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

  1. A closer look at the long-term patterns of regional income inequality in Spain: the poor stay poor (and stay together) By Daniel A. Tirado-Fabregat; Alfonso D’ez-Minguela; Julio Mart’nez-Galarraga
  2. House Prices and Consumer Spending By David Berger; Veronica Guerrieri; Guido Lorenzoni; Joseph Vavra
  3. Mortgages and Monetary Policy By Garriga, Carlos; Kydland, Finn E.; Sustek, Roman
  4. The Long-Term Impacts of Low-Achieving Childhood Peers: Evidence from Project STAR By Bietenbeck, Jan
  5. Putting it off for later By Stuart Baumann
  6. The rise and fall of consumption in the '00s By Demyanyk, Yuliya; Hryshko, Dmytro; Luengo-Prado, Maria Jose; Sorensen, Bent E.
  7. Learning and the Market for Housing By Eyno Rots
  8. Labour Mobility of Migrants and Natives in the European Union: An Empirical Test of the 'Greasing of the Wheels’ Effect of Migrants By Michael Landesmann; Sandra M. Leitner
  9. Convergence of Electricity Consumption in Turkey: A Spatial Dynamic Panel Analysis By Gülsüm Akarsu; Burcu Berke
  10. More than A to B: the role of free bus travel for the mobility and wellbeing of older citizens in London By Judith Green; Alasdair Jones; Helen Roberts
  11. Express delivery to the suburbs. The effects of transportation in Europe’s heterogeneous cities By Miquel-Ángel Garcia-López; Ilias Pasidis; Elisabet Viladecans-Marsal
  12. Do People Shape Cities, or Do Cities Shape People? The Co-evolution of Physical, Social, and Economic Change in Five Major U.S. Cities By Nikhil Naik; Scott Duke Kominers; Ramesh Raskar; Edward L. Glaeser; César A. Hidalgo
  13. Identification of Regional Clusters in Mexican Manufacturing Industry By Chávez Juan Carlos; García Loredo Katia
  14. A Racial Inequality Trap By Badel, Alejandro
  15. Smart guide on regional transport innovation strategy: Transport innovation roadmaps By Ana Condeco-Melhorado; Aris Christodoulou; Panayotis Christidis
  16. Pollution and Mortality in the 19th Century By W. Walker Hanlon
  17. Where Does Voucher Funding Go? How Large-Scale Subsidy Programs Affect Private-School Revenue, Enrollment, and Prices By Daniel M. Hungerman; Kevin Rinz
  18. Border effects and urban structure By Dávid K. Nagy
  19. India’s Air Traffic System: Network Topologies, Hierarchies and Evolution By Huber, Hans
  20. The Association between Immigration and Labor Market Outcomes in the United States By Basso, Gaetano; Peri, Giovanni
  21. Carrot and Stick? Impact of a Low-Stakes School Accountability Program on Student Achievement By Woo, Seokjin; Lee, Soohyung; Kim, Kyunghee
  22. Racial Discrimination in Local Public Services: A Field Experiment in the US By Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos
  23. Spatial analysis of the financial system in urban areas: The case of Buenos Aires city By Andrés Denes; Gastón Repetto
  24. Centrality of regions in R&D networks: Conceptual clarifications and a new measure By Laurent Bergé; Iris Wanzenböck; Thomas Scherngell
  25. Spatial vs. Social Network Effects in Risk Sharing By Aida, Takeshi
  26. Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects By Feld, Jan; Zölitz, Ulf
  27. Minimum Wages and Spatial Equilibrium: Theory and Evidence By Monras, Joan
  28. Oil and Gas Revenue Allocation to Local Governments in Eight States By Richard G. Newell; Daniel Raimi
  29. Inter- and intra-firm linkages: Evidence from microgeographic location patterns By Behrens, Kristian; Sharunova, Vera
  30. Debt, Inequality and House Prices: Explaining the Dynamics of Household Borrowing Prior to the Great Recession By Alessia De Stefani
  31. Peer Effects in Computer Assisted Learning: Evidence from a Randomized Experiment By Fafchamps, Marcel; Mo, Di
  32. Social cooperatives, social welfare associations and social networks By Degli Antoni, Giacomo; Sabatini, Fabio
  33. The impact of cultural diversity on firm innovation: evidence from Dutch micro-data By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  34. Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response By Andrew Foote; Michel Grosz; Ann Huff Stevens
  35. The digital skin of cities: urban theory and research in the age of the sensored and metered city, ubiquitous computing and big data By Chirag Rabari; Michael Storper
  36. Leading, lagging, and left behind: identifying metropolitan leaders and labor market outcomes By Andreason, Stuart
  37. Findings from the Trafford Hall Energy Plus Think Tank By LSE Housing and Communities
  38. Urbanisation-construction-migration nexus | 5 cities | South Asia By Sunil Kumar; Melissa Fernández
  39. EU Survey on issues related to transport and mobility By Davide Fiorello; Loredana Zani
  40. Eco-Clusters as Driving Force for Greening Regional Economic Policy By Alina Pohl
  41. A place-based strategy to smart specialisation: the case of Apulia By Chiara Pancotti; Emanuela Sirtori; Silvia Vignetti
  42. Social Networks and Factor Markets: Panel Data Evidence from Ethiopia By Abay, Kibrom; Kahsay, Goytom; Berhane, Guush
  43. Phasing Out the GSEs By Vadim Elenev; Tim Landvoigt; Stijn Van Nieuwerburgh
  44. Can't Pay or Won't Pay? Unemployment, Negative Equity, and Strategic Default By Kristopher Gerardi; Kyle F. Herkenhoff; Lee E. Ohanian; Paul S. Willen
  45. High and Low Activity Spell in Housing Markets By Eric Smith
  46. Does Cultural Diversity of Migrant Employees Affect Innovation? By Ceren Ozgen; Cornelius Peters; Annekatrin Niebuhr; Peter Nijkamp; Jacques Poot
  47. Speaking in Numbers: The Effect of Reading Performance on Math Performance among Immigrants By Isphording, Ingo E.; Piopiunik, Marc; Rodríguez-Planas, Núria
  48. Sibling Health, Schooling and Longer-Term Developmental Outcomes By Chris Ryan; Anna Zhu
  49. Regional Competitiveness Under New Perspectives By Karl Aiginger; Matthias Firgo
  50. Bullying among Adolescents: The Role of Cognitive and Non-Cognitive Skills By Miguel Sarzosa; Sergio Urzúa
  51. Long-term Direct and Spillover Effects of Job Training: Experimental Evidence from Colombia By Adriana Kugler; Maurice Kugler; Juan Saavedra; Luis Omar Herrera Prada
  52. Discrimination and Worker Evaluation By Costas Cavounidis; Kevin Lang

  1. By: Daniel A. Tirado-Fabregat (Universitat de Valncia); Alfonso D’ez-Minguela (Universitat de Valncia); Julio Mart’nez-Galarraga (Universitat de Valncia)
    Abstract: This paper explores regional (NUTS3) income inequality in Spain, 1860-2010. Using a novel dataset spanning 150 years, we analyse the evolution of inequality in regional per-capita GDP. To do this, we follow the growth literature and use spatial exploratory tools. Our aim is to understand not only the long-term evolution as regards convergence or dispersion, but also aspects related to income distribution, i.e. modality, mobility and spatial clustering. We therefore use tolls such as kernel density estimates, boxplots, transition probability matrices, Shorrocks indices, KendallÕs !, MoranÕs I and LISA maps. The main finding is that there were two clearly distinguishable periods in the economic development process. First, there was an upswing in regional inequality accompanied by a certain mobility betwee 1860 and 1930. This was followed by a period of regional convergence lasting until the 1980Õs, in which mobility in income class or rank was rather low. As a result, spatial clustering became more significant and income distribution was transformed. Decreasing regional inequality was thus accompanied by a geographical concentration of the richest and poorest regions. While wealthy Spain was located in the north-east, poor Spain was in the south, particularly the south-west. Mobility has also been virtually non-existent in recent decades. All in all, the study shows the importance of history in the shaping of SpainÕs regional income distribution.
    Keywords: Regional inequality, Spain, Regional growth, Economic history
    JEL: C21 O18 R0 N64 F14
    Date: 2015–10
  2. By: David Berger; Veronica Guerrieri; Guido Lorenzoni; Joseph Vavra
    Abstract: Recent empirical work shows large consumption responses to house price movements. Can consumption theory explain these responses? We consider a variety of consumption models with uninsurable income risk and show that consumption responses to permanent house price shocks can be approximated by a simple "sufficient-statistic" formula: the marginal propensity to consume out of temporary income times the value of housing. Calibrated versions of the models generate house price effects that are both large and sensitive to the level of household debt in the economy. We apply our formula to micro data to provide new measures of house price effects.
    JEL: D14 D91 E21 E32 E6 R21
    Date: 2015–10
  3. By: Garriga, Carlos (Federal Reserve Bank of St. Louis); Kydland, Finn E. (University of California–Santa Barbara and NBER); Sustek, Roman (University of London and Centre for Macroeconomics)
    Abstract: Mortgages are long-term nominal loans. Under incomplete asset markets, monetary policy is shown to affect housing investment and the economy through the cost of new mortgage borrowing and the value of payments on outstanding debt. These channels, distinct from traditional transmission of monetary policy, are evaluated within a general equilibrium model. Persistent monetary policy shocks, resembling the level factor in the nominal yield curve, have larger effects than transitory shocks, manifesting themselves as long-short spread. The transmission is stronger under adjustable- than fixed-rate mortgages. Higher, persistent, inflation benefits homeowners under FRMs, but hurts them under ARMs.
    Keywords: Mortgage finance; monetary policy; general equilibrium; housing investment; redistribution
    JEL: E32 E52 G21 R21
    Date: 2015–10–25
  4. By: Bietenbeck, Jan (Lund University)
    Abstract: This paper evaluates how sharing a kindergarten classroom with low-achieving repeaters affects the long-term educational performance of regular first-time kindergarten students. Exploiting random assignment of teachers and students to classes in Project STAR, I document three sets of causal impacts: students who are exposed to repeaters (1) score lower on standardized tests at the end of kindergarten, an effect that fades out in later grades; (2) show persistent improvements in non-cognitive skills such as effort and discipline; and (3) are more likely to graduate from high school and to take a college entrance exam around the age of eighteen. I show that the positive spillovers from repeaters on long-term educational attainment are likely driven by the differential accumulation of non-cognitive skills by repeater-exposed students during childhood. The improvements in these skills are in turn a result of behavioral adjustments by teachers, students, or parents to the presence of low-achieving repeaters in the classroom.
    Keywords: peer effects, long-term outcomes, non-cognitive skills, Project STAR
    JEL: I21 J24
    Date: 2015–10
  5. By: Stuart Baumann
    Abstract: self-reported value of homes of about 0.6% across US states and 0.7% across metro areas. Inequality therefore induced a wealth effect in homeowners. I also show that the increase in housing wealth was associated with higher consumption, despite constant real income. A 1% increase in top incomes induced a 0.46% increase in “non-rich†homeowners’ consumption, and a 0.18% increase in mortgage debt. The wealth effect experienced by homeowners living in highinequality regions can therefore explain the link between inequality and household debt without recourse to behavioral explanations such as the “conspicuous consumption†hypothesis.
    Keywords: Government spending, fiscal year distortions
    JEL: H11 H50 H61
    Date: 2015–10–21
  6. By: Demyanyk, Yuliya (Federal Reserve Bank of Cleveland); Hryshko, Dmytro (University of Alberta); Luengo-Prado, Maria Jose (Federal Reserve Bank of Boston); Sorensen, Bent E. (University of Houston)
    Abstract: The major portion of U.S. gross domestic product (GDP) is accounted for by consumer spending, which significantly affects the business cycle. Consumer demand has been extremely volatile since 2000, especially given the booms and busts in housing values and in subprime mortgage lending. While it is well-established that housing net worth, credit availability, and household debt levels help to explain changes in consumer spending, the roles played by other potential determinants of consumption are not well identified or understood. This paper uses county-level data and a multiple-regression framework to explore how fluctuations in consumption between 2000 and 2012 are correlated with these macroeconomic variables: income, unemployment, debt, income inequality, consumer expectations, housing wealth, credit access, cash-out refinancings, and foreclosures. Four subperiods are considered: the "dot-com" recession (2001–2003), the "subprime boom" (2004–2006), the Great Recession (2007–2009), and the "tepid recovery" (2010–2012).
    JEL: E21 E37
    Date: 2015–10–16
  7. By: Eyno Rots (Magyar Nemzeti Bank (the Central Bank of Hungary))
    Abstract: House prices have inertia, which may be because housing-market participants need time to recognize long booms and recessions. Within a dynamic stochastic general-equilibrium model with markets for housing and defaultable mortgages, I consider the case of imperfect knowledge and learning about the persistence of exogenous shocks. I evaluate the performance of the model against the last 40 years of key U.S. macroeconomic data. Bayesian comparison strongly favors the model with learning over the baseline case with perfect knowledge, although additional assumptions about the learning process may be necessary for an adequate account of house-price dynamics.
    Keywords: housing market, DSGE, signal extraction, Bayesian estimation.
    JEL: E32 E37 R31
    Date: 2015
  8. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract In the context of current developments of large refugee movements across Europe, it is important to study the impact of migration flows in the European economy. One aspect of this is the impact on mobility patterns (i.e. in and out of jobs, across sectors, across regions and across types of jobs). This paper presents a comprehensive account of key determinants of labour mobility of both migrant and native workers across the EU economies between 2000 and 2011. The main indicators examined are the gross employment reallocation and net employment creation rates (GERR and NECR, respectively) taken over from Davis and Haltiwanger (1992, 1999). We analyse differences in mobility patterns in the EU‑15 and the NMS as regards age groups, skill groups, gender, length of job tenure, and the impact of labour market institutions. A particular focus of the study is the potential of migrants to ‘grease the wheels’ (Borjas, 2001) of labour markets by either themselves showing higher mobility rates or impacting on the mobility patterns of natives or existing migrants. This impact is analysed in great detail with respect to the differentiated impact of migrants of different skill groups or from different countries of origin on patterns of labour market mobility. Furthermore, apart from overall labour market mobility, we also examine inter-regional and inter-sectoral mobility.
    Keywords: labour mobility, employment reallocation, net employment creation, European Union, international migration, inter-sectoral and regional migration
    JEL: F22 J61 J62 J63 R23
    Date: 2015–08
  9. By: Gülsüm Akarsu (Ondokuz Mayıs University, Faculty of Economic and Administrative Sciences); Burcu Berke (Niğde University, Faculty of Economic and Administrative Sciences)
    Abstract: The issue of convergence has been discussed by many theoretical and empirical studies beginning by the major contributions of Solow (1956), Baumol (1986), and Barro and Sala-i Martin (1991). In the literature, there are two different convergence concepts, as betaconvergence and sigma-convergence. However, in this study, our focus is on the betaconvergence. As per capita electricity consumption has been considered as an indication of economic growth and development, this study aims to test the presence of “conditional betaconvergence” of per capita electricity consumption among the provinces of Turkey for the period between 1987 and 2013. We employ a spatial dynamic panel data model with fixed effects in order to account for spatial spillover, spatial clusters and cross-sectional heterogeneity. Also, we consider two types of spatial models as Spatial Autoregressive Model and Spatial Error Model. We find that our results are robust to the different specifications of model and weight matrices, however, weight matrix based on the nearest three neighbours perform better than others. Findings show the evidence of conditional beta-convergence of per capita electricity consumption among the provinces of Turkey as well as the existence of spatial clusters and spillovers. Therefore, we can conclude that the regional policies are successful to reduce the regional disparities related to the electricity consumption.
    Keywords: : Convergence, Per Capita Electricity Consumption, Spatial Dynamic Panel Data Model, Spatial Effects
    JEL: C50 Q41 R10
    Date: 2015
  10. By: Judith Green; Alasdair Jones; Helen Roberts
    Abstract: This study contributes to the literature on mobility and wellbeing at older ages through an empirical exploration of the meanings of free bus travel for older citizens, addressing the meanings this holds for older people in urban settings, which have been under-researched. Taking London as a case study, where older citizens have free access to a relatively extensive public transport network through a Freedom Pass, we explore from a public health perspective the mechanisms that link this travel benefit to determinants of wellbeing. In addition to the ways in which the Freedom Pass enabled access to health-related goods and services, it provided less tangible benefits. Travelling by bus provided opportunities for meaningful social interaction; travelling as part of the ‘general public’ provided a sense of belonging and visibility in the public arena – a socially acceptable way of tackling chronic loneliness. The Freedom Pass was described not only as providing access to essential goods and services but also as a widely prized mechanism for participation in life in the city. We argue that the mechanisms linking mobility and wellbeing are culturally, materially and politically specific. Our data suggest that in contexts where good public transport is available as a right, and bus travel not stigmatised, it is experienced as a major contributor to wellbeing, rather than a transport choice of last resort. This has implications for other jurisdictions working on accessible transport for older citizens and, more broadly, improving the sustainability of cities.
    Keywords: bus travel; loneliness; mobility; wellbeing
    JEL: L91 L96
    Date: 2014–03
  11. By: Miquel-Ángel Garcia-López (Universitat Autònoma de Barcelona & IEB); Ilias Pasidis (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: This paper provides evidence for the causal effect of the highway and railway infrastructure on the suburbanization of population in European cities. We adopt different measures of transportation infrastructure and estimate their joint effects on suburbanization using a two-step panel approach. Our main results suggest that an additional highway ray displaced approximately 4% of the central city population in European cities over a 10-year period, whereas we find no significant effect for the railways on average. However, railways did cause suburbanization those located in Central-North Europe. When employing the full time span covered by our data and accounting for the diversity of European cities, we find a smaller effect of highways on suburbanization during more recent decades and for “cities with history”. Factors such as historical urban amenities, traffic congestion, urban policies etc. appear to provide reasonable explanations for these differences. The findings of this paper are novel and provide valuable insights for European regional and transport policies.
    Keywords: Suburbanization, transportation, Europe
    JEL: R4 R2 O4
    Date: 2015
  12. By: Nikhil Naik; Scott Duke Kominers; Ramesh Raskar; Edward L. Glaeser; César A. Hidalgo
    Abstract: Urban change involves transformations in the physical appearance and the social composition of neighborhoods. Yet, the relationship between the physical and social components of urban change is not well understood due to the lack of comprehensive measures of neighborhood appearance. Here, we introduce a computer vision method to quantify change in physical appearance of streetscapes and generate a dataset of physical change for five large American cities. We combine this dataset with socioeconomic indicators to explore whether demographic and economic changes precede, follow, or co-occur with changes in physical appearance. We find that the strongest predictors of improvement in a neighborhood’s physical appearance are population density and share of college-educated adults. Other socioeconomic characteristics, like median income, share of vacant homes, and monthly rent, do not predict improvement in physical appearance. We also find that neighborhood appearances converge to the initial appearances of bordering areas, supporting the Burgess “invasion” theory. In addition, physical appearance is more likely to improve in neighborhoods proximal to the central business district. Finally, we find modest support for “tipping” and “filtering” theories of urban change.
    JEL: C8 R20 Y10
    Date: 2015–10
  13. By: Chávez Juan Carlos; García Loredo Katia
    Abstract: This research presents a methodology to identify regional clusters based on the estimation of location's coefficients and measures of spatial autocorrelation. Local Moran I index is used as a measure of spatial autocorrelation, which allows to obtain a more varied typology of regional clusters. The methodology was applied to both the Mexican manufacturing industry as a whole, and its partition in 14 industry groups for 1993 and 2008. The results indicate the existence of heterogeneity in regional patterns of agglomeration of manufacturing activity at the aggregate level and at group level. It is shown that the process of relocation of manufacturing industry that occurred after the entry into force of the North American Free Trade Agreement (NAFTA) differentially affected the patterns of agglomeration of activity in different regions of the country.
    Keywords: Spatial autocorrelation; Location coefficient; Regional clusters; Manufacturing.
    JEL: L60 R11 R12
    Date: 2015–10
  14. By: Badel, Alejandro (Federal Reserve Bank of St. Louis)
    Abstract: Why has the U.S. black/white earnings gap remained around 40 percent for nearly 40 years? This paper''s answer consists of a model of skill accumulation and neighborhood formation featuring a trap: Initial racial inequality and racial preferences induce racial segregation and asymmetric skill accumulation choices that perpetuate racial inequality. Calibrated to match the U.S. distribution of race, house prices and earnings across neighborhoods, the model produces one-half of the observed racial earnings gap. Moving the economy from the trap to a racially integrated steady state implies a 15.6 percent welfare gain for black households and a 2.7 percent loss for white households.
    Keywords: Racial Inequality; Neighborhood Externalities; Human Capital; Segregation; Incomplete Markets; Earnings Inequality
    JEL: E24 J15 J24 O18
    Date: 2015–09–11
  15. By: Ana Condeco-Melhorado (European Commission – JRC - IPTS); Aris Christodoulou (European Commission – JRC - IPTS); Panayotis Christidis (European Commission – JRC - IPTS)
    Abstract: This guide provides regions with information and guidelines useful for the development of smart specialisation strategies (RIS3) in transport. The guide follows the six steps for Smart Specialization with a special focus in transport. The six steps include the analysis of the regional context and potential for innovation, the discussion of governance structure, the development of a shared vision about the future of the region, approaches for the selection of transport related priorities for regional development, policy mixes and options for the integration of monitoring and evaluation mechanisms. The recommended process consists of a bottom-up analysis of regional capabilities of the industry and scientific community that needs to be aligned with national and European objectives. At the European level, the Strategic Transport Technological Plan (STTP) identifies ten innovation areas that will be extremely important for the future competitiveness of the transport sector. The guide also analyses different innovation area in the context of RIS3 methodology, showing specific examples and roadmaps on how these could be implemented in the regional innovation strategies. Finally tools are offered to analyse the innovation potential, performance and priorities in the transport sector, such as data and indicators regarding regional transport innovation, as well as methodologies to analyse innovation capabilities of European regions.
    Keywords: transport, industry, competitiveness, research
    JEL: L90 L99 R23 R40 R49
    Date: 2015–11
  16. By: W. Walker Hanlon
    Abstract: Mortality was extremely high in the industrial cities of the 19th century, but little is known about the role played by pollution in generating this pattern, due largely to a lack of direct pollution measures. I overcome this problem by combining data on the local composition of industries in Britain with information on the intensity with which industries used polluting inputs. Using this new measure, I show that pollution had a strong impact on mortality as far back as the 1850s. Industrial pollution explains 30-40% of the relationship between mortality and population density in 1851-60, and nearly 60% of this relationship in 1900. Growing industrial coal use from 1851-1900 reduced life expectancy by at least 0.57 years. A back-of-the envelope estimate suggests that the value of this loss of life, expressed as a one-time cost, was equal to at least 0.33-1.00 of annual GDP in 1900. Overall, these results show that industrial pollution was a major cause of mortality in the 19th century, particularly in urban areas, and that industrial growth during this period came at a substantial cost to health.
    JEL: I10 N33 N53 Q53
    Date: 2015–10
  17. By: Daniel M. Hungerman; Kevin Rinz
    Abstract: Using a new dataset constructed from nonprofit tax-returns, this paper explores how vouchers and other large-scale programs subsidizing private school attendance have affected the fiscal outcomes of private schools and the affordability of a private education. We find that subsidy programs created a large transfer of public funding to private schools, suggesting that every dollar of funding increased revenue by a dollar or more. Turning to the incidence of subsidies and the impact of subsidies on enrollment, our findings depend on the type of program introduced, with programs restricting eligibility to certain groups of students creating relatively large enrollment gains and small price increases compared to unrestricted programs. We calculate elasticities of demand and supply for private schools, and discuss welfare effects.
    JEL: H2 I2 I22
    Date: 2015–10
  18. By: Dávid K. Nagy
    Abstract: I propose a general model of economic geography to investigate the effect of border changes on the spatial distribution of population. I decompose the total effect into a standard "local effect" related to the change in distance from borders, and a novel "global effect" related to centrality before the border change. The global effect is especially strong in economies with a dominant central region that is home to a large fraction of the country's population. Conforming to this prediction, I show that the global effect played an important role in the population reallocation in Hungary after border changes in 1920.
    Date: 2015–07–15
  19. By: Huber, Hans
    Abstract: The paper examines multi-dimensional patterns of network characteristics for scheduled Indian airlines between 2006 and 2014. The well-known skewed traffic distribution which concentrates traffic around relatively few hub airports serves as the starting point for decomposing the air traffic system (ATS) into its constituent route types. Operations of distinct airlines along these route classes allows for classifying carrier’s network features as an embedded part of the system. Discussion of the carriers’ role in the overall domestic ATS includes a spatial component. Inferences about development paths – past, present, future – of the Indian scheduled ATS can be made.
  20. By: Basso, Gaetano (University of California, Davis); Peri, Giovanni (University of California, Davis)
    Abstract: In this paper we present important correlations between immigration and labor market outcomes of native workers in the US. We use data on local labor markets, states and regions from the Census and American Community Survey over the period 1970-2010. We first look at simple correlations and then we use regression analysis with an increasing number of controls for observed and unobserved factors. We review the potential methods to separate the part of this correlation that captures the causal link from immigrants to native labor outcomes and we show estimates obtained with 2SLS method using the popular shift-share instrument. One fact emerging from all the specifications is that the net growth of immigrant labor has a zero to positive correlation with changes in native wages and native employment, in aggregate and by skill group. We briefly review the literature on the channels and the mechanisms that allow local economies to absorb immigrants with no negative (and possibly positive) impact on the labor demand for natives.
    Keywords: immigration, employment, wages, labor markets
    JEL: J21 J31 J61
    Date: 2015–10
  21. By: Woo, Seokjin (Myongji University); Lee, Soohyung (University of Maryland); Kim, Kyunghee (Korea Institute for Curriculum and Evaluation)
    Abstract: A key concern in the design of education policies relates to the structure of incentives in accountability systems. This paper examines a school accountability program that provides financial support to low-performing schools but has no direct punishment scheme for recipients who do not exhibit improvement. Although the program does not include high-stakes consequences, our estimates indicate that the program reduced the share of underperforming students by 18 percent. This paper's results suggest that to improve student achievement, a school accountability program does not need to set high-stakes consequences that potentially induce unwanted strategic behaviors on the part of school workers.
    Keywords: school accountability, student achievement, school performance, fuzzy regression discontinuity design
    JEL: C5 I2
    Date: 2015–10
  22. By: Corrado Giulietti (Institute for the Study of Labor (IZA)); Mirco Tonin (Free University of Bolzano‐Bozen, Faculty of Economics and Management); Michael Vlassopoulos (University of Southampton)
    Abstract: Discrimination in access to public services can act as a major obstacle towards addressing racial inequality. We examine whether racial discrimination exists in access to a wide spectrum of public services in the US. We carry out an email correspondence study in which we pose simple queries to more than 19,000 local public service providers. We find that emails are less likely to receive a response if signed by a black-sounding name compared to a white-sounding name. Given a response rate of 72% for white senders, emails from putatively black senders are almost 4 percentage points less likely to receive an answer. We also find that responses to queries coming from black names are less likely to have a cordial tone. Further tests suggest that the differential in the likelihood of answering is due to animus towards blacks rather than inferring socioeconomic status from race.
    Keywords: discrimination, public services provision, school districts, libraries, sheriffs, field experiment, correspondence study
    JEL: D73 H41 J15
    Date: 2015–10
  23. By: Andrés Denes (Central Bank of Argentina); Gastón Repetto (Central Bank of Argentina)
    Abstract: Broadening the geographical coverage of the Önancial system is one of the concerns of the Central Bank of Argentina. In this regard, e§orts have been made to achieve a diagnosis of this issue at a national level. These led to concrete policy measures. Nevertheless, the spatial distribution of Önancial systems in large urban areas has been less explored. This paper aims at providing a comprehensive study of the geographical distribution of the supply and demand for Önancial services in the city of Buenos Aires. Our results are useful as drivers for economic and Önancial policy making at a urban level.
    Keywords: Buenos Aires City, financial system, spatial analysis
    JEL: C31 G21 G28 R12
    Date: 2015–10
  24. By: Laurent Bergé; Iris Wanzenböck; Thomas Scherngell
    Abstract: This paper aims at introducing a novel measure of regional centrality in the context of R&D networks. We first demonstrate some substantial problems of SNA-based centrality measures to cope with regional R&D networks in a meaningful way. Then, we introduce a new measurement approach of regional network centrality based on the concept of inter-regional bridging paths (indirect connections at the regional level). We show that the formal definition of our regional bridging centrality measure can be expressed in terms of three simple components: the participation intensity of a region in inter-regional R&D collaborations, the relative outward orientation in terms of all established links and the diversification of R&D collaborations among partner regions. We illustrate the measure and its behaviour with respect to other conventional centrality measures by using the European co-patent network at the NUTS 2 level.
    Keywords: network centrality of regions, inter-regional R&D networks, inter-regional bridges, aggregated networks, co-patent network
    JEL: D85 L14 O31
    Date: 2015
  25. By: Aida, Takeshi
    Abstract: Although substantial research has been conducted on informal consumption smoothing mechanisms within villages, or within social clusters such as family and friends, few studies have compared the effects of these spatial and social networks. Employing spatial panel econometric models, this study extends the conventional empirical test of the full risk-sharing hypothesis to incorporate spatial and social network effects, and quantifies the diffusion of income shocks in each network. Estimation results based on household survey data in Southern Sri Lanka show that consumption smoothing performs better in spatial networks than in social ones, because income shocks defuse more effectively among neighboring households. This study also shows the limitations of the conventional test when it is considered a special case of a spatial econometric model.
    Keywords: Agribusiness,
    Date: 2015
  26. By: Feld, Jan; Zölitz, Ulf
    Abstract: This paper estimates peer effects in a university context where students are randomly assigned to sections. While students benefit from better peers on average, low-achieving students are harmed by high-achieving peers. Analyzing students’ course evaluations suggests that peer effects are driven by improved group interaction rather than adjustments in teachers’ behavior or students’effort. We further show, building on Angrist (2014), that classical measurement error in a setting where group assignment is systematic can lead to substantial overestimation of peer effects. With random assignment, as is the case in our setting, estimates are only attenuated.
    Keywords: Peer effects, Higher education, Measurement error, Estimation bias,
    Date: 2015
  27. By: Monras, Joan (Sciences Po, Paris)
    Abstract: Often, minimum wage laws are decided at the state or regional level, and even when not, federal level increases are only binding in certain states. This has been used in previous literature to evaluate the effects of minimum wages on earnings and employment levels. This paper introduces a spatial equilibrium model to think about the seemingly conflicting findings of this previous literature. The model shows that the introduction of minimum wages can lead to an increase or a decrease in population depending on the local labor demand elasticity and on how unemployment benefits are financed. The paper provides empirical evidence consistent with the model. On average, increases in minimum wages lead to increases in average wages and decreases in employment. The low-skilled local labor demand elasticity is estimated to be above 1, which in the model is a necessary condition for the migration responses found in the data. Low-skilled workers, who are presumably the target of the policy, tend to leave or avoid moving to the regions that increase minimum wages.
    Keywords: minimum wages, spatial equilibrium, internal migration
    JEL: J38
    Date: 2015–10
  28. By: Richard G. Newell; Daniel Raimi
    Abstract: This report examines how oil and gas production generates revenue for local governments in eight states through four key mechanisms: (i) state taxes or fees on oil and gas production; (ii) local property taxes on oil and gas property; (iii) leasing of state-owned land; and (iv) leasing of federally-owned land. To compare across states, we show the percentage of total revenue generated by oil and gas production that flows to local governments from these revenue sources. We also connect these calculations to related research to assess whether state and local policies are providing sufficient revenue for local governments to manage increased costs associated with shale development. We find that in most cases, existing policies appear to provide adequate revenue for local governments to manage increased costs associated with growing oil and gas activity. As of 2014, revenues fall short of the costs imposed on local governments in some highly rural regions experiencing rapid, large-scale development, notably the Bakken region of North Dakota and Montana, select counties in Texas, and select local governments in Colorado and Wyoming. Collaboration between industry and local governments, especially on road repairs, could reduce public costs.
    JEL: H25 H71 H72 Q4 Q41 Q43 Q48
    Date: 2015–10
  29. By: Behrens, Kristian; Sharunova, Vera
    Abstract: Multiunit firms can draw on internal resources, thus their plants should depend less on external agglomeration benefits than comparable standalone plants. Because interacting at a distance is costly, multiunit firms should also be geographically 'compact'. We dissect the microgeographic location patterns of hundreds of thousands of Canadian establishments and find robust evidence for these predictions: multiunit firms are compact, and their plants locate in areas offering potentially less external agglomeration benefits. Within firms, plants with stronger vertical links are geographically more central. The latter effect is stronger for plants in high transport cost industries that produce durables and source a larger share of non-homogeneous inputs. These findings suggest that vertical supply chains are important in explaining firms' internal spatial organization.
    Keywords: inter-firm linkages; intra-firm linkages; microgeographic location patterns; multiunit firms; spatial organization of firms
    JEL: D22 L22 R12 R32
    Date: 2015–11
  30. By: Alessia De Stefani
    Abstract: Growth rates of income inequality and household debt levels are strongly correlated within OECD economies. I explain this evidence through the role of collateral capacity and mortgage lending. My analysis of disaggregated US data in the decade preceding the 2007/2008 financial crisis shows how the rise in income inequality across US regions was associated with a higher than average increase in house prices. Exploiting geographical variation across US regions, I apply a methodology which can be considered similar to a diff-in-diff approach. I show that between 1997 and 2007 a 1% increase in inequality, measured as the ratio of top incomes to median incomes, determined an increase in the
    Keywords: Consumption Behaviour, Credit, Inequality, Veblen Effects, House Prices
    JEL: D12 D14 D31 G21
    Date: 2015–09–18
  31. By: Fafchamps, Marcel; Mo, Di
    Abstract: We conduct a large scale RCT to investigate peer e↵ects in computer assisted learning (CAL). Identification of peer e↵ects relies on three levels of randomization. It is already known that CAL improves math test scores in Chinese rural schools. We find that paired treatment improves the beneficial e↵ects of treatment for poor performers when they are paired with high performers. We test whether CAL treatment reduces the dispersion in math scores relative to controls, and we find statistically significant evidence that it does. We also demonstrate that the beneficial e↵ects of CAL could potentially be strengthened, both in terms of average e↵ect and in terms of reduced dispersion, if weak students are systematically paired with strong students during treatment. To our knowledge, this is the first time that a school intervention has been identified in which peer e↵ects unambiguously help weak students catch up with the rest of the class without imposing any learning cost on other students.
    Keywords: Teaching/Communication/Extension/Profession,
    Date: 2015
  32. By: Degli Antoni, Giacomo; Sabatini, Fabio
    Abstract: We use an original dataset to study how participation in two types of nonprofit organizations, i.e. social welfare associations and social cooperatives, affects individual social capital, intended as networks of cooperative relationships. Participation in both the types of organization allows members to start new social relations. However, social welfare associations seem to play a significantly greater role in the development of volunteers’ social capital, favouring the creation of weak ties that are used to exchange information and advice, and offering the opportunity to establish stronger ties entailing concrete mutual support. Within social cooperatives, workers appear to develop their individual social capital to a greater extent than volunteers. Our results suggest that the composition of the workforce, the depth of members’ involvement in the organization’s activities and human resources strategies adopted by the management influence the creation of cooperative relations through on-the-job interactions.
    Keywords: social capital, nonprofit organizations, social cooperatives, social networks, volunteering
    JEL: L31 L33 P13 Z1 Z13
    Date: 2015–11–03
  33. By: Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (University of Waikato)
    Abstract: An important question for firms and policymakers is whether the recruitment of foreign workers can boost innovation. Migration studies have demonstrated positive economic impacts of cultural diversity on productivity and innovation at the regional level, but the impacts at firm level are less well known. Merging data from four different sources, provided by Statistics Netherlands, we construct and analyze a unique linked employer-employee micro dataset of 4582 firms that includes qualitative information on firm innovation. We consider both the number of immigrants these firms employ and their cultural diversity. Potential endogeneity of migrant employment is addressed by an instrumental variables approach that accounts for the past geographic distribution of immigrants and the past culinary diversity of the municipality the firm is located in. We find robust evidence that firms employing relatively more migrants are less innovative. However, there is evidence of integration in that this effect is generall less strong or even absent for second generation immigrants. Moreover, firms employing a more diverse foreign workforce are more innovative, particularly in terms of product innovations. The benefits of diversity for innovation are more apparent in sectors employing relatively more skilled immigrants.
    Keywords: Immigration,Innovation,Cultural diversity, Knowledge spillovers,Netherlands
    JEL: D22 F22 O31
    Date: 2013–12
  34. By: Andrew Foote; Michel Grosz; Ann Huff Stevens
    Abstract: Large shocks to local labor markets can cause long-lasting changes to employment, unemployment and the local labor force. This study examines the relationship between mass layoffs and the long-run size of the local labor force. It considers four main channels through which the local labor force may adjust: in-migration, out-migration, retirement, and disability insurance enrollment. We show that these channels account for over half of the labor force reductions following a mass layoff event. By measuring the residual difference between these channels and net labor force change, we also show that labor force non-participation accounted for much of the local labor force response in the period during and after the Great Recession.
    JEL: H55 J01 J63 R23
    Date: 2015–10
  35. By: Chirag Rabari; Michael Storper
    Abstract: A ‘digital skin’ of the city is coming into being. This skin consists of a sensored and metered urban environment. The urban world is becoming a platform for generating data on the workings of human society, human interactions with the physical environment and manifold economic, political and social processes. The advent of the digital skin opens up many questions for urban theory and research, and many new issues for public and urban policy, which are explored in this article.
    Keywords: Big data; urban theory ;urban research; social science; smart cities
    JEL: M21 O18 O31 R50
    Date: 2014
  36. By: Andreason, Stuart (Federal Reserve Bank of Atlanta)
    Abstract: From 1990 to 2010, the United States underwent significant changes in the makeup of the population and its educational attainment. During the period, bachelor's degree or higher attainment proportions rose significantly—7.9 percentage points—from 20.3 percent in 1990 to 28.2 percent in 2010. This growth happened unevenly, though. Of 283 metropolitan areas, only 78 were above the 7.9 percentage point increase, suggesting much more concentrated growth than would be expected if growth were experienced evenly. This paper documents the concentration of growth and examines four labor market outcomes in the 78 "leader metros." Unexpectedly, labor market outcomes are not even or common across these metros, suggesting that growth in the proportion of the population holding a BA or higher degree will have different effects depending on local conditions. It also suggests that increasing BA+ attainment at the population level is not a solution to all labor market challenges equally. The analysis suggests that considering local products and their related demands for labor are important steps in developing human capital–based economic development strategies.
    Keywords: educational attainment; labor markets; inequality; talent attraction and retention; metropolitan areas
    JEL: J10 O21 R11
    Date: 2015–10–01
  37. By: LSE Housing and Communities
    Keywords: Energy, Housing, Social Landlord, Trafford Hall
    Date: 2015–10
  38. By: Sunil Kumar; Melissa Fernández
    JEL: N0
    Date: 2015
  39. By: Davide Fiorello (Trt); Loredana Zani (Trt)
    Abstract: The main purpose of the survey was to collect data on car use, on use of transport modes for long distance mobility as well as on some other policy relevant issues (e.g. the attitude towards internalisation of road external costs by means of road charging). The survey involved all the 28 European countries. In each country a sample of 1000 individuals (500 in Cyprus, Luxembourg and Malta) was asked to fill in a questionnaire divided into four sections: a. general information on the respondent (e.g. age, gender, living area) as well as details on availability of cars and public transport service. b. information on everyday mobility in terms of mode used, frequency of trips, duration, distance, inter-modality and opinions on main problems experienced. c. information long distance trips (between 300 km and 1000 km as well as over 1000 km) made in the last 12 months; number of trips by purpose and main mode; connections between rail and air transport. d. opinions on aspects related to the European transport policy and especially on the scope for road charging.
    Keywords: transport, user survey, mobility, urban, public transport
    JEL: L90 L99 R23 R40 R49
    Date: 2015–10
  40. By: Alina Pohl
    Abstract: This research investigates eco-clusters as driver for greening regional economic policy and examines necessary incentive structures to foster eco-innovation as well as growth and employment in the eco-industry sector. Eco-clusters are seen in context with sustainability and environmental friendly behavior as means for a socio-ecological transition in the long run. The main hypothesis implies that eco-clusters have to be policy driven and established top-down and therefore differ from cluster structures in other industries. Possible reasons are uncertainty on a developing market as well as external effects of eco-innovations; the latter are seen as radical innovations. Based on theoretic findings for the establishment of clusters and general research findings for eco-clusters and eco-innovations, it is differentiated between a spontaneous cluster emergence from private initiatives through self-reinforcing forces of companies in a region (bottom-up), and the formation of a policy-driven network with primarily regional objectives to stimulate the competitive advantage of the regional industrial location (top-down). The hypothesis will be proofed by empirical results gained through personal interviews and complemented by findings in current research literature. Finally, implications for incentive structures to green economic policy are identified. It is shown that eco-clusters are different to other clusters and crucial for a long-term sustainable change and thus need political commitment and public incentives. For empirical observation, eco-clusters in Austria were selected. This research relates to the ongoing debate on green growth and develops policy incentives for establishment of eco-clusters and thus greening of economic policy.
    Keywords: Cluster Analysis, Ecological Cluster, Ecological Innovations, Regional Economic Policy, top-down vs. bottom-up
    JEL: C38 I31 O31 O44 Q01 Q55 Q58
    Date: 2015–10
  41. By: Chiara Pancotti (CSIL Centre for Industrial Studies); Emanuela Sirtori (CSIL Centre for Industrial Studies); Silvia Vignetti (CSIL Centre for Industrial Studies)
    Abstract: A debated policy issue is how to combine the excellence goals chased by Research and Innovation (R&I) policies and the need to reduce regional disparities as of the EU Cohesion Policy priorities. In other words there is a tension between concentrating funds in core and well-endowed urban areas, in order to reach economies of scale and scope, or rather favouring less endowed, peripheral and economically weaker regions, which could be less prepared to achieve excellence in innovation and research. A way to address this trade-off has been proposed by the recent smart specialisation approach. This approach admits the possibility for any region to generate innovation, by leveraging its own strengths and competitive advantages and selectively targeting its place-based R&I strategy on those economic activities in which the region can hope to excel. However, the conditions which could actually ensure a synergic relation between different policies aiming at enhancing European competitiveness, overcoming possible obstacles and tensions, still have to be explored. This paper aims at providing some insights on how and at which conditions regional innovation policies can be effective in promoting both excellence and cohesion objectives in lagging behind EU regions. To this end, the case of the regional innovation policy carried out by Apulia region (Southern Italy) is presented. The experience of Apulia indicates that there is scope for lagging behind regions to develop well-designed regional innovation systems, supporting the development and implementation of far reaching innovation strategies adapted to the specific needs and assets of regional economy. At the same time, there is a pressing need to develop novel practices of governance in particular as regards avoiding demand-driven approach which adapts excessively to the perspectives of local firms and can be more easily (and in difficult circumstances perhaps even necessarily) prone to short termism. This paper critically describes elements of strengths and weaknesses observed within the case study of Apulia region, to produce lessons learned of more general relevance.
    Keywords: smart specialisation, place based, cohesion policy, regional innovation system
    JEL: O25 O38 R58
    Date: 2015–09–01
  42. By: Abay, Kibrom; Kahsay, Goytom; Berhane, Guush
    Abstract: In the absence of well-established factor markets, the role of indigenous institutions and social networks can be substantial for mobilizing factors for agricultural production. We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. Using detailed longitudinal household survey data and employing a difference-in-differences approach, we find that iddir membership improves households’ access to factor markets. Specifically, we find that joining an iddir network improves households’ access to land, labor and credit transactions between 7 and 11 percentage points. Furthermore, our findings also indicate that iddir networks crowd-out borrowing from local moneylenders (locally referred as Arata Abedari), a relatively expensive credit source, virtually without affecting borrowing from formal credit sources. These results point out the roles non-market arrangements, such as social networks, can play in mitigating market inefficiencies in poor rural markets.
    Keywords: Social networks, iddir networks, factor market imperfections, factor market transactions, crowding-out, Marketing, Public Economics,
    Date: 2015
  43. By: Vadim Elenev; Tim Landvoigt; Stijn Van Nieuwerburgh
    Abstract: We develop a new model of the mortgage market where both borrowers and lenders can default. Risk tolerant savers act as intermediaries between risk averse depositors and impatient borrowers. The government plays a crucial role by providing both mortgage guarantees and deposit insurance. Underpriced government mortgage guarantees lead to more and riskier mortgage originations as well as to high financial sector leverage. Mortgage crises occasionally turn into financial crises and government bailouts due to the fragility of the intermediaries' balance sheets. Increasing the price of the mortgage guarantee "crowds in" the private sector, reduces financial fragility, leads to fewer but safer mortgages, lowers house prices, and raises mortgage and risk-free interest rates. Due to a more robust financial sector, consumption smoothing improves and aggregate welfare increases. While borrowers are nearly indifferent to a world with or without mortgage guarantees, savers are substantially better off. While aggregate welfare increases, so does wealth inequality.
    JEL: E0 E21 E62 G00 G12 G18 G21 G28
    Date: 2015–10
  44. By: Kristopher Gerardi; Kyle F. Herkenhoff; Lee E. Ohanian; Paul S. Willen
    Abstract: Previous research on mortgage default has been constrained by data limitations, including lack of data on mortgagor employment status. This paper studies mortgage default using PSID data, which includes a richer set of covariates, including employment status, equity, and other assets. In sharp contrast to prior studies, we find that unemployment and other negative financial shocks are key default predictors. Using wealth data, we find a limited scope for strategic default, as only 1/3 of underwater defaulters have enough assets to pay their mortgage. We discuss the implications of these findings for theoretical default models and for loss mitigation policies
    JEL: G21 G33 R3 R51
    Date: 2015–10
  45. By: Eric Smith
    Abstract: This paper demonstrates the way in which stock-flow matching with endogenous seller entry generates hot and cold spells in house sales. Potential sellers know the number of bidders remaining from the last house sale. If two or more bidders remain, the seller obtains the gains to trade through competitive bidding. The market is active. With one monopolistic bidder, the buyer captures the surplus and sellers become unwilling to enter. The market remains dormant until sellers think enough time has passed for buyer entry to have replenished the market and make entry profitable. The resulting pattern of trade matches up with observations from Wisconsin.
    Date: 2015–09–30
  46. By: Ceren Ozgen (VU University Amsterdam); Cornelius Peters (IAB); Annekatrin Niebuhr (Christian-Albrechts-Universitat zu Kiel); Peter Nijkamp (VU University Amsterdam); Jacques Poot (University of Waikato)
    Abstract: Increasing international labor migration has important effects on the workforce composition of firms in all migrant-receiving countries. The consequences of these changes for firm performance have attracted growing attention in recent years. In this paper, we focus explicitly on the impact of cultural diversity among migrant employees on the innovativeness of firms. We briefly synthesize empirical evidence from a range of contexts across Europe, North America, and New Zealand. We then utilize two unique and harmonized linked employer–employee datasets to provide comparative microeconometric evidence for Germany and the Netherlands. Our panel datasets contain detailed information on the generation of new products and services, determinants of innovation success, and the composition of employment in establishments of firms over the period 1999 to 2006. We find that innovation in both countries is predominantly determined by establishment size and industry. Moreover, obstacles encountered and organizational changes faced by firms drive innovation too. With respect to the composition of employment, the presence of high-skilled staff is most important. Cultural diversity of employees has a positive partial correlation with product innovation. The size and statistical significance of this effect depends on the econometric model specification and the country considered. We conclude from the literature synthesis and the new comparative evidence that cultural diversity of employees can make a positive, but modest and context dependent, contribution to innovation.
    Date: 2014–12
  47. By: Isphording, Ingo E. (IZA); Piopiunik, Marc (Ifo Institute for Economic Research); Rodríguez-Planas, Núria (Queens College, CUNY)
    Abstract: This paper is the first to estimate a causal effect of immigrant students' reading performance on their math performance. To overcome endogeneity issues due to unobserved ability, we apply an IV approach exploiting variation in age-at-arrival and the linguistic distance between origin and destination country languages. Using four PISA waves, we find a strong influence of reading performance on math performance, highlighting the importance of early language support for immigrants for their educational career.
    Keywords: immigrants, language, math performance, linguistic distance, age-at-arrival, instrumental variable
    JEL: I21 I24 Z13
    Date: 2015–10
  48. By: Chris Ryan (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Anna Zhu (The University of Melbourne; and ARC Centre of Excellence for Children and Families over the Life Course)
    Abstract: We explore the extent to which starting primary school earlier by up to one year can help shield children from the detrimental, long-term developmental consequences of having an ill or disabled sibling. Using data from the Longitudinal Study of Australian Children, we employ a Regression Discontinuity Design based on birthday eligibility cut-offs. We find that Australian children who have a sibling in poor health persistently lag behind other children in their cognitive development — but only for the children who start school later. In contrast, for the children who commence school earlier, we do not find any cognitive developmental gaps. The results are strongest when the ill-health in the sibling is of a temporary rather than longer-term nature. We hypothesise that an early school start achieves this by lessening the importance of resource-access inequalities within the family home. However, we find mixed impacts on the gaps in non-cognitive development. Classification-J13, I21
    Keywords: Educational economics, human capital, school starting age, sibling health
    Date: 2015–10
  49. By: Karl Aiginger; Matthias Firgo
    Abstract: The term “competitiveness” has been used in conceptually distinct ways at the firm, regional and national levels. After primarily reviewing existing concepts at the national level, we introduce a new definition of regional competitiveness adapting definitions used in the academic literature. Specifically, we connect “outcome competitiveness” with new perspectives on a more socially inclusive and ecologically sustainable growth path, as envisaged in the WWWforEurope research program, in which 33 European research groups are taking part. Evaluating competitiveness requires both an input assessment (costs, productivity, economic structure, capabilities) and an outcome assessment. We define regional outcome competitiveness as the ability of a region to deliver Beyond GDP goals. For regions in industrialized countries, this ability depends on innovation, education, institutions, social cohesion and ecological ambition. Given this new perspective (of broader Beyond GDP goals), social investments and ecological ambitions should not be considered costs, but rather drivers of competitiveness. This is compatible with a new innovation policy fostering non-technical innovations and a new industrial policy supporting societal goals. Applying this concept to European regions, we show which regions take the "high road" to competitiveness and compare our results with the existing literature.
    Keywords: Regional competitiveness, Beyond GDP goals, composite index, European Union
    JEL: I31 O47 Q56 R11 R58
    Date: 2015–10
  50. By: Miguel Sarzosa; Sergio Urzúa
    Abstract: Bullying is a behavioral phenomenon that has received increasing attention in recent times. This paper uses a structural model with latent skills and longitudinal information from Korean youths to identify the determinants and effects of bullying. We find that, unlike cognitive skills, non-cognitive skills significantly reduce the chances of being bullied during high school. We use the model to estimate average treatment effects of being bullied at age 15 on several outcomes measured at age 18. We show that bullying is very costly. It increases the probability of smoking as well as the likelihood of feeling sick, depressed, stressed and unsatisfied with life. It also reduces college enrollment and increases the dislike of school. We document that differences in non-cognitive and cognitive skill endowments palliate or exacerbate these consequences. Finally, we explore whether investing in non-cognitive skills could reduce the occurrence of bullying. Our findings indicate that the investment in skill development is key in any policy intended to fight the behavior.
    JEL: C34 C38 I21 J24
    Date: 2015–10
  51. By: Adriana Kugler; Maurice Kugler; Juan Saavedra; Luis Omar Herrera Prada
    Abstract: We use administrative data to examine medium and long-term formal education and labor market impacts among participants and family members of a randomized vocational training program for disadvantaged youth in Colombia. In the Colombian program, vocational training and formal education are complementary investments: relative to non-participants, randomly selected participants are more likely to complete secondary school and to attend and persist in tertiary education eight years after random assignment. Complementarity is strongest among applicants with high baseline educational attainment. Training also has educational spillover effects on participants’ family members, who are more likely to enroll in tertiary education. Between three and eight years after randomization, participants are more likely to enter and remain in formal employment, and have formal sector earnings that are at least 11 percent higher than those of non-participants.
    JEL: J24 J38 J6 O17 O54
    Date: 2015–10
  52. By: Costas Cavounidis; Kevin Lang
    Abstract: We develop a model of self-sustaining discrimination in wages, coupled with higher unemployment and shorter employment duration among blacks. While white workers are hired and retained indefinitely without monitoring, black workers are monitored and fired if a negative signal is received. The fired workers, who return to the pool of job-seekers, lower the average productivity of black job-seekers, perpetuating the cycle of lower wages and discriminatory monitoring. Under suitable parameter values the model has two steady states, one corresponding to each population group. Discrimination can persist even if the productivity of blacks exceeds that of whites.
    JEL: J71
    Date: 2015–10

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