nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒06‒27
29 papers chosen by
Steve Ross
University of Connecticut

  1. Regional Housing Supply Elasticity in Spatial Equilibrium Growth Analysis By Rickman, Dan S.; Wang, Hongbo
  2. Inclusive economic growth in America?s cities : what?s the playbook and the score ? By de Souza Briggs,Xavier; Pendall,Rolf Joseph; Rubin,Victor
  3. Green Cities? Urbanization, Trade and the Environment By Borck, Rainald; Pflüger, Michael P.
  4. In a Small Moment: Class Size and Moral Hazard in the Mezzogiorno By Joshua D. Angrist; Erich Battistin; Daniela Vuri
  5. Housing Policies for Asia: A Theoretical Analysis by Use of a Demand and Supply Model By Yoshino, Naoyuki; Helble, Matthias; Aizawa, Toshiaki
  6. Explaining the Boom-Bust Cycle in the U.S. Housing Market: A Reverse-Engineering Approach By Paolo Gelain; Kevin J. Lansing; Gisle J. Natvik
  7. Industrial agglomeration and spatial persistence of employment in software publishing By George Deltas; Dakshina De Silva; Robert P. McComb
  8. Demography, urbanization and development : rural push, urban pull and... urban push ? By Jedwab,Remi Camille; Christiaensen,Luc; Gindelsky,Marina
  9. Comparison of Social Trust’s Effect on Suicide Ideation between Urban and Non-urban Areas: The Case of Japanese Adults in 2006 By Eiji Yamamura
  10. The Information Value of Central School Exams By Schwerdt, Guido; Woessmann, Ludger
  11. Extending the school day in Latin America and the Caribbean By Holland,Peter Anthony; Alfaro,Pablo; Evans,David
  12. Quasi Maximum Likelihood Estimation of Spatial Models with Heterogeneous Coefficients By Michele Aquaro; Natalia Bailey; M. Hashem Pesaran
  13. Willing but Unable: Short-Term Experimental Evidence on Parent Empowerment and School Quality By Elizabeth Beasley; Elise Huillery
  14. Entrepreneurial Regions: do macro-psychological Cultural Characteristics of Regions help solve the “Knowledge Paradox” of Economics? By Obschonka, Martin; Stuetzer, Michael; Gosling, Samuel D.; Rentfrow, Peter J.; Lamb, Michael E.; Potter, Jeff; Audretsch, David B.
  15. Human Capital Quality and Aggregate Income Differences: Development Accounting for U.S. States By Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
  16. Cluster Policy: Renewal through the integration of institutional variety By Grillitsch, Markus; Asheim, Björn
  17. Identifying Periods of US Housing Market Explosivity By Mehmet Balcilar; Nico Katzke; Rangan Gupta
  18. The Performance of School Assignment Mechanisms in Practice By de Haan, Monique; Gautier, Pieter A.; Oosterbeek, Hessel; van der Klaauw, Bas
  19. The Impact of Going to School at Night on Teenage Risky Behavior By Martín Rossi; Ana Reynoso
  20. A Big Fish in a Small Pond: Ability Rank and Human Capital Investment By Elsner, Benjamin; Isphording, Ingo E.
  21. School Meals and Children Satisfaction. Evidence from Italian Primary Schools By Maria Teresa Gorgitano; Ornella Wanda Maietta
  22. The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation By Baier, Elisabeth; Rammer, Christian; Schubert, Torben
  23. Explaining the Unexplained: Residual Wage Inequality, Manufacturing Decline, and Low-Skilled Immigration By Gould, Eric D.
  24. When the Mafia Comes to Town By Annalisa Scognamiglio
  25. Home ownership, labour markets and the economic crisis By Bouyon, Sylvain
  26. A Bathtub Model of Downtown Traffic Congestion By Arnott, Richard
  27. Street based self-employment: A poverty trap or a stepping stone for migrant youth in Africa? By Bezu, Sosina; Holden, Stein
  28. The Impact of Fiscal Decentralization: A Survey. By Jorge Martinez-Vazquez; Santiago Lago-Peñas; Agnese Sacchi
  29. Do exposures to sagging real estate, subprime or conduits abroad lead to contraction and flight to quality in bank lending at home? By Ongena, Steven; Tümer-Alkan, Günseli; von Westernhagen, Natalja

  1. By: Rickman, Dan S.; Wang, Hongbo
    Abstract: The spatial equilibrium growth model of Glaeser and Tobio (2008) is built upon the traditional static Rosen-Roback spatial equilibrium model. A distinguishing feature is the addition of a regionally-varying elasticity of housing supply, which was found empirically for the U.S. in a number of studies. Applications of the framework have been limited. But it is sufficiently flexible to be used in a wide variety of settings. Numerous policies and site characteristics of areas have the potential to simultaneously influence household amenity demand, firm productivity and elasticity of housing supply. The spatial equilibrium growth model not only ascertains the growth effects of policies and site characteristics, but it also assesses the channels through which they affect regional growth.
    Keywords: Spatial equilibrium; Housing supply
    JEL: R11 R12 R31
    Date: 2015–06–19
  2. By: de Souza Briggs,Xavier; Pendall,Rolf Joseph; Rubin,Victor
    Abstract: This paper defines economic inclusion as the ability of all people, including the disadvantaged, to share in economic gains, that is, the conditions that allow for broadly shared prosperity. Beyond the ?right? to access consumption in cities, and beyond relatively standardized safety net policies that support economic security, inclusion demands intentional, flexible, context-appropriate strategies aimed at shifting the dynamics of local land and labor markets, public education, and other institutions. The paper analyzes the varied contexts for designing and supporting such strategies in a rapidly changing society, where urban regions have long been critical to incorporating a broad cross-section of people, including immigrant newcomers. Four dimensions are particularly crucial: an urban area?s level of economic growth, the quality of its jobs, its demographic profile, and its geography of opportunity (degree and form of spatial inequality). Economic inclusion is particularly urgent in America?s strongest local markets, which are pricing out the lowest-wage workers and showing a disturbing tendency to import rather than grow the talent needed for the emerging, innovation-driven economy. But weak-market regions face important challenges?and a range of options for leveraging demographic and other changes?as well. And for now, in all types of cities, innovative and promising strategies remain small in scale, in part because they are competing for support with entrenched, underperforming systems.
    Keywords: Labor Markets,Housing&Human Habitats,Population Policies,Labor Policies,Disability
    Date: 2015–06–22
  3. By: Borck, Rainald (University of Potsdam); Pflüger, Michael P. (University of Würzburg)
    Abstract: This paper establishes a simple theoretical framework which comprises key forces that shape the structure and interrelation of cities to study the interdependencies between urban evolution and the environment. We focus on the potential of the unfettered market forces to economize on emissions. A key finding is that these forces alone may suffice to generate an urban Environmental Kuznets Curve. In particular, reducing trade costs increases per capita incomes and generates a U-shaped evolution of emissions in the process of agglomeration and redispersion. Another key result is that agglomeration per se is typically not a boon for the environment, as total emissions in the total city system are likely to rise.
    Keywords: city structure, city systems, environmental pollution, global warming, Environmental Kuznets Curve, trade costs, commuting costs, housing
    JEL: F18 Q50 R11 R12
    Date: 2015–06
  4. By: Joshua D. Angrist (MIT, IZA and NBER); Erich Battistin (Queen Mary University of London, IRVAPP and IZA); Daniela Vuri (University of Rome Tor Vergata, CEIS, CESifo and IZA)
    Abstract: An instrumental variables (IV) identification strategy that exploits statutory class size caps shows significant achievement gains in smaller classes in Italian primary schools. Gains from small classes are driven mainly by schools in Southern Italy, suggesting a substantial return to class size reductions for residents of the Mezzogiorno. In addition to high unemployment and other social problems, however, the Mezzogiorno is distinguished by pervasive manipulation of standardized test scores, a finding revealed in a natural experiment that randomly assigns school monitors. IV estimates also show that small classes increase score manipulation. Dishonest scoring appears to be a consequence of teacher shirking in grade transcription, rather than cheating by either students or teachers. Estimates of a causal model for achievement with two endogenous variables, class size and score manipulation, suggest that the effects of class size on measured achievement are driven entirely by the relationship between class size and manipulation. These findings show how consequential score manipulation can arise even in assessment systems with few NCLB-style accountability concerns.
    Keywords: Test scores, Education production, Regression discontinuity
    JEL: C26 C31 I21 I28 J24
    Date: 2015–06
  5. By: Yoshino, Naoyuki (Asian Development Bank Institute); Helble, Matthias (Asian Development Bank Institute); Aizawa, Toshiaki (Asian Development Bank Institute)
    Abstract: The main objective of this paper is to give an overview of the most commonly used housing policies and to illustrate their economic impact. To facilitate the analysis, we first introduce a simple two-period housing demand model for owner-occupied houses and rental houses. We then add a standard stock-flow housing supply model. Using this modelling framework, we explain the qualitative effects of various housing policies on supply and demand. In the last section of the paper, we provide a quantitative estimation of the impact of each policy and assess its effectiveness using a simple analysis of cost effectiveness. We hope that the model’s versatility makes it a simple tool for policymakers to better understand the economic consequences of various housing policies.
    Keywords: view-source:
    JEL: R21 R28 R31 R38
    Date: 2015–06–17
  6. By: Paolo Gelain (Norges Bank (Central Bank of Norway)); Kevin J. Lansing (Federal Reserve Bank San Francisco); Gisle J. Natvik (BI Norwegian Business School)
    Abstract: We use a simple quantitative asset pricing model to "reverse-engineer" the sequences of stochastic shocks to housing demand and lending standards that are needed to exactly replicate the boom-bust patterns in U.S. household real estate value and mortgage debt over the period 1995 to 2012. Conditional on the observed paths for U.S. disposable income growth and the mortgage interest rate, we consider four different specifications of the model that vary according to the way that household expectations are formed (rational versus moving average forecast rules) and the maturity of the mortgage contract (one-period versus long-term). We find that the model with moving average forecast rules and long-term mortgage debt does best in plausibly matching the patterns observed in the data. Counterfactual simulations show that shifting lending standards (as measured by a loan-to-equity limit) were an important driver of the episode while movements in the mortgage interest rate were not. All models deliver rapid consumption growth during the boom, negative consumption growth during the Great Recession, and sluggish consumption growth during the recovery when households are deleveraging.
    Keywords: Housing bubbles, Mortgage debt, Borrowing constraints, Lending standards, Macroprudential policy
    JEL: D84 E32 E44 G12 O40 R31
    Date: 2015–06–16
  7. By: George Deltas; Dakshina De Silva; Robert P. McComb
    Abstract: We use geocoded administrative establishment data in Texas to estimate the effects of localization economies on the spatial persistence of industrial employment in the software industry. The choice of the software industry allows us to distinguish between the spatial persistence of employment due to human capital spillovers from that due to the labor pool channel. Unlike previous research, this analysis is independent of administrative boundaries. The results suggest that a location, defined as a 1-mile radius circle, with an initial concentration of software industry employment, retains a disproportionate number of employees 6 years later despite significant job turnover. Software industry employment in surrounding areas has small effects. The results are not driven by higher establishment growth rates in high concentration locations or by differences in survival probabilities. They are fully explained by: (i) the retention by other establishments in a location of jobs lost by an establishment in that location, and (ii) an increased propensity of software establishments to enter in or near locations with prior software establishment presence. The entry effect diminishes sharply beyond one mile. We demonstrate that these findings are most consistent with labor channel effects, although the presence of human capital spillovers cannot be fully excluded.
    Keywords: agglomeration economies, labor pools, knowledge spillovers, firm growth
    JEL: R12
    Date: 2015
  8. By: Jedwab,Remi Camille; Christiaensen,Luc; Gindelsky,Marina
    Abstract: Developing countries have urbanized rapidly since 1950. To explain urbanization, standard models emphasize rural-urban migration, focusing on rural push factors (agricultural modernization and rural poverty) and urban pull factors (industrialization and urban-biased policies). Using new historical data on urban birth and death rates for seven countries from Industrial Europe (1800?1910) and thirty-five developing countries (1960?2010), this paper argues that a non-negligible part of developing countries? rapid urban growth and urbanization may also be linked to demographic factors, such as rapid internal urban population growth, or an urban push. High urban natural increase in today?s developing countries follows from lower urban mortality, relative to Industrial Europe, where higher urban deaths offset urban births. This compounds the effects of migration and displays strong associations with urban congestion, providing additional insight into the phenomenon of urbanization without growth.
    Keywords: Pro-Poor Growth,National Urban Development Policies&Strategies,Population Policies,Regional Urban Development,Urban Housing and Land Settlements
    Date: 2015–06–23
  9. By: Eiji Yamamura
    Abstract: An increasing number of studies have addressed the determinants of suicide. Social capital is a key factor in preventing suicide. However, little is known about the experience of suicide ideation using subjective values. From the viewpoint of suicide prevention, it is worth examining how people think of suicide. This paper attempts to examine the effect of social capital on suicide ideation. Furthermore, the paper compares the effect of social capital between urban and non-urban areas. In this paper, urban areas are equivalent to mega-cities with populations over one million. Non-urban areas are cities with populations of less than one million, towns and villages. Individual-level data from the Japanese General Social Surveys (JGSSs) are used. The survey, which was conducted in 2006, provides information about the subjective value of suicide ideation. The survey was answered by 1,413 subjects with a mean age of 54.5. Of the subjects, 49% were male. Social trust is used to measure the degree of social capital, and the outcome of interest is suicide ideation within the past 5 years. After controlling for various factors, the major findings are that both individual-level social trust and social trust accumulated in one’s residential administrative district reduce the probability that one will consider suicide. After dividing the sample into urban and non-urban residents, particularized trust plays a role in deterring suicide ideation in urban areas, while generalized trust plays a role in deterring suicide ideation in non-urban areas. The effect of each type of trust depends on its scarcity in residential areas.
    Keywords: Social capital; Suicide ideation; Urban.
    JEL: Z13
    Date: 2015–06–06
  10. By: Schwerdt, Guido (University of Konstanz); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: The central vs. local nature of high-school exit exam systems can have important repercussions on the labor market. By increasing the informational content of grades, central exams may improve the sorting of students by productivity. To test this, we exploit the unique German setting where students from states with and without central exams work on the same labor market. Our difference-in-difference model estimates whether the earnings difference between individuals with high and low grades differs between central and local exams. We find that the earnings premium for a one standard-deviation increase in high-school grades is indeed 6 percent when obtained on central exams but less than 2 percent when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.
    Keywords: central exit exams, labor-market sorting, earnings, measurement error, difference-in-difference, Germany
    JEL: I20 J24 J31
    Date: 2015–06
  11. By: Holland,Peter Anthony; Alfaro,Pablo; Evans,David
    Abstract: Countries throughout Latin America and the Caribbean are reforming their education systems with the view of adding more hours to the school day. This paper examines the existing evidence on the relationship between instructional time and student learning, and reviews 15 studies measuring the effects of longer school days. It draws on examples throughout the region to characterize differences in the implementation of extended school day programs, and provides one detailed case study and cost-effectiveness exercise (for Uruguay). While the evidence suggests positive impacts across a range of outcome variables, including gains in student learning, reductions in repetition and dropout, and reductions in teenage pregnancy, there is considerable heterogeneity across programs and studies. Even using the most optimistic impact estimates, a cost-effectiveness exercise suggests that there are likely many more cost-effective reforms to achieve similar effects. The paper concludes with a discussion of the implications for policy makers and practitioners considering an extension of the school day.
    Keywords: Education For All,Secondary Education,Tertiary Education,Effective Schools and Teachers,Primary Education
    Date: 2015–06–16
  12. By: Michele Aquaro (University of Warwick); Natalia Bailey (Queen Mary University of London); M. Hashem Pesaran (University of Southern California and University of Cambridge)
    Abstract: This paper considers spatial autoregressive panel data models and extends their analysis to the case where the spatial coefficients differ across the spatial units. It derives conditions under which the spatial coefficients are identified and develops a quasi maximum likelihood (QML) estimation procedure. Under certain regularity conditions, it is shown that the QML estimators of individual spatial coefficients are consistent and asymptotically normally distributed when both the time and cross section dimensions of the panel are large. It derives the asymptotic covariance matrix of the QML estimators allowing for the possibility of non-Gaussian error processes. Small sample properties of the proposed estimators are investigated by Monte Carlo simulations for Gaussian and non-Gaussian errors, and with spatial weight matrices of differing degree of sparseness. The simulation results are in line with the paper's key theoretical findings and show that the QML estimators have satisfactory small sample properties for panels with moderate time dimensions and irrespective of the number of cross section units in the panel, under certain sparsity conditions on the spatial weight matrix.
    Keywords: Spatial panel data models, Heterogeneous spatial lag coefficients, Identification, Quasi maximum likelihood (QML) estimators, Non-Gaussian errors
    JEL: C21 C23
    Date: 2015–06
  13. By: Elizabeth Beasley; Elise Huillery (Département d'économie)
    Abstract: Giving communities power over school management and spending decisions has been a favored strategy to increase school quality, but its effectiveness may be limited by weak capacity and low authority. We examine the short-term responses of a grant to school committees in a context such a context and find that overall, parents increased participation and responsibility, but these efforts did not improve quality. Enrollment at the lowest grades increased and school resources improved, but teacher absenteeism increased, and there was no impact on test scores. We examine heterogeneous impacts, and provide a model of school quality explaining the results and other results in the literature. The findings of this paper imply that strategies to improve quality by empowering parents should take levels of community authority and capacity into account: even when communities are willing to work to improve their schools, they may not be able to do so.
    Date: 2015–01
  14. By: Obschonka, Martin; Stuetzer, Michael; Gosling, Samuel D.; Rentfrow, Peter J.; Lamb, Michael E.; Potter, Jeff; Audretsch, David B.
    Abstract: In recent years, modern economies have shifted away from being based on physical capital and towards being based on new knowledge (e.g., new ideas and inventions). Consequently, contemporary economic theorizing and key public policies have been based on the assumption that resources for generating knowledge (e.g., education, diversity of industries) are essential for regional economic vitality. However, policy makers and scholars have discovered that, contrary to expectations, the mere presence of, and investments in, new knowledge does not guarantee a high level of regional economic performance (e.g., high entrepreneurship rates). To date, this “knowledge paradox” has resisted resolution. We take an interdisciplinary perspective to offer a new explanation, hypothesizing that “hidden” regional culture differences serve as a crucial factor that is missing from conventional economic analyses and public policy strategies. Focusing on entrepreneurial activity, we hypothesize that the statistical relation between knowledge resources and entrepreneurial vitality (i.e., high entrepreneurship rates) in a region will depend on “hidden” regional differences in entrepreneurial culture. To capture such “hidden” regional differences, we derive measures of entrepreneurship-prone culture from two large personality datasets from the United States (N = 935,858) and Great Britain (N = 417,217). In both countries, the findings were consistent with the knowledge-culture-interaction hypothesis. A series of nine additional robustness checks underscored the robustness of these results. Naturally, these purely correlational findings cannot provide direct evidence for causal processes, but the results nonetheless yield a remarkably consistent and robust picture in the two countries. In doing so, the findings raise the idea of regional culture serving as a new causal candidate, potentially driving the knowledge paradox; such an explanation would be consistent with research on the psychological characteristics of entrepreneurs.
    Keywords: Innovation, Personality, Knowledge, Culture, Entrepreneurship, Psychology, Regions, Cities
    JEL: L26 M13 O3 O30
    Date: 2015
  15. By: Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
    Abstract: Although many U.S. state policies presume that human capital is important for state economic development, there is little research linking better education to state incomes. In a complement to international studies of income differences, we investigate the extent to which quality-adjusted measures of human capital can explain within-country income differences. We develop detailed measures of state human capital based on school attainment from census micro data and on cognitive skills from state- and country-of-origin achievement tests. Partitioning current state workforces into state locals, interstate migrants, and immigrants, we adjust achievement scores for selective migration. We use the new human capital measures in development accounting analyses calibrated with standard production parameters. We find that differences in human capital account for 20-35 percent of the current variation in per-capita GDP among states, with roughly even contributions by school attainment and cognitive skills. Similar results emerge from growth accounting analyses.
    JEL: I25 J24 O47
    Date: 2015–06
  16. By: Grillitsch, Markus (CIRCLE, Lund University); Asheim, Björn (CIRCLE, Lund University; UiS Business School/Centre for Innovation Research, University of Stavanger; BI Norwegian Business School, Oslo)
    Abstract: The literature on cluster evolution suggests that heterogeneity of firm capabilities and openness of network structures are essential for the renewal of mature and declining clusters. This paper argues that the regional and institutional context in which clusters are embedded plays an important role for the renewal of clusters. It elaborates how the integration of institutional variety can stimulate the combination of different types of knowledge, learning and modes of innovation, thereby promoting cluster renewal. The conceptual argument is illustrated with a case study of the maritime cluster in Møre and Romsdal, Norway, which is one of the globally leading clusters in this industry. We find that key actors and policy play an important role in integrating institutional variety. Additionally, the case shows that institutional variety and the integration thereof can be a driving force for cluster renewal even in specialized and semi-peripheral locations.
    Keywords: cluster policy; institutions; path-renewal; path-creation; manufacturing; periphery
    JEL: B52 O10 O30 R30 R50
    Date: 2015–06–08
  17. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10, Turkey; Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.); Nico Katzke (Department of Economics, Stellenbosch University, South Africa); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: In this paper we set out to date-stamp periods of US housing price explosivity for the period 1830-2013. We make use of several robust techniques that allow us to identify such periods by determining when prices start to exhibit explosivity with respect to its past behaviour and when it recedes to long term stable prices. The first technique used is the Generalized sup ADF (GSADF) test procedure developed by Phillips, Shi, and Yu (2013), which allows the recursive identification of multiple periods of price explosivity. The second approach makes use of Robinson (1994)'s test statistic, comparing the null of a unit root process against the alternative of specified orders of fractional integration. Our analysis date-stamps several periods of US house price explosivity, allowing us to contextualize its historic relevance.
    Keywords: GSADF, Bubble, Structural Breaks, Random Walk, Explosivity
    JEL: C22 G15 G14
    Date: 2015–06
  18. By: de Haan, Monique (University of Oslo); Gautier, Pieter A. (VU University Amsterdam); Oosterbeek, Hessel (University of Amsterdam); van der Klaauw, Bas (VU University Amsterdam)
    Abstract: Theory points to a potential trade-off between two main school assignment mechanisms; Boston and Deferred Acceptance (DA). While DA is strategy-proof and gives a stable matching, Boston might outperform DA in terms of ex-ante efficiency. We quantify the (dis)advantages of the mechanisms by using information about actual choices under Boston complemented with survey data eliciting students' school preferences. We find that under Boston around 8% of the students apply to another school than their most-preferred school. We compare allocations resulting from Boston with DA with single tie-breaking (one central lottery; DA-STB) and multiple tie-breaking (separate lottery per school; DA-MTB). DA-STB places more students in their top-n schools, for any n, than Boston and results in higher average welfare. We find a trade-off between DA-STB and DA-MTB. DA-STB places more students in their single most-preferred school than DA-MTB, but fewer in their top-n, for n ≥ 2. Finally, students from disadvantaged backgrounds benefit most from a switch from Boston to any of the DA mechanisms.
    Keywords: school choice, Boston mechanism, deferred acceptance mechanism, strategic behavior, ex-ante efficiency, ex-post efficiency
    JEL: C83 I20
    Date: 2015–06
  19. By: Martín Rossi (Department of Economics, Universidad de San Andres); Ana Reynoso (Department of Economics, Yale University)
    Abstract: We study the relationship between attending high school at night and the probability of engaging in risky behavior, such as having unsafe sex or consuming substances. To address potential endogeneity concerns we take advantage of a random assignment of high school students to daytime and night shifts in the city of Buenos Aires. Using an original survey on students attending their last year of high school, we nd that girls attending high school in the evening start having sex at an earlier age and present a higher probability of getting an abortion. We find no significant differences for substance use. Our experimental approach suggests that the link between high school shift and risky behavior is causal. Results hold when we use an alternative sample of alumni.
    Keywords: school, teenage, behavior
    Date: 2015–04
  20. By: Elsner, Benjamin (IZA); Isphording, Ingo E. (IZA)
    Abstract: We study the impact of a student's ordinal rank in a high school cohort on educational attainment several years later. To identify a causal effect, we compare multiple cohorts within the same school, exploiting idiosyncratic variation in cohort composition. We find that a student's ordinal rank significantly affects educational outcomes later in life. If two students with the same ability have a different rank in their respective cohort, the higher- ranked student is significantly more likely to finish high school, attend college, and complete a 4-year college degree. These results suggest that low-ranked students under-invest in their human capital even if they have a high ability compared to most students of the same age. Exploring potential channels, we find that students with a higher rank have higher expectations about their future career, a higher perceived intelligence, and receive more support from their teachers.
    Keywords: human capital, ordinal rank, peer effects, educational attainment
    JEL: I21 I23 J24
    Date: 2015–06
  21. By: Maria Teresa Gorgitano (Università di Napoli Federico II.); Ornella Wanda Maietta (Università di Napoli Federico II and CSEF)
    Abstract: This paper aims to identify which variables affect the degree of primary pupils' satisfaction concerning the quality of school meals. A representative sample of 33 public primary schools offering meals was extracted for the metropolitan city of Naples. Two questionnaires were distributed, one to the headteachers concerned and the other to the pupils enrolled in the 5th grade. Information about the catering companies is mainly sourced from the AIDA database. Pupil satisfaction is measured by two key variables: pleasantness of eating at school and food tastiness. Controlling for pupil, family, school, foodservice and catering company characteristics, the paper shows that catering company size is negatively associated with pupil satisfaction with the foodservice, whereas meal average production cost is positively associated with satisfaction. The study could assist city boroughs in devising meal quality indicators to be taken into account in designing competitive tendering.
    Keywords: school meal quality, school foodservice satisfaction, catering companies, public procurement, tendering, quality-shading hypothesis.
    JEL: I21 H44
    Date: 2015–05–30
  22. By: Baier, Elisabeth (PTV Group AG, Karlsruhe, Germany); Rammer, Christian (ZEW, Mannheim, Germany); Schubert, Torben (CIRCLE, Lund University & Fraunhofer ISI, Karlsruhe, Germany)
    Abstract: We analyze the effects of captive offshoring of innovation activities on the ability of the firms to adapt their organizational structures. Basing our arguments on complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation offshoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation offshoring. This value is 11% for share of offshored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular, we show that the costs of innovation offshoring in terms of reduced organizational adaptation are increased by a regional dispersion of the offshoring activities and strong embeddedness in onshore networks. We also show that smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities.
    Keywords: Internationalization; Offshoring; Innovation; Organizational Adaptation; Organizational Adaptability
    JEL: O31 O32
    Date: 2015–06–21
  23. By: Gould, Eric D. (Hebrew University, Jerusalem)
    Abstract: This paper investigates whether the increasing "residual wage inequality" trend is related to manufacturing decline and the influx of low-skilled immigrants. There is a vast literature arguing that technological change, international trade, and institutional factors have played a significant role in the inequality trend. However, most of the trend is unexplained by observable factors. This paper attempts to "explain" the growth in the unexplained variance of wages by exploiting variation across locations (states or cities) in the United States in the local level of "residual inequality." The evidence shows that a shrinking manufacturing sector increases inequality. In addition, an influx of low-skilled immigrants increases inequality, but this effect is concentrated in areas with a steeper manufacturing decline. Similar results are found for two alternative measures linked to increasing inequality: the increasing return to education and the decline in the employment rate of non-college men. The overall evidence suggests that the manufacturing and immigration trends have hollowed-out the overall demand for middle-skilled workers in all sectors, while increasing the supply of workers in lower skilled jobs. Both phenomena are producing downward pressure on the relative wages of workers at the low end of the income distribution.
    Keywords: inequality, manufacturing, low-skilled immigration
    JEL: J31
    Date: 2015–06
  24. By: Annalisa Scognamiglio (CSEF, University of Naples)
    Abstract: This paper investigates the effect of diffusion of organized crime on local economies by examining a legal institution that operated in Italy between 1956 and 1988. The law allowed Public Authorities to force mafiosos to resettle to another town. Using variation in the number of resettled mafia members across destination provinces in a differences-in-differences setting, I find no conclusive evidence on the effect of the policy on crime or homicides, while there is a very robust positive impact on employment in the construction sector. Results are consistent with mafia exploiting these new locations mainly for money laundering. JEL Classification: K42, O17.
    Keywords: Organized crime, law making, shadow economy.
    Date: 2015–05–30
  25. By: Bouyon, Sylvain
    Abstract: In recent decades, a growing body of academic literature has focused on the possible negative effects of high levels of home ownership, especially on labour markets. More-than-optimal levels of home ownership may impede the mobility of workers, resulting in higher unemployment rates in some European regions. Against that backdrop, a simple model was devised to test the relationship between home ownership, mobility and unemployment. Recent macroeconomic data published by Eurostat suggest that both the variables of mobility and home ownership have had a significant impact on the dynamics of unemployment rates across the EU28. This ECRI Commentary is one of two on the topic of home ownership in the EU, published simultaneously by the same author; ECRI Commentary No.15, entitled “Recent trends in EU home ownership” looks at the major developments since the crisis of 2008.
    Date: 2015–06
  26. By: Arnott, Richard
    Keywords: Architecture, Arts and Humanities, Engineering
    Date: 2015–04–01
  27. By: Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: Street vending of goods and services is a common phenomenon in urban areas of Africa. Although such street based self-employment activities often lack legal recognition and are sometimes criminalized, significant share of the youth labor force in urban areas earn their livelihood from such activities. This study examines whether street based self-employment is a viable livelihood with a potential for transition or a poverty trap for youth migrants. The study is based on a survey of 445 youth who are engaged in shoe shining and coffee vending activities in two urban areas in Ethiopia. We found that street based self-employment is indeed dominated by migrant youth. In this sample, 96% of those engaged in the street based self-employment are youth and 98% are migrants from rural areas or smaller towns. We found that the average monthly earning of these self-employed youth is better than the minimum wage in public sector and much larger than the official poverty line. We found that most of the youth consider this as transitory employment and accumulate skill and capital with a view to establishing their own enterprise or joining skilled employment. While young women are in general found to be less likely than young men to seek exit out of street based self-employment, education increases the likelihood that young women aspire for a change in their employment situation. Youth with better-off parents back home and those with larger network in their new residence are more likely to change their current occupation.
    Keywords: Informal employment; youth migration; youth unemployment; Africa; Ethiopia
    JEL: J20 J60 O15 O17
    Date: 2015–06–15
  28. By: Jorge Martinez-Vazquez; Santiago Lago-Peñas; Agnese Sacchi
    Abstract: In this paper we offer a comprehensive and updated review of the impact of fiscal decentralization on the economy, society and politics. We start with the examination of two crucial and yet unsolved issues in the literature on decentralization: its proper measurement and the potential endogeneity of fiscal decentralization with many of the variables of interest we are trying to investigate. Then we discuss the main findings in the existing literature on the effects of decentralization on a relevant list of socio-economic variables. The impact of fiscal decentralization reforms on political institutions is also considered. Complete answers to the many questions on the impact of fiscal decentralization are not likely to be certain but overall there are reasons to be optimistic about the overall positive impact of the decentralized systems that have been introduced all over the world in the past several decades. The survey offered in this paper by necessity has to be selective but it presents a balanced view of what is known and what is not yet known opening room for further research and practice on fiscal decentralization.
    Keywords: Fiscal federalism, governance, political decentralization, sub-national governments, macroeconomic stability, economic growth, public policies, politics, corruption, regional disparities, inequality.
    JEL: H70 H72 H77
    Date: 2015–06
  29. By: Ongena, Steven; Tümer-Alkan, Günseli; von Westernhagen, Natalja
    Abstract: We investigate how differential exposures by German banks to the US real estate market during the recent financial crisis affect their corporate lending in Germany. Using unique bank-level exposure data, we distinguish between three different types of bank exposures, i.e. direct exposure to the US real estate sector, direct exposure to subprime lenders in the US, and indirect exposure through the liquidity provided to ABCP conduits. We find that banks with a higher exposure to the US real estate sector and to conduits cut their lending to German firms by more following a decrease in US home prices than banks that do not have such an exposure. Moreover, these banks then also shift their lending to industry-region combinations with lower insolvency ratios. Hence possible losses abroad shift bank lending at home, and the size of this effect depends on the type and the degree of exposure the bank has.
    Keywords: financial sector,bank lending,real estate exposure,subprime,conduits
    JEL: G01 G21 R00
    Date: 2015

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