nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒10‒30
forty papers chosen by
Steve Ross
University of Connecticut

  1. Urban Infrastructure Investment and Rent-Capture Potentials By Vincent Viguié; Stéphane Hallegatte
  2. Determinants of Urbanization in Different Size/Class Distribution of Cities/Towns in India By Rani, Chetana; Tripathi, Sabyasachi
  3. Structural Demand Estimation with Borrowing Constraints By Amine Ouazad; Romain Rancière
  4. Pareto's Law and City Size in China: Diverging Patterns in Land and People By Chao Li; John Gibson
  5. "Industrial Structure in Urban Accounting" By Jun Oshiro; Yasuhiro Sato
  6. Development and Application of Regional Employment IO Model (Japanese) By NAKAMURA Ryohei
  7. Export diversification and economic development: a dynamic spatial data analysis By Roberto Basile; Aleksandra Parteka; Rosanna Pittiglio
  8. The Evolution of Income Disparities across US Metropolitan Statistical Areas By Licia Ferranna; Margherita Gerolimetto; Stefano Magrini
  9. The Effect of House Prices on Fertility: Evidence from Canada By Jeremy Clark; Ana Ferrer
  10. Spatio-Temporal Autoregressive Semiparametric Model for the analysis of regional economic data By Román Mínguez; María L.; Roberto Basile
  11. Exploring the polycentric city with multi-worker households: an agent-based microeconomic model By Rémi Lemoy; Charles Raux; Pablo Jensen
  12. Does Public Pension Funding Affect Where People Move? By Jean-Pierre Aubry; Caroline V. Crawford
  13. Population growth, interest rate, and housing tax in the transitional China By Ling-Yun He; Xing-Chun Wen
  14. Global Investments and Regional Development Trajectories: the Missing Links By Riccardo Crescenzi; Simona Iammarino
  15. Survival of Entrepreneurial Firms: The Role of Agglomeration Externalities By Tavassoli, Sam; Jienwatcharamongkhol, Viroj
  16. Adjusting content to individual student needs: Further evidence from an in-service teacher training program By Adrien Bouguen
  17. The Role of English Fluency in Migrant Assimilation: Evidence from United States History By Zachary Ward
  18. Hospital Employment and Local Unemployment: Evidence from French Health Reforms By Andrew E. Clark; Carine Milcent
  19. The Empirics of Agglomeration Economies By Pierre-Philippe Combes; Laurent Gobillon
  20. Where Are the Artists? Analyzing Economies of Agglomeration in Spain By Ivan Boal-San Miguel; Luis Cesar Herrero-Prieto
  21. Migration in the People’s Republic of China By Lu, Ming; Xia, Yiran
  22. Giving a Little Help to Girls? Evidence on Grade Discrimination and its Effect on Students Achievement By Camille Terrier
  23. Refugee Migration and Electoral Outcomes By Christian Dustman; Kristine Vasiljeva; Anna Piil Damm
  24. Does distance determine who is in higher education? By Sørensen, Elise Stenholt; Høst, Anders Kamp
  25. A Marginalist Model of Network Formation By Olaizola Ortega, María Norma; Valenciano Llovera, Federico
  26. Does increasing compulsory education decrease or displace adolescent crime? New evidence from administrative and victimization data By Brilli, Ylenia; Tonello, Marco
  27. Understanding the response to financial and non-financial incentives in education: Field experimental evidence using high-stakes assessments By Simon Burgess; Robert Metcalfe; Sally Sadoff
  28. Endogenous Transport Networks By Edouard Schaal; Pablo Fajgelbaum
  29. High-Stakes Accountability and Teacher Turnover: how do different school inspection judgements affect teachers' decisions to leave their school? By Sam Sims
  30. Reimagining Accountability in K-12 Education By Brian P. Gill; Jennifer S. Lerner; Paul Meosky
  31. Bobos in Paradise: Urban Politics and the New Economy By Gilles Saint-Paul
  32. Interstate Migration and Employer-to-Employer Transitions in the U.S. New Evidence from Administrative Records Data By Henry Hyatt; Erika McEntarfer; Ken Ueda; Alexandria Zhang
  33. What Types of Firms Relocate Their Headquarters and Why? Analyzing the effects of the dual corporate tax system (Japanese) By NAKATA Kazuko
  34. Random Scaling Factors in Bayesian Distributional Regression Models with an Application to Real Estate Data By Alexander Razen; Stefan Lang
  35. Preschool and Parental Response in a Second Best World: Evidence from a School Construction Experiment By Adrien Bouguen; Deon Filmer; Karen Macours; Sophie Naudeau
  36. Core and Periphery in the European Monetary Union: Bayoumi and Eichengreen 25 Years Later By Nauro F. Campos; Corrado Macchiarelli
  37. Determinants of Regional Differences in Rates of Overeducation in Europe By Davia, Maria A.; McGuinness, Seamus; O'Connell, Philip J.
  38. Discrete-Space Agglomeration Model with Social Interactions: Multiplicity, Stability, and Continuous Limit of Equilibria By Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
  39. Falling Real Interest Rates, House Prices, and the Introduction of the Pill By Lu, J.; Teulings, C.
  40. Estimation of social interaction models using regularization By Guy Tchuente

  1. By: Vincent Viguié (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique); Stéphane Hallegatte (World Bank - World Bank)
    Abstract: In a context of rapid urbanization and energy transition, massive investments will be required to develop efficient public transport networks. Capturing the increase in land value caused by transport infrastructure (for example, through a betterment tax) appears a promising way to finance public transport. However, it is no trivial task, as it is difficult to anticipate the rent creation. This paper uses a simple city model based on urban economic theory to compute the rent created by improvements in public transport infrastructure in Paris, France. To apply in places where models or data are not available, a reduced form of the model is shown to provide acceptable approximations of the rent creation. Simulations confirm that land value capture can finance a significant part of transport investments. The simulations also show that value capture potentials are influenced by what happens in the entire agglomeration. Simultaneous infrastructure investments in different parts of the city play a significant role, as they change overall accessibility patterns. Evolutions taking place in other cities also have a comparable influence. Non-local effects can change the total potential for land value capture and multiply this potential by as much as a factor of two.
    Keywords: modeling,public finance,Public transport,urban economics,transport
    Date: 2015–03–26
  2. By: Rani, Chetana; Tripathi, Sabyasachi
    Abstract: While there are several studies that have investigated the determinants of urbanization in India by considering all the cities/towns together or only large cities, this paper tries to investigate it by considering different class/size of cities of major states separately. For the analysis we use OLS regression model by considering latest Census data in 2011. Urbanization is conventionally measured by size/growth/density of city population. On the other hand, this study considers environmental effect (rain fall and temperature), spatial interaction effect (road distance to state headquarters/subdivision headquarters/ nearest city with population 1 lakh/ 5 lakh or more) and basic infrastructural facilities (number of school/colleges/universities/electricity connections/road length) to investigate the determinants of urbanization in different class/size cities in India. The results show that though overall environment and infrastructural facilities have a positive effect and spatial interaction has negative effect on urbanization, the results obtained here differ from earlier ones in respect of different size/class of cities/towns as also different measurements of urbanization. Finally, the paper suggests that for promotion of urbanization in India different urban policies have to be evolved to suit different size/class of cities/towns. Otherwise, India will face the problem of unbalanced urbanization which may not unlock the full potential contribution of urbanization on economic growth in India.
    Keywords: Urbanization, city size classes, India
    JEL: O18 R11 R12
    Date: 2016–10–26
  3. By: Amine Ouazad (Insead - INSEAD - INSEAD); Romain Rancière (International Monetary Fund (IMF), CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)
    Abstract: Structural models of housing or product choice use observed demand to estimate household preferences. However, household demand may be partly determined by borrowing constraints, limiting households’ choice set. Such borrowing constraints will differ across locations, households, and years. We put forward a model of neighborhood choice with borrowing constraints that accounts for mortgage credit approval rates. We estimate the model’s parameters using micro-level data on households, property transactions and mortgage applications for the San Francisco Bay. Approval rates vary significantly both across households and across neighborhoods. The model with borrowing constraints yields significantly higher estimated willingness to pay to live close to good schools and in majority-white neighborhoods. The model provides general equilibrium estimates of the impact of a relaxation of lending standards. Between 2000 and 2006, the model provides two out-of-sample predictions: (i) a compression of the price distribution and (ii) a decline in black households’ exposure to white households. Both predictions are supported by empirical observation.
    Keywords: household preference
    Date: 2015–10
  4. By: Chao Li (Auckland Institute of Technology); John Gibson (University of Waikato)
    Abstract: Using Pareto’s Law as a benchmark, the very largest cities in China appear to have scope to absorb more migrants, contrary to the pro-small bias in urban policy. We use population census data from 2000 and 2010 and remote sensing data to study the evolution of the size distribution of Chinese cities in terms of land and people. Migrants without local hukou registration increasingly congregate in a few larger cities, so previous studies that rely on the count of local hukou holders wrongly make the city size distribution seem more even. Temporal comparisons show the city size distribution is diverging in terms of the urban resident population but converging in terms of land area. These divergent patterns suggest that growth in the resident population of large cities is not being assisted by fast enough area expansion, while area expansion of less populous cities is too fast for their slow growth in resident numbers.
    Keywords: agglomeration; city size; hukou; migration; Pareto’s law; China
    JEL: R12 O15
    Date: 2016–10–17
  5. By: Jun Oshiro (Department of Law and Economics, Okinawa University); Yasuhiro Sato (Faculty of Economics, The University of Tokyo)
    Abstract: We develop a multisector general equilibrium model of a system of cities to study the quantitative significance of industrial structure in determining spatial structure. We first identify three types of wedges that capture the extent to which the standard urban economic model fails to explain empirically: efficiency and labor wedges, and amenity. We then calibrate the model to Japanese regional data and run counterfactual exercises to identify the significance of each wedge in each sector. Our analysis shows (i) that the labor wedge plays the primary role in determining the spatial structure, and (ii) that the secondary sector is the most influential.
    Date: 2016–10
  6. By: NAKAMURA Ryohei
    Abstract: The major concern for local municipalities aiming at regional vitalization is enhancing or maintaining employment rather than increasing regional income or output. This is becoming particularly important in the era of declining population. Using employment coefficients in the regional input-output (IO) table, we can calculate employment inducement effects for final demand by industrial sectors. However, the changing process of employment through industrial relations cannot be verified. To investigate the process, we need to construct a Leontief-type inverse matrix based on employment coefficients. In this study, we replace commodity price-based regional tables into employment-based IO tables and analyze the employment effects by the changes in final demand. Furthermore, endogenizing final consumption enables separation of the total inducement effects of employment change into the Leontief effect and the Keynes effect. By clarifying the relationship between economic base models and the predetermined IO model, we show that all industrial sectors including the service industries can become a basic industry, and accordingly, we can grasp the employment effect by treating all of the industries as basic industries. Traditionally, industries such as the primary industry and manufacturing industries were the predetermined basic industries. Those development of regional IO application would substantially contribute to policy making and implementation of a comprehensive regional strategy for local municipalities.
    Date: 2016–09
  7. By: Roberto Basile (Second University of Naples); Aleksandra Parteka (Gdansk University of Technology); Rosanna Pittiglio (Second University of Naples)
    Abstract: This paper contributes to the empirical literature on the relationship between ‘export variety’ (export diversification) and economic development by relaxing the assumption of cross-country independence and allowing for spatial diffusion of shocks in observed and unobserved factors. Export variety is measured for a balanced panel of 114 countries (1992-2012) using very detailed information on their exports (HS 6-digit product level). The estimation results of a dynamic spatial panel data model confirm the relevance of spatial network effects: indirect effects (spatial spillovers) strongly reinforce direct effects, while spatial proximity to large countries accelerates the diversification process. These results are robust to the choice of the weights matrix (an inverse-distance matrix, an exponential distance matrix and a matrix based on bilateral trade flows are used).
    Keywords: export diversification, economic development, panel spatial data models
    JEL: F14 F43 C31 O11
    Date: 2016
  8. By: Licia Ferranna (Ca’ Foscari University of Venice, Department of Economics); Margherita Gerolimetto; Stefano Magrini (Ca’ Foscari University of Venice, Department of Economics)
    Abstract: The paper investigates how the spatial evolution of core-based city regions affects the dynamics of income disparities across Metropolitan Statistical Areas in the United States between 1971 and 2010. Treating initially non-metropolitan counties as part of the functional economic system for the whole time period changes the internal composition of average per capita personal income thus biasing convergence analysis. The paper analyses the dynamics of the cross-sectional distribution of per capita personal income by comparing different methods to define MSAs over time. The results show that a cluster of high income economies emerges when MSAs are allowed to evolve spatially.
    Keywords: Convergence, Metropolitan Statistical Areas, Distribution Dynamics, Decentralization
    JEL: R12 R23 C14
    Date: 2016
  9. By: Jeremy Clark (University of Canterbury); Ana Ferrer
    Abstract: The price of housing is an important and under-studied candidate for consideration in fertility decisions. Theoretically, higher housing prices will cause renters to have fewer additional children, and home owners to have more children if they already have sufficient housing and low substitution between children and other “goods†, and fewer children otherwise. In this paper, we combine longitudinal data from the Canadian Survey of Labour Income and Dynamics (SLID) and housing price data from the Canadian Real Estate Association to estimate the effect of housing price on fertility. We follow non-moving women aged 18-40 (with their associated families) over time to ask whether changes in lagged housing price affects marginal or total fertility. For home owners, we find that lagged housing prices are positively associated with marginal fertility using pooled cross section or fixed effects, negatively associated with total fertility under pooled cross section, but positively associated using fixed effects. For renters, lagged housing prices are not significantly negatively associated with either total or marginal fertility measures.
    Keywords: Economic Determinants of Fertility, Housing Prices, Wealth Effects, Home Ownership
    JEL: D13 J13 J18 R21
    Date: 2016–10–27
  10. By: Román Mínguez (University of Castilla-La Mancha); María L. (Carlos III University); Roberto Basile (Second University of Naples)
    Abstract: In this paper we propose an extension of the semiparametric P-Spline model to spatio-temporal data including a non-parametric trend, as well as a spatial lag of the dependent variable. This model is able to simultaneously control for func- tional form bias, spatial dependence bias, spatial heterogeneity bias, and omitted time-related factors bias. Specically, we consider a spatio-temporal ANOVA model disaggregating the trend in spatial and temporal main eects, and second and third order interactions between them. The model can include both linear and non-linear effects of the covariates, and other additional xed or random eects. Recent algorithms based on spatial anisotropic penalties (SAP) are used to estimate all the parameters in a closed form without the need of multidimensional optimization. An empirical case compares the performance of this model against alternatives models like spatial panel data models.
    Keywords: : spatio-temporal trend, mixed models, P-splines, PS-ANOVA, SAR, spatial panel.
    JEL: C33 C14 C63
    Date: 2016
  11. By: Rémi Lemoy (University of Luxembourg [Luxembourg], LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE] - CNRS - Centre National de la Recherche Scientifique); Charles Raux (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE] - CNRS - Centre National de la Recherche Scientifique); Pablo Jensen (IXXI - Institut Rhône-Alpin des Systèmes Complexes - ENS Lyon - École normale supérieure - Lyon, LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE] - CNRS - Centre National de la Recherche Scientifique, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - CNRS - Centre National de la Recherche Scientifique - ENS Lyon - École normale supérieure - Lyon)
    Abstract: We propose an agent-based dynamics which leads an urban system to the standard equilibrium of the Alonso, Muth, Mills (AMM) framework. Starting for instance from a random initialization, agents move and bid for land, performing a kind of local search and finally leading the system to equilibrium rent, density and land use. Agreement with continuous analytical results is only limited by the discreteness of simulations. We then study polycentrism in cities with this tool. Two job centers are introduced, and the economic, social and environmental outcomes of various polycentric spatial structures are presented. We also introduce two-worker households whose partners may work in different job centers. When various two-worker households are mixed, polycentrism is desirable, as long as centers are not moved too far apart from each other. The environmental outcome is also positive, but housing surfaces increase.
    Keywords: urban economics,location choice,polycentric city,two-worker households,agent-based model
    Date: 2016–10–14
  12. By: Jean-Pierre Aubry; Caroline V. Crawford
    Abstract: In prior briefs, the Center has focused on the impact of pensions on state and local finances, including their influence on total budgets, borrowing costs, and the fiscal health of troubled jurisdictions. Overall, this research found that pensions play only a modest role. However, one other way that pensions may impact public finances is through where individuals choose to live. Past research has found that individuals are more likely to move to places with the best “bundle” of amenities and opportunities. Influential factors may include house prices and jobs, as well as government finances, such as taxes and debt. More recently, unfunded pension liabilities have raised concerns about jurisdictions’ ability to manage their finances, as an increasing portion of today’s taxes must be used to cover past shortfalls and future taxes may end up being higher as well. This brief explores the role that unfunded pension liabilities play in migration from state to state. Policymakers care about migration, because it is linked to economic consequences. For example, when many people leave a state, the loss of income tax revenue and consumer spending can hurt the state’s economy. Therefore, understanding the underlying forces that contribute to migration patterns is important. The discussion proceeds as follows. The first section describes broad migration patterns. The second section summarizes the data used for the analysis. The third section explains the methodology for analyzing how state differences in unfunded pension liabilities relate to interstate migration patterns. The fourth section presents the findings. The final section concludes that while economic factors and the distance between locations are the primary drivers of migration, a state’s pension funding also plays a role, albeit small.
    Date: 2016–10
  13. By: Ling-Yun He; Xing-Chun Wen
    Abstract: This paper combines and develops the models in Lastrapes (2002) and Mankiw & Weil (1989), which enables us to analyze the effects of interest rate and population growth shocks on housing price in one integrated framework. Based on this model, we carry out policy simulations to examine whether the housing (stock or flow) tax reduces the housing price fluctuations caused by interest rate or population growth shocks. Simulation results imply that the choice of housing tax tools depends on the kind of shock that housing market faces. In the situation where the housing price volatility is caused by the population growth shock, the flow tax can reduce the volatility of housing price while the stock tax makes no difference to it. If the shock is resulting from the interest rate, the policy maker should not impose any kind of the housing taxes. Furthermore, the effect of one kind of the housing tax can be strengthened by that of the other type of housing tax.
    Date: 2016–10
  14. By: Riccardo Crescenzi; Simona Iammarino
    Abstract: Regional economic development has been long conceptualised as a non-linear, interactive and socially embedded process: these features were traditionally regarded as spatially mediated and highly localised. However, unprecedentedly fast technological change coupled with the intensification of global economic integration processes has spurred the need to place regional development in a truly open and interdependent framework. Despite substantial progress made by the academic literature, rethinking regional development in this perspective still presents a number of challenges in terms of concepts, empirical evidence and policy approaches. Following an interdisciplinary assessment of how openness and connectivity – proxied by one particular of the many cross-border flows, i.e. global investments – interact with regional economic development trajectories, this paper presents a picture of the geography of foreign investments from and to the European regions and its change after the financial and economic crisis in 2008. This simple exercise allows us to shed some initial light on how the operationalisation of regional connectivity can improve our empirical understanding of the evolution of regional economies and the policy approach needed to support their reaction to change.
    Keywords: FDI, regions, local-global connectivity, regional development, Europe
    JEL: F2 R11 R12 O19 O3 O52
    Date: 2016–10
  15. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Department of Economics, Lund University)
    Abstract: This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service (KIBS) sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the “related variety” of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while “unrelated variety” barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.
    Keywords: Entrepreneurial firms; region; agglomeration externalities; survival analysis; related variety; unrelated variety
    JEL: J24 L26 R12
    Date: 2016–10–19
  16. By: Adrien Bouguen (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)
    Abstract: Adapting instruction to the specific needs of each student is a promising strategy to improve overall academic achievement. In this article, I study the impact of an intensive in-service teacher training program on reading skills offered to kindergarten teachers in France. The program modifies the lesson content and encourages teachers to adapt instruction to student needs by dividing the class according to initial achievement. While assessing impact is usually difficult due to the presence of ability bias and teacher selection, I show that in this context, a value-added model that controls for school and teacher characteristics constitutes a legitimate strategy to estimate the treatment effect. Results show that all students benefiting from the program progressed in reading skills at the end of the year. Besides, weaker students progressed faster on less-advanced competences (such as letter recognition), while stronger students improved their reading skills. This suggests that teachers adjusted content to students' needs. Finally, a cost-effectiveness analysis reveals that the program is approximately three times more cost-effective than reducing class size in France.
    Keywords: teacher training,inequality, Early childcare program,teaching practices and content
    Date: 2015–03
  17. By: Zachary Ward
    Abstract: I estimate the premium for speaking English and the rate of language acquisition in the early 20th century US using new linked data on over half a million migrants. Compared with today's migrants, early 20th century migrants arrived with much lower levels of proficiency, yet many acquired language skills rapidly after arrival. Learning to speak English was correlated with a small upgrade in occupational-based earnings (2 to 6%); the premium has at least doubled between 1900 and 2010, revealing that English fluency has become an increasingly large barrier to migration over time.
    Keywords: English fl uency, language, migrant assimilation
    JEL: F22 J24 J61 J62 N31 N32
    Date: 2016–10
  18. By: Andrew E. Clark (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Carine Milcent (CEPREMAP - Centre pour la recherche économique et ses applications, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)
    Abstract: We here ask whether French local authorities respond to depressed local labour markets by increasing employment in State-owned hospitals. We use 2006-2010 panel data to examine within-hospital employment changes: higher local unemployment is associated with greater employment in State-owned hospitals, but not for any other hospital type. Our data cover a reimbursement reform introducing competition between hospitals. This reform reduced public-hospital employment, but had no overall effect on the relationship between public-hospital employment and local unemployment. Further analysis shows that this continuing relationship is only found in higher unemployment areas, where public-hospital employment remained counter-cyclical.
    Keywords: I18,D21,D72,Hospitals,Competition,Public Employment,Unemployment,J21
    Date: 2015–08
  19. By: Pierre-Philippe Combes (Institut d'Études Politiques [IEP] - Paris, CEPR - Center for Economic Policy Research - CEPR, AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Laurent Gobillon (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics, INED - Institut national d'études démographiques)
    Abstract: We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and workers' endogenous location choices. We emphasise the impact of local density on productivity but we also consider many other local determinants supported by theory. Empirical issues are then addressed. Most important concerns are about endogeneity at the local and individual levels, the choice of a productivity measure between wage and TFP, and the roles of spatial scale, firms' characteristics, and functional forms. Estimated impacts of local determinants of productivity, employment, and firms' locations choices are surveyed for both developed and developing economies. We finally provide a discussion of attempts to identify and quantify specific agglomeration mechanisms.
    Keywords: Agglomeration gains,Density,Sorting,Learning,Location choices
    Date: 2014–10
  20. By: Ivan Boal-San Miguel (Department of Applied Economics, University of Valladolid); Luis Cesar Herrero-Prieto (Department of Applied Economics, University of Valladolid)
    Abstract: The creative economy has become the subject of increasing interest in recent years, both in the area of cultural economics as well as in economic development studies and the analysis of spatial disparities. In this regard, various studies have examined the spatial logics of cultural and creative industries, although analyses into the location and agglomeration of artists therein remain few and far between, in other words inquiry into the activities location linked to artistic creation in a purer sense. The present work thus seeks to delve into location and spatial structure of the cultural sector in a Spanish region, focusing specifically on activities more closely linked to artistic creativity, such as literary creation, performing arts, bullfighting, music, cinema, etc. The work examines the autonomous community of Castilla y León as an example, and posits an analysis of the spatial distribution of artists using micro-spatial disaggregation, in other words taking the network of towns as the territorial analysis unit. Spatial econometric techniques are used to identify location patterns, pinpoint territorial activity clusters and to measure agglomeration economies. A first look at the findings reveals that the cultural sector in Castilla y León evidences a strong trend towards concentration, with spatial distribution patterns which lead to the formation of statistically significant cultural clusters and strong spatial dependence between territories over the whole of the period analysed (2005-2013).
    Keywords: Artists, spatial economic analysis, economies of agglomeration, cultural clusters, micro-territorial analysis
    JEL: Z11 R12
    Date: 2016–10
  21. By: Lu, Ming (Asian Development Bank Institute); Xia, Yiran (Asian Development Bank Institute)
    Abstract: This report summarizes the characteristics of migration in the People’s Republic of China (PRC) after its reforms and opening up. Rapid urbanization in the PRC has resulted from recent decades of intense rural–urban migration. The scale of migration increased rapidly and long-term migration is the main characteristic. The population characteristics of migration are determined not only by a personal decision, but also a joint decision within households to send members with comparative advantages in manufacturing and services, usually male and young, to work in cities. Coastal regions where manufacturing and services are better developed, especially big cities, are the major destinations. The aspiration for higher-income and better job opportunities is the major force that drives migration, while public services and urban amenities also partly account for population flows. However, in the PRC, there are still major institutional barriers—especially the hukou system and related segmentation in the urban labor market, social security, and public services access—that hinder rural–urban and interregional migration. Facing the challenges of fast urbanization and growing urban diseases, local governments still rely on the current system to control the population flow into large cities. Controlling population growth by discriminative policies will lead to more social problems. Policy makers should reconsider the way to achieve efficient and harmonious urbanization by shifting to more pro-market policies and reducing the migration costs embedded in institutional constraints.
    Keywords: migration; rural-urban migration; PRC; urbanization; hukou system; People’s Republic of China; rapid urbanization
    JEL: J61 P25 R23
    Date: 2016–10–17
  22. By: Camille Terrier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)
    Abstract: This paper tests whether we observe sex-discrimination in teachers' grades, and whether such biases affect pupils' achievement during the school year. I use a unique dataset containing standardized tests, teachers' attributed grades, and pupil's behavior, all three at different periods in time. Based on double-differences, the identification of the gender bias in teachers' grades suggests that (i) girls benefit from a substantive positive discrimination in math but not in French, (ii) girls' better behavior than boys, and their initial lower achievement in math do not explain much of this gender bias. Then, I use the heterogeneity in teachers' discriminatory behavior to show that classes in which teachers present a high degree of discrimination in favor of girls at the beginning of the year are also classes in which girls tend to progress more over the school year compared to boys.
    Keywords: Gender,grading,discrimination,progress
    Date: 2014–11
  23. By: Christian Dustman (University College London and CReAM); Kristine Vasiljeva (Kraka); Anna Piil Damm (Aarhus University)
    Abstract: To estimate the causal effect of refugee migration on voting outcomes in parliamentary and municipal elections in Denmark, our study is the first that addresses the key problem of immigrant sorting by exploiting a policy that assigned refugee immigrants to municipalities on a quasi-random basis. We find that – in all but the most urban municipalities - allocation of larger refugee shares between electoral cycles leads to an increase in the vote share not only for parties with an anti-immigration agenda but also for centre-right parties, while the vote share for centre-left parties decreases. However, in the largest and most urban municipalities refugee allocation has – if anything – the opposite effect on vote shares for anti-immigration parties. We demonstrate response heterogeneity according to municipal characteristics, with a more pronounced response in less urban municipalities in which the pre-policy shares of both immigrants and the more affluent is high, and in urban municipalities with high unemployment. At the same time, higher pre-policy crime rates are associated with more support for anti-immigration parties in response to refugee allocation in both urban and non-urban municipalities. We also find some evidence that refugee allocation influences voter turnout. Moreover, it has a large impact on the decision of anti-immigration parties’ choice of where to stand for municipal election.
    Keywords: immigration, political preferences, re-distribution, welfare, random allocation
    JEL: H53 I38
    Date: 2016–10
  24. By: Sørensen, Elise Stenholt; Høst, Anders Kamp
    Abstract: We assessed the effect of distance to higher education institutions on education enrolment. Furthermore, we analysed how parental education and geographic region affect the relationship between distance and enrolment. We employed Danish administrative data of high school students from 2006–2013 and found no relationship between distance and the decision to enrol in higher education, when controlling for individual and parental characteristics. However, the results did suggest a small negative association between distance and enrolment among students in cases where neither of their parents completed a higher education. However, this only applied in Central Jutland Region and Southern Denmark Region.
    Keywords: High school graduates, higher education, geographical accessibility, distance to school
    JEL: C25 I21 R10
    Date: 2015–12–11
  25. By: Olaizola Ortega, María Norma; Valenciano Llovera, Federico
    Abstract: We develop a network-formation model where the quality of a link depends on the amount invested in it and is determined by a link-formation "technology" , an increasing strictly concave function which is the only exogenous ingredient in the model. The revenue from the investments in links is the information that the nodes receive through the network. Two approaches are considered. First, assuming that the investments in links are made by a planner, the basic question is that of the efficient investments, either relative to a given infrastructure (i.e. a set of feasible links) or in absolute terms. It is proved that efficient networks belong to a special class of weighted nested split graph networks. Second, assuming that links are the result of investments of the node-players involved, there is the question of stability in the underlying network-formation game, be it restricted to a given infrastructure or unrestricted. Necessary and sufficient conditions for stability of the complete and star networks, and nested split graph networks in general, are obtained.
    Keywords: network, formation, efficiency, stability, nested, core, periphery, split, graphs
    JEL: A14 C72 D85
    Date: 2016–08–18
  26. By: Brilli, Ylenia (Department of Economics, School of Business, Economics and Law, Göteborg University); Tonello, Marco (Bank of Italy, Economic Research Department, Territorial Economic Research Unit)
    Abstract: This paper estimates the contemporaneous effect of education on adolescent crime by exploiting the implementation a reform that increases the school leaving age in Italy by one year. We find that the Reform increases the enrollment rate of all ages, but decreases the offending rate of 14-year-olds only, who are the age group explicitly targeted by the Reform. The effect mainly comes from natives males, while females and immigrants are not affected. The Reform does not induce crime displacement in times of the year or of the day when the school is not in session, but it increases violent crimes at school. By using measures of enrollment and crime, as well data at the aggregate and individual level, this paper shows that compulsory education reforms have a crime reducing effect induced by incapacitation, but may also lead to an increase of crimes in school facilities plausibly due to a higher students concentration.
    Keywords: adolescent crime; school enrollment; crime displacement; incapacitation
    JEL: I21 I28 J13 K42
    Date: 2016–10–18
  27. By: Simon Burgess; Robert Metcalfe; Sally Sadoff
    Abstract: We analyze the impact of incentivizing students’ effort during the school year on performance on high-stakes assessments in a field experiment with 63 low-income high schools and over 10,000 students. We contribute to the literature on education incentives by incentivising inputs rather than output, by focusing on high stakes outcomes, and by comparing financial and non-financial rewards. We take advantage of our large sample and rich data to explore heterogeneity in the effects of incentives, and identify a “right tail” of underperforming students who experience a significant impact on high stakes assessments. Among students in the upper half of the distribution of incentive effectiveness, exam scores improve by 10% to 20% of a standard deviation, equal to about half the attainment gap between poor and non-poor students.
    Date: 2016–10–19
  28. By: Edouard Schaal (New York University); Pablo Fajgelbaum (UCLA)
    Abstract: Abstract We develop a new theory of transport networks and study its implications for trade and growth. Given arbitrary demand and supply patterns, the model gives rise to endogenous bilateral trade costs. We first show how different spatial configurations of output and demand give rise to different types of networks. We determine conditions under which the ensuing network features spatial distributions of price gaps and employment that correspond to what is observed empirically.
    Date: 2016
  29. By: Sam Sims (Department of Social Science, University College London)
    Abstract: High teacher turnover damages pupil attainment (Borg et al., 2012; Ronfeldt et al., 2012). But while the effects of pupil and teacher characteristics on turnover are well documented, relatively little attention has been paid to the impact of the accountability system. This paper is the first to evaluate the effect on turnover of schools receiving different judgements from the English national schools inspectorate, Ofsted. Theoretically, the effects of inspection judgements are ambiguous. An 'Inadequate' rating may harm teachers' self-efficacy, increasing the chance of them leaving their current school. On the other hand, an 'Inadequate' rating provides a negative signal about the quality of teachers working in that school, decreasing the chance of them finding employment elsewhere. I use a difference in difference approach to estimate this empirically and find that an 'Inadequate' rating leads to an increase in turnover of 3.4 percentage points. By contrast, schools receiving an 'Outstanding' rating see no change in turnover. The results are robust to a number of specifications, sample restrictions and a placebo test.
    Keywords: Teacher turnover, high-stakes accountability, school inspection, efficacy, signalling
    JEL: I21 J44 J63 D82
    Date: 2016–10–10
  30. By: Brian P. Gill; Jennifer S. Lerner; Paul Meosky
    Abstract: The authors review rule-based, market-based, and professional accountability alongside outcome-based accountability, using evidence from the laboratory and the field to describe how each can produce favorable or unfavorable effects.
    Keywords: k-12 education, accountability
    JEL: I
  31. By: Gilles Saint-Paul (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics, New York University Abu Dhabi - Abu Dhabi)
    Abstract: This paper provides some elements to explain the observed takeover in some urban areas of a new kind of elite associated with new economy jobs, also known as "bourgeois bohème" (bobos). This takeover has been associated with greater investment in urban amenities and "clean" means of transport, with adverse e¤ects on commuting time. The model allows us to explain those developments by productivity is growth in the new economy, and by the di¤erences in production processes between the new and old economies. The consequences of bobo takeover for house prices and employment of unskilled service workers are also discussed. A bunkerized equilibrium in which skilled workers in the old economy no longer reside in the city and have been replaced by service workers is studied. In such an equilibrium urban amenities are at their maximum and commuting .ows have been eliminated. For some parameter values, bobos are better-o¤ under bunkerization, in which case they may gain by favoring it with a "diversity" subsidy for unskilled workers to reside in the city.
    Keywords: bobos,residential choice,local public goods,urban voting models,bunkerization,New economy,urban amenities
    Date: 2015–10
  32. By: Henry Hyatt; Erika McEntarfer; Ken Ueda; Alexandria Zhang
    Abstract: Recent evidence has suggested that interstate migration is in decline in the United States, which might imply that the labor market is becoming more rigid. However, the sharp post-2000 decline in the non-imputed interstate migration rate in the Current Population Survey (CPS), which has received considerable attention, is not reflected in other available data. In this paper, we use administrative records data to investigate labor mobility and migration within the U.S. We investigate the discrepancy in recent migration trends in the CPS and migration rates derived from administrative records sources using CPS microdata linked to administrative records on residential location. We find that a substantial fraction of CPS respondents who are cross-state migrants in the administrative records data do not report a cross-state move in the CPS, and that this disagreement has grown over time. Despite this disagreement in recent trends in overall interstate migration, rates and trends related to economic migration are remarkably similar in available data sources.
    Date: 2016–01
  33. By: NAKATA Kazuko
    Abstract: In 2004, the Japanese government introduced the dual corporate tax system, which allows prefectural governments to set their own corporate income tax rates. The purpose of this paper is to examine the effects of this tax reform on firms' location decision based on a discrete choice model, which investigates what types of firms relocate their headquarters across prefectures and whether their relocation decision was affected by the tax reform. The analysis indicates that the decision to relocate is negatively associated with firms' age and positively associated with their amount of assets, number of employees, debt-to-assets ratio, real estate rent, and payroll. Moreover, firms with a parent company, a foreign subsidiary, fewer business establishments, less capital stock, and fewer employees at the headquarters are more likely to relocate. After the tax reform, firms tend to avoid relocating to prefectures with a high corporate tax rate.
    Date: 2016–10
  34. By: Alexander Razen; Stefan Lang
    Abstract: Distributional structured additive regression provides a flexible framework for modeling each parameter of a potentially complex response distribution in dependence of covariates. Structured additive predictors allow for an additive decomposition of covariate effects with nonlinear effects and time trends, unit- or cluster-specific heterogeneity, spatial heterogeneity and complex interactions between covariates of different type. Within this framework, we present a simultaneous estimation approach for multiplicative random effects that allow for cluster-specific heterogeneity with respect to the scaling of a covariate's effect. More specifically, a possibly nonlinear function f(z) of a covariate z may be scaled by a multiplicative cluster-specific random effect (1+alpha). Inference is fully Bayesian and is based on highly efficient Markov Chain Monte Carlo (MCMC) algorithms. We investigate the statistical properties of our approach within extensive simulation experiments for different response distributions. Furthermore, we apply the methodology to German real estate data where we identify significant district-specific scaling factors. According to the deviance information criterion, the models incorporating these factors perform significantly better than standard models without random scaling factors.
    Keywords: iteratively weighted least squares proposals, MCMC, multiplicative random effects, structured additive predictors
    Date: 2016–10
  35. By: Adrien Bouguen (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Deon Filmer (Banque Mondiale - Centre de recherche de la Banque Mondiale - Banque Mondiale); Karen Macours (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Sophie Naudeau (Banque Mondiale - Centre de recherche de la Banque Mondiale - Banque Mondiale)
    Abstract: Interventions targeting early childhood development hold promise for increasing human capital and reducing the intergenerational transmission of poverty. This paper presents results from a randomized evaluation of a preschool construction program in Cambodia, and suggests caution. The overall impact of the program on early childhood outcomes was small and statistically insignificant. For the cohort with highest program exposure, the impact on cognitive indicators was negative; with the largest negative effects among children of poorer and less educated parents. The results are consistent with frequent underage enrollment in primary school in the absence of preschools, stricter enforcement of the minimum age for primary school entry after the intervention, substitution between primary and preschool following intervention, and difference in demand responses to the new preschools between more and less educated parents. The results show that contextual and program specifics, and behavioral responses, can potentially lead to perverse effects of programs.
    Keywords: Poverty and inequality,Parental involvement,Preschool and kindergarten,cognitive development
    Date: 2014–10
  36. By: Nauro F. Campos; Corrado Macchiarelli
    Abstract: Bayoumi-Eichengreen (1993) establish a EMU core-periphery pattern using 1963-1988 data. We use same methodology, sample, window length (1989-2015), and a novel over-identifying restriction test to ask whether the EMU strengthened or weakened the core-periphery pattern. Our results suggest the latter.
    Keywords: Business cycle synchronization, Structural VAR, European Monetary Union, Core-periphery
    JEL: E32 E63 F02
    Date: 2016–09
  37. By: Davia, Maria A. (Universidad de Castilla – La Mancha); McGuinness, Seamus (Economic and Social Research Institute, Dublin); O'Connell, Philip J. (ESRI, Dublin)
    Abstract: This paper examines the factors determining variations in spatial rates of overeducation. A quantile regression model has been implemented on a sample of region-yearly data drawn from the EU Survey on Income and Living Conditions (EU-SILC) and several institutional and macroeconomic features captured from other data-sets. Potential determinants of overeducation rates include factors such as labour market risk, financial aid to university students, excess labour demand and institutional factors. We find significant effects both for labour market structural imbalances and institutional factors. The research supports the findings of micro based studies which have found that overeducation is consistent with an assignment interpretation of the labour market.
    Keywords: regional variation, overeducation, mismatch
    JEL: C29 I21 J24
    Date: 2016–09
  38. By: Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
    Abstract: This study examines the properties of equilibrium, including the stability, of discrete-space agglomeration models with social interactions. The findings reveal that while the corresponding continuous-space model has a unique equilibrium, the equilibrium in discrete space can be non-unique for any finite degree of discretization by characterizing the discrete-space model as a potential game. Furthermore, it indicates that despite the above result, any sequence of discrete-space models' equilibria converges to the continuous-space model's unique equilibrium as the discretization of space is refined.
    Keywords: Social interaction; Agglomeration; Discrete space; Potential game; Stability; Evolutionary game theory
    JEL: C62 C72 C73 D62 R12
    Date: 2016–10–23
  39. By: Lu, J.; Teulings, C.
    Abstract: The past 30 years has witnessed a worldwide decrease in real interest rates. Simultaneously over this period house prices have grown in real terms. We demonstrate that these trends can be explained by changes in demographic structure associated with the introduction of the pill in the early 1970s. Following this, most of the western world, Japan and China saw similar reductions in fertility rates, though timing and magnitude differ among countries. In the long-run this leads to lower population growth. In the short-run the cohort born just before the introduction of the pill are disproportionally larger than cohorts born before and after. As this large cohort accumulates assets for retirement, aggregate savings supply increases which results in falling real interest rates and rising house prices. We find that an increase in house prices over the past decades was likely an efficient outcome that aided efficiency in the transition towards the new balanced growth path. However, housing's appreciation is a feature that can't be easily explained in a rational framework. Our model predicts that real interest rates will continue to fall, overshooting the new balanced growth path level until hitting a trough at around the year 2035.
    Date: 2016–10–27
  40. By: Guy Tchuente
    Abstract: In social interaction models, the identification of the network effect is based on either group size variation, structure of the network or the relative position in the network measured by the Bonacich centrality measure. These identification strategies imply the use of many instruments or instruments that are highly correlated. The use of highly correlated instruments may lead to the weak identification of the parameters while, in finite samples, the inclusion of an excessive number of moments increases the bias. This paper proposes regularized versions of the 2SLS and GMM as a solution to these problems. The regularization is based on three different methods: Tikhonov, Landweber Fridman, and Principal Components. The proposed estimators are consistent and asymptotically normal. A Monte Carlo study illustrates the relevance of the estimators and evaluates their finite sample performance.
    Keywords: High-dimensional models; Social network; Identification; Spatial autoregressive model; GMM; 2SLS; regularization methods
    Date: 2016–07

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