nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒09‒26
forty papers chosen by
Steve Ross
University of Connecticut

  1. Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates By Raj Chetty; John N. Friedman; Jonah E. Rockoff
  2. Moving to a Job: The Role of Home Equity, Debt, and Access to Credit By Demyanyk, Yuliya; Hryshko, Dmytro; Luengo-Prado, Maria Jose; Sørensen, Bent E
  3. The Location of the UK Cotton Textiles Industry in 1838: a Quantitative Analysis By Nicholas Crafts; Nikolaus Wolf
  4. Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum By Matthew Collin
  5. Rational Housing Bubble By Bo Zhao
  6. Bridging Education Gender Gaps in Developing Countries: The Role of Female Teachers By Karthik Muralidharan; Ketki Sheth
  7. The impact of a senior high school tuition relief program on poor junior high schoolstudents in rural China By Xinxin Chen; Yaojiang Shi; Hongmei Yi; Linxiu Zhang; Di Mo; James Chu; Prashant Loyalka; Scott Rozelle
  8. Creativity, cities and innovation By Lee, Neil; Rodríguez-Pose, Andrés
  9. Endogenous Scheduling Preferences and Congestion By Mogens Fosgerau; Kenneth Small
  10. Does economic globalization affect regional inequality? A cross-country analysis By Ezcurra, Roberto; Rodríguez-Pose, Andrés
  11. Houses as ATMs? Mortgage Refinancing and Macroeconomic Uncertainty By Hui Chen; Michael Michaux; Nikolai Roussanov
  12. Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance? By Berg, Erlend; Ghatak, Maitreesh; Manjula, R; Rajasekhar, D; Roy, Sanchari
  13. Payment Size, Negative Equity, and Mortgage Default By Andreas Fuster; Paul S. Willen
  14. European migration, national origin and long-term economic development in the US By Rodríguez-Pose, Andrés; von Berlepsch, Viola
  15. Re-Examining the Impact of Housing Wealth and Stock Wealth on Household Spending: Does Persistence in Wealth Changes Matter? By Richard A. Ashley; Guo Li
  16. Land Access and Youth Livelihood Opportunities in Southern Ethiopia By Holden, Stein; Bezu, Sosina
  17. Credit disruptions and the spillover effects between the household and business sectors By Nilavongse, Rachatar
  18. When Strong Ties are Strong: Networks and Youth Labor Market Entry By Kramarz, Francis; Nordström Skans, Oskar
  19. Decomposition of Regional Wage Differences Along the Wage Distribution in Portugal: the Importance of Covariates By Aurora Galego; João Pereira
  20. Asset Management for Sustainable Road Funding By Philippe Crist; Jari Kauppila; José Vassallo; Butch Wlaschin
  21. Do we go shopping downtown or in the `burbs? Why not both? By Sloev, Igor; Thisse, Jacques-François; Ushchev, Philip
  22. Leaving Boys Behind: Gender Disparities in High Academic Achievement By Nicole M. Fortin; Philip Oreopoulos; Shelley Phipps
  23. The Value of Social Networks in Financial Markets By Michela Rancan
  24. Shelter from the Storm: Upgrading Housing Infrastructure in Latin American Slums By Sebastian Galiani; Paul Gertler; Ryan Cooper; Sebastian Martinez; Adam Ross; Raimundo Undurraga
  25. Estimating spatial panel models using unbalanced panels By Gordon Hughes
  26. Better Workers Move to Better Firms: A Simple Test to Identify Sorting By Bartolucci, Cristian; Devicienti, Francesco
  27. Locally owned: Do local business ownership and size matter for local economic well-being? By Anil Rupasingha
  28. Time-To-Plan Lags for Commercial Construction Projects By Jonathan N. Millar; Stephen D. Oliner; Daniel E. Sichel
  29. Geography, Transparency and Institutions By Mayshar, Joram; Moav, Omer; Neeman, Zvika
  30. Productivity Growth, Human Capital, and Technology Spillovers: Nonparametric Evidence for EU Regions By Badinger, Harald; Egger, Peter; von Ehrlich, Maximilian
  31. Peer Groups, Employment Status and Mental Well-being among Older Adults in Ireland By Hudson, Eibhlin; Barrett, Alan
  32. Information Externalities and Intermediaries in Frictional Search Markets By Xianwen Shi; Aloysius Siow
  33. Immigration, Wages, and Education: A Labor Market Equilibrium Structural Model By Joan Llull
  34. State Incentives for Innovation, Star Scientists and Jobs: Evidence from Biotech By Enrico Moretti; Daniel J. Wilson
  35. Social diversity: a look at tourism By Giusti, Antonio; Viviani, Alessandro
  36. Reading to young children: a head-start in life? By Kalb, Guyonne; van Ours, Jan C
  37. South-South migration and the labor market: Evidence from South Africa By Facchini, Giovanni; Mayda, Anna Maria; Mendola, Mariapia
  38. Migration, wages and fiscal competition By Jean Gabszewicz; Ornella Tarola; Skerdilajda Zanaj
  39. Natural disasters and social capital formation: The impact of the Great Hanshin-Awaji earthquake By Eiji Yamamura
  40. Discrimination or Social Networks? Industrial Investment in Colonial India By Gupta, Bishnupriya

  1. By: Raj Chetty; John N. Friedman; Jonah E. Rockoff
    Abstract: Are teachers' impacts on students' test scores ("value-added") a good measure of their quality? One reason this question has sparked debate is disagreement about whether value-added (VA) measures provide unbiased estimates of teachers' causal impacts on student achievement. We test for bias in VA using previously unobserved parent characteristics and a quasi-experimental design based on changes in teaching staff. Using school district and tax records for more than one million children, we find that VA models which control for a student's prior test scores exhibit little bias in forecasting teachers' impacts on student achievement. Although teachers have substantial impacts, differences in teacher quality account for a small fraction of achievement gaps across demographic groups, as more than 85% of the variation in teacher VA is within rather than between schools.
    JEL: H0 H52 H75
    Date: 2013–09
  2. By: Demyanyk, Yuliya; Hryshko, Dmytro; Luengo-Prado, Maria Jose; Sørensen, Bent E
    Abstract: Using credit report data from two of the three major credit bureaus in the United States, we infer with high certainty whether households move to other labor markets defined by metropolitan areas. We estimate how moving patterns relate to labor market conditions, personal credit, and homeownership using panel regressions with fixed effects which control for all constant individual-specific traits. We interpret the patterns through simulations of a dynamic model of consumption, housing, and location choice. We find that homeowners with negative home equity move more than other homeowners, in particular when local unemployment growth is high---overall, negative home equity is not an important barrier to labor mobility.
    Keywords: credit contraint; credit reports; mobility; unemployment
    JEL: D1 E2
    Date: 2013–05
  3. By: Nicholas Crafts (University of Warwick); Nikolaus Wolf (Humboldt University Berlin)
    Abstract: We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects.
    Keywords: agglomeration; cotton textiles; geography; industry location
    JEL: N63 N93 R12
    Date: 2013–09
  4. By: Matthew Collin
    Abstract: This paper examines the relationship between ethnic heterogeneity and the demand for formal land tenure in urban Tanzania. Using a unique census of two highly-fractionalized unplanned settlements in Dar es Salaam, I show that households located near coethnics are significantly less likely to purchase a limited form of land tenure recently offered by the government. I attempt to address one of the chief concerns - endogenous sorting of households - by conditioning on a household’s choice of coethnics neighbors upon arrival in the neighborhood. I also find that coethnic residence predicts lower levels of perceived expropriation risk, but not perceived access to credit nor contribution to local public goods. These results suggest that close-knit ethnic groups may be less likely to accept state-provided goods due to their ability to generate reasonable substitutes, in this case protection from expropriation. The results are robust to different definitions of coethnicity and spatial cut-offs, controls for family ties and religious similarity as well as spatial fixed effects. Finally, the main result is confirmed using a large-scale administrative data-set covering over 20,000 land parcels in the city, exploiting ethnically-unique last names to predict tribal affiliation.
    Keywords: Ethnicity, Land tenure, Tanzania, Unplanned settlements
    JEL: J15 Q15 R23
    Date: 2013
  5. By: Bo Zhao
    Abstract: This paper studies an economy inhabited by overlapping generations of homeowners and investors, with the only difference between the two being that homeowners derive utility from housing services whereas investors do not. Tight collateral constraint limits the borrowing capacity of homeowners and drives the equilibrium interest rate level down to the housing price growth rate, which makes housing attractive as a store of value for investors. As long as the rental market friction is high enough, the investors will hold a positive number of vacant houses in equilibrium. A housing bubble arises in an equilibrium in which investors hold houses for resale purposes only and without the expectation of receiving a dividend either in terms of utility or rent. The model can be applied to China, where the housing bubble can be attributed to the rapid decline in the replacement rate of the pension system.
    JEL: D21 E13 E21 R21
    Date: 2013–08
  6. By: Karthik Muralidharan; Ketki Sheth
    Abstract: Recruiting female teachers is frequently suggested as a policy option for improving girls' education outcomes in developing countries, but there is surprisingly little evidence on the effectiveness of such a policy. We study gender gaps in learning outcomes, and the effectiveness of female teachers in reducing these gaps using a large, representative, annual panel data set on learning outcomes in rural public schools in the Indian state of Andhra Pradesh. We report six main results in this paper. (1) We find a small but significant negative trend in girls' test scores in both math (0.02σ/year) and language (0.01σ/year) as they progress through the public primary school system; (2) Using five years of panel data, school-grade and student gender by grade fixed effects, we find that both male and female teachers are more effective at teaching students of their own gender; (3) However, female teachers are more effective overall, resulting in girls' test scores improving by an additional 0.036σ in years when they are taught by a female teacher, with no adverse effects on boys when they are taught by female teachers; (4) The overall gains from having a female teacher are mainly attributable to their greater effectiveness at improving math test scores than male teachers (especially for girls); (5) We find no effect of having a same-gender teacher on student attendance, suggesting that the mechanism for the impact on learning outcomes is not on the extensive margin of increased school participation, but on the intensive margin of more effective classroom interactions; (6) Finally, the increasing probability of having a male teacher in higher grades can account for around 10-20% of the negative trend we find in girls' test scores as they move to higher grades.
    JEL: I21 J16 O15
    Date: 2013–08
  7. By: Xinxin Chen; Yaojiang Shi; Hongmei Yi; Linxiu Zhang; Di Mo; James Chu; Prashant Loyalka; Scott Rozelle
    Abstract: A significant gap remains between rural and urban students in the rate of admission to senior high school. One reason for this gap may be high tuition and other school fees at the senior high school level. By reducing student expectations of attending high school, high tuition and school fees can reduce student academic performance in junior high school. In this paper we evaluate the impact of a senior high tuition relief program on the test scores of poor, rural seventh grade students in China. We surveyed three counties in Shaanxi Province and exploit the fact that, while the counties are adjacent to one another and share similar characteristics, only one of the three implemented a tuition relief program. Using several alternative estimation strategies, including difference-in-differences (DD), difference-indifference-in-differences (DDD), propensity score matching (PSM) and difference-indifferences matching (DDM), we find that the tuition program has a statistically significant and positive impact on the math scores of seventh grade students. More importantly, this program is shown to have the largest (and only significant) impact on the poorest students.
    Keywords: Tuition relief program, education program evaluation, rural China
    JEL: I22 O12 O15
    Date: 2013
  8. By: Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: The creative industries have long been seen as an innovative sector. More recent research posits that creative occupations are also a fundamental, but overlooked, driver of innovation. Theory also suggests cities are important for both creative industries and occupations, with urban environments helping firms innovate. Yet little empirical work has considered the links between creative industries, occupations, cities and innovation at the firm level. This paper addresses this gap using a sample of over 9,000 UK SMEs. Our results stress that creative industries firms are more likely to introduce original product innovations, but not those learnt from elsewhere. Creative occupations, however, appear a more robust general driver of innovation. We find no support for the hypothesis that urban creative industries firms are particularly innovative. However, creative occupations are used in cities to introduce product innovations learnt elsewhere. The results suggest future work needs to seriously consider the importance of occupations in empirical studies of innovation.
    Keywords: Cities; Creative industries; Creative occupations; Innovation; Learning
    JEL: O31 O38 R11 R58
    Date: 2013–08
  9. By: Mogens Fosgerau (Technical University of Denmark and Centre for Transport Studies, Sweden); Kenneth Small (Department of Economics, University of California-Irvine)
    Abstract: We seek to better understand the scheduling of activities in time through a dynamic model of commuting with congestion, in which workers care solely about leisure and consumption. Implicit preferences for the timing of the commute form endogenously due to concave preferences and temporal agglomeration economies. Equilibrium exists uniquely and is indistinguishable from that of a generalized version of the classical Vickrey bottleneck model, based on exogenous trip-timing preferences; but optimal policies differ: the Vickrey model will under-predict the benefits of congestion pricing, and such pricing may make people better off even without considering the use of revenues.
    Keywords: Urban congestion; Agglomeration; Endogenous preferences; scheduling preferences; Bottleneck
    JEL: D11 R41
    Date: 2013–01
  10. By: Ezcurra, Roberto; Rodríguez-Pose, Andrés
    Abstract: This paper investigates the relationship between economic globalization and regional inequality in a panel of 47 countries over the period 1990-2007, using a measure of globalization that distinguishes the different dimensions of economic integration. The results show that there is a positive and statistically significant association between economic globalization and the magnitude of regional disparities. Countries with a greater degree of economic integration with the rest of the world tend to register higher levels of regional inequality. This finding is robust to the inclusion of additional explanatory variables and to the choice of the specific measure used to quantify the relevance of spatial inequality within the sample countries. Our analysis also reveals that the spatial impact of economic globalization is greater in low- and middle-income countries, whose levels of regional disparities are on average significantly higher than in high-income countries.
    Keywords: Economic globalization; Regional inequality
    JEL: F15 R11 R12
    Date: 2013–07
  11. By: Hui Chen; Michael Michaux; Nikolai Roussanov
    Abstract: We estimate a structural model of household liquidity management in the presence of long-term mortgages. Households face counter-cyclical idiosyncratic labor income uncertainty and borrowing constraints, which affect optimal choices of leverage, precautionary saving in liquid assets and illiquid home equity, debt repayment, mortgage refinancing, and default. Taking the observed historical path of house prices, aggregate income, and interest rates as given, the model quantitatively accounts for the run-up in household debt and consumption boom prior to the financial crisis, their subsequent collapse, and mild recovery following the Great Recession, especially among the most constrained households.
    JEL: E21 E44 G21
    Date: 2013–09
  12. By: Berg, Erlend; Ghatak, Maitreesh; Manjula, R; Rajasekhar, D; Roy, Sanchari
    Abstract: This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to flat pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent.
    Keywords: incentive pay; information constraints; knowledge transmission; public services; social proximity
    JEL: C93 D83 I38 M52 O15 Z13
    Date: 2013–05
  13. By: Andreas Fuster; Paul S. Willen
    Abstract: Surprisingly little is known about the importance of mortgage payment size for default, as efforts to measure the treatment effect of rate increases or loan modifications are confounded by borrower selection. We study a sample of hybrid adjustable-rate mortgages that have experienced large rate reductions over the past years and are largely immune to these selection concerns. We show that interest rate reductions dramatically affect repayment behavior, even for borrowers who are significantly underwater on their mortgages. Our estimates imply that cutting a borrower’s payment in half reduces his hazard of becoming delinquent by about 55 percent, an effect approximately equivalent to lowering the borrower’s combined loan-to-value ratio from 145 to 95 (holding the payment fixed). These findings shed light on the driving forces behind default behavior and have important implications for public policy.
    JEL: E43 G21
    Date: 2013–08
  14. By: Rodríguez-Pose, Andrés; von Berlepsch, Viola
    Abstract: Have Irish, German or Italian settlers arriving in the US at the turn of the 20th century left an institutional trace which determines economic development differences to this day? Does the national origin of migrants matter for long-term development? This paper explores whether the distinct geographical settlement patterns of European migrants according to national origin affected economic development across US counties. It uses micro-data from the 1880 and 1910 censuses in order to identify where migrants from different nationalities settled and then regresses these patterns on current levels of economic development, using both OLS and instrumental variable approaches. The analysis controls for a number of factors which would have determined both the attractiveness of different US counties at the time of migration, as well as current levels of development. The results indicate that while there is a strong and positive impact associated with overall migration, the national origin of migrants does not make a difference for the current levels of economic development of US counties.
    Keywords: Counties; Economic Development; Ethnic/National Origin; Institutions; Migration; USA
    JEL: F22 N91 O15 R23
    Date: 2013–04
  15. By: Richard A. Ashley; Guo Li
    Abstract: Case, Quigley and Shiller (2013) distinguished and quantified two wealth effects in retail sales at the state level: One from wealth held as corporate stock and one from wealth held in the form of home ownership. Here we investigate how each of these wealth e¤ects varies by frequency that is, over different levels of persistence in the wealth fluctuations. Using the Case, Quigley and Shiller state-level panel data over the period from 1975Q1 to 2012Q2, and separately modeling the financial crisis period of 2008Q1 onward, we estimate a dynamic fixed- effects model for retail sales, allowing for endogeneity in both wealth variables. We find that the quarterly growth rate of state-level retail sales responds differently to fluctuations in these two wealth variables at different persistent levels. In particular, retail sales respond more intensely to highly-persistent fluctuations in stock wealth, and respond more strongly to less-persistent (more transitory) fluctuations in housing wealth.
    Keywords: wealth effect, frequency dependence, nonlinearities
    Date: 2013
  16. By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: This study aims to examine current land access and youth livelihood opportunities in Southern Ethiopia. Access to agricultural land is a constitutional right for rural residents of Ethiopia. We used survey data from the relatively land abundant districts of Oromia Region and from the land scarce districts of Southern Nations, Nationalities and Peoples’ (SNNP) Region. We found that youth in the rural south have limited potential to obtain agricultural land that can be a basis for viable livelihood. The law prohibits the purchase and sale of land in Ethiopia. We found that land access through allocation from authorities is virtually nonexistent while land that can be obtained from parents through inheritance or gift is too small to establish a meaningful livelihood. The land rental market has restrictions, including on the number of years land can be rented out. Perhaps as a result of limited land access, the youth have turned their back on agriculture. Our study shows that only nine percent of youth in these rural areas plan to pursue farming. The majority are planning non-agricultural livelihoods. We also found a significant rural -urban migration among the youth and especially in areas with severe agricultural land scarcity. Our econometric analyses show that youth from families with larger land holding are less likely to choose non-agricultural livelihood as well as less likely to migrate to urban areas. We suggest here some measures to improve rural livelihood such as creation of non-farm employment opportunities and improvement of land rental markets. We also argue that as a certain level of rural-urban migration is unavoidable, investigating youth migration is essential to design policies that help the migrating youth as well as the host communities.
    Keywords: Youth unemployment; youth livelihood; rural livelihood; migration; Ethiopia
    JEL: J13 Q15 R23
    Date: 2013–09–16
  17. By: Nilavongse, Rachatar
    Abstract: This paper studies the effects of credit supply disruptions in a dynamic stochastic general equilibrium (DSGE) framework. First, this paper examines the effects of credit supply disruptions in the business sector. The model with financially constrained households generates a bigger decline in aggregate consumption and GDP than the model without financially constrained households. The reason is that the spillover effect from the business sector to the household sector occurs through a labor income channel. With financially constrained households in the model, a collateral channel strengthens the spillover effects and amplifies business cycles. Then this paper examines the effects of credit supply disruptions in the household sector. A tightening of household credit conditions causes a substantial drop in aggregate consumption, which pushes inflation downward. Debt deflation further depresses consumption, labor demand, and investment, altogether generating a sharp decline in GDP. --
    Keywords: financially constrained households,entrepreneurs,credit conditions,spillover effects,housing prices,collateral value
    JEL: E31 E32 E44 G01
    Date: 2013
  18. By: Kramarz, Francis; Nordström Skans, Oskar
    Abstract: The conditions under which young workers find their first real post-graduation jobs are both very important for the young’ future careers and insufficiently documented given their potential importance for young workers welfare. To study these conditions, and in particular the role played by social ties, 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, class composition, and parents’ and children’ employers over a period covering years with both high and low unemployment, together with measures of firm performance. We find that strong social ties (parents) are an important determinant for where young workers find their first job. The effects are larger if the graduate’s position is “weak” (low education, bad grades), during high unemployment years, and when information on potential openings are likely to be scarce. On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (long tenure, high wage) and if the parent’s plant is more productive. The youths appear to benefit from the use of strong social ties through faster access to jobs and by better labor market outcomes as measured a few years after entry. In particular, workers finding their entry jobs through strong social ties are considerably more likely to remain in this job, while experiencing better wage growth than other entrants in the same plant. Firms also appear to benefit from these wage costs (relative to comparable entrants) starting at a lower base. They also benefit on the parents’ side; parents’ wage growth drops dramatically exactly at the entry of one of their children in the plant, although this is a moment when firm profits tend to be growing. Indeed, the firm-side benefits appear large enough for (at least small) firms to increase job creation at the entry level in years when a child of one of their employees graduates.
    Keywords: network; strong tie; youth employment
    JEL: J30
    Date: 2013–09
  19. By: Aurora Galego (University of Évora, Department of Economics and CEFAGE-UE); João Pereira (University of Évora, Department of Economics and CEFAGE-UE)
    Abstract: Unlike previous studies, in this paper we estimate the contribution of covariates for the regional wage decomposition components along the wage distribution employing Firpo et al. (2009) method. We consider the case of Portugal, a country with persistent and large regional wage gaps. We find that education, occupation and firm size are the most important factors to explain the growing importance of the composition effect. The wage structure effect, in turn, is mainly determined by differences in rewards to experience and tenure. Moreover, we conclude that the importance of these covariates for both effects is not equal along the wage distribution.
    Keywords: Regions; Wage differentials; Wage decompositions; Unconditional quantile regression; Recentered influence function.
    JEL: J31 J38 C21
    Date: 2013
  20. By: Philippe Crist; Jari Kauppila; José Vassallo; Butch Wlaschin
    Abstract: This paper lays out a framework for managing complex asset systems, such as road networks, with a view to optimising life-cycle value of the asset base. It is based on discussions at the International transport Forum Roundtable on Sustainable Road Funding held in Paris 25-26 October 20121 and includes inputs from the ITF working Group on Infrastructure Adaptation to Extreme Weather and Climate Change.
    Date: 2013–05–01
  21. By: Sloev, Igor; Thisse, Jacques-François; Ushchev, Philip
    Abstract: We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. Consumers shop at either marketplace or at both, and buy each variety in volume. The market solution stems from the interplay between the market expansion effect generated by consumers seeking more opportunities, and the ccompetition effect. Firms' profits increase (decrease) with the entry of local competitors when the former (latter) dominates. Downtown retailers swiftly vanish when the mall is large. A predatory but efficient mall need not be regulated, whereas the regulator must restrict the size of a mall accommodating downtown retailers.
    Keywords: monopolistic competition; retailers; shopping behavior; shopping mall; spatial comparison
    JEL: D43 L81 R10
    Date: 2013–08
  22. By: Nicole M. Fortin; Philip Oreopoulos; Shelley Phipps
    Abstract: Using three decades of data from the “Monitoring the Future” cross-sectional surveys, this paper shows that, from the 1980s to the 2000s, the mode of girls’ high school GPA distribution has shifted from “B” to “A”, essentially “leaving boys behind” as the mode of boys’ GPA distribution stayed at “B”. In a reweighted Oaxaca-Blinder decomposition of achievement at each GPA level, we find that gender differences in post-secondary expectations, controlling for school ability, and as early as 8th grade are the most important factor accounting for this trend. Increases in the growing proportion of girls who aim for a post-graduate degree are sufficient to account for the increase over time in the proportion of girls earning “A’s”. The larger relative share of boys obtaining “C” and C+” can be accounted for by a higher frequency of school misbehavior and a higher proportion of boys aiming for a two-year college degree.
    JEL: I20 J16 J24
    Date: 2013–08
  23. By: Michela Rancan
    Abstract: Social contacts influence decisions and economic outputs in a variety of contexts. Does social network matter also in financial markets? In this paper I investigate the effect of social networks on mutual funds performance by exploiting data on the education of U.S. fund managers. The results show that performance is better for fund managers with many social connections. Furthermore, positional advantages in the social network generate superior performance. This evidence suggests that social interaction and information spillovers have a positive and meaningful value for mutual funds.
    Keywords: Social Network, Mutual Fund, Performance
    JEL: G23 L14
    Date: 2013–03
  24. By: Sebastian Galiani; Paul Gertler; Ryan Cooper; Sebastian Martinez; Adam Ross; Raimundo Undurraga
    Abstract: This paper provides rigorous empirical evidence on the causal effects that upgrading slum dwellings has on the living conditions of the extremely poor. In particular, we study the impact of providing better houses in situ to slum dwellers in El Salvador, Mexico and Uruguay. We experimentally evaluate the impact of a housing project run by the NGO TECHO, a youth-led program which provides basic pre-fabricated houses to members of extremely poor population groups in Latin America. The main objective of the program is to improve household well-being. Our findings show that better houses have a positive effect on overall housing conditions and general well-being: the members of treated households are happier with their quality of life. In two countries, we also document significant improvements in children’s health; in El Salvador, slum dwellers also feel that they are safer than before. There are no statistically significant effects on the possession of durable goods or in terms of labor outcomes. Our results are unusually robust in terms of both internal and external validity because they are derived from experiments in three different Latin American countries.
    JEL: C93 D63 O0
    Date: 2013–08
  25. By: Gordon Hughes (University of Edinburgh)
    Abstract: Econometricians have begun to devote more attention to spatial interactions when carrying out applied econometric studies. In part, this is motivated by an explicit focus on spatial interactions in policy formulation or market behavior, but it may also reflect concern about the role of omitted variables that are or may be spatially correlated. The Stata user-written procedure xsmle has been designed to estimate a wide range of spatial panel models, including spatial autocorrelation, spatial Durbin, and spatial error models using maximum likelihood methods. It relies upon the availability of balanced panel data with no missing observations. This requirement is stringent, but it arises from the fact that in principle, the values of the dependent variable for any panel unit may depend upon the values of the dependent and independent variables for all the other panel units. Thus even a single missing data point may require that all data for a time period, panel unit, or variable be discarded. The presence of missing data is an endemic problem for many types of applied work, often because of the creation or disappearance of panel units. At the macro level, the number and composition of countries in Europe or local government units in the United Kingdom has changed substantially over the last three decades. In longitudinal household surveys, new households are created and old ones disappear all the time. Restricting the analysis to a subset of panel units that have remained stable over time is a form of sample selection whose consequences are uncertain and that may have statistical implications that merit additional investigation. The simplest mechanisms by which missing data may arise underpin the missing-at-random (MAR) assumption. When this is appropriate, it is possible to use two approaches to estimation with missing data. The first is either simple or, preferably, multiple imputation, which involves the replacement of missing data by stochastic imputed values. The Stata procedure mi can be combined with xsmle to implement a variety of estimates that rely upon multiple imputation. While the combination of procedures is relatively simple to estimate, practical experience suggests that the results can be quite sensitive to the specification that is adopted for the imputation phase of the analysis. Hence, this is not a one-size-fits-all method of dealing with unbalanced panels, because the analyst must give serious consideration to the way in which imputed values are generated. The second approach has been developed by Pfaffermayr. It relies upon the spatial interactions in the model, which means that the influence of the missing observations can be inferred from the values taken by nonmissing observations. In effect, the missing observations are treated as latent variables whose distribution can be derived from the values of the nonmissing data. This leads to a likelihood function that can be partitioned between missing and nonmissing data and thus used to estimate the coefficients of the full model. The merit of the approach is that it takes explicit account of the spatial structure of the model. However, the procedure becomes computationally demanding if the proportion of missing observations is too large and, as one would expect, the information provided by the spatial interactions is not sufficient to generate well-defined estimates of the structural coefficients. The missing-at-random assumption is crucial for both of these approaches, but it is not reasonable to rely upon it when dealing with the birth or death of distinct panel units. A third approach, which is based on methods used in the literature on statistical signal processing, relies upon reducing the spatial interactions to immediate neighbors. Intuitively, the basic unit for the analysis becomes a block consisting of a central unit (the dependent variable) and its neighbors (the spatial interactions). Because spatial interactions are restricted to within-block effects, the population of blocks can vary over time and standard nonspatial panel methods can be applied. The presentation will describe and compare the three approaches to estimating spatial panel models as implemented in Stata as extensions to xsmle. It will be illustrated by analyses of i) state data on electricity consumption in the U.S. and ii) gridded historical data on temperature and precipitation to identify the effects of El Niño (ENSO) and other major weather oscillations.
    Date: 2013–09–16
  26. By: Bartolucci, Cristian (Collegio Carlo Alberto); Devicienti, Francesco (University of Turin)
    Abstract: We propose a simple test that uses information on workers' mobility, wages and firms' profits to identify the sign and strength of assortative matching. The basic intuition underlying our empirical strategy is that, in the presence of positive (negative) assortative matching, good workers are more (less) likely to move to better firms than bad workers. Assuming that agents' payoffs are increasing in their own types, our test exploits within-firm variation on wages to rank workers by their types and firm profits to rank firms. We use a panel data set that combines social security earnings records for workers in the Veneto region of Italy with detailed balance-sheet data for firms. We find robust evidence that positive assortative matching is pervasive in the labor market. This result is in contrast with what we find from correlating the worker and firm fixed effects in standard Mincerian wage equations.
    Keywords: assortative matching, worker mobility, wages, profits, matched employer-employee data
    JEL: J6 J31 L2
    Date: 2013–08
  27. By: Anil Rupasingha
    Abstract: The concept of “economic gardening”—supporting locally owned businesses over nonlocally owned businesses and small businesses over large ones—has gained traction as a means of economic development since the 1980s. However, there is no definitive evidence for or against this pro-local business view. Therefore, I am using a rich U.S. county-level data set to obtain a statistical characterization of the relationship between local-based entrepreneurship and county economic performance for the period 2000–2009. I investigate the importance of the size of locally based businesses relative to all businesses in a county measured by the share of employment by local businesses in total employment. I also disaggregate employment by local businesses based on the establishment size. My results provide evidence that local entrepreneurship matters for local economic performance and smaller local businesses are more important than larger local businesses for local economic performance.
    Date: 2013
  28. By: Jonathan N. Millar; Stephen D. Oliner; Daniel E. Sichel
    Abstract: We use a large project-level dataset to estimate the length of the planning period for commercial construction projects in the United States. We find that these time-to-plan lags are long, averaging about 17 months when we aggregate the projects without regard to size and more than 28 months when we weight the projects by their construction cost. The full distribution of time-to-plan lags is very wide, and we relate this variation to the characteristics of the project and its location. In addition, we show that time-to-plan lags lengthened by 3 to 4 months, on average, over our sample period (1999 to 2010). Regulatory factors are associated with the variation in planning lags across locations, and we present anecdotal evidence that links at least some of the lengthening over time to heightened regulatory scrutiny.
    JEL: E22 E32 L50 L74 R52
    Date: 2013–09
  29. By: Mayshar, Joram; Moav, Omer; Neeman, Zvika
    Abstract: We propose a theory by which geographic variations in the transparency of the production process explain cross-regional differences in the scale of the state, in its hierarchical structure, and in property rights over land. The key linkage between geography and these institutions, we posit, is via the effect of transparency on the state's extractive capacity. We apply our theory to explain institutional differences between ancient Egypt and ancient Upper and Lower Mesopotamia. We also discuss the relevance of our theory to analyses of the deep rooted factors affecting economic development and the growth of taxation in the modern age.
    Keywords: Geography; Institutions; Land Tenure; State Capacity; State Concentration; Transparency
    JEL: D02 D82 H10 O43
    Date: 2013–09
  30. By: Badinger, Harald; Egger, Peter; von Ehrlich, Maximilian
    Abstract: This paper assesses the strength of productivity spillovers non-parametrically in a data-set of 12 industries and 231 NUTS2 regions in 17 European Union member countries between 1992 and 2006. It devotes particular attention to measuring catching up through spillovers depending on the technology gap of a unit to the industry leader and the local human capital endowment. We find evidence of a non-monotonic relationship between the technology gap to the leader as well as human capital and growth. Spillovers are strongest for units with a small technology gap to the leader and with abundant human capital.
    Keywords: Absorptive capacity; Nonparametric estimation; Technology spillovers; Total factor productivity
    JEL: C14 N10 N14 O33 O47 R11
    Date: 2013–04
  31. By: Hudson, Eibhlin (Trinity College Dublin); Barrett, Alan (ESRI, Dublin)
    Abstract: Research has shown that employment status, such as being unemployed or retired, can be related to well-being. In addition, the direction and size of these relationships can be influenced by the employment status of one's peer group. For example, it has been shown that the well-being of the unemployed tends to be higher for those living in high-unemployment areas compared to the unemployed living in low-unemployment areas. In this paper, we explore whether such employment peer effects impact upon the well-being of older workers. This is an important issue in the context of promoting longer working lives. If the well-being of older people in employment is lowered by low employment levels in their peer group, then sustaining high employment among older workers will be more difficult. We use data from the Irish Longitudinal Study on Ageing (TILDA) which is a nationally representative sample of people aged fifty and over and living in Ireland, collected between 2009 and 2011. Employment peer effects are proxied using the peer group non-employment rate where a peer is defined as someone in the same age-group and region and of the same gender. We find that for the employed, an increase in peer non-employment is associated with an increase in reported depressive symptoms, whereas for those not employed such an increase is associated with a decrease in reported depressive symptoms. However, these findings hold mainly for men.
    Keywords: peer groups, well-being, older adults
    JEL: I10 J26 C21
    Date: 2013–08
  32. By: Xianwen Shi; Aloysius Siow
    Abstract: In frictional matching markets with heterogeneous buyers and sellers, sellers incur discrete showing costs to show goods to buyers who incur discrete inspection costs to assess the suitability of the goods on offer. We study how brokers can help reduce these costs by managing the level and mix of goods in their inventory. Intermediaries emerge and improve social welfare when there is sufficient heterogeneity in the types of goods and preferences. Learning and inventory management enable search intermediaries to internalize information externalities generated in unintermediated private search.
    Keywords: Search; Intermediation; Brokers; Housing Markets
    JEL: D83 D82
    Date: 2013–09–10
  33. By: Joan Llull
    Abstract: This paper analyzes the effect of immigration on wages taking into account human capital and labor supply adjustments. Using U.S. micro-data for 1967-2007, I estimate a labor market equilibrium model that includes endogenous decisions on education, participation, and occupation, and allows for skill-biased technical change. Results suggest important labor market adjustments that mitigate the effect of immigration on wages. These adjustments include career switches, labor market detachment and changes in schooling decisions, and are heterogeneous across the workforce. The adjustments generate substantial self-selection biases at the lower tail of the wage distribution that are corrected by the estimated model.
    Keywords: immigration, wages, human capital, labor supply, dynamic discrete choice, labor market equilibrium
    JEL: J2 J31 J61
    Date: 2013–09
  34. By: Enrico Moretti; Daniel J. Wilson
    Abstract: We evaluate the effects of state-provided financial incentives for biotech companies, which are part of a growing trend of placed-based policies designed to spur innovation clusters. We estimate that the adoption of subsidies for biotech employers by a state raises the number of star biotech scientists in that state by about 15 percent over a three year period. A 10% decline in the user cost of capital induced by an increase in R&D tax incentives raises the number of stars by 22%. Most of the gains are due to the relocation of star scientist to adopting states, with limited effect on the productivity of incumbent scientists already in the state. The gains are concentrated among private sector inventors. We uncover little effect of subsidies on academic researchers, consistent with the fact that their incentives are unaffected. Our estimates indicate that the effect on overall employment in the biotech sector is of comparable magnitude to that on star scientists. Consistent with a model where workers are fairly mobile across states, we find limited effects on salaries in the industry. We uncover large effects on employment in the non-traded sector due to a sizable multiplier effect, with the largest impact on employment in construction and retail. Finally, we find mixed evidence of a displacement effect on states that are geographically close, or states that economically close as measured by migration flows.
    JEL: H0 J0 R0
    Date: 2013–08
  35. By: Giusti, Antonio; Viviani, Alessandro
    Abstract: This paper addresses the issue of social diversity, with reference to the phenomenon of tourism in Italy. Social inequality influences numerous socio-economic phenomena: tourism has been scarcely examined under this perspective. Tourism has significant effects at social level: both on travellers and on the inhabitants of the visited regions. Italy that is one of the most important touristic nations is significantly affected by the phenomena we are studying and, therefore, is an ideal context to analyse and identify the characteristics of tourism and its interaction on various aspects of social diversity. We could consider the interactions on tourism by persons with different economic and social conditions, race, gender, age, religion, mentality. These issues are usually considered by qualitative approaches. This paper attempts to give a quantitative dimension to these phenomena looking for possible statistical and administrative sources. We examined some, direct and indirect, official sources of the National Statistical System and other sources disseminated by European projects and research institutions. To get a more detailed picture of a particular form of social tourism, we used the data provided to us by a very active association in this area. This study is only a first approach in order to find a strategy to help assessing some quantitative characteristics of accessible tourism. The development of this type of tourism shall imply actions, techniques, and policies aimed at reducing the problems about social diversity in the sector, in order to make tourism become a factor of social inclusion.
    Keywords: Social distress, Statistical sources, Tourism.
    JEL: A13 L83 Z13
    Date: 2013–02–27
  36. By: Kalb, Guyonne; van Ours, Jan C
    Abstract: This paper investigates the importance of parents reading to their young children. Using Australian data we find that parental reading to children at age 4 to 5 has positive and significant effects on reading skills and cognitive skills of these children at least up to age 10 or 11. Our findings are robust to a wide range of sensitivity analyses.
    Keywords: Cognitive skills; Reading to children
    JEL: C26 I21 J24
    Date: 2013–05
  37. By: Facchini, Giovanni; Mayda, Anna Maria; Mendola, Mariapia
    Abstract: Using census data for 1996, 2001 and 2007 we study the labor market effect of immigration to South Africa. The paper contributes to a small but growing literature on the impact of South-South migration by looking at one of the most attractive destinations for migrant workers in Sub--Saharan Africa. We exploit the variation -- both at the district level and at the national one -- in the share of foreign--born male workers across schooling and experience groups over time. At the district level, we estimate that increased immigration has a negative and significant effect on natives' employment rates -- and that this effect is more negative for skilled and white South African native workers -- but not on total income. These results are robust to using an instrumental variable estimation strategy. At the national level, we find that increased immigration has a negative and significant effect on natives' total income but not on employment rates. Our results are consistent with outflows of natives to other districts as a consequence of migration, as in Borjas (2006).
    Keywords: Immigration; Labor market effects; South Africa
    JEL: F22 J61
    Date: 2013–04
  38. By: Jean Gabszewicz (CORE, Universite catholique de Louvain, Belgique); Ornella Tarola (DAES, University of Rome, La Sapienza, Italy); Skerdilajda Zanaj (CREA, Universite de Luxembourg)
    Abstract: We analyze the effects of labor migration flows on income taxation between two countries (regions) differing by the size of their population and the level of productive efficiencies. Residents, otherwise identical, are heterogeneous because they incur different migration costs. Each resident compares the post-tax amount of money at home with the one obtained abroad, including the cost of migration. The government in each coun- try maximizes the tax receipt in order to provide the largest possible amount of public good. We prove the existence of an equilibrium for any configuration of wage and any different relative size of the countries (re- gions). Then, we compute and characterize the equilibrium for any set of parameters, size and wage differential. Finally, we show how equili- brium migration flows affect the level of income taxation in the origin and destination country.
    Keywords: migration, income tax, fiscal competition
    JEL: F22 H20
    Date: 2013
  39. By: Eiji Yamamura
    Abstract: The Great Hanshin-Awaji (Kobe) earthquake struck Japan in 1995, causing devastating damage to the economic landscape of south-central Japan. The earthquake also caused people to realize the importance of social capital in Japan. Based on a large, individual-level database comprising 488,223 observations, this study investigated how, and the extent to which, the earthquake enhanced the investment in social capital through participation in community activity. The differences-in-differences method was used, and the following key findings were obtained: (1) In Japan, people were more likely to invest in social capital in 1996 than in 1991, (2) the effects of the earthquake decreased as the distance of one’s place of residence increased from Kobe, and (3) the earthquake significantly increased the social capital investment rate of Kobe residents, whereas it had no significant influence on the investment rate of residents of large cities close to Kobe.
    Keywords: Natural disasters, social capital, volunteer activities.
    JEL: N35 Q54 Z13
    Date: 2013–09–10
  40. By: Gupta, Bishnupriya (Department of Economics, University of Warwick)
    Abstract: Industrial investment in Colonial India was segregated by the export oriented industries, such as tea and jute that relied on British firms and the import substituting cotton textile industry that was dominated by Indian firms. The literature emphasizes discrimination against Indian capital. Instead informational factors played an important role. British entrepreneurs knew the export markets and the Indian entrepreneurs were familiar with the local markets. The divergent flows of entrepreneurship can be explained by the comparative advantage enjoyed by social groups in information and the role of social networks in determining entry and creating separate spheres of industrial investment. JEL classification: JEL codes:
    Date: 2013

This nep-ure issue is ©2013 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.