nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒03‒23
43 papers chosen by
Steve Ross
University of Connecticut

  1. The Impact of Chicago’s Small High School Initiative By Lisa Barrow; Amy Claessens; Diane Whitmore Schanzenbach
  2. The Great Recession and Nonmetropolitan America By Rickman, Dan S.; Guettabi, Mouhcine
  3. The regional pattern of the U.S. house price bubble - An application of SPC to city level data By Freese, Julia
  4. Optimal Transportation Network in a Closed City under Residential and Absentee Land Ownerships By Yuichiro Yoshida; Abu Nur Rashed Ahmed
  5. U.S. State and Local Fiscal Policies and Nonmetropolitan Area Economic Performance: A Spatial Equilibrium Analysis By Yu, Yihua; Rickman, Dan S.
  6. Evaluation of the Urban Green Infrastructure using Landscape Modules, GIS and a Population Survey: Linking Environmental with Social Aspects in Studying and Managing Urban Forests By Gonzalez-Duque, Jose Antonio; Panagopoulos, Thomas
  7. Top Team Demographics, Innovation and Business Performance: Findings from English Firms and Cities 2008-9 By Max Nathan
  8. Regional Variation of Returns to Education By Backman, Mikaela
  9. The quest for cost-efficient local government in New England: what role for regional consolidation? By Yolanda K. Kodrzycki
  10. Urban-to-Rural Population Growth Linkages: Evidence from OECD TL3 Regions By Paolo Veneri; Vicente Ruiz
  11. A Spatial Approach to Identifying Agglomeration Determinants By MORI Tomoya; Tony E. SMITH
  12. The Relationship between the Housing & Labor Market Crises and Doubling-Up: An MSA-Level Analysis, 2005-2010 By Rogers, William H.; Winkler, Anne E.
  13. House prices, expectations, and time-varying fundamentals By Paolo Gelain; Kevin J. Lansing
  14. Long-Term Effects of Preschooling on Educational Attainments By Hideo Akabayashi; Ryuichi Tanaka
  15. "Mixed oligopoly in education" By Cremer, Helmuth; Maldonado, Dario
  16. Endogenous Structure of Cities: Trade, Commuting, Communication By Sidorov Alexander
  17. The subprime crisis in suburbia: exploring the links between foreclosures and suburban poverty By Chris Schildt; Naomi Cytron; Elizabeth Kneebone; Carolina Reid
  18. Road Infrastructure and Enterprise Dynamics in Ethiopia By Admasu Shiferaw; Måns Söderbom; Eyersusalem Siba; Getnet Alemu
  19. Returns to Communication in Specialised and Diversified US Cities By Suzanne Kok
  20. Pure Ethnic Gaps in Educational Attainment and School to Work Transitions: When Do They Arise? By Baert, Stijn; Cockx, Bart
  21. “Decomposing the Rural-Urban Differential in Student Achievement in Colombia Using PISA Microdata” By Raul Ramos; Juan Carlos Duque; Sandra Nieto
  22. Household leveraging and deleveraging By Alejandro Justiniano; Giorgio Primiceri; Andrea Tambalotti
  23. Real Wages, Amenities and the Adjustment of Working Hours Across Regional Labour Markets By Teresa Schlüter
  24. A Probabilistic Modeling Approach to the Detection of Industrial Agglomerations By MORI Tomoya; Tony E. SMITH
  25. Comparing Least-Squares Value-Added Analysis and Student Growth Percentile Analysis for Evaluating Student Progress and Estimating School Effects By Brendan Houng; Moshe Justman
  26. Political determinants and impact analysis of using a cable system as a complement to an urban transport system By Escobar-Garcia, Diego; Garcia-Orozco, Francisco; Cadena-Gaitan, Carlos
  27. Assessment of efficiency in basic and secondary education in Tunisia, a regional analysis By António Afonso,; Mohamed Ayadi,; Sourour Ramzi,
  28. The Effects of School Libraries on Language Skills: Evidence from a Randomized Controlled Trial in India By Borkum, Evan; He, Fang; Linden, Leigh L.
  29. An Equilibrium Search Model of the Labor Market Entry of Second-Generation Immigrants and Ethnic Danes By Datta Gupta, Nabanita; Kromann, Lene
  30. Summarizing large spatial datasets: Spatial principal components and spatial canonical correlation By Bhupathiraju, Samyukta; Verspagen, Bart; Ziesemer, Thomas
  31. Modelling Migration and Regional Labour Markets: An Application of the New Economic Geography Model RHOMOLO By Andries Brandsma; d'Artis Kancs; Damiaan Persyn
  32. Where the Streets Have a Name: Income Comparisons in the US By Abel Brodeur; Sarah Flèche
  33. Minimum Wages and Regional Disparity: An analysis on the evolution of price-adjusted minimum wages and their effects on firm profitability (Japanese) By MORIKAWA Masayuki
  34. Human capital in the inner city By Dionissi Aliprantis
  35. Regional systems of innovation in the Arab region By Nour, Samia Satti Osman Mohamed
  36. The Impact of City Contracting Set-Asides on Black Self-Employment and Employment By Aaron K. Chatterji; Kenneth Y. Chay; Robert W. Fairlie
  37. Entrepreneurship of the Left-Behind By Giulietti, Corrado; Wahba, Jackline; Zimmermann, Klaus F.
  38. Is There A Real Estate Bubble in Switzerland? By Diego Ardila; Peter Cauwels; Dorsa Sanadgol; Didier Sornette
  39. Explaining the Patenting Propensity: A Regional Analysis using EPO-OECD Data By Cozza, Claudio; Schettino, Francesco
  40. Do public pension obligations affect state funding costs? By Jean Burson; John Carlson; O. Emre Ergungor; Patricia Waiwood
  41. Disentangling the relationship between nonprofit and social capital: the role of social cooperatives and social welfare associations in the development of networks of strong and weak ties By Giacomo, Degli Antoni; Fabio, Sabatini
  42. How Immigration May Affect U.S. Native Entrepreneurship: Theoretical Building Blocks and Preliminary Results By Harriet Orcutt Duleep; David Jaeger; Mark C. Regets
  43. A Regional Input-Output Model For Izmir By Osman Aydogus; Cagacan Deger; Elif Tunali Caliskan; Gülcin Gürel

  1. By: Lisa Barrow; Amy Claessens; Diane Whitmore Schanzenbach
    Abstract: This project examines the effects of the introduction of new small high schools on student performance in the Chicago Public School (CPS) district. Specifically, we investigate whether students attending small high schools have better graduation/enrollment rates and achievement than similar students who attend regular CPS high schools. We show that students who choose to attend a small school are more disadvantaged on average. To address the selection problem, we use an instrumental variables strategy and compare students who live in the same neighborhoods but differ in their residential proximity to a small school. In this approach, one student is more likely to sign up for a small school than another statistically identical student because the small school is located closer to the student’s house and therefore the “cost” of attending the school is lower. We find that small schools students are substantially more likely to persist in school and eventually graduate. Nonetheless, there is no positive impact on student achievement as measured by test scores. The finding of no test score improvement but a strong improvement in school attainment is consistent with a growing literature suggesting that interventions aimed at older children are more effective at improving their non-cognitive skills than their cognitive skills.
    JEL: I21 I24
    Date: 2013–03
  2. By: Rickman, Dan S.; Guettabi, Mouhcine
    Abstract: The influence of the housing market bubble on U.S. business cycle dynamics during the previous decade has been well-documented. Yet, little if anything is known about how nonmetropolitan areas fared during the period. This study examines the association of regional housing market bubbles with relative nonmetropolitan economic performance during the business cycle phases of the decade. To better infer causality the study makes extensive use of exogenous measures of asymmetric labor demand shocks. Among the primary findings, the study establishes the important role of natural amenity attractivness in regional housing market cycles and regional employment population growth dynamics.
    Keywords: Great Recession; Housing Market Bubble; Natural Amenities; Nonmetropolitan
    JEL: R11 R12 R21 R23 R31
    Date: 2013–03–03
  3. By: Freese, Julia (Helmut Schmidt University, Hamburg)
    Abstract: The recent U.S. house price bubble and the subsequent deep financial crisis have renewed the interest in reliable identification methods for asset price bubbles. While there is a growing number of studies focussing on the detection of U.S. regional bubbles, estimations of the likely starting points in different local U.S. markets are still rare. Using regional data from 1990 to 2010 methods of Statistical Process Control (SPC) are used to test for house price bubbles in 17 major U.S. cities. Based on the EWMA control chart we also present estimations of the likely starting point of the regional bubbles. As a result, we find indications of house price bubbles in all 17 considered cities. Interestingly enough, the recent bubble was not a homogeneous event since regional starting points range from 1996 to 2002.
    Keywords: statistical process control; real estate; bubble; regional U.S. house prices
    JEL: C32 E44 R11
    Date: 2013–01–01
  4. By: Yuichiro Yoshida (National Graduate Institute for Policy Studies); Abu Nur Rashed Ahmed (National Graduate Institute for Policy Studies)
    Abstract: This paper investigates the optimality condition of transport network development in a closed city with residents’ and absentee land ownerships. We set up an urban land use model in which, taking prices and characteristics of transport network as given, households that are identical in their preferences and endowments maximize utility by choosing residential location, lot size, and travel modes. Social planner then optimizes with respect to the characteristics of transportation network so as to maximize the level of utility in the spatial equilibrium. The key findings of this paper include that under resident landlord case the general optimality condition of the transport network improvement is such that the marginal cost of improvement is equal to the marginal increase in the aggregated differential land rent evaluated at current level of land rent.
    Date: 2013–03
  5. By: Yu, Yihua; Rickman, Dan S.
    Abstract: Faced with declining economic bases, many nonmetropolitan areas increasingly have become concerned about their future economic viability. A crucial dimension of this concern is the balancing of the need to be cost-competitive in terms of lower taxes against the need for provision of valued government services. Using a spatial equilibrium framework, this study econometrically examines the nexus between U.S. state and local fiscal policies and nonmetropolitan county growth in earnings and housing rents during the 1990s. The results suggest that state and local fiscal characteristics were important location determinants. Some characteristics could be clearly identified as having dominant firm profit effects while numerous others were identified as having household amenity effects. In addition, fiscal policies appeared to be more important for economic growth of nonmetropolitan counties which were remote from metropolitan areas than they were for counties adjacent to metropolitan areas.
    Keywords: Regional Fiscal Policies; Rural Development; Spatial Equilibrium
    JEL: H30 R51 R58
    Date: 2013–03–12
  6. By: Gonzalez-Duque, Jose Antonio (School of Engineering of Huelva); Panagopoulos, Thomas (Research Centre for Spatial and Organizational Dynamics)
    Abstract: Modern cities have to reconcile the needs of the citizens for green areas considering the evolutionary trends of the city, especially in terms of growth and the required transformation in modern times. The present study attempts to analyze and evaluate the amount and distribution of the existing urban green space and the requirements of those green areas by the public. The green infrastructure of the city of Faro was evaluated with three methods: landscape assessment using modules, spatial assessment using GIS and social assessment using an urban population survey. This research provided indicators and thresholds to be included by policy makers in local regulations about green infrastructure of the city of Faro.
    Keywords: Cityscape; Urban Green Network; Evaluation of Green Areas; Urban Forestry
    JEL: Q28 Z13
    Date: 2013–03–19
  7. By: Max Nathan
    Abstract: High levels of net migration to the UK have contributed to growing cultural diversity, and researchers are turning their attention to the long-term effects of diversity on productivity. Yet little is known about these issues. This paper asks: what are the links between the composition of firms' top teams and business performance? What role do ethnic diversity and co-ethnic networks play? And do cities amplify or dampen these channels? I explore using a rich dataset of over 6,000 English firms. Owners, partners and directors set firms' strategic direction. Top team demography might generate production externalities through diversity (a wider range of ideas/ experiences, helping problem solving) and/or 'sameness' (via specialist knowledge or better access to international markets). These channels may be balanced by internal downsides (lower trust) and external barriers (discrimination), so that overall effects on business performance are unclear. In addition, urban locations (particularly big cities) may amplify any demographics-performance effects. I create a repeat cross-section of firms from the RDA National Business Survey. I construct measures of diversity and sameness across ethnicity and gender 'bases', alongside information on revenues, product and process innovation. I then regress these measures of business performance on top team demographics, plus firm level controls, area, year and detailed industry fixed effects. My results suggest a non-linear link between diversity and business performance, which is net positive for process innovation and net negative for turnover. Further tests on diverse and minority/female-headed firms find positive links for diverse top teams, negative for minority and female-only top teams. This implies that while diversity has internal and external benefits, penalties from being 'too diverse' probably result from external constraints. Further tests for intervening effects of capital cities, metropolitan hierarchies and urban form find some evidence of amplifying and dampening effects - which are generally stronger in London and larger cities.
    Keywords: Cities, innovation, entrepreneurship, cultural diversity, migration, gender
    JEL: J61 L21 M13 O11 O31 R23
    Date: 2013–03
  8. By: Backman, Mikaela (Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics (CEnSE))
    Abstract: Returns to education are mainly influenced by the characteristics of the individual. However, returns are also likely to depend on location characteristics. Thus, there are different location premiums for educational attainment. This paper analyse the regional variation of returns to education where Swedish municipal markets are divided into four categories based on size and commuting patterns. Through the obtained results, the often-assumed hypothesis of equal returns to education for all regions in a country can be rejected. Highest returns to education are found in municipalities in metropolitan functional regions and the lowest in peripheral municipalities in small functional regions.
    Keywords: Returns to education; regional attributes; fixed-effects model
    JEL: H52 I21 I22 J61 R11
    Date: 2013–03–15
  9. By: Yolanda K. Kodrzycki
    Abstract: In the aftermath of the Great Recession, many local governments have experienced significant financial strain. Local governments’ financial challenges are likely to continue in the foreseeable future, as federal deficit-reducing measures trigger cuts in state and local aid and as all levels of government struggle to fund their medical and retirement obligations. In an effort to maintain service provision without significant tax increases, many cities and towns will be forced to consider a variety of cost-cutting measures, including joint service provision with other localities. ; This research examines the potential long term savings that could be realized through greater regional consolidation of select local government services, specifically emergency call handling and dispatch, public health, and high-level government administrative services. It focuses especially on the expected long term savings in the New England states, with specific estimates for Massachusetts and Connecticut. ; The report finds that regional service-sharing can be an effective means to achieve savings, particularly for services that rely on high levels of technology, capital, or specialized expertise. The author recommends that the state consider playing a stronger role in encouraging local regionalization through measures such as instituting quality standards and using funding to promote and facilitate consolidation.
    Keywords: Local government ; Local government - New England ; Local government - Connecticut ; Local finance ; Local finance - Massachusetts ; Local finance - New England ; Local finance - Connecticut ; Local government - Massachusetts ; Municipal finance ; Municipal finance - Massachusetts ; Municipal finance - New England ; Municipal finance - Connecticut
    Date: 2013
  10. By: Paolo Veneri; Vicente Ruiz
    Abstract: The objective of this paper is to better understand how the population growth rates of rural regions are affected by their closeness to urban regions and by the economic performance of the latter. By means of a cross-sectional analysis of OECD TL3 regions, it identifies the growth spillover effects from the net effect of distance to non-rural places. Distance-based measures are used to approximate the extent to which urban and rural areas are integrated in relational terms. Results shows that positive growth spillovers exist, suggesting that spread effects overcome backwash effects and thus that rural regions benefit from the growth process taking place in urban and intermediate regions. After having controlled for these growth spillovers, the distance from urban and intermediate regions has a negative effect on the population growth rate of rural regions. Nevertheless, both the strength of this effect and the growth spillovers decay with distance. Results further suggest that proximity to urban areas has higher positive influence than to intermediate areas.
    Keywords: growth, linkages, spillovers, urban, rural
    JEL: R11 R12 R58
    Date: 2013–03–13
  11. By: MORI Tomoya; Tony E. SMITH
    Abstract: Typical analyses of industrial agglomerations start with some aggregate measure of the "agglomeration degree" for each industry, and attempt to explain differences in these values across industries by regressing them on sets of industrial attributes. But this aggregation makes it difficult to capture the spatial aspects of individual agglomerations. In the present paper, we develop a more explicit spatial approach to identifying agglomeration determinants by means of a two-stage analysis. First, we detect individual spatial clusters of each industry on a map. We then attempt to explain differences in these cluster patterns between industries by employing an appropriate regression framework. Here, cluster employment sizes are regressed on selected regional attributes for each industry-cluster pair, and significant differences between industries are captured in terms of industry-level interactions with these attributes. This modeling approach is then applied to the three-digit manufacturing industries in Japan.
    Date: 2013–03
  12. By: Rogers, William H. (University of Missouri-St. Louis); Winkler, Anne E. (University of Missouri-St. Louis)
    Abstract: It is now well-established that the U.S. housing market crisis preceded the labor market crisis and that, in the wake of these crises, doubling-up and cohabitation increased and homeownership fell. What is less clear is what happened at the subnational level. This study reports on: 1) how the length, severity and relative timing of both the labor market and housing crises varied by MSA; and 2) the association between the timing of the labor market and housing crises and changes in homeownership and doubling-up at the MSA level. The analysis is conducted using data on 353 MSAs, with a focus on 12 MSAs, for the period 2005 (pre-crisis) through 2010/2011. MSAs are categorized into those where the housing market declined first, those where the labor market declined first, and those where the events were concurrent. The analysis reveals that: 1) in the majority of MSAs, the labor market declined first, contrary to the national pattern and the experience of the vast majority of large MSAs; 2) there is a clear relationship between greater regional housing distress and falling homeownership rates; and 3) somewhat surprisingly, the association between changes in doubling-up and these crises are fairly weak at the MSA level.
    Keywords: labor market, housing market, foreclosures, household formation
    JEL: R23 J12
    Date: 2013–03
  13. By: Paolo Gelain; Kevin J. Lansing
    Abstract: We investigate the behavior of the equilibrium price-rent ratio for housing in a standard asset pricing model. We allow for time-varying risk aversion (via external habit formation) and time-varying persistence and volatility in the stochastic process for rent growth, consistent with U.S. data for the period 1960 to 2011. Under fully-rational expectations, the model significantly underpredicts the volatility of the U.S. price-rent ratio for reasonable levels of risk aversion. We demonstrate that the model can approximately match the volatility of the price-rent ratio in the data if near-rational agents continually update their estimates for the mean, persistence and volatility of fundamental rent growth using only recent data (i.e., the past 4 years), or if agents employ a simple moving-average forecast rule that places a large weight on the most recent observation. These two versions of the model can be distinguished by their predictions for the correlation between expected future returns on housing and the price-rent ratio. Only the moving-average model predicts a positive correlation such that agents tend to expect higher future returns when house prices are high relative to fundamentals–a feature that is consistent with survey evidence on the expectations of real-world housing investors.
    Keywords: Asset pricing ; Housing - Prices
    Date: 2013
  14. By: Hideo Akabayashi (Keio University); Ryuichi Tanaka (National Graduate Institute for Policy Studies)
    Abstract: Whether universal preschool education can eliminate the achievement gap among children in the long term has been debated in the United States and elsewhere. This paper offers new evidence from the experience of massive preschool education expansion in Japan. Using prefecture-level panel data, we estimate the effects of preschooling expansion on two measures of long-term educational achievement: high school and college advancement rates. We find that the expansion of both kindergarten and nursery schools have a significant positive impact on high school and college advancement rates, and the effect of attendance in nursery school is stronger than that in kindergarten.
    Date: 2013–02
  15. By: Cremer, Helmuth (TSE, IDEI); Maldonado, Dario (University Bogota)
    Abstract: This paper studies oligopolistic competition in education markets when schools can be private and public and when the quality of education depends on "peer group"effects. In the first stage of our game schools set their quality and in the second stage they fix their tuition fees. We examine how the (subgame perfect Nash) equilibrium allocation (qualities, tuition fees and welfare) is affected by the presence of public schools and by their relative position in the quality range. When there are no peer group effects, efficiency is achieved when (at least) all but one school are public. In particular in the two school case, the impact of a public school is spectacular as we go from a setting of extreme differentiation to an efficient allocation. However, in the three school case, a single public school will lower welfare compared to the private equilibrium. We then introduce a peer group effect which, for any given school is determined by its student with the highest ability. These PGE do have a significant impact on the results. The mixed equilibrium is now never efficient. However, welfare continues to be improved if all but one school are public. Overall, the presence of PGE reduces the effectiveness of public schools as regulatory tool in an otherwise private education sector.
    Keywords: Education, peer-group effects, mixed duopoly
    Date: 2013–02
  16. By: Sidorov Alexander
    Abstract: The purpose of paper is to investigate how the interplay of trade, commuting and communication costs shapes economy at both inter-regional and intra-urban level. Specifically, we study how trade affects the internal structure of cities and how decentralizing the production and consumption of goods in secondary employment centers allows firms located in a large city to maintain their predominance. The feature of approach is using of two-dimensional city pattern instead of the “long narrow city” model.
    JEL: F12 F22 R12 R14
    Date: 2013–11–03
  17. By: Chris Schildt; Naomi Cytron; Elizabeth Kneebone; Carolina Reid
    Abstract: In this brief, we provide an overview of patterns of subprime lending, as well as trends in foreclosures and REOs, in suburban communities compared to inner-cities. We also explore the relationship between foreclosures in suburban areas and the increased suburbanization of poverty. We find that the vast majority of foreclosures –nearly three out of four (73.1 percent)—have been in suburban areas, and that suburban neighborhoods with higher rates of poverty are more likely to experience higher foreclosure rates. This is of concern because the mechanisms for addressing the challenges associated with concentrated foreclosures can be more difficult to implement in suburban areas; suburbs may have smaller local governments, fewer nonprofits, and a more dispersed urban form, making it difficult for cities or nonprofits to administer programs or for residents to access them. Because the distribution of foreclosed homes has significant implications for the long-term stability of suburban neighborhoods, increased resources and attention should be devoted to developing foreclosure responses that take into account the capacity and access challenges that are unique to suburban neighborhoods.
    Keywords: Subprime mortgage ; Foreclosure ; Poverty ; Cities and towns
    Date: 2013
  18. By: Admasu Shiferaw (Department of Economics, The College of William and Mary); Måns Söderbom (Economics Department, University of Gothenburg, Sweden); Eyersusalem Siba (Economics Department, University of Gothenburg, Sweden); Getnet Alemu (College of Development Studies, Addis Ababa University, Ethiopia)
    Abstract: This paper investigates firm level responses to a large scale public investment program on road infrastructure in Ethiopia during 1997 to 2010. Firms' location choices and average start-up size are examined by combining town level panel data on road accessibility with a panel of manufacturing firms for the period 1996 to 2009. We find econometric results showing that better road access increases a town's attractiveness for manufacturing firms. While towns with initially large number of firms continue to attract more firms, there has been a tendency toward convergence in the distribution of firms, reducing their geographic concentration. Average startup size in isolated locations is also smaller relative to firms entering well connected markets in terms of road access. We conclude that improved road infrastructure has a favorable impact on the entry patterns and structure of the manufacturing sector in Ethiopia.
    Keywords: Road infrastructure, Firm Entry, Location Choice, Startup-Size, Ethiopian Manufacturing
    Date: 2013–03–10
  19. By: Suzanne Kok
    Abstract: This CPB Discussion Paper documents and interprets the significance of communication for individual wages within cities with a diversified or specialised industrial structure. Diversified cities house firms which are optimizing their production process by learning from a wide variety of firms. Specialised cities house firms benefiting from the co-agglomeration of similar firms. We find substantial individual wage returns to the performance of communication job tasks in both specialised and diversified US cities in 2009. Communication seems to be less important for the production processes of firms in specialised cities as it is valued less in these cities than in diversified cities. The results are robust to a variety of specifications and other explanations, such as unobserved ability and variation in returns to communication across skill levels. Our results indicate that there is no one-type-fits-all advantage of city environments.
    JEL: J31 R19 D83
    Date: 2013–03
  20. By: Baert, Stijn (Ghent University); Cockx, Bart (Ghent University)
    Abstract: This article decomposes the observed gaps in educational attainment and school-to-work transitions between grandchildren of natives and immigrants in Belgium into (i) differences in observed family endowments and (ii) a residual "pure ethnic gap". It innovates by explicitly taking delays in educational attainment into account, by identifying the moments at which the pure ethnic gaps arise, by disentangling the decision to continue schooling at the end of a school year from the achievement within a particular grade, and by integrating the language spoken at home among observed family endowments. The pure ethnic gap in educational attainment is found to be small if delays are neglected, but substantial if not and for school-to-work transitions. It is shown that more than 20% of the pure ethnic gap in graduating from secondary school without delay originates in tenth grade. Language usage explains only part of the gap in school-to-work transitions for low educated.
    Keywords: dynamic discrete choice, dynamic selection bias, educational attainment, school-to-work transitions, ethnic minorities, discrimination
    JEL: C35 J15 J70
    Date: 2013–03
  21. By: Raul Ramos (Faculty of Economics, University of Barcelona); Juan Carlos Duque (RiSE-group, Department of Economics, EAFIT University); Sandra Nieto (Faculty of Economics, University of Barcelona)
    Abstract: Despite the large number of studies that draw on Programme for International Student Assessment (PISA) microdata in their analyses of the determinants of educational outcomes, no more than a few consider the relevance of geographical location. In going some way to rectify this, our paper examines the differences in educational outcomes between students attending schools in rural areas and those enrolled in urban schools. We use microdata from the 2006 and 2009 PISA survey waves for Colombia. The Colombian case is particularly interesting in this regard due to the structural changes suffered by the country in recent years, both in terms of its political stability and of the educational reform measures introduced. Our descriptive analysis of the data shows that the educational outcomes of rural students are worse than those of urban students. In order to identify the factors underpinning this differential, we use the Oaxaca-Blinder decomposition and then exploit the time variation in the data using the methodology proposed by Juhn-Murphy-Pierce. Our results show that most of the differential is attributable to family characteristics as opposed to those of the school. From a policy perspective, our evidence supports actions addressed at improving conditions in the family rather than measures of positive discrimination of rural schools.
    Keywords: educational outcomes, rural-urban differences, decomposition methods. JEL classification: J24, I25, R58
    Date: 2013–03
  22. By: Alejandro Justiniano; Giorgio Primiceri; Andrea Tambalotti
    Abstract: U.S. households' debt skyrocketed between 2000 and 2007, but has since been falling. This leveraging and deleveraging cycle cannot be accounted for by the liberalization and subsequent tightening of mortgage credit standards that occurred during the period. We base this conclusion on a quantitative dynamic general equilibrium model calibrated using macroeconomic aggregates and microeconomic data from the Survey of Consumer Finances. From the perspective of the model, the credit cycle is more likely due to factors that impacted house prices more directly, thus affecting the availability of credit through a collateral channel. In either case, the macroeconomic consequences of leveraging and deleveraging are relatively minor because the responses of borrowers and lenders roughly wash out in the aggregate.
    Keywords: Households - Economic aspects ; Debt ; Consumer credit ; Housing - Prices ; Mortgages
    Date: 2013
  23. By: Teresa Schlüter
    Abstract: This article establishes a link between the traditional labour economics and the urban economics literature by analyzing differences in working hours across regional labour market areas in the UK. Using a real wage index reflecting skill adjusted earnings net of quality adjusted house prices in Britain and panel data on working hours the effect of regional real wages on labour supply is assessed. The identification strategy relies on workers who move across 157 labour market areas in Britain and includes individual fixed effects. The main finding is that working hours are significantly higher in labour market areas that offer lower real wages. Decreasing real wages by £1000 results in an increase of working hours of 0.3 %. Real wage differentials can be seen as a proxy for the local amenity level. I can replicate my finding including a set of amenities instead of the real wage index. The effect is mainly due to labour supply decisions of low skilled workers who work significantly longer hours in low real wage areas than high skilled workers. This indicates that low skilled workers are willing to increase their labour supply in order to afford living in high amenity areas.
    Date: 2013–03
  24. By: MORI Tomoya; Tony E. SMITH
    Abstract: Dating from the seminal work of Ellison and Glaeser [7] in 1997, a wealth of evidence for the ubiquity of industrial agglomerations has been published. However, most of these results are based on analyses of single (scalar) indices of agglomeration. Hence, it is not surprising that industries deemed to be similar by such indices can often exhibit very different patterns of agglomeration—with respect to the number, size, and spatial extent of individual agglomerations. The purpose of this paper is thus to propose a more detailed spatial analysis of agglomeration in terms of multiple-cluster patterns, where each cluster represents a (roughly) convex set of contiguous regions within which the density of establishments is relatively uniform. The key idea is to develop a simple probability model of multiple clusters, called cluster schemes, and then to seek a "best" cluster scheme for each industry by employing a standard model-selection criterion. Our ultimate objective is to provide a richer characterization of spatial agglomeration patterns that will allow more meaningful comparisons of these patterns across industries.
    Date: 2013–03
  25. By: Brendan Houng (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Moshe Justman (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Department of Economics, Ben Gurion University, Israel)
    Abstract: This paper compares two functionally different approaches to analyzing standardized test data: least-squares based value-added analysis, geared principally to supporting teacher and school accountability; and Betebenner’s (2009) student growth percentiles, which focuses primarily on tracking individual student progress in a normative context and projecting probable trajectories of future performance. Applying the two methods to Australian standardized numeracy and reading test scores (NAPLAN) in grades 3 to 5 and 7 to 9, we find that although they are used differently, the two methods share key structural elements, and produce similar quantitative indicators of both individual student progress and estimated school effects.
    Keywords: Value-added analysis, student growth percentiles, NAPLAN
    JEL: I21 I28
    Date: 2013–03
  26. By: Escobar-Garcia, Diego (Department of Civil Engineering, National University of Colombia); Garcia-Orozco, Francisco (Department of Civil Engineering, National University of Colombia); Cadena-Gaitan, Carlos (UNU-MERIT/MGSoG)
    Abstract: The construction of cable-propelled systems, fully integrated to urban public transport systems, has become an innovative trend in recent years for some Colombian cities. The most prominent examples include the cities of Medellin and Manizales, where these infrastructures have been built and running for several years. In fact, it should be highlighted that Manizales hosted, during the first half of the 20th century, the longest cable system in the world, which operated for nearly 40 years and was a cornerstone in the development of the region. This historic cable enabled the transportation of large shipments of coffee to the Magdalena River, to be exported across the world. In this paper we provide a thorough assessment of the current cable system in Manizales. We evaluate its costs in a comparative perspective against the impacts generated by the system, via time savings in daily travel. Due to its full integration with the public transport system, we also provide empirical evidence of the related passenger demand variability. Upon the implementation of the first cable system, additional similar projects have been initiated. We provide insights into a cable system designed and being built for recreation, and describe the planning process for the most recent public transport cable system being designed. All these systems are evaluated from the supply-side, measuring accessibility, from the demand-side, modelling the complete urban transport system for the city, and from the political side, describing the determinants of the decisions that ultimately stimulate the implementation of these projects in sustainable mobility. Based on the results obtained, we offer conclusions regarding the actual competitiveness of cable-propelled systems, arguing that they should be considered valid urban passenger transport solutions.
    Keywords: O33, R41, R42
    Date: 2013
  27. By: António Afonso,; Mohamed Ayadi,; Sourour Ramzi,
    Abstract: We evaluate the efficiency of basic and secondary education in 24 governorates of Tunisia during the period 1999-2008 using a non-parametric approach, DEA (Data Envelopment Analysis). We use four inputs: number of teacher per 100 students, number of classes per 100 students, number of schools per million inhabitants and education spending per student, while the output measures include the success rate of baccalaureate exam and the rate of nondoubling in the 9th year. Our results show that there is a positive relationship between school resources and student achievement and performance. Moreover, there was an increase in output efficiency scores in most governorates through the period from 1999 to 2008.
    Keywords: basic and secondary education, efficiency, DEA, Tunisia
    JEL: C14 H52 I21
    Date: 2013–02
  28. By: Borkum, Evan (Mathematica Policy Research); He, Fang (US Government Accountability Office); Linden, Leigh L. (University of Texas at Austin)
    Abstract: We conduct a randomized controlled trial of an Indian school library program. Overall, the program had no impact on students' scores on a language skills test administered after 16 months. The estimates are sufficiently precise to rule out effects larger than 0.053 and 0.037 standard deviations, based on the 95 and 90 percent confidence intervals. This finding is robust across individual competencies and subsets of the sample. The method of treatment, however, does seem to matter – physical libraries have no effect, while visiting librarians actually reduce test scores. We find no impact on test scores in other subjects or attendance rates.
    Keywords: library, randomized controlled trial, education, development
    JEL: I21 I28 O15
    Date: 2013–03
  29. By: Datta Gupta, Nabanita (Aarhus University); Kromann, Lene (CEBR, Copenhagen)
    Abstract: Using a search model for Danish labor market entrants, we are one of the first studies to test whether second‐generation immigrants have the same job‐offer arrival and layoff rates as ethnic Danes have. We contribute to the search literature by incorporating matching as a way to ensure sub‐sample homogeneity. Thus, we match second‐generation immigrants to their ethnic Danish twins on the basis of parental characteristics and informal network quality. There are big differences before matching, but after matching, second‐generation immigrants perform as well or better than their ethnic Dane counterparts do on the labor market, though not with respect to layoffs. This result is mainly driven by the group of high school graduates and those with a primary school education only. Second generation immigrants with vocational education, males in particular, face both significantly lower arrival rates when unemployed and significantly higher layoff rates than those of their ethnic Danish twins.
    Keywords: firm behavior, equilibrium search model, matching, second‐generation immigrants
    JEL: J15 J61 J71
    Date: 2013–02
  30. By: Bhupathiraju, Samyukta (UNU-MERIT/MGSoG); Verspagen, Bart (UNU-MERIT/MGSoG, and Maastricht University); Ziesemer, Thomas (UNU-MERIT/MGSoG, and Maastricht University)
    Abstract: We propose a method for spatial principal components analysis that has two important advantages over the method that Wartenberg (1985) proposed. The first advantage is that, contrary to Wartenberg's method, our method has a clear and exact interpretation: it produces a summary measure (component) that itself has maximum spatial correlation. Second, an easy and intuitive link can be made to canonical correlation analysis. Our spatial canonical correlation analysis produces summary measures of two datasets (e.g., each measuring a different phenomenon), and these summary measures maximize the spatial correlation between themselves. This provides an alternative weighting scheme as compared to spatial principal components analysis. We provide example applications of the methods and show that our variant of spatial canonical correlation analysis may produce rather different results than spatial principal components analysis using Wartenberg's method. We also illustrate how spatial canonical correlation analysis may produce different results than spatial principal components analysis.
    Keywords: spatial principal components analysis, spatial canonical correlation analysis, spatial econometrics, Moran coefficients, spatial concentration
    JEL: R10 R15 C10
    Date: 2013
  31. By: Andries Brandsma; d'Artis Kancs; Damiaan Persyn
    Abstract: The present paper describes the modelling of regional labour markets in the newly developed dynamic spatial general equilibrium model RHOMOLO, where the labour market equilibrium is determined by firms' labour demand, a wage-curve determining unemployment, and inter- regional labour migration. The RHOMOLO model is parameterised by estimating the key structural parameters econometrically. In order to illustrate the potential of the proposed dynamic spatial general equilibrium approach for analysing regionally integrated labour markets, we carry out simulations showing the effects of a reduction in transportation cost, and assess the impact on regional labour markets. Our results confirm that wages and unemployment are by far the most important channels of adjustment to macro-economic and policy shocks in the EU. In contrast, labour migration plays a secondary role in labour market adjustments in the EU. Our results also suggest that the relationship between market access, labour demand and labour supply is non-linear and spatially inter-dependent, which underlines the importance of the proposed dynamic spatial general equilibrium approach.
    Date: 2013
  32. By: Abel Brodeur; Sarah Flèche
    Abstract: This paper analyses how neighbors' income affect agents' well-being using unprecedented data from the BRFSS and the City of Somerville. We conduct a multi-scale approach at the county, ZIP code and street-levels and find that the association between well-being and neighbors' income follows an inverted U-shaped pattern in the size of the area. We find a negative relationship between well-being and neighbors' income in the county of residence, but the opposite at the ZIP code-level. Our results are consistent with the fact that agents enjoy living in a rich ZIP code but also having poor faraway neighbors since they have preferences for high social status. We test explicitly this interpretation by including amenities and the relative rank in the local income distribution in our model. At the street-level, we find a negative association between neighbors' income and self-reported well-being indicating the presence of income comparisons between very close neighbors.
    Keywords: Income comparisons, rank, relative utility, social interactions, social status, well-being
    JEL: C25 D00 J31
    Date: 2013–03
  33. By: MORIKAWA Masayuki
    Abstract: This paper, using prefecture level panel data, empirically analyzes 1) the recent evolution of price-adjusted regional minimum wages and 2) the effects of minimum wages on firm profitability. As a result of rapid increases in minimum wages in the metropolitan areas since 2007, the regional disparity of nominal minimum wages has been widening. However, the disparity of price-adjusted minimum wages has been shrinking. According to the analysis of the effects of minimum wages on profitability using firm level panel data, higher minimum wages reduce firms' profit rate. This negative effect of minimum wages on profitability is pronounced among firms of lower mean wage levels. The results suggest that overinflated minimum wages may adversely affect regional economic activities.
    Date: 2013–03
  34. By: Dionissi Aliprantis
    Abstract: Black males in the United States are exposed to tremendous violence at young ages: In the NLSY97 26 percent report seeing someone shot by age 12, and 43 percent by age 18. This paper studies how this exposure to violence and its associated social isolation affect education and labor market outcomes. I use Elijah Anderson’s ethnographic research on the “code of the street” to guide the specification of a model of human capital accumulation that includes street capital, the skills and knowledge useful for providing personal security in neighborhoods where it is not provided by state institutions. The model is estimated assuming either selection on observables or dynamic selection with permanent unobserved heterogeneity. Counterfactuals from these estimated models indicate that exposure to violence has large effects, decreasing the high school graduation rate between 6.1 and 10.5 percentage points (20 and 35 percent of the high school dropout rate) and hours worked between 3.0 and 4.0 hours per week (0.15 and 0.19 s).
    Keywords: Occupational choice ; Human capital ; Income distribution
    Date: 2013
  35. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT/MGSoG)
    Abstract: This paper employs both the descriptive and comparative approaches and uses the definition of systems of innovation used in the literature to examine the existence, characteristics and implications of the regional systems of innovation in the Arab region. We examine three hypotheses, that the regional systems of innovation exist but are characterized by serious weaknesses in the Arab region compared with other world regions, that the structure of the economy has a significant effect in the performance of innovation systems in the Arab region, and that the poor Arab systems of innovation have serious implications in the Arab region. We explain two common characteristics of Arab regional systems of innovation concerning poor subsystems of education, S&T, R&D and ICT institutions in the Arab region and concentration of R&D activities within public and universities sectors and small contribution of the private sector in R&D activities. We find that the major implications are the poor performance of the Arab region in terms of S&T indicators, competitiveness indicators, technology achievement index and poor integration in the knowledge economy index. Therefore, it is essential for the Arab region to enhance the institutions of higher education, S&T, R&D and ICT to build the Arab regional systems of innovation and to achieve economic development in the Arab region.
    Keywords: Education, S&T, R&D, Systems of innovation, economic structure, Arab region
    JEL: O10 O11 O30
    Date: 2013
  36. By: Aaron K. Chatterji; Kenneth Y. Chay; Robert W. Fairlie
    Abstract: In the 1980s, many U.S. cities initiated programs reserving a proportion of government contracts for minority-owned businesses. The staggered introduction of these set-aside programs is used to estimate their impacts on the self-employment and employment rates of African-American men. Black business ownership rates increased significantly after program initiation, with the black-white gap falling three percentage points. The evidence that the racial gap in employment also fell is less clear as it is depends on assumptions about the continuation of pre-existing trends. The black gains were concentrated in industries heavily affected by set-asides and mostly benefited the better educated.
    JEL: H76 J15 L26
    Date: 2013–03
  37. By: Giulietti, Corrado (IZA); Wahba, Jackline (University of Southampton); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: While there is evidence that return migration promotes entrepreneurship and self-employment of those who migrated, previous studies have not focused on whether migration provides the same benefits to individuals who did not migrate. Using a unique dataset that provides information on both current and return migrants in rural China (RUMiC), we investigate the impact of migration on entrepreneurship among individuals with no migration experience. We explore the self-employment choices of individuals who live in households with return migrants and individuals who live in households that have migrants currently in the city, comparing them with individuals living in non-migrant households. Our methodology allows us to control for the potential endogeneity between the migration and self-employment decisions. The results show that return migration promotes self-employment among household members that have not migrated. However, left-behind individuals are less likely to be self-employed when compared to those living in non-migrant households.
    Keywords: rural to urban migration, RUMiC dataset, self-employment
    JEL: J23 J61 O15
    Date: 2013–03
  38. By: Diego Ardila; Peter Cauwels; Dorsa Sanadgol; Didier Sornette
    Abstract: We have analyzed the risks of possible development of bubbles in the Swiss residential real estate market. The data employed in this work has been collected by, and carefully cleaned from duplicate records through a procedure based on supervised machine learning methods. The study uses the log periodic power law (LPPL) bubble model to analyze the development of asking prices of residential properties in all Swiss districts between 2005 and 2013. The results suggest that there are 11 critical districts that exhibit signatures of bubbles, and seven districts where bubbles have already burst. Despite these strong signatures, it is argued that, based on the current economic environment, a soft landing rather than a severe crash is expected.
    Date: 2013–03
  39. By: Cozza, Claudio; Schettino, Francesco
    Abstract: The aim of this paper is to study empirically the patenting propensity at the European regional level. To do that we use the OECD-REGPAT dataset, that includes patent applications made by European inventors and applicants to EPO in the time-span 1978-2011. Explanatory variables on R&D and human capital are extracted from EUROSTAT and OECD databases. In order to reduce biases we use patent applications by region of the inventor, as its linkage to the territory is stronger than using the region of the applicant. Analyzing the data, we sketch out the existence of a deep uneven distribution both in patent applications and R&D expenditure. Richer regions in terms of GDP – generally those of central-western Europe – show higher level of both private and public R&D expenditure as well as a consistent share of the whole European patent applications in last decades. As a consequence, eastern (and to a minor extent southern) European regions report harmful outcomes in terms of both variables. Thus, following the approach of Cincera (1997, 2005) we explain the determinants of patenting propensity using a regional panel data. Our main results substantially confirm the key role of R&D expenditure on patenting activity: mainly the business-enterprises component, but also the government sector one. Moreover, human capital variables – such as the share of human resources employed in high tech industries, and the number of highly qualified workers in science and technology occupations – show a positive relationship with patenting propensity. On the other side, average enterprise size seems not to play a determinant role on patent applications.
    Keywords: Patents, Intellectual Property Rights, Innovation, EPO, R&D
    JEL: K29 O34 O4
    Date: 2013–03–01
  40. By: Jean Burson; John Carlson; O. Emre Ergungor; Patricia Waiwood
    Abstract: States’ unfunded pension obligations to their current and retired employees have exploded in recent years to levels that are estimated to be between $750 billion and $4.4 trillion. In theory, this massive debt should have implications for states’ ability to meet their financial obligations and a measurable impact on funding costs. Yet, we find no evidence that municipal bond markets are pricing the risks to states’ fiscal health arising from these large obligations.
    Keywords: Pensions ; Local finance
    Date: 2013
  41. By: Giacomo, Degli Antoni; Fabio, Sabatini
    Abstract: We use a unique dataset to study how participation in two specific types of nonprofit organizations, i.e. social welfare associations and social cooperatives, affects individual social capital. A descriptive analysis shows that both the types of organization have a positive impact. The econometric analysis reveals that social welfare associations play a significantly greater role in the development of volunteers’ networks of cooperative relationships, favouring the creation of weak ties which are used to exchange information and advice, and offering the opportunity to establish stronger ties entailing concrete mutual support. Within social cooperatives, workers develop their individual social capital to a greater extent than volunteers.
    Keywords: volunteering, nonprofit organizations, cooperative enterprises, social cooperatives, social capital, social networks
    JEL: L31 L33 P13 Z1
    Date: 2013–03–08
  42. By: Harriet Orcutt Duleep (Thomas Jefferson Program in Public Policy, The College of William and Mary); David Jaeger (Program in Economics, Graduate Center of the City University of New York); Mark C. Regets (National Science Foundation)
    Abstract: This paper describes the theoretical underpinnings and provides empirical evidence for a model that predicts a positive impact of immigration on entrepreneurial activity. Immigrants, we hypothesize, facilitate innovation and entrepreneurship by being willing and able to invest in new skills. At the heart of this theoretical prediction is the observation that human capital not immediately valued in the U.S. labor market is useful for learning new skills. Because immigrants face a lower opportunity cost of investing in new skills or methods, this “transfer” of source-specific skills to the U.S. may lead immigrants to be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants (even if they are not self-employed) may prove to be areas in which entrepreneurship and innovation are easier to accomplish. Our theory offers a unique perspective on the contributions of immigrants to economic development beyond traditional perspectives that focus on low-cost immigrant labor or immigrant entrepreneurship.
    Keywords: immigration, innovation, entrepreneurship, human capital investment, skill transferability, opportunity cost, learning transferability
    JEL: J15 J24 J39 J61 L26
    Date: 2013–03–17
  43. By: Osman Aydogus (Department of Economics, Ege University); Cagacan Deger (Department of Economics, Ege University); Elif Tunali Caliskan (Department of Economics, Ege University); Gülcin Gürel (Department of Economics, Ege University)
    Abstract: Input-output (I-O) tables provide a snapshot of an economy, with details on i) intersectoral exchange of intermediate inputs, ii) components of final demand for sectoral outputs, and iii) components of sectoral value added and production. The tables are generally prepared by national statistics institutes at a national level. Even though their policy and academic value are not refuted, regional tables and regional models are seldom produced. This paper presents a 36 sector regional I-O table, the 2008 IZKA (Izmir Kalkinma Ajansi, Izmir Development Agency) Izmir Table, and a model for the Izmir province of Turkey. Table construction process requires an update of the available Turkish national table. The update of the national table and the construction of the regional model are detailed. A structural analysis of the Izmir province is performed through the constructed table.
    Keywords: Input-output models, planning policy, regional economics
    JEL: C67 C81 O21 R11 R15 R58
    Date: 2013–02

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