|
on Urban and Real Estate Economics |
| By: | Inga Molenda (Institute of Transport Economics, Muenster); Gernot Sieg (Institute of Transport Economics, Muenster) |
| Keywords: | residential parking, urban vitality, love of variety, local decision-making |
| JEL: | R41 R48 D61 D72 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:mut:wpaper:18&r=ure |
| By: | Max Nathan; Emma Vandore |
| Abstract: | The digital industries cluster known as 'Silicon Roundabout' has been quietly growing in East London since the 1990s. Now rebranded 'Tech City', it is now the focus of huge public and government attention. National and local policymakers wish to accelerate the local area's development: such cluster policies are back in vogue as part of a re-awakened interest in industrial policy in many developed countries. Surprisingly little is known about Tech City's firms or the wider ecosystem, however, and existing cluster policies have a high failure rate. This paper performs a detailed mixed-methods analysis, combining rich enterprise-level data with semi-structured interviews. We track firm and employment growth from 1997-2010 and identify a number of distinctive features: branching from creative to digital content industries, street-level sorting of firms, the importance of local amenities and a lack of conventional cluster actors such as universities or anchor businesses. We also argue that the existing policy mix embodies a number of tensions, and suggest areas for improvement. |
| Keywords: | Digital economy, cities, clusters, innovation, London, Silicon Roundabout, Tech City |
| JEL: | L2 L52 M13 O18 O31 R11 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0146&r=ure |
| By: | Siqi Zheng; Cong Sun; Ye Qi; Matthew E. Kahn |
| Abstract: | China’s rapid economic growth has been fueled by industrialization and urbanization. Given its export focus, this industrialization was spatially concentrated in the coastal eastern cities. Over the last decade, a spatial transformation has taken place leading to a deindustrialization of the rich coastal cities and sharp industrial growth in the inland cities. This survey examines recent work that studies the economic geography of industrial production, per-capita income, pollution and quality of life in China’s cities. We focus on the interaction between firms, local governments and the central government that together determine the new economic geography of industry and pollution within China. |
| JEL: | L23 L38 L6 R14 R23 R28 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19624&r=ure |
| By: | Luis Quintero |
| Abstract: | We provide a model for the price-quality frontier of housing with latent housing quality and heterogeneity in household preferences. Modeling house quality as unobserved by the econometrician is desirable because of the challenges of quality characterization and measurement. Similarly, our method deals with the issue that rental prices and housing values are partially latent through a non-parametric matching approach. Sorting by income is better satisfied empirically when households are divided into types by simple demographic characteristics, which motivates modeling heterogeneous preferences to understand housing market dynamics and policies directed to different types. An estimator of the structural model is introduced. We use the presence of children to define household types as an application. Using data for Chicago, New York and Philadelhia between 1999 and 2003 we obtain the robust surprising pattern that households without children have stronger preferences for housing quality conditional on income. This supports the view that children presence further raises the desired levels of non-housing consumption. Finally, clustering techniques are used to learn alternative categorization of households into types from the data. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cmu:gsiawp:816905155&r=ure |
| By: | Doling, John (University of Birmingham); Vandenberg, Paul (Asian Development Bank); Tolentino, Jade (Institute for Development and Econometric Analysis, Inc.) |
| Abstract: | The paper provides a review of the literature that links housing, housing finance, and economic development. The housing sector may support poverty reduction and inclusive growth in two general ways. First, housing construction contributes to economic output, creates employment, and generates a demand for materials and related services. Second, improved housing raises the standard of living of occupants. At the same time, housing purchases are costly for individuals, constituting the most valuable asset owned by most households and often requiring housing finance (mortgages) to allow for purchase. These links—between housing and the economy and between housing and housing finance—are explored in this review paper. It finds that the benefits of housing for individuals accrue in large part indirectly through better health, based on improved water and sanitation. Housing also generates large multiplier effects in terms of employment and output. Employment is created for both skilled and poorer, unskilled workers. The evidence also suggests that there is a symbiotic relationship between housing finance and financial sector development. Housing finance helps to develop the financial sector (contributing to economic growth) and is also helped by financial sector development. |
| Keywords: | housing; finance; mortgages; inclusive growth |
| JEL: | G21 O40 R21 |
| Date: | 2013–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0362&r=ure |
| By: | Luigi Benfratello; Giuseppe Sorrenti; Gilberto Turati |
| Abstract: | We study whether – beyond an EU-style tracking separating students in general versus vocational curricula – the Italian highly centralized public schooling is characterized by an implicit US-style tracking system separating students by ability within the same track. We pursue this aim by using administrative data on a standardized admission test at the School of Economics in Turin. We proxy students’ ability with the test score and check whether students across schools within the same track are stratified by ability and household income. Our findings strongly suggest that the inequality patterns common in Italian schooling are affected by both types of tracking. |
| Keywords: | public schools, educational inequalities, school stratification, school tracking |
| JEL: | I24 I28 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wchild:19&r=ure |
| By: | Cordero, José Manuel; Prior, Diego; Simancas Rodríguez, Rosa |
| Abstract: | This paper uses an innovative approach to evaluate educational performance of Spanish students in PISA 2009. Our purpose is to decompose their overall inefficiency between different components with a special focus on studying the differences between public and state subsidized private schools. We use a technique inspired by the non-parametric Free Disposal Hull (FDH) and the application of robust order-m models, which allow us to mitigate the influence of outliers and the curse of dimensionality. Subsequently, we adopt a metafrontier framework to assess each student relative to the own group best practice frontier (students in the same school) and to different frontiers constructed from the best practices of different types of schools. The results show that state-subsidised private schools outperform public schools, although the differences between them are significantly reduced once we control for the type of students enrolled in both type of centres. |
| Keywords: | Education, Efficiency, Multilevel Modelling, Free Disposal Hull |
| JEL: | C14 H41 I21 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:51375&r=ure |
| By: | Alicia H. Munnell; Jean-Pierre Aubry; Josh Hurwitz; Mark Cafarelli |
| Abstract: | Stories in the popular press suggest – particularly in the wake of the bankruptcy of Detroit – that pensions are the major expense of American cities and will lead to their widespread collapse.1 Thus, it is important to know the burden of pensions on cities. This burden can be measured in two ways. The first is the direct cost of pensions to city governments. These costs include contributions to locally-administered plans, contributions to state non-teacher plans, and contributions to state teacher plans on behalf of dependent school districts. The direct cost measures the pressure on the city’s finances. But there is also a broader question: how much do residents of a city pay for pensions? Here one would add to the city’s direct costs the contributions made by independent school districts that serve city residents and contributions that city residents make to county plans. This second concept – which is more comprehensive, avoids distortions created by local government arrangements, and provides a measure of residents’ incentive to move – is the focus of this brief. The question is whether pension costs – measured comprehensively – account for 5 percent or 50 percent of total local revenue raised from city taxpayers. (The Appendix presents both measures of the pension burden.) The discussion proceeds as follows. The first section highlights the importance of looking beyond the cost of locally-administered plans and describes the process of collecting and allocating the amounts paid for pensions by school districts within the city and by counties in which the cities are located. The second section describes our sample of 173 cities and illustrates how costs and revenues from the various units of local government are allocated to city taxpayers. The third section reports that, for the full sample, overall pension costs borne by city residents amount to 7.9 percent of revenue. The discrepancy between the 7.9 percent and the average reported in the U.S. Census of 5.6 percent is primarily because our study uses the full Annual Required Contribution (ARC), while the Census reports the amount that the local governments actually paid. In terms of individual cities, taxpayer costs average 2.7 percent of revenue for the least expensive fifth of cities and 12.3 percent for the top fifth. Among major cities, Chicago, New York, and Philadelphia have very high pension costs. Detroit was #61 primarily because it issued Pension Obligation Bonds in 2005, which increased its overall borrowing costs but reduced its reported pension expense. The final section concludes that pension costs are closer to 5 percent of revenue than to 50 percent for cities, even in the wake of two financial crises and the Great Recession. However, in those cases where pensions are both expensive and underfunded, such as Chicago, they exacerbate fiscal problems. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ibslp35&r=ure |
| By: | DE PALMA, André; LINDSEY, Robin; NISKANEN, Esko |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvrp:-1881&r=ure |
| By: | TANSEL, AYSIT |
| Abstract: | Purpose: This paper aims to provide the recent developments on the supplementary education system in Turkey. The national examinations for advancing to higher levels of schooling are believed to fuel the demand for Supplementary Education Centers (SEC). Further, we aim to understand the distribution of the SECs and of the secondary schools across the provinces of Turkey in order to evaluate the spacial equity considerations. Design/Methodology/Approach: The evolution of the SECs and of the secondary schools over time are described and compared. The provincial distribution of the SECs, secondary schools and the high school age population are compared. The characteristics of these distributions are evaluated to inform the about spatial equity issues. The distribution of high school age population that attend secondary schools and the distribution of the secondary school students that attend SECs across the provinces are compared. Findings: The evidence points out to significant provincial variations in various characteristics of SECs and the secondary schools. The distribution of the SECs is more unequal than that of the secondary schools. The provinces located mostly in the east and south east of the country have lower quality SECs and secondary schools. Further, the SEC participation among the secondary school students and the secondary school participation among the relevant age group are lower in some of the provinces indicating major disadvantages. Originality/Value: The review of the most recent developments about the SECs, examination and comparison of provincial distributions of the SECs and of the secondary schools are novelties in this paper. |
| Keywords: | Supplementary Education, Demand for Education, Turkey |
| JEL: | I20 I21 I22 |
| Date: | 2013–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50213&r=ure |
| By: | Thieme Claudio (Universidad Diego portales); Prior Diego (Universidad Autónoma de Barcelona); Tortosa-Ausina Emili (INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY JAUME I); Gempp René (Diego Portales University) |
| Abstract: | There is consensus in the literature about the need to control for socioeconomic status and other contextual variables at student and school level in the estimation of value added models, for which methodologies rely on hierarchical linear models. However, this approach is problematic because the nature of their estimate is a comparison with a school mean, implying no real incentive for performance excellence. Meanwhile, activity analysis models recently developed to estimate school value added have been unable to control for contextual variables. We propose a robust frontier model to estimate contextual value added which integrates recent advances in the activity analysis literature. We provide an application to a sample of schools in Chile, where reforms have been made in the educational system focusing on the need for accountability measures. Results indicate the general relevance of including contextual variables, and explain the performance differentials found for the three school types. |
| Keywords: | Efficiency, order-m, school effectiveness, value added. |
| JEL: | C61 I21 H52 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:fbb:wpaper:2013129&r=ure |
| By: | BELLEFLAMME, Paul; PICARD, Pierre; THISSE, Jacques-François |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvrp:-1464&r=ure |
| By: | Dethier, Jean-Jacques |
| Abstract: | The economic recession, the end of stimulus funding and central government cutbacks, rising social costs and aging, and the need for infrastructure upgrading for urbanization are putting enormous fiscal stress on cities. The financing capacity of municipalities is greatly affected because of the decline in the tax base, expenditure pressures, and growing and more expensive debt. Today's urban fiscal crisis is similar to that experienced in the 1970s, but the growing urbanization in the world and massive increase in municipal access to financial markets create a new context. This paper surveys three important topics related to the urban fiscal crisis in developed and developing countries: How do cities finance themselves? When they have access to financial markets, should city managers use loans, own revenues or private-public partnerships to pay for municipal expenditures? And what are the remedies to municipal fiscal crises in case of insolvency? |
| Keywords: | Banks&Banking Reform,Debt Markets,Access to Finance,Municipal Financial Management,Public Sector Economics |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6693&r=ure |
| By: | Durand-Lasserve, Alain; Durand-Lasserve, Maylis; Selod, Harris |
| Abstract: | This paper presents a new type of land market analysis relevant to cities with plural tenure systems as in West Africa. The methodology hinges on a systemic analysis of land delivery channels, which helps to show how land is initially made available for circulation, how tenure can be formalized incrementally, and the different means whereby households can access land. The analysis is applied to the area of Bamako in Mali, where information was collected through (i) interviews with key informants, (ii) a literature review on land policies, public allocations, and customary transfers of land, (iii) a press review on land disputes, and (iv) a survey of more than 1,600 land transfers of un-built plots that occurred between 2009 and 2012. The analysis finds that land is mostly accessed through an informal customary channel, whereby peri-urban land is transformed from agricultural to residential use, and through a public channel, which involves the administrative allocation of residential plots to households. The integrated analysis of land markets and land institutions stresses the complexity of procedures and the extra-legality of practices that strongly affect the functioning of formal and informal markets and make access to land costly and insecure, with negative social, economic, and environmental impacts over the long term. |
| Keywords: | Urban Housing,Public Sector Management and Reform,Municipal Housing and Land,National Urban Development Policies&Strategies,Urban Housing and Land Settlements |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6687&r=ure |
| By: | Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jorn Rattso (Department of Economics, Norwegian University of Science and Technology); Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | We analyze static and dynamic agglomeration effects across education groups. The data are based on administrative registers covering all full time workers in the private sector of Norway during 2001-2010, about 6.5 million worker-year observations, including place and sector of work experience since 1993. Accounting for unobservable abilities with identification based on movers, the static urban wage premium is similar across education groups. When the history of work experience in different regions and sectors is included, we show that the dynamic wage premium increases in education level and that highly educated in high wage sectors have the largest learning advantage. |
| Keywords: | Agglomeration economies, sorting, education, worker experience |
| JEL: | J24 J31 J61 R12 R23 |
| Date: | 2013–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:15213&r=ure |
| By: | Jason M. Fletcher (University of Wisconsin-Madison); Stephen L. Ross (University of Connecticut); Yuxiu Zhang (Yale University) |
| Abstract: | This paper examines the demographic pattern of friendship links among youth and the impact of those patterns on own educational outcomes using the friendship network data in the Add Health. We develop and estimate a reduced form matching model to predict friendship link formation and identify the parameters based on across-cohort, within school variation in the “supply” of potential friends. We find novel evidence showing that small increase in the share of students with college-educated mothers raises the likelihood of friendship links among students with high maternal education, and that small increase in the share of minority students increases the level of racial homophily in friendship patterns. We then use the predicted friendship links from the matching model in an instrumental variable analysis, and find positive effects of friends’ high socioeconomic status, as measured by parental education, on own GPA outcomes among girls. The GPA effects are likely driven by science and English grades,and through non-cognitive factors. |
| Keywords: | Friendship Formation, Grades, Cohort Study, Peer Effects, Non-Cognitive Effects |
| JEL: | I21 J13 D85 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2013-31&r=ure |
| By: | Tara Watson |
| Abstract: | This paper investigates the effect of local immigration enforcement regimes on the migration decisions of the foreign born. Specifically, the analysis uses individual level American Community Survey data to examine the effect of recent 287(g) agreements which allow state and local law enforcement agencies to enforce Federal immigration law. The results suggest that one type of 287(g) agreement – the controversial local “task force” model emphasizing street enforcement – nearly doubles the propensity for the foreign-born to relocate within the United States. The largest effects are observed among non-citizens with college education, suggesting that aggressive enforcement policies may be missing their intended targets. No similar effect is found for the native born. After the extreme case of Maricopa County is excluded, there is no evidence that local enforcement causes the foreign-born to exit the United States or deters their entry from abroad. Rather, 287(g) task force agreements encourage the foreign born to move to a new Census division or region within the United States. |
| JEL: | J15 J18 R23 R28 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19626&r=ure |
| By: | David Lam; Cally Ardington; Nicola Branson; Murray Leibbrandt |
| Abstract: | This paper analyzes the impact of high school household income and scholastic ability on post-secondary enrollment in South Africa. Using longitudinal data from the Cape Area Panel Study (CAPS), we analyze the large racial gaps in the proportion of high school graduates who enroll in university and other forms of post-secondary education. Our results indicate that family background and high school achievement (measured by a literacy and numeracy exam and performance on the grade 12 matriculation exam) are strong predictors of post-secondary enrollment and statistically account for all of the black-white difference in enrollment. Controlling for parental education and baseline scholastic ability reduces the estimated impact of household income on university enrollment, though there continues to be an effect at the top of the income distribution. We also find evidence of credit constraints on non-university forms of post-secondary enrollment. Counterfactual estimates indicate that if all South Africans had the incomes of the richest whites, African university enrollment would increase by 65%, even without changing parental education or high school academic achievement. The racial gap in university enrollment would narrow only slightly, however as our results suggest that this gap in postsecondary enrollment results mainly from the large racial gap in high school academic achievement. |
| JEL: | I24 I25 J15 J24 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19607&r=ure |
| By: | Lei, J. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper considers spatial autoregressive (SAR) binary choice models in the context of panel data with fixed effects, where the latent dependent variables are spatially correlated. Without imposing any parametric structure of the error terms, this paper proposes a smoothed spatial maximum score (SSMS) estimator which consistently estimates the model parameters up to scale. The identification of parameters is obtained, when the disturbances are time-stationary and the explanatory variables vary enough over time along with an exogenous and time-invariant spatial weight matrix. Consistency and asymptotic distribution of the proposed estimator are also derived in the paper. Finally, a Monte Carlo study indicates that the SSMS estimator performs quite well in finite samples. |
| Keywords: | Spatial Autoregressive Models;Binary Choice;Fixed Effects;Maximum Score Estimation |
| JEL: | C14 C21 C23 C25 R15 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013061&r=ure |
| By: | Dang, Hai-Anh H.; King, Elizabeth M. |
| Abstract: | Few would contest that teachers are a very important determinant of whether students learn in school. Yet, in the face of compelling evidence that many students are not learning what they are expected to learn, how to improve teacher performance has been the focus of much policy debate in rich and poor countries. This paper examines how incentives, both pecuniary and non-pecuniary, influence teacher effort. Using school survey data from Lao PDR, it estimates new measures of teacher effort, including the number of hours that teachers spend preparing for classes and teacher provision of private tutoring classes outside class hours. The estimation results indicate that teachers increase effort in response to non-pecuniary incentives, such as greater teacher autonomy over teaching materials, and monitoring mechanism, such as the existence of an active parent-teacher association and the ability of school principals to dismiss teachers. Methodologically, the paper provides a detailed derivation of a simultaneous ordinary least squares-probit model with school random effects that can jointly estimate teacher work hours and tutoring provision. |
| Keywords: | Tertiary Education,Education For All,Teaching and Learning,Primary Education,Secondary Education |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6694&r=ure |
| By: | Manuel Förster (CORE - Université Catholique de Louvain et Centre d'Economie de la Sorbonne); Ana Mauleon (CORE - Université Catholique de Louvain et CEREC - Université Saint-Louis - Bruxelles); Vincent Vannetelbosch (Università di Trento and LEM Scuola Superiore Sant'Anna) |
| Abstract: | We investigate the role of manipulation in a model of opinion formation where agents have opinions about some common question of interest. Agents repeatedly communicate with their neighbors in the social network, can exert some effort to manipulate the trust of others, and update their opinions taking weighted averages of neighbors' opinions. The incentives to manipulate are given by the agents' preferences. We show that manipulation can modify the trust structure and lead to a connected society, and thus, make the society reaching a consensus. Manipulation fosters opinion leadership, but the manipulated agent may even gain influence on the long-run opinions. In sufficiently homophilic societies, manipulation accelerates (slows down) convergence if it decreases (increases) homophily. Finally, we investigate the tension between information aggregation and spread of misinformation. We find that if the ability of the manipulating agent is weak and the agents underselling (overselling) their information gain (lose) overall influence, then manipulation reduces misinformation and agents converge jointly to more accurate opinions about some underlying true state. |
| Keywords: | Social networks, trust, manipulation, opinion leadership, consensus, Wisdom of crowds. |
| JEL: | D83 D85 Z13 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:13065&r=ure |
| By: | Debertin, David L.; Goetz, Stephan J. |
| Abstract: | In this paper, we define social capital from different perspectives and show how it is linked to the concept of a community. Based on these definitions, a conceptual framework for analyzing and measuring social capital and its indicators is developed. A typology for analyzing social capital is then created based on different types of communities. The characteristics of three prototype communities–a small rural community, a modern city suburb, and a community located in the core of a central city are outlined. For each prototype community, social capital formation strategies and indicators suggesting evidence of social capital are identified. Implications for future research efforts dealing with social capital are discussed. |
| Keywords: | social capital, community, rural community, suburban community, urban community, community development, Community/Rural/Urban Development, Labor and Human Capital, R58, |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ukysps:159102&r=ure |
| By: | Asako Ohinata; Jan C. van Ours |
| Abstract: | We analyze how the share of immigrant children in the classroom affects the edu- cational attainment of native Dutch children in terms of their language and math performance at the end of primary school. Our paper studies the spill-over effects at different parts of the test score distribution of native Dutch students using a quantile regression approach. We find no evidence of negative spillover effects of the classroom presence of immigrant children at the median of the test score distri- bution. In addition, there is no indication that these spill-over effects are present at other parts of the distribution. |
| Keywords: | Immigrant children; Peer effects; Educational attainment |
| JEL: | I21 J15 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:13/23&r=ure |
| By: | CHARLOT, Sylvie; GAIGNE, Carl; ROBERT-Nicoud, Frederic; THISSE, Jacques-François |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvrp:-1857&r=ure |
| By: | Ayumu Tanaka |
| Abstract: | This paper provides the first evidence of geographic concentration of foreign visitors in Japan, using a new data on nights spent by foreign visitors in each region. Using locational Gini coefficients, I show that foreign visitors are more geographically concentrated than Japanese visitors and the level of geographical concentration vary across source countries. In addition, I employ gravity equations to examine the determinants of nights spent by foreign visitors in each prefecture. The results suggest that visa policy, transport infrastructure, and natural and cultural factors, as well as traditional gravity variables such as distance and economic size, play a role in international travel to Japanese prefectures. |
| Keywords: | foreign visitors, geographic concentration, locational Gini coefficient, gravity equation |
| JEL: | F14 L83 R12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-12-013&r=ure |
| By: | Peterson, George E. |
| Abstract: | Despite strong economic growth, investment in basic urban infrastructure -- water supply, wastewater removal and treatment, roads, and other capital-intensive systems -- has failed to keep pace with urban growth, leaving a critical urban infrastructure deficit. At the same time, urban lands in these many developing countries are among the most expensive in the world. Much of this land is owned by public authorities. Significant parts of it lie vacant, unused for public service provision or inappropriate for conversion to higher-valued economic activity. A composite public-sector balance sheet for India's urban areas would show an asset mix strong on public-sector landholdings but weak on infrastructure. This raises the following questions: Can some excess public-sector land be exchanged for infrastructure, in a manner that is politically acceptable and economically efficient? Can public land sales be a realistic source of finance for critically needed urban infrastructure investment? This paper considers the policy context that has shaped different land-disposal and earmarking initiatives, provides details about the actual workings of institutions, and examines international experience in infrastructure investment. This study contributes to the consultative process underway in India to consider strategies to unlock public land values to help finance urban infrastructure investment. |
| Keywords: | Public Sector Economics,Public Sector Management and Reform,Municipal Financial Management,Debt Markets,Regional Governance |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6683&r=ure |
| By: | Matthias Duschl (Economic geography and Location Research, Philipps-Universität Marburg); Thomas Brenner (Economic geography and Location Research, Philipps-Universität Marburg) |
| Abstract: | This paper analyses the causal relationships in regional technological systems within a structural vector autoregression (SVAR) framework. Applying a data-driven identification strategy based on Independent Component Analysis, it shows how the regional growth dynamics of economic, research, innovation and educational activities affect each other instantaneously and over time in five different industries. Referring to the type of industry and its knowledge base, expectations are derived on how industry-specific growth processes unfold. Knowledge on the causal relations among the various activities in such regional technological systems is of utmost relevance to the design and implementation of efficient policy instruments. |
| Keywords: | regional growth, SVAR, non-normality, innovations, universities, R&D, regional technological systems |
| JEL: | C33 O30 R11 |
| Date: | 2013–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-12&r=ure |
| By: | Ohinata, A.; Ours, J.C. van (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: We analyze how the share of immigrant children in the classroom aects the educational attainment of native Dutch children in terms of their language and math performance at the end of primary school. Our paper studies the spill-over effects at different parts of the test score distribution of native Dutch students using a quantile regression approach. We fi nd no evidence of negative spillover effects of the classroom presence of immigrant children at the median of the test score distribution. In addition, there is no indication that these spill-over effects are present at other parts of the distribution. |
| Keywords: | Immigrant children;Peer effects;Educational attainment |
| JEL: | I21 J15 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013058&r=ure |
| By: | Cem Oyvat |
| Abstract: | This study examines the impact of agrarian structures on income inequality over the long run. High land inequality increases income Gini coefficients in the urban sector as well as the rural sector, not only by creating congestion in the urban subsistence sector, but also by feeding the growth of the urban reserve army of labor, which pulls down the wages in the urban capitalist sector. An econometric analysis shows that the impact of initial land ownership distribution on both national and urban income distribution can persist for decades. |
| Keywords: | distribution, urbanization, informality, development |
| JEL: | O15 Q15 I24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp336&r=ure |
| By: | Audra J. Bowlus (University of Western Ontario); Masashi Miyairi (University of Western Ontario); Chris Robinson (University of Western Ontario) |
| Abstract: | Immigrant assimilation is a major issue in many countries. While most of the literature studies assimilation through a human capital framework, we examine the role of job search assimilation. To do so, we estimate an equilibrium search model of immigrants operating in the same labor market as natives, where newly arrived immigrants have lower job offer arrival rates than natives but can acquire the same arrival rates according to a stochastic process. Using Canadian panel data, we find substantial differences in job offer arrival and destruction rates between natives and immigrants that are able to account for three fifths of the observed earnings gap. The estimates imply that immigrants take, on average, 13 years to acquire the native search parameters. The job search assimilation process generates 18% earnings growth for immigrants in a 40 year period following migration. |
| Keywords: | None available |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20136&r=ure |
| By: | Bold, Tessa; Kimenyi, Mwangi; Mwabu, Germano; Sandefur, Justin |
| Abstract: | In 2003 Kenya abolished user fees in all government primary schools. Analysis of household survey data shows this policy contributed to a shift in demand away from free schools, where net enrollment stagnated after 2003, toward fee-charging private schools, where both enrollment and fee levels grew rapidly after 2003. These shifts had mixed distributional consequences. Enrollment by poorer households increased, but segregation between socio-economic groups also increased. The shift in demand toward private schooling was driven by more affluent households who (i) paid higher ex ante fees and thus experienced a larger reduction in school funding, and (ii) appear to have exited public schools partially in reaction to increased enrollment by poorer children. |
| Keywords: | Primary Education,Education For All,Teaching and Learning,Tertiary Education,Secondary Education |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6685&r=ure |
| By: | Andrew Lee Smith (Department of Economics, The University of Kansas) |
| Abstract: | Bank regulators acknowledge that large U.S. commercial banks allocate considerably more resources to originating and trading off-balance sheet assets than their smaller counter parts. In this paper: (i) I show the asset concentration in these large banks moves closely with home prices due to the collateralized nature of off-balance sheet assets. (ii) I then develop a general equilibrium capable of capturing this asset redistribution between heterogeneous banks. When home prices fall, endogenously tightening leverage constraints force the big productive banks to unload real-estate secured debt to small unproductive banks. The redistribution to less productive banks sets off an asset price spiral in the model - amplifying typical downturns into deep recessions. The model has predictions for the joint behavior of finance premiums, output, home prices and the share of assets held by large banks. (iii) I use a VAR to confirm the model's predictions for these variables are consistent with the data. (iv) Finally, I use this empirically verified model to examine the effectiveness of unconventional monetary policyin mitigating a recession generated by a drop in housing demand. Despite the fact that both equity injections into "Too Big to Fail" banks and asset purchases by the Fed such as "QE 1/2/3" mitigate the crisis, the nuances of the policies are important. A prolonged asset purchase program is preferable to a short-term equity injection. |
| Keywords: | Financial Crises, Financial Frictions, Housing, Unconventional Monetary Policy |
| JEL: | E32 E44 G01 G21 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:201311&r=ure |
| By: | Dominik Menno; Tommaso Oliviero |
| Abstract: | This paper quantifies the effects of credit spread and income shocks on aggregate house prices and households’ welfare. We address this issue within a stochastic dynamic general equilibrium model with heterogeneous households and occasionally binding collateral constraints. Credit spread shocks arise as innovations to the financial intermediation technology of stylized banks. We calibrate the model to the U.S. economy and simulate the Great Recession as a contemporaneous negative shock to financial intermediation and aggregate income. We find that (i) in the Great recession constrained agents (borrowers) lose more than unconstrained agents (savers) from the aggregate house prices drop; (ii) credit spread shocks have, by their nature, re-distributive effects and - when coupled with a negative income shock as in the Great Recession - give rise to larger (smaller) welfare losses for borrowers (savers); (iii) imposing an always binding collateral constraint, the non-linearity coming from the combination of the two shocks vanishes, and the re-distributive effects between agents’ types are smaller. |
| Keywords: | HousingWealth, Mortgage Debt, Borrowing Constraints, Heterogeneous Agents, Welfare, Aggregate Credit Risk |
| JEL: | E21 E32 E43 E44 I31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2013/05&r=ure |
| By: | PICARD, Pierre M.; ZENG, Dao-Zhi |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvrp:-1893&r=ure |
| By: | Edoardo Marcucci (University of Roma Tre and CREI); Valerio Gatta (University of Roma Tre and CREI) |
| Abstract: | Urban freight distribution policies aim to improve the efficiency of deliveries of goods in cities. Local policy makers intervene on rooted, complex and pre-existent relationships. Various are the agents, both collaborating and competing, involved in providing and buying freight distribution services. Retailers, transport providers and own-account agents are among the most important actors; they are all potentially characterized both by inter and intra agent heterogeneity in preferences. Heterogeneity in preferences, whenever present, has relevant implications for policy intervention. There is a knowledge gap related to the peculiarities of these agents' preferences and behavior, notwithstanding some recent attempts to bridge it, that call for a thorough agent-specific analysis. This paper focuses on urban freight distribution with specific reference to the impact that variations of policy characteristics (e.g. time windows, number of loading and unloading bays, entrance fees, etc.) might cause on own-account agents' behavior. It is important to underline that, de facto, own-account agents are among the least studied operators in this context. This lack of attention is mostly attributable to the toil needed to acquire relevant data to study their preferences and behavior. This lack of knowledge has favored the birth of a widely accepted presumption concerning their inefficiency that, in turn, has produced specifically targeted policies often hindering their activities. This paper reports the empirical results of a study conducted in the limited traffic zone in Rome's city center in 2009 thanks to a Volvo Research Foundation grant. The analysis is based on a comprehensive and representative data set including: 1) general information on the respondent, 2) company characteristics, and 3) stated ranking exercises. The ranking data were subsequently transformed in choice data. The paper describes own-account operators' preferences as they emerge from the stated ranking exercises and proposes a systematic comparison among them via willingness to pay measures. The compared estimates are derived under different assumptions concerning agents' preference heterogeneity. More in detail we discuss results assuming: 1) no heterogeneity (multinomial logit), 2) covariates-explained heterogeneity (multinomial logit including interactions with relevant socio-economic variables), 3) flexible heterogeneity (investigating the systematic and stochastic components of the utility function). Heterogeneity analysis, apart from relevant theoretical implications, has important policy repercussions in as much as it impacts on the willingness to pay measures of the policies implemented. An appropriate treatment of heterogeneity is therefore functional to obtaining undistorted and reliable policy forecasts to be fed to micro simulation models used to support the decision-making process. The paper: 1) addresses methodologically relevant issues, 2) uses a new, detailed and significant data set, 3) tackles policy relevant questions, 4) provides worthwhile information for policy-makers. The estimation of willingness to pay / willingness to accept measures for hypothetical policies sets a benchmark for policy makers and researchers alike. |
| Keywords: | urban freight distribution; own-account; preference heterogeneity, freight policy evaluation. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rcr:wpaper:04_13&r=ure |
| By: | Damien PUY |
| Abstract: | This paper explores the geography of portfolio flows emanating from institutional investors located in mature markets. We identify precise global and regional dynamics in equity and bond flows. Very few countries happen to receive (or lose) funding in isolation. We also find strong evidence of global contagion: although global waves originate in developed countries, emerging markets’ funding is much more affected. We illustrate this finding by deriving “contagion maps” showing where contagion spreads and with what intensity. In general, our results suggest that “push” effects from advanced market investors affect massively developing countries. |
| Keywords: | Capital flows, Institutional Investors, Mutual Funds, Contagion, Crises, Push-and-Pull factors. |
| JEL: | F32 F36 G11 G15 G23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2013/06&r=ure |
| By: | Valerio Gatta (University of Roma Tre and CREI); Edoardo Marcucci (University of Roma Tre and CREI) |
| Abstract: | Data quality plays a relevant role in policy evaluation. Data quality is also strictly linked to questionnaire development and administration strategies. Willingness to pay estimates might be influenced by the data acquisition method adopted if an ex-post sophisticated modelling cannot compensate for the low quality data acquired. We test this hypothesis by comparing agent-generic vs. agent-specific data acquisition. This methodologically relevant question is investigated with respect to urban freight transport policy evaluation. In this field, in fact, heterogeneity among stakeholders' (i.e. retailers and transport providers) preferences is allegedly important since retailers, demanding freight transportation services, and transport providers, offering them, are characterised by, structurally and functionally motivated, differences in preferences. Results indicate that agent-specific data acquisition should be adopted. The analyst ought to take the longer data acquisition route when a strong and well rooted a priori knowledge suggests different agent-types' preferences are at work. This reflections are particularly valuable given ex-post agent-specific modelling cannot compensate for ex-ante agent-generic data acquisition procedure. Once perpetrated, the original sin cannot be redeemed. |
| Keywords: | Urban freight transport, policy evaluation, experimental design, data acquisition, willingness to pay, agent-specific. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rcr:wpaper:06_13&r=ure |
| By: | Qichun He (Central University of Finance and Economics); Meng Sun (Beijing Normal University); Heng-fu Zou (Development Research Group, World Bank) |
| Abstract: | In 1994, the Chinese government introduced a new fiscal system -- the tax assignment system -- to replace the old discretion-based system of revenue-sharing. Using this natural experiment and the dynamic provincial panel data during the following period 1995-2002, we find fiscal decentralization has a significant positive effect on the physical capital investment rate in both LSDV (Least squares dummy variables) regression and system GMM (Generalized method of moments) estimation that overcomes the endogeneity of fiscal decentralization. The results are robust to controlling for other variables, and province and time effects. The independence of the local governments is no free lunch. The local officials are not elected by the local constituents. Instead, the central government solely determines their appointment and thereby disciplines them by linking their promotion with the performance of the local economy. Therefore, it is rational for local officials to raise investment rate and thereby growth to maximize their chance of promotion, explaining our findings. |
| Keywords: | Fiscal decentralization, Investment rate, Dynamic Panel data |
| JEL: | O11 O33 F43 C23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:592&r=ure |
| By: | O'Higgins, Niall (University of Salerno); Brüggemann, Christian (TU Dortmund) |
| Abstract: | Unequal labour market outcomes between Roma and non-Roma have typically been explained by either the low level of educational attainment on the one hand or labour marked discrimination on the other – or both. A number of studies have found that significant labour market inequalities persist even after the low levels of educational attainment amongst Roma have been accounted for. Here we look at the role of special schooling in driving labour market inequalities between Roma and non-Roma in the Czech Republic. We confirm the findings of other studies that Roma face significant differences in labour market outcomes which cannot be explained in terms of educational attainment. Moreover, we find that the segregation of Roma into special remedial schools for the mentally disabled influences both labour market outcomes and the level of educational attainment; the latter effect being particularly strong. Special school attendance explains a small part of Roma labour market discrimination as typically measured, but its main impact is through lowering Roma educational attainment suggesting an additional discriminatory element in Roma/non-Roma labour market outcomes which is more typically ascribed to ‘justified’ Roma/non-Roma educational differences. Thus, we propose that labour market inequality should not only be understood as result of low attainment and labour market discrimination per se but as a complex outcome of cumulative discrimination. In contrast to previous papers which take a parametric approach assuming common support between Roma and non-Roma, the non-parametric matching approach employed here explicitly takes into consideration the substantial differences in educational attainment observable between Roma and non-Roma. |
| Keywords: | Central Europe, labour market discrimination, Roma |
| JEL: | J15 I24 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7668&r=ure |
| By: | Valerio Gatta (University of Roma Tre and CREI); Edoardo Marcucci (University of Roma Tre and CREI) |
| Abstract: | This paper jointly investigates non-linear attribute effects and discrete mixture heterogeneity. The research context relates to urban freight transport policy evaluation. The paper adopts an agent-specific perspective. The often unforeseen and undesired results deriving from urban freight transport policy implementation have induced many researchers to call for an in-depth analysis of specific agents' preferences. However, the structural lack of appropriate data has hindered investigations at such a detailed level. This paper contributes to bridging this data and knowledge gap by: constructing an original data set; testing for non-linear effects in attribute level variations; investigating the presence of inter and intra-agent heterogeneity; jointly exploring non-linear attribute effects and intraagent heterogeneity. The results obtained underline the relevance of intra-agent preference heterogeneity and non-linear effects of attribute variations. More in detail, the paper detects two classes of agents with substantially different preferences with respect to the possible policy interventions. Non-linear sensitivity suggests policy makers should carefully consider the effects induced by the specific status quo level for policy relevant attribute variations. Intraagent discrete heterogeneity implies different willingness to pay measures for given policy changes. The presence of both non-linear effects and intra-agent heterogeneity suggests policy makers to explicitly consider the status quo level that is to be changed while, at the same time, contemplate differentiated reactions deriving from the implementation of a urban freight policy change. In conclusion, the paper underlines the need for rigorous ex-ante policy analysis if the correct policy outcomes are to be estimated with an adequate level of accuracy. |
| Keywords: | Urban freight transport, discrete mixture heterogeneity, non-linear attribute effects, policy evaluation |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rcr:wpaper:03_13&r=ure |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Pascal Sulser (Department of Economics, University of Konstanz, Germany) |
| Abstract: | We present results from a field experiments at Swiss high schools in which we compare the effectiveness of teaching methods in economics. We randomly assigned classes into an experimental and a conventional teaching group, or a control group that received no specific instruction. Both of our teaching treatments improve economic understanding considerably while effect sizes are almost identical. However, student ability crucially affects learning outcomes as more able students seem to benefit disproportionately from classroom experiments while weaker students lose out. Supplemental data indicates that our experimental treatment crowded out time for adequately discussing the subject, which may have limited less able students to generate a profound understanding. Furthermore there is no robust impact of economic training on social preferences, measured as both individual behavior in incentivized decisions or political opinions. |
| Keywords: | Education of Economics, Classroom Experiments, Conventional Teaching |
| JEL: | A21 C93 I21 |
| Date: | 2013–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1317&r=ure |
| By: | Alex Fenton; Amanda Fitzgerald; Ruth Lupton |
| Abstract: | When he came to power in 1997, Tony Blair reacted to widening disparities between poorer and richer neighbourhoods by declaring that no one in future decades should be seriously disadvantaged by where they lived. This paper reviews the policies that Labour pursued and assesses how close it came to realising Blair's vision. It draws on speeches, policy documents, government website and evaluation reports, and on new analysis of administrative and survey data. We find that Labour's neighbourhood initial policy approach - the cross departmental National Strategy for Neighbourhood Renewal, with its 'floor targets' below which no neighbourhood should fall - was distinctive, although after 2007 there was a move away from this approach towards a narrower focus on economic regeneration, at large spatial scales, and on the reduction of worklessness. Evaluations report that the policies pursued represented value for money and there were trends towards positive outcomes. Physical environments and services got better during Labour's term in office - a direct result of the policies enacted. Gaps between poorer and richer areas also improved in many individual outcomes, although these cannot be so readily attributed to neighbourhood policy per se. All gaps remained large in 2010, suggesting that Blair's vision was not fully realised: which is, perhaps, not surprising in the context of sustained income inequalities. |
| Keywords: | neighbourhood, regeneration, renewal, spatial, New Labour |
| JEL: | I38 H76 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/177&r=ure |
| By: | OZAKI Masahiko |
| Abstract: | Interregional migration is one of the most important issues for the vitalization of the regional economies. What is the factor in changing the regional populations? Numerous factors have been used in past empirical analysis, and many researchers have noticed that using various kinds of explanatory variables concurrently is rather difficult. This paper challenges the problem by creating comprehensive explanatory variables. Applying a text mining method against the text data of speeches of the governors of the 47 prefectures in their prefectural assemblies, we quantitatively measure the sensitivities of the region's policy priority: (1) economic policy, (2) social policy, and (3) culture policy. Our study finds a positive correlation between the number of movers and the destination's sensitivities of policies [(1) and (2)] in the case of distances over 300km; the destination's sensitivity of policy (2) in the case of distances under 100km; and both the destination's and origin's sensitivities of policy (3) in the case of distances under 300km. We also find a negative correlation between the number of movers and the origin's sensitivities of policy (2) in the cases of distances over 100km and under 300km. |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:13072&r=ure |
| By: | KUPFER, Franziska; KESSELS, Roselinde; GOOS, Peter; VAN DE VOORDE, Eddy; VERHETSEL, Ann |
| Abstract: | Airport competition is a topic which recently gained interest in transport research. However, many studies about airport competition focus on passengers or passenger operations. Research about airport competition for air cargo is still scarce. This paper contributes to the understanding of this topic by analyzing the airport choice for freighter operations in Europe. It first reveals the choice process that airports follow, as well as the different factors that play a role therein. Furthermore, using a discrete choice experiment, we analyzed six choice factors more in-depth. We collected completed questionnaires from 26 airlines and used the discrete choice data as input for a multinomial logit model. The results show that the presence of passenger operations at an airport is not a significant factor in explaining airlines’ choices, which, from an airline’s point of view, supports the idea of all-cargo airports and therefore the relocation of cargo operations to non-congested airports. The presence of forwarders, on the other hand, is the most important factor. This shows that, when trying to influence airlines in their airport choice, airports and policy makers also have to consider the preferences of forwarders. |
| Keywords: | Air cargo, Discrete choice analysis, Airport choice, Multinomial logit |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2013028&r=ure |
| By: | Alberto Ruiz-Villaverde (Universidad de Granada.); Andrés J. Picazo-Tadeo (Universidad de Valencia); Francisco González-Gómez (Universidad de Granada.) |
| Abstract: | In countries where privatisation is permitted by law, policymakers usually give different reasons of general interest to allow private companies to manage water services. However, these kinds of decisions often provoke intense political debate and are at times opposed by citizens. In this paper, we illustrate how Analytic Hierarchy Process (AHP) techniques can be used to analyse the rationality of complex decisions regarding the management of water services. As a case study, we analyse the recent decision taken by the Regional Government of Madrid (Spain) to part-privatise the management of water services by introducing a private partner. In doing so, we use information from a questionnaire completed by a panel of five experts in water management, including both scholars and professionals. The results raise doubts about the rationality of the decision to privatise water services in Madrid. Rather than social interest, other reasons may be behind the decision, such as satisfying private interests whilst continuing to take advantage of maintaining public institution status. |
| JEL: | C61 H83 L33 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1322&r=ure |
| By: | Tariq Modood |
| Abstract: | Ethno-religious diversity is a fact of Western European cities and will grow and spread. Living in these locations today requires a respect for ‘difference’ as well as a sense of commonalities; these are required at the level of the local and the city but also at the level of the national. A framework of anti-discrimination and processes of uncoercive cultural encounters are also necessary but are not sufficient. We also need to have the possibility of sharing a macro-symbolic sense of belonging. With this in mind I consider a number of modes of integration. I argue that multiculturalism is a mode of integration, which can be contrasted with other modes such as assimilation, individualist-integration and cosmopolitanism, and like the others it is based on the core democratic values of liberty, equality and fraternity/unity. My contention is that even though multiculturalism is unpopular with some European publics today, integration is not possible without including it within an integration strategy. I go on to consider what kinds of ‘difference’ mark the real divisions today and into the future. I conclude that one of the most profound questions Europeans are being forced to consider is about the place of religion in the public space. |
| Date: | 2013–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0349&r=ure |
| By: | Benjamin Moll; Robert M. Townsend; Victor Zhorin |
| Abstract: | Motivated by evidence from the micro data that the type of financial frictions faced by individuals varies across regions within countries, we develop a general equilibrium framework that encompasses different micro financial underpinnings. We use it to compare the implications of two concrete frictions, limited commitment and moral hazard, and argue that these have potentially very different implications at both the macro and the micro level. Aggregate productivity is depressed in the two regimes but for completely different reasons: under limited commitment capital is misallocated across heterogeneous firms. In contrast, under moral hazard, productivity is endogenously lower at the firm level because entrepreneurs exert suboptimal effort. Occupational choice, productivity and firm size distribution, income and wealth inequality, and the speed of individual transitions also differ markedly. We also present an economy with different frictions in different regions. Such mixture regimes turn out to be different from simple convex combinations of the pure moral hazard and pure limited commitment regimes, and they produce interregional patterns of aggregate income, capital and labor flows and external finance that resemble rural-urban patterns observed in the data. |
| JEL: | D82 E2 O1 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19618&r=ure |
| By: | FORNERO Elsa; ROMITI Agnese; ROSSI Cristina |
| Abstract: | Parents can adopt two strategies to take care about their children and their future life: they can invest in their human capital, or in real (and financial) wealth to bequeath to them. The optimal children?s endowment is assured in equilibrium by complete and perfect markets. However, in the real world markets are far from being perfect and the investment in real or financial wealth can ultimately displace the human capital?s one. A strong preference for home ownership makes parents inclined to consider the house as the typical bequest-friendly asset, even at the expense of children?s education. Misconceptions about the relative returns of the two different forms of wealth, with a perceived excessive premium from the returns from housing wealth, may also be at work. We argue that this scenario could be well represented by the Italian context. Therefore we analyze the possible trade off between (children?s) human and (inherited) real capital by using the Bank of Italy?s Survey of Household Income and Wealth (SHIW). Our evidence seems to confirm our hypothesis, and in particular the results are higher for the women?s sample. |
| Keywords: | Education; Bequests; parental investment |
| JEL: | D10 D91 I21 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2013-21&r=ure |