insubstantial effects. In this paper, we document the evolution of immigrant segregation in England over the last 40 years. We show that standard measures of segregation point to gentle declines over time for all immigrant groups. However, this hides a significant increase in the number of immigrant enclaves where immigrants account for a substantial fraction of the local population. We then explore the link between immigrant segregation, enclaves and crime using both recorded crime and self-reported crime victimization data. Controlling for a rich set of observables, we find that crime is substantially lower in those neighbourhoods with sizeable immigrant population shares. The effect is non-linear and only becomes significant in enclaves. It is present for both natives and immigrants living in such neighbourhoods. Considering different crime types, the evidence suggests that such neighbourhoods benefit from a reduction in more minor, non-violent crimes. We discuss possible mechanisms for the results we observe.
    Keywords: crime, immigrant segregation, enclaves
    JEL: F22 J15 K42
    Date: 2011–12
  31. By: Dan Breznitz; Mollie Taylor
    Abstract: The importance of social embeddedness in economic activity is now widely accepted. Embeddedness has been shown to be particularly significant in explaining the trajectory of regional development. Nonetheless, most studies of embeddeddness and its impacts have treated each locale as an independent unit. Following recent calls for the study of cross-cluster social interactions, we look at the consistent failure of numerous localities in the United States with high potential to emulate Silicon Valley and achieve sustained success in the ICT industry. The paper contends that the answer lies in high-technology clusters being part of a larger system. Therefore, we must include in our analysis of their social structure the influence of cross-cluster embeddedness of firms and entrepreneurs. These cross-clusters dynamics lead to self-reinforcing social fragmentation in the aspiring clusters and, in time, to the creation of an industrial system in the United States based on stable dominant and subordinate (feeder) clusters. The paper expands theories of industrial clusters, focusing on social capital, networks, and embeddedness arguments, to explain a world with one predominant cluster region. It utilizes a multimethod analysis of the ICT industry centered in Atlanta, Georgia, as an empirical example to elaborate and hone these theoretical arguments.
    Date: 2011
  32. By: T.Ohnishi, T.Mizuno, C.Shimizu, T.Watanabe (Canon Institute for Global Studies, University of Tsukuba, Reitaku University, Faculty of Economics, University of Tokyo)
    Abstract: How can we detect real estate bubbles? In this paper, we propose making use of information on the cross-sectional dispersion of real estate prices. During bubble periods, prices tend to go up considerably for some properties, but less so for others, so that price inequality across properties increases. In other words, a key characteristic of real estate bubbles is not the rapid price hike itself but a rise in price dispersion. Given this, the purpose of this paper is to examine whether developments in the dispersion in real estate prices can be used to detect bubbles in property markets as they arise, using data from Japan and the U.S. First, we show that the land price distribution in Tokyo had a power-law tail during the bubble period in the late 1980s, while it was very close to a lognormal before and after the bubble period. Second, in the U.S. data we find that the tail of the house price distribution tends to be heavier in those states which experienced a housing bubble. We also provide evidence suggesting that the power-law tail observed during bubble periods arises due to the lack of price arbitrage across regions.
    Date: 2011–12
  33. By: Antonio accetturo; Alberto Dalmazzo; Guido De Blasio
    Abstract: This paper considers the “share-altering” technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a sufficient proportion of highly educated individuals. Moreover, areas that experiment this kind of technical change will initially exhibit a rise in local skill premia, but such a trend tends to be reverted over time due to labour mobility. Also, when technical progress is such to disproportionately replace middle-skill jobs, the local distribution of skill will exhibit “fat-tails”, where the proportion of both highly skilled and low-skilled workers increases. These predictions are consistent with recent existing evidence.
    Keywords: share-altering technologies, local skill distribution, local wage premium.
    JEL: O33 R12 R23 J31
    Date: 2011–11
  34. By: Guglielmo Barone (Bank of Italy); Gaia Narciso (Department of Economics, Trinity College Dublin)
    Abstract: Organized crime is a worldwide, widespread phenomenon, which affects developing as well as developed countries, and entails deep economic and social consequences. The purpose of this study is to enhance our understanding of organized crime activities. By using an innovative data set on Sicilian mafia activity available at municipality level, we test whether firms located in municipalities with mafia-related crimes obtain more public subsidies. In order to deal with the endogeneity of the relationship, we explore the origins of mafia. We instrument current mafia activity with exogenous historical and geographical shifters of land productivity, i.e. rainfall in the XIX century and geographical features at municipality level. We provide evidence that the presence of mafia affects the allocation of public transfers: municipalities with mafia activity receive larger public funding. The estimated impact of mafia is also economically relevant and equals one standard deviation of the dependent variable. According to our estimates the presence of mafia increases the total amounts of funds by about 35% on average. A series of robustness checks confirms the above findings.
    Keywords: organized crime, public transfers
    JEL: H4 K4 O17
    Date: 2011–12
  35. By: Ortega, Javier
    Abstract: Using the Public Use Microdata Files of the 2001 and 2006 Canadian Censuses, we study the determinants of the assimilation of language minorities into the city majority language. We show that official minority members (i.e. francophones in English-speaking cities and anglophones in French-speaking cities) assimilate less than the "allophones" (the individuals with a mother tongue other than English or French), and that immigrants generally assimilate less than natives. In addition, the language composition of cities is shown to be an important determinant of assimilation both for allophones and for official minorities. Finally, we show that assimilation into French in French-majority cities is lower than assimilation into English in English-majority cities even when controlling for the language composition of the cities and including a rich set of language dummmies.
    Keywords: immigration; assimilation; language policies; minorities
    JEL: F22 J15
    Date: 2011–12
  36. By: Iversen, Vegard Iversen (University of Manchester); Torsvik, Gaute (Department of Economics, University of Bergen)
    Abstract: Abstract: Workplace referrals may resolve incentive problems that arise due to incomplete contracts. We use an in-depth primary data set covering low- and unskilled migrants from Western Uttar Pradesh (India), to examine this and alternative explanations for referral-based recruitment. We find little evidence of referral screening for unobservable worker traits, but some support for a hypothesis of referral as a mechanism to enforce workforce discipline. Two observations back this conjecture: the high prevalence of strong kinship ties between referees and new recruits and that those who recruit are in more ‘prestigious’ jobs and therefore have higher stakes vis-à-vis their employer. These main findings are exposed to robustness checks to rule out rival explanations: that entry through a workplace insider merely reflects privileged access to job vacancy information; that workplace clustering results from preferences for working together or that the higher prevalence of referral for very young migrants that we observe may reflect that referral has an insurance dimension.
    Keywords: Work Migration; Social Networks; Screening; Moral Hazard
    JEL: J24 J61 R23 Z13
    Date: 2011–12–15
  37. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Elhorst (2010) shows how the recent publication of LeSage and Pace (2009) in his expression “raises the bar” for our fitting of spatial econometrics models. By extending the family of models that deserve attention, Elhorst reveals the need to explore how they might be fitted, and discusses some alternatives. This paper attempts to take up this challenge with respect to implementation in the R spdep package for the maximum likelihood case, using a smaller data set to see whether earlier conclusions would be changed when newer techniques are used, and two larger data sets to examine model fitting issues.
    Keywords: Models; Econometrics;
    JEL: C13 C21 C87
    Date: 2011–10–15
  38. By: Kramarz, Francis (Center for Research in Economics and Statistics (CREST), CEPR, IZA, IFAU); Nordström Skans, Oskar (Uppsala Center for Labor Studies)
    Abstract: The conditions under which young workers find their first real post-graduation jobs are both very important for the young’s future careers and insufficiently known given their public policy implications. To study these conditions, and in particular the role played by networks, we use a Swedish population-wide linked employer-employee data set of graduates from all levels of schooling which includes detailed information on family ties, neighborhoods, schools, and class composition over a period covering high as well as low unemployment years. We find that strong social ties (parents) are an important determinant of where young workers find their first job. This remarkably robust effect is estimated controlling for all confounding factors related to time, location, education, occupation, and the interaction of these. The effect is larger if the graduate’s position is “weak” (low education) or during high unemployment years, a pattern which does not emerge when analyzing the role of weak ties (neighbors or friends as measured using classmates and their parents). On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (e.g. by tenure or wage). We find no evidence of substitution in recruitment over time and fields induced by “family ties hires”. However, we do find that, just after their child is hired in their plant, parents experience a sharp drop in their wage growth. Overall, our results show that strong (family) ties are more important in the job finding process of young workers in weak positions than those weak ties usually measured in the literature (neighbors, in particular), suggesting that labor market experience and education are essential conditions for weak ties to be strong.
    Keywords: Weak ties; social networks; youth employment
    JEL: J24 J62 J64
    Date: 2011–10–27
  39. By: Grönqvist, Hans (Stockholm University); Hall, Caroline (Institute for Labour Market Policy Evaluation)
    Abstract: This paper studies effects of education policy on early fertility. We study a major educational reform in Sweden in which vocational tracks in upper secondary school were prolonged from two to three years and the curricula were made more academic. Our identification strategy takes advantage of cross-regional and cross-time variation in the implementation of a pilot scheme preceding the reform in which several municipalities evaluated the new policy. The empirical analysis draws on rich population micro data. We find that women who enrolled in the new program were significantly less likely to give birth early in life and that this effect is driven by women with higher opportunity costs of child rearing. There is however no statistically significant effect on men’s fertility decisions. Our results suggest that the social benefits of changes in education policy may extend beyond those usually claimed.
    Keywords: Schooling reform; teenage childbearing; fertility
    JEL: I20 J13
    Date: 2011–12–15
  40. By: Santiago Carbó-Valverde; Francisco Rodríguez Fernández; Richard J. Rosen
    Abstract: Covered bonds and mortgage-backed securities both allow mortgages to be financed with duration-matched bonds. Given the problems in the MBS market during the financial crisis, some suggest that covered bonds might be a substitute for MBS. We examine the use of covered bonds and MBS in the U.S. and Europe, finding that the two are used for different purposes. Covered bonds are used more to increase liquidity than are MBS. MBS are more often used in ways consistent with exploiting some kinds of agency problems.
    Keywords: Bonds ; Mortgage-backed securities
    Date: 2011
  41. By: Pyle, William (BOFIT); Schoors, Koen (BOFIT)
    Abstract: Russia’s tremendous inter-regional variation in the pace of industrial land rights reform has meant that geography has helped determine the current tenure status of firms’ production plots as much as any individual firm characteristics. By exploiting both this difference in the pace with which land reform has been carried out across Russia’s federal subjects and a unique micro-level dataset, we present evidence strongly consistent with the proposition that more secure rights to land facilitate access to external financing. This finding is confirmed by other evidence from the survey that points to private land serving as an important source of collateral for Russian lenders and borrowers.
    Keywords: industrial land; property rights; Russia; collateral
    JEL: O16 P25 P31 R14 R52
    Date: 2011–12–15
  42. By: Abdurrahman Aydemir (Sabanci University); Murat G. Kirdar (Middle East Technical University)
    Abstract: This paper examines the employment effects of an increase in labor supply using the politically-driven exodus of ethnic Turks from Bulgaria into Turkey in 1989. The strong involvement of the Turkish state in the settlement of earlier waves of repatriates provides us a strong source of exogenous variation in the 1989 immigrant shock across locations. Using a potential sample of 613 cities and towns in Turkey with variable treatment intensity - in some locations the change in the labor force is almost 10 percent - this analysis places much attention on constructing a matched sample that is well balanced in terms of covariate distributions of the treatment and comparison groups, including matching based on an estimated propensity score. We find a positive effect of repatriates on the unemployment of non-repatriates. In fact, in certain regions, a 10-percentage-point increase in the share of repatriates in the labor force increases the unemployment rate of natives by 4 percentage points. When the analysis is done according to skill groups, we find that the impact is the strongest on the young and on non-repatriates with similar educational attainment.
    Keywords: Labor Force and Employment, Immigrant Workers, Quasi experiments
    JEL: J21 J61
    Date: 2011–12
  43. By: Tripe, David; Xia, Bingru; Roberts, Leigh
    Abstract: Retail mortgage rate data for the last 13 years in New Zealand indicates that implied forward mortgage rates have only limited power to predict later spot mortgage rates. The low correlation of the forward rates and the future spot rates may in part arise from thin futures and forward markets in interest rates in New Zealand for anything longer than short term contracts. While the pattern of mortgage yield curves has varied substantially over those 13 years, the accumulated or future value of a putative deposit of one dollar with a bank offering the same term rates as the mortgage rates shows relatively little variation over this period. In the wake of the uncertainties following the global financial crisis, the relatively stable pattern of these accumulated values probably provides the best means of prediction of New Zealand mortgage yield curves, at least in the short term. The framework used for dealing with data in this paper could be applied to yield curves based on further families of interest rates; to exchange rates; to analyses of run-off data, as in cohort and longevity analysis; and for claims payments run-off in insurance, as well as in many other contexts.
    Keywords: implied forward mortgage rates, New Zealand, spot mortgage rates,
    Date: 2011–12–16
  44. By: Wrede, Matthias
    Abstract: Employing a standard matching unemployment model extended by within-labor-market-regions commuting, this paper analyzes the tradeoff between commuting costs and unemployment. Depending on whether commuters are able to bargain for fringe benefits, search may or may not be biased towards distant workplaces and less productive centers. As a consequence, unemployment benefits should be tied to search in high productivity regions. Using German county data, the paper tests some positive predictions that emerge from of the model. In particular, it confirms that increasing labor market tightness reduces the willingness to out-commute. --
    Keywords: unemployment,matching,commuting,search,labor market policy
    JEL: R12 R13 R14 H22
    Date: 2011

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