nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒08‒28
thirty papers chosen by
Steve Ross
University of Connecticut

  1. Traffic Externalities and Housing Prices: Evidence from the London Congestion Charge By Cheng Keat Tang
  2. The Housing Market Impacts of Constraining Second Home Investments By Christian A. L. Hilber; Olivier Schöni
  3. The Effects of School Desegregation on Mixed-Race Births By Nora Gordon; Sarah Reber
  4. Neoliberalization and the Changing Roles of Stakeholders in State-Led Shantytown Redevelopment in Shenyang City, China By Li, Xin; Kleinhans, Reinout; van Ham, Maarten
  5. Environmental Zoning and Urban Development: Natural Regional Parks in France By Julien Salanié; Thomas Coisnon
  6. EthniCity of Leisure: A Domains Approach to Ethnic Integration During Free Time Activities By Kamenik, Kristiina; Tammaru, Tiit; van Ham, Maarten
  7. Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia By Samuel Bazzi; Arya Gaduh; Alexander D. Rothenberg; Maisy Wong
  8. Flood risk and housing prices: evidence from Hungary By Gabor Bekes; Aron Horvath; Zoltan Sapi
  9. Bright Minds, Big Rent: Gentrification and the Rising Returns to Skill By Lena Edlund; Cecilia Machado; Maria Sviatschi
  10. The persistence of air pollution in four mega-cities of China By Luis Alberiko Gil-Alaña; Carlos Pestana Barros; Zhongfei Chen
  11. Long-Term Orientation and Educational Performance By Figlio, David N.; Giuliano, Paola; Özek, Umut; Sapienza, Paola
  12. How Do Users Value a Network Expansion? Evidence from the Public Transit System in Singapore By Fesselmeyer, Eric; Liu, Haoming
  13. Academic achievement and tracking: A theory based on grading standards By Ehlers, Tim; Schwager, Robert
  14. Disconnected Geography: A Spatial Analysis of Disconnected Youth in the United States By Jeremy W Bray; Brooks Depro; Dorren McMahon; Marion Siegle; Lee Mobley
  15. Local Government Proliferation, Diversity, and Conflict By Samuel Bazzi; Matthew Gudgeon
  16. When incentives backfire: Spillover effects in food choice By Angelucci, Manuela; Prina, Silvia; Royer, Heather; Samek, Anya
  17. Public Debt and Private Firm Funding. Evidence from Chinese Cities. By Yi Huang; Marco Pagano; Ugo Panizza
  18. The Role of Capital Requirements and Credit Composition in the Transmission of Macroeconomic and Financial Shocks By Oscar Valencia; Daniel Osorio; Pablo Garay
  19. News and noise in the housing market By Gazzani, Andrea
  20. Infrastructure Development vs Direct Cash Transfer: A General Equilibrium Comparison By Marjit, Sugata; Mandal, Biswajit; Chatterjee, Tonmoy
  21. Understanding the Experiences of Relocatees During Forced Relocation in Chinese Urban Restructuring By Li, Xin; van Ham, Maarten; Kleinhans, Reinout
  22. Labor Supply Shocks, Native Wages, and the Adjustment of Local Employment By Dustmann, Christian; Schönberg, Uta; Stuhler, Jan
  23. An evaluation of inclusive capital stock for urban planning By Fujii, Hidemichi; Managi, Shunsuke
  24. Match or Mismatch? Automatic Admissions and College Preferences of Low- and High-Income Students By Lincove, Jane Arnold; Cortes, Kalena E.
  25. Pay For Locally Monitored Performance- A Welfare Analysis for Teacher Attendance in Ugandan Primary Schools By Jacobus, Cilliers; Ibrahim, Kasirye; Clare, Leaver; Pieter, Serneels; Andrew, Zeitlink
  26. Network Search: Climbing the Job Ladder Faster By Marcelo Arbex; Dennis O'Dea; David Wiczer
  27. EU Tax Competition and Tax Avoidance: A Multiprincipal Perspective By Florence LACHET-TOUYA
  28. Cities ad Inequality By Alessandra Michelangeli; Eugenio Peluso
  29. How Do Voters Matter? Evidence from US Congressional Redistricting By Daniel B. Jones; Randall Walsh
  30. Urbanization and Environmental Quality in Africa By Effiong, Ekpeno

  1. By: Cheng Keat Tang
    Abstract: This study exploits the introduction of the London Congestion Charge (CC) that greatly improves traffic conditions in Central London to provide new evidence on the capitalization of traffic externalities onto housing values. The Congestion Charge restricts traffic into the cordoned area by imposing a flat fee on drivers whenever they enter during charging periods. I show that the introduction of the CC in the Western Extension Zone (WEZ) increases home prices by 3.68\% relative to untreated housing units within 1 kilometre away from the CC boundary. These estimates, which measures the marginal willingness to pay to avoid negative traffic externalities, are robust to many changes in specifications, suggesting that homeowners pay to avoid traffic so as to reduce commuting time, to enjoy better air quality and less traffic noise, and to travel on safer roads.
    Keywords: housing prices, capitalization effects, congestion charge, traffic externalities, marginal willingness to pay, difference-in-difference
    JEL: R21 R31 R38 R41 Q25
    Date: 2016–08
  2. By: Christian A. L. Hilber; Olivier Schöni
    Abstract: We investigate how political backlash against wealthy second home investors in high-amenity places - tourist areas or superstar cities - affects local residents. We develop a general equilibrium model and exploit a quasi-natural experiment -the 'Swiss Second Home Initiative' (SHI) -to test the key predictions of the model. Consistent with theory, we find that the SHI, which banned the construction of new second homes in desirable tourist locations, lowered transaction prices of primary homes in affected areas by around 12 percent but did not adversely affect prices of second homes. Our findings suggest that the negative effect on local economies dominated positive amenity-preservation effects. We conclude that constraining second home investments may reinforce rather than reduce wealth inequality.
    Keywords: second homes, wealth inequality, land use regulation, house prices, homeownership, real estate investments
    JEL: D63 G12 R11 R21 R31 R52
    Date: 2016–08
  3. By: Nora Gordon; Sarah Reber
    Abstract: We find a strong positive correlation between black exposure to whites in their school district and the prevalence of later mixed-race (black-white) births, consistent with the literature on residential segregation and endogamy. However, that relationship is significantly attenuated by the addition of a few control variables, suggesting that individuals with higher propensities to have mixed-race births are more likely to live in desegregated school districts. We exploit quasi-random variation to estimate causal effects of school desegregation on mixed-race childbearing, finding small to moderate statistically insignificant effects. Because the upward trend across cohorts in mixed-race childbearing was substantial, separating the effects of desegregation plans from secular cohort trends is difficult; results are sensitive to how we specify the cohort trends and to the inclusion of Chicago/Cook County in the sample. Taken together, the analyses suggest that while lower levels of school segregation are associated with higher rates of mixed-race childbearing, a substantial portion of that relationship is likely due to who chooses to live in places with desegregated schools. This suggests that researchers should be cautious about interpreting the relationship between segregation—whether residential or school—and other outcomes as causal.
    JEL: I21 J1
    Date: 2016–08
  4. By: Li, Xin (Delft University of Technology); Kleinhans, Reinout (Delft University of Technology); van Ham, Maarten (Delft University of Technology)
    Abstract: Neoliberal politics in China have changed the roles of, and the interrelationships between, the state, the market and society in urban restructuring. Since 2008, the central state has initiated the Shantytown Redevelopment Projects (SRPs) to improve the living conditions of low-income residents. Between 2008 and 2012, about 12.6 million households were involved in these national SRPs, and forced to move as their dwellings were demolished. This paper investigates how different stakeholders perceive and interact with each other in the state-led SRPs in Shenyang City in Northeast China. Through in-depth interviews with a range of stakeholders and analysis of policy documentation on SRPs, we find that there is a complex interplay between centralization, decentralization, marginalization of market forces, and the empowerment of residents in SRPs. The central government has replaced local governments in the initiation of redevelopment projects in disadvantaged neighbourhoods. District-level governments have replaced developers and municipal governments in land expropriation. Developers have become marginalized in SRPs and residents have become more empowered in the land expropriation taking place in urban redevelopment.
    Keywords: Shantytown redevelopment, neoliberalization, governance, demolition, China
    JEL: O18 R23
    Date: 2016–08
  5. By: Julien Salanié; Thomas Coisnon
    Abstract: This study provides an empirical analysis of the effects of environmental zoning on urban development. It focuses on the case of Natural Regional Parks (NRPs) in France. Of the environmental zoning instruments used in France, NRPs extend over the widest physical area. The analysis uses a quasi-experimental empirical approach (difference-in-differences) to evaluate the effects of NRPs on urban development at the municipality level. Three potential side-effects of NRPs on urban development in the regulated area are investigated. First, the long-term effects of environmental zoning on housing and population flows are analysed using French National Census data in the period from 1968-2011. Second, annual data on building permits granted in the period from 2003-2012 are used to estimate the short-term effects of NRPs on housing supply. Finally, the effects of NRPs on land-use in the regulated area using high-resolution geospatial data are evaluated. The results of the empirical analysis reveal that NRPs have had heterogeneous effects on urban development in regulated areas. Compared to development in neighbouring areas, some NRPs have discouraged urban development in the regulated area, in line with their intended objectives. However, in other cases NRPs have actually favoured urban development. In most cases, however, the policy had no significant effect on urban development within the regulated area.
    Keywords: urban development, Environmental zoning, Natural regional parks
    JEL: Q24 Q26 R14
    Date: 2016–08–25
  6. By: Kamenik, Kristiina (University of Tartu); Tammaru, Tiit (University of Tartu); van Ham, Maarten (Delft University of Technology)
    Abstract: This paper takes a domains approach to understanding ethnic segregation; ethnic segregation occurs in different ways in different domains (such as the residential neighbourhood, workplaces, leisure, etc.). Where most studies focus on residential segregation, this study focusses on ethnic segregation during leisure time. We investigate the most common leisure time activities, activity sites and the interaction between members of minority and majority populations as they spend their time out-of- home and out-of-workplace. Conceptually we link leisure time segregation both with residential and workplace segregation, in line with the domains approach. Our case study area is Tallinn, Estonia, and the main findings show that leisure time activity patterns have become very similar across the main ethnic groups, which is different from what is found for workplace and residential segregation. This shows the integrative potential of leisure time activities. However, different ethnic groups tend to visit different activity sites as leisure sites are related to where people live.
    Keywords: leisure time, ethnic integration, ethnic segmentation, ethnic segregation, mixed method approach, Estonia
    JEL: J15 R23
    Date: 2016–08
  7. By: Samuel Bazzi (Boston University & BREAD); Arya Gaduh (University of Arkansas); Alexander D. Rothenberg (RAND Corporation); Maisy Wong (University of Pennsylvania)
    Abstract: We use a natural experiment in Indonesia to provide causal evidence on the role of location-specific human capital and skill transferability in shaping the spatial distribution of productivity. From 1979– 1988, the Transmigration Program relocated two million migrants from rural Java and Bali to new rural settlements in the Outer Islands. Villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later. We find some evidence of migrants’ adaptation to agroclimatic change. Overall, our re- sults suggest that regional productivity differences may overstate the potential gains from migration.
    Keywords: Internal Migration, Comparative Advantage, Spatial Labor Allocation, Agricultural Adaptation
    JEL: J43 J61 O12 O13 O15 R12
    Date: 2015–11
  8. By: Gabor Bekes (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Aron Horvath (Institute of Economics - Centre for Economic and Regional Studies Hungarian Academy of Sciences and ELTINGA Centre for Real Estate Research); Zoltan Sapi (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTINGA Centre for Real Estate Research)
    Abstract: This study employs the hedonic property price method to analyze the flood risk effect on a rich set of data. The analysis is carried out on Hungary, but as the control variables are extremely elaborated, our results have general importance. The paper finds a significant reduction in housing prices accounted to ZIP code level flood risk even after controlling for a wide range of geographical and socio-economic features. This paper finds that flood risk reduces housing prices substantially. It turns out that the average elasticity is driven by being in close proximity of major rivers. While riverside areas have an overall price premium in Hungary, risky areas loose this advantage to flood risk. In ZIP code areas where the inundation depths are 10% higher, housing prices tend to be 1% lower on average plus another 1% lower along the major rivers.
    Keywords: housing, hedonic pricing, flood risk, geography
    JEL: Q51 Q54 R30 R31
    Date: 2016–06
  9. By: Lena Edlund; Cecilia Machado; Maria Sviatschi
    Abstract: In 1980, Census data indicate, housing prices in large US cities rose with distance from the city center. By 2010, that relationship had reversed. We propose that this development can be traced to greater labor supply of high-income households which reduced the tolerance for commuting. In a tract-level data set covering the 27 largest US cities, years 1980-2010, we find support for our hypothesis using a Bartik-type demand shifter for skilled labor: full-time skilled workers favor proximity to the city center and their increased presence can account for the rising price premium commanded by centrality.
    Keywords: Gentrification; suburbanization; returns to skill; labor supply; location choice
    JEL: J13 J24
    Date: 2016–01
  10. By: Luis Alberiko Gil-Alaña; Carlos Pestana Barros; Zhongfei Chen
    Abstract: This paper analyses long range fractional dependence of China pollution in four major cities, namely Beijing, Shangai, Guangzhou and Shenzhen from September 28 of 2013 to December 12 of 2015. Unit roots hypotheses are tested by using fractional integration methods using both uncorrelated and autocorrelated errors. The results reveal that the pollution is persistent, meaning that it will continue until strong anti-pollution measures are adopted. Policy implication is derived.
    Keywords: Chinese cities, pollution, unit roots, AR
    JEL: C22 O11
    Date: 2016–02
  11. By: Figlio, David N. (Northwestern University); Giuliano, Paola (University of California, Los Angeles); Özek, Umut (American Institutes for Research); Sapienza, Paola (Northwestern University)
    Abstract: We use remarkable population-level administrative education and birth records from Florida to study the role of Long-Term Orientation on the educational attainment of immigrant students living in the US. Controlling for the quality of schools and individual characteristics, students from countries with long term oriented attitudes perform better than students from cultures that do not emphasize the importance of delayed gratification. These students perform better in third grade reading and math tests, have larger test score gains over time, have fewer absences and disciplinary incidents, are less likely to repeat grades, and are more likely to graduate from high school in four years. Also, they are more likely to enroll in advanced high school courses, especially in scientific subjects. Parents from long term oriented cultures are more likely to secure better educational opportunities for their children. A larger fraction of immigrants speaking the same language in the school amplifies the effect of Long-Term Orientation on educational performance. We validate these results using a sample of immigrant students living in 37 different countries.
    Keywords: long-term orientation, education, cultural transmission
    JEL: I20 I24 J15 Z1
    Date: 2016–08
  12. By: Fesselmeyer, Eric (National University of Singapore); Liu, Haoming (National University of Singapore)
    Abstract: We estimate the network externality of a public transit system by examining the effects of its expansion on the housing market. Our results show that a major expansion of Singapore's Mass Rapid Transit (MRT) system increased the price of apartments within 0.5 km of a pre-expansion station by 1.6% to 2.1% relative to apartments that were further away from a station. Evaluated at the mean housing price, the expansion increased the value of pre-connected apartments by at least S$386 million, which is equivalent to about 8% of the estimated S$5 billion cost of the expansion.
    Keywords: public transportation, housing, network effects
    JEL: H4 R21 R42 H23
    Date: 2016–08
  13. By: Ehlers, Tim; Schwager, Robert
    Abstract: We present a theory explaining the impact of ability tracking on academic performance based on grading policies. Our model distinguishes between initial ability, which is mainly determined by parental background, and eagerness to extend knowledge. We show that achievements of low ability students may be higher in a comprehensive school system, even if there are no synergy effects from teaching different students together. This arises because the comprehensive school sets a compromise standard which exceeds the standard from the low ability track. Moreover, if students with lower initial ability have higher eagerness to learn, merging classes will increase average performance.
    Keywords: ability tracking,comprehensive school,education,equality of opportunity,peer group effects
    JEL: I21 I28 D63
    Date: 2016
  14. By: Jeremy W Bray; Brooks Depro; Dorren McMahon; Marion Siegle; Lee Mobley
    Abstract: Since the Great Recession, US policy and advocacy groups have sought to better understand its effect on a group of especially vulnerable young adults who are not enrolled in school or training programs and not participating in the labor market, so called ‘disconnected youth.’ This article distinguishes between disconnected youth and unemployed youth and examines the spatial clustering of these two groups across counties in the US. The focus is to ascertain whether there are differences in underlying contextual factors among groups of counties that are mutually exclusive and spatially disparate (non-adjacent), comprising two types of spatial clusters – high rates of disconnected youth and high rates of unemployed youth. Using restricted, household-level census data inside the Census Research Data Center (RDC) under special permission by the US Census Bureau, we were able to define these two groups using detailed household questionnaires that are not available to researchers outside the RDC. The geospatial patterns in the two types of clusters suggest that places with high concentrations of disconnected youth are distinctly different in terms of underlying characteristics from places with high concentrations of unemployed youth. These differences include, among other things, arrests for synthetic drug production, enclaves of poor in rural areas, persistent poverty in areas, educational attainment in the populace, children in poverty, persons without health insurance, the social capital index, and elders who receive disability benefits. This article provides some preliminary evidence regarding the social forces underlying the two types of observed geospatial clusters and discusses how they differ.
    Keywords: NEETs; disconnected youth; opportunity youth; geographic concentration
    JEL: J21 J61
    Date: 2016–01
  15. By: Samuel Bazzi (Boston University & BREAD); Matthew Gudgeon (Boston University)
    Abstract: The creation of new local governments is a key feature of decentralization in developing countries. This process often causes substantial changes in contestable public resources and the local diversity of the electorate. We exploit the plausibly exogenous timing of new district creation in Indonesia to iden- tify the implications of these changes for violent conflict. Using new geospatial data on violence, we show that allowing for redistricting along group lines can reduce conflict. However, these reductions are undone and even reversed if the newly defined electorates are ethnically polarized, particularly in areas that receive an entirely new seat of government. We identify several mechanisms highlighting the violent contestation of political control.
    Keywords: Conflict, Polarization, Ethnic Diversity, Decentralization
    JEL: D72 D74 H41 H77 O13 Q34
    Date: 2016–03
  16. By: Angelucci, Manuela; Prina, Silvia; Royer, Heather; Samek, Anya
    Abstract: Little is known about how peers influence the impact of incentives. We investigate two mechanisms by which these effects can occur: through peers' actions and peers' incentives. In a field experiment on snack choice in the school lunchroom (choice of grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers' choices are incentivized. We show that, while peers' actions - picking grapes - have a positive spillover effect on children's take-up of grapes, seeing that peers are incentivized to pick grapes has a negative spillover effect on take-up. When incentivized choices are public, incentivizing all children to pick grapes has no statistically significant effect on take-up, as the negative spillover offsets the positive impacts of incentives on take-up.
    Keywords: food choice,incentives,spillovers,field experiment
    JEL: C93 I1 J13
    Date: 2016
  17. By: Yi Huang (The Graduate Institute, Geneva); Marco Pagano (University of Naples Federico II, CSEF, EIEF, CEPR, and ECGI); Ugo Panizza (The Graduate Institute, Geneva, and CEPR)
    Abstract: In China local public debt issuance between 2006 and 2013 crowded out investment by private manufacturing firms by tightening their funding constraints, while it did not affect state-owned and foreign fi rms. Using novel data for local public debt issuance, we establish this result in three ways. First, local public debt is inversely correlated with the city-level investment ratio of domestic private manufacturing firms. Instrumental variable regressions indicate that this link is causal. Second, local public debt has a larger negative effect on investment by private firms in industries more dependent on external funding. Finally, in cities with high government debt, firm-level investment is more sensitive to internal funding, also when this sensitivity is estimated jointly with the firm's likelihood of being credit-constrained. Altogether, these results suggest that, by curtailing private investment, the massive public debt issuance associated with the post-2008 fiscal stimulus sapped long-term growth prospects in China.
    Date: 2016
  18. By: Oscar Valencia (Banco de la República de Colombia); Daniel Osorio (Banco de la República de Colombia); Pablo Garay
    Abstract: This paper builds a general equilibrium model that incorporates banks, financial frictions, default and a capital requirements. Ex-ante heterogeneous households decide how much to save or borrow for the sake of consumption (consumer credit) or the provision of housing services(mortgages). These choices are subject to borrowing limits, which depend on the value of real estate assets (for mortgages) or labour income (for consumer loans). The model includes final goods producers who must borrow in order to finance working capital/labour requirements (business credit borrowing) and intermediate good producers subject to nominal rigidities. Saving and borrowing are intermediated by a bank facing different capital requirements for each credit category. Any shock that has an impact on bank capital (for instance, a default shock) directly affects the bank’s income, the cost of external finance and, eventually, interest rates on loans. Changes in interest rates have second-round effects on labour and consumption through the borrowing limits. Simulations of the model suggest that the business cycle properties of credit and credit quality for each credit category are consistent with what is observed in the data. Classification JEL: E5, G21, G28
    Keywords: DSGE Models; Financial Frictions; Macroprudential Policy
    Date: 2016–08
  19. By: Gazzani, Andrea
    Abstract: Housing prices are subject to boom and bust episodes with long-lasting deviation from fundamentals. By considering a present value housing price model under noisy information, I study the macroeconomic implications of movements in housing prices related (news) and not related (noise) to future fundamentals. I provide empirical evidence of the sizable macroeconomic effects of news and noise shocks. Following Forni et al. (2014, 2016), I identify news and noise shocks through a non-standard VAR technique which exploits future information. In the US, news shocks are the main driver of the housing market at low frequencies, but in the short-medium horizon noise shocks explain a large share of the variability in housing prices, residential investment and GDP. Historically, many housing cycles are driven by noise. The empirical findings are consistent with a model à la Iacoviello which features a rental market. In this model, the usual optimal policy exercise concerns an augmented Taylor rule and a pro-cyclical loan-to-value ratio. I propose pro-cyclical property taxes as the most effective policy tool to deal with fluctuations originating from the housing market. JEL Classification: E30, E40, E50
    Keywords: housing market, macro-prudential, noise, non-fundamental VAR, property tax
    Date: 2016–07
  20. By: Marjit, Sugata; Mandal, Biswajit; Chatterjee, Tonmoy
    Abstract: This paper attempts to provide an explanation to the debate whether infrastructure development is more effective than direct cash transfer to reduce wage disparity between skilled and unskilled workers. We use a simple general equilibrium structure to argue that in the presence of symmetric productivity effects direct cash transfer meets the target when such transfer is financed by tax revenue collected from skilled wage bill. Nevertheless, in case of asymmetric productivity effects the arguments boil down to how different sectors absorb infrastructural facility to improve their productivity.
    Keywords: Infrastructure, Redistribution, Personnel income tax, General Equilibrium
    JEL: D5 F1 H23 H24 H54
    Date: 2016–08–10
  21. By: Li, Xin (Delft University of Technology); van Ham, Maarten (Delft University of Technology); Kleinhans, Reinout (Delft University of Technology)
    Abstract: Despite the massive forced relocation of residents during urban restructuring in China, there are no systematic studies on how residents undergo the process. Most studies concerning urban restructuring in China directly equate forced relocation with displacement, which has a negative connotation. This negative view overlooks the multifaceted effects of forced relocation on relocatees. This paper aims to develop a critical understanding of the forced relocation of residents during urban restructuring in China. It takes forced relocation to be a process with changing contents over time, and as a specific type of residential mobility that occurs in the context of urban restructuring. This paper presents a conceptual model that includes different stages and contexts to analyse the experiences of relocatees during forced relocation. It divides the process of forced relocation into three stages – the pre-demolition stage, the transitional stage and the post-relocation stage – and investigates the social, economic, physical, psychological and behavioural dimensions of the experiences of relocatees at the macro and micro levels. We argue that forced relocation in urban China is not necessarily equivalent to displacement. Studying the experiences of relocatees from the household and residential mobility perspectives reveals the dynamic, variable and complex nature of forced relocation.
    Keywords: experience of relocatees, forced relocation, urban restructuring, displacement, residential mobility, China
    JEL: O18 R23
    Date: 2016–08
  22. By: Dustmann, Christian; Schönberg, Uta; Stuhler, Jan
    Abstract: By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standard models of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or non-employment, suggesting that "outsiders" shield"insiders" from the increased competition.
    Keywords: Immigration; internal migration; labor supply elasticity; wage effects
    JEL: J21 J22 J61 R23
    Date: 2016–08
  23. By: Fujii, Hidemichi; Managi, Shunsuke
    Abstract: Rapid urbanization has caused significant problems, and sustainable city design can play an important role in solving these problems under limited budgets and resources. Previous studies have proposed city evaluation indicators that can suggest appropriate urban designs. However, these indicators do not clearly consider economic theory, which is crucial for understanding accumulation of urban capital stock by the flows from daily urban activities. This study proposes a research framework based on economic theory for evaluating urban sustainability; this framework uses the inclusive wealth index (IWI) concept to examine inclusive urban capital stock. It examines the advantages of using the IWI as a city evaluation indicator along with data envelopment analysis and a decomposition analysis framework. We use data for 20 Japanese ordinance-designated cities for an empirical study to demonstrate a proposed approach for evaluating inclusive urban capital. The developed research application evaluates each city’s relative superiority in terms of capital accumulation and identifies those factors determining changes in capital flows via changes in efficiency, priority, and scale. The combination of these results can be helpful to decision makers seeking to increase urban capital by considering reference city information and relative superiority.
    Keywords: inclusive urban capital; urban planning; sustainability; decomposition analysis; data envelopment analysis
    JEL: R11 R58
    Date: 2016–08
  24. By: Lincove, Jane Arnold (University of Maryland, Baltimore County); Cortes, Kalena E. (Texas A&M University)
    Abstract: We examine the role of information in the college matching behavior of low- and high-income students, exploiting a state automatic admissions policy that provides some students with perfect a priori certainty of college admissions. We find that admissions certainty encourages college-ready low-income students to seek more rigorous universities. Low-income students who are less college-ready are not influenced by admissions certainty and are sensitive to college entrance exams scores. Most students also prefer campuses with students of similar race, income, and high school class rank, but only highly-qualified low-income students choose institutions where they have fewer same-race and same-income peers.
    Keywords: academic undermatching and overmatching, social matching, admissions policies, Texas Top 10% Plan, automatic admissions
    JEL: I21 I23 J15
    Date: 2016–08
  25. By: Jacobus, Cilliers; Ibrahim, Kasirye; Clare, Leaver; Pieter, Serneels; Andrew, Zeitlink
    Abstract: Public sector organizations often rely on reports by local monitors that are costly to verify and that serve twin objectives: to incentivize agent performance, and to provide information for planning purposes. Received wisdom has it that pay for locally monitored performance (P4LMP) will result in collusion and undermine both objectives. But simple Coasian logic suggests the reverse: P4LMP puts transferable money on the table and may enable interested parties to bargain to a more efficient outcome. This paper develops a theoretical model that shows why, and for which parameters, the welfare-enhancing Coasian scenario exists. Focusing on education, the authors model how the preferences of a teacher (agent) and head-teacher (local monitor) affect actual and reported teacher attendance, and how these equilibrium outcomes depend on the financial stakes attached to reports. To capture the value of information, we also consider the welfare of a bureaucracy that makes a costly policy mistake when holding the wrong belief about teacher performance. We test the model and estimate the predicted effects using data from a field experiment in Ugandan primary schools, randomly varying whether head teachers’ reports of teacher attendance are tied to bonus payments or not. Consistent with Coasian logic, P4LMP increased actual and reported teacher attendance (by 9 and 15 percentage points respectively) and reduced policy mistakes (by 7 percentage points) relative to unincentivized local monitoring. We use these experimental impacts to undertake a detailed cost-benefit analysis and conclude, even under conservative assumptions that welfare improved when paying for locally monitored performance.
    Keywords: Institutional and Behavioral Economics, Labor and Human Capital, Public Economics, Resource /Energy Economics and Policy, Risk and Uncertainty, Teaching/Communication/Extension/Profession, D61 H52 I25 I26,
    Date: 2016–08
  26. By: Marcelo Arbex (Department of Economics, University of Windsor); Dennis O'Dea (Department of Economics, University of Washington); David Wiczer (Research Division, Federal Reserve Bank of St. Louis)
    Abstract: We introduce a complex network into a search model in which workers find jobs through their network or directly from firms. This framework links heterogeneity in network position to heterogeneity in wage-employment dynamics: better-connected workers climb the job ladder faster, drawing more frequently from the network offer distribution which stochastically dominates the direct-search distribution. The mean- field approach allows a tractable, recursive formulation and our calibrated version is consistent with several empirical findings. Further, we present new evidence consistent with our model: Job-to-job switches use networks more frequently at higher rungs of the ladder.
    Keywords: Labor Markets; Social networks; Job search; Unemployment; Wages dispersion.
    JEL: D83 D85 E24 J31 J64
    Date: 2016–08
  27. By: Florence LACHET-TOUYA
    Keywords: Vertical and horizontal tax externalities; Information asymmetry; Tax competition; EU taxation; Governments' objective function
    JEL: D72 D82 H23 H30 H32 H71 H77
    Date: 2016–08
  28. By: Alessandra Michelangeli (University of Milano-Bicocca, DEMS, Piazza Ateneo Nuovo 1, Milan I-20126, Italy); Eugenio Peluso (Department of Economics (University of Verona))
    Abstract: We propose an innovative methodology to measure inequality between cities. If an even distribution of amenities across cities is assumed to increase the average well-being in a given country, inequality between cities can be evaluated through a multidimensional index of the Atkinson (1970) type. This index is shown to be decomposabe into the sum of inequality indices computed on the marginal distributions of the amenities across cities, plus a residual term accounting for their correlation. We apply this methodology to assess inequality between Italian cities in terms of the distribution of public infrastructures, local services, economic and environmental conditions.
    Keywords: Inequality, inequality aversion, social welfare, city
    JEL: R11 R12 R23
    Date: 2016–08
  29. By: Daniel B. Jones; Randall Walsh
    Abstract: How does the partisan composition of an electorate impact the policies adopted by an elected representative? We take advantage of variation in the partisan composition of Congressional districts stemming from Census-initiated redistricting in the 1990’s, 2000’s, and 2010’s. Using this variation, we examine how an increase in Democrat share within a district impacts the district representative’s roll call voting. We find that an increase in Democrat share within a district causes more leftist roll call voting. This occurs because a Democrat is more likely to hold the seat, but also because – in contrast to existing empirical work – partisan composition has a direct effect on the roll call voting of individual representatives. This is true of both Democrats and Republicans. It is also true regardless of the nature of the redistricting (e.g., whether the redistricting was generated by a partisan or non-partisan process).
    JEL: D72 H0
    Date: 2016–08
  30. By: Effiong, Ekpeno
    Abstract: Africa’s rapid urbanization pose challenges for her sustainable development. This paper investigates the environmental impact of urbanization for 49 African countries from 1990 to 2010. Using the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) framework, a recently developed semi-parametric panel fixed-effects regression technique, and two atmospheric air pollutants, namely carbon dioxide (CO2) and ambient particulate matter PM10 emissions, the evidence indicates that urbanization reduces environmental pollution. The semi-parametric analysis reveals that the result is more pronounced with PM10 but weaker for CO2 emissions. Moreover, there is no evidence to confirm the Kuznets hypothesis of an inverted U-shaped curve between urbanization and environmental pollution. To reap the benefits of urbanization, there is need for a strategic urban planning with basic infrastructure investment that promotes a green environment.
    Keywords: Urbanization; Environmental Quality; STIRPAT; Semi-parametric method; Africa.
    JEL: C14 C33 O55 Q2 Q20 Q5 R11
    Date: 2016–07–31

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