nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒07‒11
35 papers chosen by
Steve Ross
University of Connecticut

  1. Related variety in Chinese cities: local and Foreign Direct Investment related variety and impacts on urban growth By Junsong Wang; Martha Prevezer
  2. Construction, Commissioning and Supply of New Housing in Russia in 2014 By Georgy Malginov; G. Sternik
  3. Mortgage Finance and Technological Change By Robin Döttling; Enrico Perotti
  4. Spatial Dependence in Regional Business Cycles: Evidence from Mexican States By Keisuke Kondo
  5. Differentiated property tax and urban sprawl in Italian urbanized areas By Ermini, Barbara; Santolini, Raffaella
  6. Household Demand for Housing in Kenya By Muthoka, Sila
  7. Ill communication: technology, distraction & student performance By Louis-Philippe Beland; Richard Murphy
  8. Inattention and Inertia in Household Finance: Evidence from the Danish Mortgage Market By Andersen, Steffen; Campbell, John Y; Nielsen, Kasper Meisner; Ramadorai, Tarun
  9. Location choice of German multinationals in the Czech Republic : the importance of agglomeration economies By Hecht, Veronika
  10. The persistence of local joblessness By Michael Amior; Alan Manning
  11. Does Persistence in Start-up Activity Reflect Persistence in Social Capital? By Michael Fritsch; Michael Wyrwich
  12. Temporary Shocks and Persistent Effects in the Urban System: Evidence from British Cities after the U.S. Civil War By William Hanlon
  13. The more the merrier? Migration and Convergence among European Regions By Lorenz B. Fischer; Michael Pfaffermayr
  14. Fiscal Policy Spillovers: Points of Employment to Places of Residence By Peter McCrory; Bill Dupor
  15. The association between social housing type and children's developmental outcomes By Bilal Nasim
  16. Spatial Distribution of Disposal Sites¦ Empirical Evidence from Japan By Yuichi Ishimura; Kenji Takeuchi
  17. How Does Education Improve Cognitive Skills? Instructional Time versus Timing of Instruction By Sarah Dahmann
  18. Urban Agenda and Urban Sustainability Strategies. Taking Stock of Policy Implementation and Policy Discussion By Stephanie Barnebeck; Yannick Kalff
  19. Key Enabling Technologies and Smart Specialization Strategies. European Regional Evidence from patent data By Sandro Montresor; Francesco Quatraro
  20. Education and criminal behavior: insights from an expansion of upper secondary school By Åslund, Olof; Grönqvist, Hans; Hall, Caroline; Vlachos, Jonas
  21. Children of Migrants: The Impact of Parental Migration on Their Children's Education and Health Outcomes By Meng, Xin; Yamauchi, Chikako
  22. How Do Foreclosures Exacerbate Housing Downturns? By Timothy McQuade; Adam Guren
  23. Universal pre-school education: the case of public funding with private provision By Jo Blanden; Emilia Del Bono; Sandra McNally; Birgitta Rabe
  24. Minimum wage and youth unemployment in local labor markets in Poland By Paulina Broniatowska; Aleksandra Majchrowska; Zbigniew Zolkiewski
  25. The changing returns to crime: do criminals respond to prices? By Mirko Draca; Theodore Koutmeridis; Stephen Machin
  26. ICT and education: evidence from student home addresses By Benjamin Faber; Rosa Sanchis-Guarner; Felix Weinhardt
  27. Credit scoring and loan default By Sengupta, Rajdeep; Bhardwaj, Geetesh
  28. How crime affects the economy: evidence from Italy By Naddeo, Andreina
  29. The pattern of home ownership across cohorts and its impact on the net wealth distribution: Empirical evidence from Germany and the US By Alik-Lagrange, Arthur; Schmidt, Tobias
  30. Fraud in Municipalities. Research Project By Raquel Brito; Carlos Pimenta
  31. Train Commuters' Scheduling Preferences: Evidence from a Large-Scale Peak Avoidance Experiment By Stefanie Peer; Jasper Knockaert; Erik Verhoef
  32. Congestion Pricing: A Mechanism Design Approach By C.-Philipp Heller; Johannes Johnen; Sebastian Schmitz
  33. Impact of an educational demand-and-supply policy on girls' education in West Africa: Heterogeneity in income, school environment and ethnicity By Fatoke-Dato, Mafaïzath A.
  34. Population Density, Fertility, and Childcare Services From the Perspective of a Two-Region Overlapping Generations Model By Ishida, Ryo; Oguro, Kazumasa; Yasuoka, Masaya
  35. What Broke First? Characterizing Sources of Structural Change Prior to the Great Recession By Hull, Isaiah

  1. By: Junsong Wang; Martha Prevezer
    Abstract: The paper measures agglomeration economies through related variety and their impact on growth and employment in Chinese cities, using prefecture level city-industry data from 2003 to 2010.
    Keywords: Related variety; Jacobs externalities; FDI-knowledge spillovers; Urban growth in China
    JEL: O2 R1
    Date: 2015–06
  2. By: Georgy Malginov (Gaidar Institute for Economic Policy); G. Sternik (Gaidar Institute for Economic Policy)
    Abstract: The situation in Russia’s residential housing market over the past year was largely determined by the near-stagnation macroeconomic situation and the current phase of market development, which resulted in a multi-vectored movement of prices in the housing markets of different cities, because in most of them the period of post-crisis recovery was already over, while some cities were still struggling with the consequences of the crisis
    Keywords: Russian economy, house construction, house prices, residential property market,
    JEL: R21 R31 R52
    Date: 2015
  3. By: Robin Döttling (University of Amsterdam, the Netherlands); Enrico Perotti (University of Amsterdam, the Netherlands)
    Abstract: We explore how house prices evolve under technological progress, when housing serves for consumption as well as store of value. Technological change leads to human capital substituting physical capital and manual labor. Reduced use of physical capital implies that firms have less tangible collateral to pledge for external finance. This results in lower business demand for credit and a decline in interest rates. Over time, savings are redirected to mortgage credit, where houses serve as collateral. Under fixed land supply, house prices rise in real terms. The combination of growing wage inequality and mortgage credit leads to high household leverage for low-skill workers, increasing default rates and foreclosures. Restraining mortgage borrowing is more effective than subsidies to limit mortgage defaults, by containing both leverage and house price appreciation. It also leads to lower interest rates, supporting more corporate investment and higher wages.
    Keywords: Inequality; mortgage credit; housing; human capital; skill-biased technological change
    JEL: D33 E22 E44 R21
    Date: 2015–07–06
  4. By: Keisuke Kondo (Research Institute of Economy, Trade and Industry)
    Abstract: This paper investigates how a region-specific shock propagates outward toward neighboring regions when regional business cycles are spatially dependent. For this purpose, we model business cycles by introducing a spatial autoregressive process into a Markov switching model. The advantage of this model is that it enabled us to numerically simulate spatial spillover effects. Therefore, we were able to demonstrate how the economic crisis in 2008–2009 spread across Mexican states. We found that business cycles across these states were spatially dependent and that a regime switch from expansion to recession caused conditions in the neighboring economies to deteriorate.
    Keywords: Spatial dependence, Spatial spillover effects, Regional business cycles, Markov switching model, Markov chain monte carlo
    JEL: C33 E32
    Date: 2015–07
  5. By: Ermini, Barbara; Santolini, Raffaella
    Abstract: City’s core and suburbans tax differentials can affect sprawl within an urban area. We empirically address this issue by analyzing the pattern of growth of 72 Italian urbanized areas. As a novelty, we investigate the causes of the emerging land development pattern. Our results show that density of urban area declines in response to an increase in the city’s core property tax rate. We find that this effect is due to changes in dwelling size. By contrast, density of urban area significantly rises when suburbans property tax rates increase, making the urban area more compact. This effect is attributable to changes in the improvement effect of property taxation.
    Keywords: differentiated property tax, urban sprawl, functional urban area
    JEL: H3 H30 H71 R1 R10 R14
    Date: 2015–07
  6. By: Muthoka, Sila
    Abstract: Previous studies have established that demand pattern for housing identifies with that of a necessary good. The nature of housing goods consumed is highly heterogeneous in dimensions like ownership, size, location and tenure type. In this study I model the probability of household tenure types in Kenya using Household Budget Survey data. Using a Multinomial Logit Model (MNLM) formulation three tenure, household size and age of the household head emerge as significant predictors of household housing choices. Based on the results, the government and firms can rely on household size and age of the household head to approximate demand for housing services in the various tenure types. Furthermore, the ability to interpolate these variables based on occasional population surveys makes it easier to design mechanisms of matching demand and supply for housing services.
    Keywords: housing, demand for housing, tenure, multinomial logit, hedonic regression
    JEL: D12 R21
    Date: 2015–05–30
  7. By: Louis-Philippe Beland; Richard Murphy
    Abstract: This paper investigates the impact of schools banning mobile phones on student test scores. By surveying schools in four English cities regarding their mobile phone policies and combining it with administrative data, we find that student performance in high stakes exams significantly increases post ban. We use a difference in differences (DID) strategy, exploiting variations in schools’ autonomous decisions to ban these devices, conditioning on a range of student characteristics and prior achievement. Our results indicate that these increases in performance are driven by the lowestachieving students. This suggests that restricting mobile phone use can be a low-cost policy to reduce educational inequalities.
    Keywords: Mobile phones; technology; student performance; productivity
    JEL: I21 I28 J24 O33
    Date: 2015–05
  8. By: Andersen, Steffen; Campbell, John Y; Nielsen, Kasper Meisner; Ramadorai, Tarun
    Abstract: This paper studies inattention to mortgage refinancing incentives among Danish households. Danish data are particularly suitable for this purpose because there are minimal barriers to refinancing, yet many borrowers fail to refinance optimally, and the characteristics of these borrowers can be accurately measured. The paper estimates a mixture model of household refinancing types in which household characteristics affect both inattention (a low proportion of rational refinancers) and residual inertia (a low probability that fully inattentive households refinance). Many characteristics move inattention and inertia in the same direction, implying a positive cross-sectional correlation of 0.62 between these two household attributes. Younger, better educated, and higher-income households have less inertia and less inattention. Financial wealth and housing wealth have opposite effects, with the least inertia and inattention among households whose housing wealth is high relative to their financial wealth. There is suggestive evidence of persistent unobserved heterogeneity in attention.
    Keywords: Denmark; household finance; inattention; inertia; mortgages; refinancing
    JEL: G21 N20 R21 R31
    Date: 2015–07
  9. By: Hecht, Veronika (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper analyses the location choice of German investors in the Czech Republic based on a unique dataset covering all Czech companies with a German equity holder in 2010. The identification of the regional determinants of foreign direct investment (FDI) location is an important regional policy issue as FDI is supposed to improve the labour market conditions of the host region. Using a nested logit approach the impact of agglomeration economies, labour market conditions and distance on the location choice decision is investigated. The main result of the paper is that apart from a low distance to the location of the parent company the attractiveness of a Czech district for German investors is mainly driven by agglomeration economies. Besides localisation economies the agglomeration of German companies in a region plays a decisive role. The importance of labour market characteristics differs between investment sectors, sizes and periods." (Author's abstract, IAB-Doku) ((en))
    Keywords: Standortfaktoren, Standortwahl - Determinanten, Herkunftsland, Investitionsverhalten, Auslandsinvestitionen, Arbeitsmarkt, Tschechische Republik, Bundesrepublik Deutschland, Bundesrepublik Deutschland
    JEL: F23 R12 R30
    Date: 2015–07–02
  10. By: Michael Amior; Alan Manning
    Abstract: Local differences in US employment-population ratios and unemployment rates have persisted over many decades. Using decennial census data from 1950-2010, we investigate the reasons for this. The persistence cannot be explained by permanent differences in amenities, local demographic composition or the propensity of women to work. Population does respond strongly to differences in economic fortunes, although these movements are not large enough to eliminate shocks within a decade. Over the longer run, persistence in local joblessness is largely explained by serial correlation in the demand shocks themselves.
    Keywords: Local labor markets; unemployment; inactivity; internal migration; commuting
    JEL: J61 J64 R23
    Date: 2015–06
  11. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Emerging literature shows that spatial differences in entrepreneurship tend to persist over longer periods of time. A potential mechanism underlying this pronounced persistence is that high levels of start-up activity lead to the emergence of a regional culture and a supporting environment in favor of entrepreneurship that particularly involves social capital. This chapter summarizes the available empirical evidence on the regional persistence of entrepreneurship and elaborates in detail how different elements of such a culture, such as social capital, can exert an influence on the level of new business formation and self-employment. As a demonstration for the relevance of a regional entrepreneurship culture for new business formation, we highlight the case of Germany where we find pronounced persistence of start-up activity despite radical structural and institutional shocks over the course of the 20th century. The German case suggests that there is a long-lasting local culture of entrepreneurship that can survive disruptive changes. We discuss the relationship between place-specific social capital and a regional culture of entrepreneurship and draw policy conclusions.
    Keywords: Entrepreneurship, social capital, economic development, self-employment, new business formation, entrepreneurship culture, institutions
    JEL: L26 R11 O11
    Date: 2015–07–07
  12. By: William Hanlon (UCLA)
    Abstract: Urban economies are often heavily reliant on a small number of dominant industries, leaving them vulnerable to negative industry-specific shocks. This paper analyzes the long-run impacts of one such event: the large, temporary, and industry-specific shock to the British cotton textile industry caused by the U.S. Civil War (1861-1865), which dramatically reduced supplies of raw cotton. Because the British cotton textile industry was heavily concentrated in towns in Northwest England, I compare patterns in these cotton towns to other English cities. I find that the shock had a persistent negative effect on the level of city population lasting at least 35 years with no sign of diminishing. Decomposing the effect by industry, I use new data to show that the shock to cotton textiles was rapidly transmitted to local firms in other industries, leading to increased bankruptcies and long-run reductions in employment. This transmission occurred primarily through the link to capital suppliers, such as machinery and metal-goods producers. As a result of these cascading effects, roughly half of the reduction in city-level employment growth in cotton towns during the Civil War was due to the impact on industries other than cotton textiles.
    Date: 2015
  13. By: Lorenz B. Fischer; Michael Pfaffermayr
    Abstract: Using a spatial systems estimator to incorporate spatial interactions and endogeneity of income levels and migration, this paper finds a positive effect of migration on cohesion within the European Union on the NUTS 2 level. As migration can generally be observed from low to high income regions, growth rates of income per worker tend to decrease in regions experiencing net immigration, while lagging regions experience higher speeds of income convergence. As a result, migration increases sigma-convergence. Results show an increase of more than one third. Free movement of persons also proves to increase efficiency, displayed by higher average convergence speeds.
    Keywords: Conditional spatial beta- and sigma-convergence, Migration, Spatial Solow model, European regions
    JEL: R11 C31 O47
    Date: 2015–07
  14. By: Peter McCrory (Federal Reserve Bank of St. Louis); Bill Dupor (Federal Reserve Bank of St. Louis)
    Abstract: In this paper, we study the effects of interregional spillovers from the government spending component of the American Recovery and Reinvestment Act of 2009 (the Recovery Act). Using cross-county Census Journey to Work commuting data, we cluster U.S. counties into local labor markets, each of which we further partition into two subregions. We then compare differential labor market outcomes and Recovery Act spending at the regional and subregional levels using instrumental variables. Among pairs of subregions, we find evidence of fiscal policy spillovers. For example, $1 of Recovery Act spending in a large subregion increases its own wage bill by $0.79 and increases the wage bill in its neighboring subregion by $0.59. We find similar spillover effects when we replace the wage bill with employment as our measure of economic activity. Next, we build a dynamic equilibrium trade model with interregional commuting capable of propagating these spillovers across regions.
    Date: 2015
  15. By: Bilal Nasim (Department of Quantitative Social Science, Institute of Education, University College London)
    Abstract: This paper is the first to investigate the association between social housing type and children's developmental outcomes. I compare the non-cognitive, cognitive and health outcomes of children in council-rented self-contained flats with children in council-rented semi-detached houses and explore the role of housing and neighbourhood quality in explaining differences in outcomes across the two types of social housing. I find that children in flats exhibit statistically significantly worse non-cognitive outcomes than children in houses and this deficit is not attributable to the child's socioeconomic, parental, family or own characteristics. Over half of this deficit is explained by the poorer housing quality of flats compared with houses. No differential, however, is found in the cognitive outcomes of children in council-rented flats and children in council-rented houses. The evidence on child health outcomes is mixed. No deficit is found in the general health of children in flats, although they are found to exhibit greater coughing and sleeping difficulties. Just under half of the greater sleeping difficulties of children in flats is again accounted for by the poorer housing quality of flats.
    Keywords: Social Housing Type; Child Outcomes; Housing Quality
    JEL: I3
    Date: 2015–07–07
  16. By: Yuichi Ishimura (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This study is an empirical investigation of the location of industrial waste disposal sites in Japan. We found some evidence of spatial concentration of industrial waste disposal sites in area with other waste-related facilities. In addition, we found a higher number of industrial waste disposal sites per capita in municipalities that had not experienced conflict relating to the construction of disposal sites. Our results suggest that companies may decide to locate disposal sites in areas in which other waste related facilities already exist and/or where there is less citizen conflict over their construction. This would explain why there is a spatial concentration of unwanted facilities in some areas.
    Keywords: Disposal site; Industrial waste; Spatial econometrics; NIMBY
    JEL: D72 Q53 R39
    Date: 2015–06
  17. By: Sarah Dahmann
    Abstract: This paper investigates two mechanisms through which education may affect cognitive skills in adolescence: the role of instructional quantity and the timing ofinstruction with respect to age. To identify causal effects, I exploit a school reform carried out at the state level in Germany as a quasi-natural experiment: between 2001 and 2007, the academic-track high school (Gymnasium) was reduced by one year in most of Germany's federal states, leaving the overall curriculum unchanged. To investigate the impact of this educational change on students' cognitive abilities, I conduct two separate analyses: first, I exploit the variation in the curriculum taught to same-aged students at academic-track high school over time and across states to identify the effect of the increase in class hours on students' crystallized and fluid intelligence scores. Using rich data on seventeen year-old adolescents from the German Socio-Economic Panel (SOEP) study, the estimates show that fluid intelligence remained unaffected, while crystallized intelligence improved for male students. Second, I compare students' competences in their final year of high school using data from the German National Educational Panel Study (NEPS). The results suggest that students affected by the reform catch up with their non-affected counterparts in terms of their competences by the time of graduation. However, they do not provide any evidence for the timing of instruction to matter in cognitive skill formation. Overall, secondary education therefore seems to impact students'cognitive skills in adolescence especially through instructional time and not so much through age-distinct timing of instruction.
    Keywords: Cognitive Skills, Crystallized Intelligence, Fluid Intelligence, Skill Formation, Education, High School Reform
    JEL: I21 I28 J24
    Date: 2015
  18. By: Stephanie Barnebeck; Yannick Kalff
    Abstract: Socio-ecological transitions are a main project, current EU policies, national environmental poli-tics, and regional as well as local action address. Manifold approaches exist and the European Union is anxious to coordinate and facilitate the process of a consolidated transition. Therefore, a policy paper is being developed, the European Urban Agenda, which operates on all govern-mental levels to allow cities more capability in realising said socio-ecological transition accord-ing to their own structural, spatial, social, economic, and environmental predispositions. In a broad study of 40 cities in Europe, we gathered a vast amount of empirical data that indi-cates the individual approaches towards a transition as well as their relations to European and national policies. This paper presents an extension of this research results. We depart from the results of the ROCSET study that is centred on the possibilities of self-organisation and ask about local sustainability strategies with concrete aims and goals. Further, the results of a con-sultation process on this European Urban Agenda are interpreted as an indicator on how the general perception of EU urban policies differs from actor to actor. Such an Agenda can con-tribute to unify individual approaches towards sustainability and consolidate strategies while maintaining the individuality of the local approaches. This paper starts with an outline of the research of the ROCSET study. In the second chapter, the actual urban sustainability strategies are reconstructed to take stock of the current situation in our forty researched cities. The third chapter analyses the consultation process on the Euro-pean Urban Agenda that then can be taken as an indicator on what the expectations for such an agenda are, and how they might reflect currently existing urban strategies.
    Keywords: Academic research, Beyond GDP, Demographic change, Ecological innovation, European economic policy, European governance, Good governance, Holistic and interdisciplinary approach, Research, Social innovation, Socio-ecological transition, Sustainable growth
    JEL: C01 O18 Q01 Q28 Q42 Q48 Q53 Q57 Q58 R1
    Date: 2015–06
  19. By: Sandro Montresor (Kore University of Enna); Francesco Quatraro (University of Turin)
    Abstract: The paper aims at investigating whether Key Enabling Technologies (KETs) can have a role in facilitating regional Smart Specialisation Strategies (S3). Drawing on the economic geography approach to S3, we formulate some hypotheses about the impact that KETs-related knowledge can have on the construction of new regional technological advantages (RTAs). By crossing regional data on patent applications, in KETs-mapped classes of the International Patent Classification (IPC), with a number of regional economic indicators, we test these hypotheses on a panel of 26 European countries over the period 1980-2010. KETs show a positive impact on the construction of new RTAs, pointing to a new “enabling” role for them. KETs also exert a negative moderating role on the RTAs impact of the density of related pre-existing technologies, pointing to the KETs capacity of making the latter less binding in pursuing S3. Overall, the net-impact of KETs is positive, pointing to a new case for plugging KETs in the S3 policy tool-box.
    Keywords: Key Enabling Technologies; Smart Specialization Strategies; Revealed Technological Advantages
    JEL: R11 R58 O31 O33
    Date: 2015
  20. By: Åslund, Olof (IFAU - Institute for Evaluation of Labour Market and Education Policy); Grönqvist, Hans (SOFI, Stockholm University); Hall, Caroline (IFAU - Institute for Evaluation of Labour Market and Education Policy); Vlachos, Jonas (Department of Economics, Stockholm University)
    Abstract: We study the impact on criminal activity from a large scale Swedish reform of vocational upper secondary education, extending programs from two to three years and adding more general theoretical content. The reform directly concerns age groups where criminal activity is high and students who are highly overrepresented among criminal offenders. The nature of the reform and the rich administrative data allow us to shed light on several behavioral mechanisms. Our results show that the prolonged and more general education lead to a reduction in property crime, but no significant decrease in violent crime. The effect is mainly concentrated to the third year after enrollment, which suggests that being in school reduces the opportunities and/or inclinations to commit crime.
    Keywords: Education; delinquency
    JEL: K42
    Date: 2015–06–22
  21. By: Meng, Xin (Australian National University); Yamauchi, Chikako (National Graduate Institute for Policy Studies Japan)
    Abstract: In the past 15 years around 160 million Chinese rural workers migrated to cities to work. Because of restrictions on migrant access to local health and education system a large cohort of migrant children are left-behind in rural villages and growing up without parental care. This paper examines how parental migration affects children's health and education outcomes. Using the Rural-Urban Migration Survey in China (RUMiC) data we are able to measure the share of children's lifetime during which parents migrated away from home. By instrumenting this measure of parental migration with weather changes in their home village when they were young we find a sizable adverse impact of exposure to parental migration on children's health and education outcomes. We also find that what the literature has always done (using contemporaneous measure for parental migration) is likely to underestimate the effect of exposure to parental migration on children's outcomes.
    Keywords: migration, children, education, health, China
    JEL: J38 I28
    Date: 2015–06
  22. By: Timothy McQuade (Stanford University); Adam Guren (Boston University)
    Abstract: We present a dynamic search model in which foreclosures exacerbate housing busts and delay the housing marketÂ’s recovery. By raising the seller to buyer ratio and making buyers more selective, foreclosures freeze the market for non- foreclosures and reduce price and sales volume. Because negative equity is necessary for default, foreclosures can cause price-default spirals that amplify an initial shock. To quantitatively assess these channels, the model is calibrated to the recent bust. The estimated amplification is significant: foreclosures exacerbated aggregate price declines by 60 percent and non-foreclosure price declines by 24 percent. Furthermore, policies that slow foreclosures can be counterproductive.
    Date: 2015
  23. By: Jo Blanden; Emilia Del Bono; Sandra McNally; Birgitta Rabe
    Abstract: This paper studies the effect of free pre-school education on child outcomes in primary school. We exploit the staggered implementation of free part-time pre-school for three-year-olds across Local Education Authorities in England in the early 2000s. The policy led to small improvements in attainment at age five, with no apparent benefits by age 11. We argue that this is because the expansion of free places largely crowded out privately paid care, with small changes in total participation, and was achieved through an increase in private provision, where quality is lower on average than in the public sector.
    Keywords: Childcare; child outcomes; publicly provided goods
    JEL: H44 I21
    Date: 2015–05
  24. By: Paulina Broniatowska (Warsaw School of Economics, National Bank of Poland); Aleksandra Majchrowska (Faculty of Economics and Sociology, University of Lodz, National Bank of Poland); Zbigniew Zolkiewski (National Bank of Poland)
    Abstract: The aim of the paper is to analyze the impact of minimum wage on youth unemployment (less than 25 years old) in local (NUTS4) labor markets in Poland. The results show that minimum wage in Poland significantly affects youth unemployment in local labor markets in Poland. The higher is the minimum to average wage ratio on local labor market, the higher is the share of youth unemployed in total unemployment. The fact that youths are the group which is disproportionally affected by minimum wage increases is confirmed by low and/or insignificant value of the parameter by minimum to average wage ratio for other, older groups of workers
    Keywords: minimum wage, youth unemployment, local labor markets in Poland.
    Date: 2015–06
  25. By: Mirko Draca; Theodore Koutmeridis; Stephen Machin
    Abstract: In economic models of crime individuals respond to changes in the potential value of criminal opportunities. We analyse this issue by estimating crime-price elasticities from detailed data on criminal incidents in London between 2002 and 2012. The unique data feature we exploit is a detailed classification of what goods were stolen in reported theft, robbery and burglary incidents. We first consider a panel of consumer goods covering the majority of market goods stolen in the crime incidents and find evidence of significant positive price elasticities. We then study a particular group of crimes that have risen sharply recently as world prices for them have risen, namely commodity related goods (jewellery, fuel and metal crimes), finding sizable elasticities when we instrument local UK prices by exogenous shifts in global commodity prices. Finally, we show that changes in the prices of loot from crime have played a role in explaining recent crime trends.
    Keywords: Crime; goods prices; metal crime; commodity prices
    JEL: K42
    Date: 2015–06
  26. By: Benjamin Faber; Rosa Sanchis-Guarner; Felix Weinhardt
    Abstract: Governments are making it a priority to upgrade information and communication technologies (ICT) with the aim to increase available internet connection speeds. This paper presents a new strategy to estimate the causal effects of these policies, and applies it to the questions of whether and how ICT upgrades affect educational attainment. We draw on a rich collection of microdata that allows us to link administrative test score records for the population of English primary and secondary school students to the available ICT at their home addresses. To base estimations on exogenous variation in ICT, we notice that the boundaries of usually invisible telephone exchange station catchment areas give rise to substantial and essentially randomly placed jumps in the available ICT across neighboring residences. Using this design across more than 20,000 boundaries in England, we find that even very large changes in available internet speeds have a precisely estimated zero effect on educational attainment. Guided by a simple model we then bring to bear additional microdata on student time and internet use to quantify the potentially opposing mechanisms underlying the zero reduced form effect. We find that jumps in the available ICT have no significant effect on student time spent studying online or offline, or on their productivity. Finally, while faster connections appear to increase student consumption of online content, we find that the elasticity of student demand for online content with respect to its time cost is negative but bounded by -1.
    Keywords: Education; information and communication technology; internet
    JEL: D83 I20
    Date: 2015–06
  27. By: Sengupta, Rajdeep (Federal Reserve Bank of Kansas City); Bhardwaj, Geetesh
    Abstract: A metric of credit score performance is developed to study the usage and performance of credit scoring in the loan origination process. We examine the performance of origination FICO scores as measures of ex ante borrower creditworthiness using loan-level data on ex post performance of subprime mortgages. Parametric and nonparametric estimates of credit score performance reveal different trends, especially on originations with low credit scores. The data suggest a trend of increased emphasis on higher credit scores accompanying a trend of increased riskiness in other origination attributes. Over time, this increased emphasis on credit scoring coincided with deterioration in FICO performance largely due to the fact that higher credit score originations of later cohorts were more likely to have riskier attributes. However, controlling for other attributes on originations and changes in economic conditions, we find that, as measures of borrower ranking, FICO performance on subprime loans over the years remains fairly stable.
    Keywords: Credit scoring; Subprime mortgages
    JEL: G21
    Date: 2015–02–01
  28. By: Naddeo, Andreina
    Abstract: Italy represents an interesting case study for an empirical analysis of the impact of crime on economic performance. The country, in fact, presents considerable disparities among its regions in terms of economic outcomes and crime rates. The economic performance is measured using data on regional GDP per capita, while the crime variable is given by the homicides rate (attempted and committed) per 100,000 inhabitants. Data shows that crime is higher in regions characterized by low GDP per capita. This may be due to reverse causality. GDP per capita may be lower because of the large presence of crime and the high presence of crime can be due to the economic conditions of these regions. Baseline analysis with fixed effect model shows a small negative effect of crime on GDP per capita. Results change drastically when the potential endogeneity issue is addressed. Instrumenting crime with the effective abortion rate (similar to the one developed by Levitt, 2001) and using the Two Stage Least Square method, it emerges that if the homicides rate increases by 1% than the GDP will be lower of 0.32%. System GMM estimator is used to capture the effect of crime on economic growth. Results show that the growth rate will be reduced by 0.13% if homicides rate increases of 1%. Concluding, results indicate that crime substantially affects the level of GDP per capita and economic growth across Italian regions, especially in Southern Italy, thus finding one of the possible factors explaining the Italian dualism.
    Keywords: Crime, Economic Growth, Italy, Abortion, Organized crime
    JEL: K00 K42 O47
    Date: 2014–04
  29. By: Alik-Lagrange, Arthur; Schmidt, Tobias
    Abstract: In this empirical paper we analyze the link between homeownership across cohorts and the net wealth distribution. In particular we are interested in the effect of the pattern of ownership across cohorts. Given that wealth accumulates over the life-cycle and that owners are wealthier than renters, past tenure choices, affecting today's share of owners for different cohorts, should be related to current wealth levels and inequality. In order to gauge the effect of the ownership structure over cohorts on the distribution of net wealth we impose the homeownership pattern of the US on Germany and ask: What would the net wealth distribution in Germany look like if German households were distributed across tenure status along cohorts the same way as those in the US? Our results indicate that the ownership rate and pattern within cohorts is closely linked to the wealth distribution. Imposing the structure of the US on Germany leads to a large increase in the German median and reduces wealth inequality. We show that some of these effects can be attributed to the difference in ownership shares between old cohorts in Germany and the US as often mentioned in the literature, but this effect appears to be less pronounced than expected. Past tenure choice indeed affects today's net wealth distribution.
    Keywords: homeownership,decomposition,cohort effects,wealth
    JEL: D31 D30
    Date: 2015
  30. By: Raquel Brito; Carlos Pimenta (Observatório de Economia e Gestão de Fraude. Faculdade de Economia do Porto.)
    Abstract: If one assumes that each municipality has a relative autonomy regarding the geographical and social spaces one can create fraud and corruption estimation models - in an ample sociological sense - by municipality. Fraud and corruption are the result of the social environment impact, the functioning of institutions and the individual practices, as well as the interactions between them. From this framework, vicious and virtuous cycles occur, with local specificities. The municipalities are frequently the focus of public attention and criminal investigation, but the quantified information is scarce and partial. Besides that, attention is more about the frequency of fraud rather than to its value. This can create a serious gap between the reality of fraud and corruption and its perception. Only the use of different methodologies for quantifying the facts and networking between institutions can give an insight of the fraud and corruption within a municipality. At this moment we consider the integration of three vectors in the model. However, the possibility of expansion is also considered. First of all, it is recognized that the social influence and institutional interaction about the existence of an environment more or less favorable to fraud and corruption. It is possible to estimate fraud probability assuming a set of hypotheses, and combining the information available by municipality, the knowledge of the Fraud Management, Sociology and Criminology, statistical spatial studies to other places and the detection of some indicia. Secondly, the thinly veiled nature of the fraud, its time of gestation and the great diversity of its forms, requires any quantification to use perception quantification and the results of victimization surveys. These must be applied to different targets, to compare results and to get a glimpse on the heterogeneity of analyzed frauds. Thirdly, it is recognized that local power structures in their political and administrative functions have a decisive influence on fraud. We must find ways to analyze and quantify the functioning of municipalities in relation to occupational and organizational fraud. That can be achieved, for example, by analyzing their plans for preventing corruption, their administrative practices, their political-institutional attitudes or their local social networks. The articulation between these three vectors highlights a greater possibility to quantify the fraud by municipalities. This geography allows the operationalization of fraud prevention that considers the diversity of agents, layers and times. All methods to quantify the Non-Registered Economy face difficulties, perhaps impossibility, in spatial segmentation if the unit of reference - in this case the municipality - is completely open to the outside. The model shown here allows intercepting their results with the national Non-Registered Economy, allowing an approach to spatial segmentation.
    Date: 2015–03
  31. By: Stefanie Peer (VU University Amsterdam, the Netherlands, and Vienna University of Economics and Business, Vienna, Austria); Jasper Knockaert (VU University Amsterdam, the Netherlands); Erik Verhoef (VU University Amsterdam, the Netherlands)
    Abstract: We study the trip scheduling preferences of train commuters in a real-life setting. The underlying data have been collected during large-scale peak avoidance experiment conducted in the Netherlands, in which participants could earn monetary rewards for traveling outside peak hours. The experiment included ca. 1000 participants and lasted for about 6 months. Holders of an annual train pass were invited to join the experiment, and a customized smartphone app was used to measure the travel behavior of the participants. We find that compared to the pre-measurement, the relative share of peak trips decreased by 22% during the reward period, and by 10% during the post-measurement. By combining multiple complementary data sources, we are able to specify and estimate (MNL and panel latent class) departure time choice models. These yield plausible estimates for the monetary values that participants attach to reducing travel time, schedule delays, the number of transfers, crowdedness, and unreliability.
    Keywords: C25; C90; D01; D80; R41
    Date: 2015–07–06
  32. By: C.-Philipp Heller (Humboldt-Universitaet zu Berlin); Johannes Johnen (European School of Management and Technology); Sebastian Schmitz (Freie Universitae Berlin)
    Abstract: We study road congestion as a mechanism design problem. In our basic model we analyze the allocation of a set of drivers among two roads, one of which may be congested. An additional driver on the congestible road imposes an externality on the other drivers by increasing their travel time. Each driver is privately informed about her value of time and asked to report that value to the mechanism designer, who assigns drivers to roads. With a nite number of drivers, there is aggregate uncertainty and the efficient allocation is ex ante unknown. Setting a single Pigouvian price is then not optimal. However, the efficient allocation is implementable by a Vickrey-Clarke-Groves price schedule that lets each driver pay the externality she imposes on other drivers. This allows drivers to pay to have other drivers use the slow road instead of the congestible road. As the number of drivers becomes large, there is a single optimal Pigouvian price that leads to an efficient allocation. However, finding this price requires the mechanism designer to either know the precise distribution of the value of time or the use of our mechanism. We analyze some extensions and apply our model to various congestion problems arising in other contexts. Creation Date: 2015-06-26
    Keywords: Mechanism Design, Congestion Pricing, VCG Mechanism, Externalities, Value of Time
    JEL: D82 D62 R48 R41
  33. By: Fatoke-Dato, Mafaïzath A.
    Abstract: The present paper measures the impact of an educational demand-and-supply side policy in a developing country, Benin. This West African country has introduced in 2006 a program to eliminate school fees, build schools and recruit teachers. The data used are the National Demographic and Health Surveys of 2006 and 2012. The difference-in-differences estimations reveal that the policy has lead to a huge increase in enrollment and attendance of birth cohorts of children eligible for the program. Indeed, children stayed on average two more years in school following the implementation of the program. Nevertheless, the gender disparities are tenacious. The heterogeneity analyses suggest that girls' schooling is also influenced by the school infrastructure and the cultural beliefs.
    Keywords: Policy evaluation,Education policy,School fees,Inequality,Infrastructures
    JEL: H43 I24 I25 I28
    Date: 2015
  34. By: Ishida, Ryo; Oguro, Kazumasa; Yasuoka, Masaya
    Abstract: In countries confronting the issue of low fertility, as Japan is, dual trends showing higher regional population density associated with lower fertility rates are being confirmed. It is therefore an important theme for analysis to deepen discussions related to reducing regional fertility disparities by increasing fertility through the implementation of comprehensive childcare support policies, which might facilitate the striking of a balance between child-rearing and work, even in highly populated regions. As described herein, we constructed a simple theoretical two-region Overlapping Generations (OLG) by incorporating migration and land prices. Using it, we analyzed effects of population density and childcare services on fertility. Results elucidated the following three points. First, in the presence of congestion costs associated with increased population density, the fertility rate of the region decreases with increased population density. However, if the time cost of child-rearing is brought down by raising the level of the childcare services provided in the region, then the effect of increased population density on fertility can be restrained. Second, when the effect of population size on productivity is less than a certain level, improvement in the childcare services raises the relative ratio of the population density. When the effect of population size on productivity exceeds a certain level, however, the relative ratio of the population density decreases if the relative ratio of the time cost of child-rearing decreases as a result of childcare service reform. Third, where each region imposes payroll tax on its residents and uses its tax revenue as the financial resources to adopt a decentralized strategy of providing childcare services to its region, the level of childcare services that maximizes the utility of a representative agent in each region is independent of the childcare services of any other region. Therefore, manipulation of the level of childcare services becomes a dominant strategy.
    Keywords: population density, fertility, congestion, migration, childcare services, overlapping generation (OLG)
    JEL: H40 J13 J61 R10 R12 R23
    Date: 2015–06
  35. By: Hull, Isaiah (Research Department, Central Bank of Sweden)
    Abstract: This paper identifies and characterizes episodes of structural change in the 27 years that preceded the Great Recession. This is done by performing Bai-Perron (2003a, 2003b) tests on 61,843 time series that span 34 countries, which collectively accounted for 81% of Gross World Product in 2013. Three major stylized facts are established. First, the rate of structural change increased throughout the early 1990s, stabilized in 2003, and then decreased slowly until 2007. Second, there were three large spikes in the pace of structural change after the 1990-1991 recession: 1993-1994, 2001-2003, and 2007-2009. The latter two overlap with recessions in the U.S. and many other major economies, but the first does not. This spike is associated with structural change in residential investment, consumption, exchange rates, and real estate. Across countries, the degree of structural change is highest in China during this episode. Third, the periods 1993-1994 and 1997-2000 contain heavy structural change in real estate and lending; however, the rate of structural change in house price and construction series was more pronounced in and after 2001.
    Keywords: Great Recession; Macroeconomics; Econometrics; Break Tests; Structural Stability
    JEL: C01 C59 E30 E60 R20
    Date: 2015–06–01

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