nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒11‒20
fifty-five papers chosen by
Steve Ross
University of Connecticut

  1. A New Index of Housing Sentiment By Lasse Bork; Stig V. Møller; Thomas Q. Pedersen
  2. Do Pro-Poor Schools Reach Out to the Poor? Location Choice of BRAC and ROSC Schools in Bangladesh By Asadullah, Niaz
  3. Agent Based Models, Housing Fluctuations and the Role of Heterogeneous Expectations By Jinke Li; Geoffrey Meen
  4. Grading On A Curve: When Having Good Peers Is Not Good By Caterina Calsamiglia; Annalisa Loviglio
  5. Urban Productivity Estimation with Heterogeneous Prices and Labour By David C. Maré
  6. More than Just Friends? School Peers and Adult Interracial Relationships By Merlino, Luca Paolo; Steinhardt, Max F.; Wren-Lewis, Liam
  7. Mortgage Choice: Interactive Effects of House Price Appreciation and Mortgage Pricing Components By Furlong, Frederick T.; Takhtamanova, Yelena; Lang, David
  8. Entrepreneurial Spillovers over Space and Time By Frank M. Fossen; Thorsten Martin
  9. House prices, wealth effects and labour supply By Disney, Richard; Gathergood, John
  10. Wheeling into School and Out of Crime: Evidence from Linking Driving Licenses to Minimum Academic Requirements By Barua, Rashmi; Vidal-Fernández, Marian
  11. Immigrant Crime and Legal Status: Evidence from Repeated Amnesty Programs By Fasani, Francesco
  12. Unexpected School Reform: Academisation of Primary Schools in England By Andrew Eyles; Stephen Machin; Sandra McNally
  13. A Real Estate Boom with Chinese Characteristics By Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
  14. Monitoring and sanctioning cheating at school: What works? Evidence from a national evaluation program. By Claudio Lucifora; Marco Tonello
  15. Migration and urbanisation in Post-Apartheid South Africa By Ferdinand Rauch; Christopher Parsons
  16. Boys Lag Behind: How Teachers' Gender Biases Affect Student Achievement By Terrier, Camille
  17. Exploring the Community Structure of Complex Networks By Carlo Drago
  18. Unexpected Arrivals: The Spillover Effects of Mid-Year Entry on Stable Student Achievement in New York City By Emilyn Ruble Whitesell; Leanna Stiefel; Amy Ellen Schwartz
  19. The formation of a core-periphery structure in heterogeneous financial networks By Marco van der Leij; Daan in 't Veld; Cars Hommes
  20. Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data By Rycx, Francois; Saks, Yves; Tojerow, Ilan
  21. Classifying Industries Into Types of Relative Concentration By Ludwig von Auer; Andranik Stepanyan; Mark Trede
  22. Housing and the Redistributive Effects of Monetary Policy By Michael Reiter; Philipp Hergovich
  23. The Medium-Term Impacts of Girl-Friendly Schools: Seven-Year Evidence from School Construction in Burkina Faso By Harounan Kazianga; Leigh Linden; Ali Protik; Matt Sloan
  24. Wage Determination in Social Occupations: The Role of Individual Social Capital By Hotchkiss, Julie L.; Rupasingha, Anil
  25. An OECD Review of Statistical Initiatives Measuring Tourism at Subnational Level By OECD
  26. Functional Urban Areas in Colombia By Daniel Sanchez-Serra
  27. Price Levels across Russian Regions By Gluschenko, Konstantin; Karandashova, Maria
  28. Clicking on Heaven's Door: The Effect of Immigrant Legalization on Crime By Pinotti, Paolo
  29. Impact of internal in- migration on income inequality in receiving areas: A district level study of South Africa By Umakrishnan Kollamparambil
  30. Tracking and specialization of high schools: Does school choice matter? By Olivier De Groote; Koen Declercq
  31. Is Home Sharing Driving up Rents? Evidence from Airbnb in Boston By Mark Merante; Keren Mertens Horn
  32. Migration and development at home: Bitter or sweet return? Evidence from Poland By Jan Brzozowski; Nicola Daniele Coniglio
  33. France's Almost Public Private Schools By Bertola, Giuseppe
  34. Strategic Regional Integration By Kjetil Bjorvatn; Nicola Daniele Coniglio; Hiroshi Kurata
  35. Out-Migration and Economic Cycles By Rémi BAZILLIER; Daniel MIRZA; Francesco MAGRIS
  36. Labor-Market Scars When Youth Unemployment Is Extremely High: Evidence from Macedonia By Petreski, Marjan; Mojsoska-Blazevski, Nikica; Bergolo, Marcelo
  37. The Capitalized Value of Rainwater Tanks in the Property Market of Perth, Australia By Zhang, Fan; Polyakov, Maksym; Fogarty, James; Pannell, David
  38. Reservation wages of first- and second-generation migrants By Constant, Amelie F.; Krause, Annabelle; Rinne, Ulf; Zimmermann, Klaus F.
  39. The Gravity Model of Migration: The Successful Comeback of an Ageing Superstar in Regional Science By Poot, Jacques; Alimi, Omoniyi; Cameron, Michael P.; Maré, Dave C.
  40. Effects of urbanization on economic growth and human capital formation in Africa By Mohamed Arouri; Adel Ben Youssef; Cuong Nguyen-Viet; Agnès Soucat
  41. To disqualify or not to qualify: This is the other question By Rodríguez Alcantud, José Carlos; Laruelle, Annick
  42. The Wage Penalty of Dialect-Speaking By van Ours, Jan C.; Yao, Yuxin
  43. New Business Formation and Incumbents' Perception of Competitive Pressure By Javier Changoluisa; Michael Fritsch
  44. What Grades and Achievement Tests Measure By Borghans, Lex; Golsteyn, Bart H.H.; Heckman, James J.; Humphries, John Eric
  45. What Drives Gender Differences in Commuting? Evidence from the American Time Use Survey By Gray Kimbrough
  46. Polarization and the growth of low-skill employment in Spanish Local Labor Markets By Davide Consoli; Mabel Sánchez-Barrioluengo
  47. Intra-European Labor Migration in Crisis Times By Xavier Chojnicki; Anthony Edo; Lionel Ragot
  48. Nodewise Decay in Two-way Flow Nash Network: a Study of Network Congestion By Banchongsan Charoensook
  49. Asset Bubbles, Endogenous Growth, and Financial Frictions By Hirano, Tomohiro; Yanagawa, Noriyuki
  50. A Simple Command to Calculate Travel Distance and Travel Time By Sylvain Weber; Martin Peclat
  51. The impact of intergovernmental transfers on local revenue generation in Africa Evidence from Tanzania By Takaaki Masaki
  52. Choice and Competition in Public Service Provision By James Malcomson; Timothy Besley
  53. Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from Vietnam By Mohamed Arouri; Adel Ben Youssef; Cuong Nguyen-Viet
  54. The Effect of Schooling on Teenage Fertility: Evidence from the 1994 Education Reform in Ethiopia By Elina Pradhan; David Canning
  55. Agglomeration Economies and Firm Level Labor Misallocation By Lionel Fontagné; Gianluca Santoni

  1. By: Lasse Bork (Aalborg University); Stig V. Møller (Aarhus University and CREATES); Thomas Q. Pedersen (Aarhus University and CREATES)
    Abstract: We propose a new measure for housing sentiment and show that it accurately tracks expectations about future house price growth rates. We construct the housing sentiment index using partial least squares on household survey responses to questions about buying conditions for houses. We ?find that housing sentiment explains a large share of the time-variation in house prices during both boom and bust cycles and it strongly outperforms several macroeconomic variables typically used to forecast house prices.
    Keywords: Housing sentiment, house price forecastability, partial least squares, dynamic model averaging
    JEL: C53 E3 G1
    Date: 2016–11–11
  2. By: Asadullah, Niaz (University of Malaya)
    Abstract: Non-formal schools play an increasingly important role in the delivery of educational services in poor communities, but little systematic evidence is available about their placement choices. We study location choice of "one teacher, one classroom" non-formal primary schools pioneered by BRAC vis-a-vis its first large scale replication under the government managed Reaching-Out-of-School (ROSC) project using school census data. Comparison is also made to another pro-poor educational institution – state recognized madrasas. We find that all three types of schools have a statistically significant presence in poor sub-districts within a district. However BRAC schools avoid pockets that lack public infrastructure and suffer from low female literacy rate while ROSC schools better target regions that have poor access to cities and roads, are less urbanized, more vulnerable to natural disasters, have fewer banks and working toilets. ROSC schools also have greater presence in regions that are under-served by government and government supported formal primary schools. On the contrary, the supply of BRAC schools and madrasas is significantly and positively linked to the presence of formal primary schools. Concerns over operational viability may explain why BRAC often leaves out remote regions where socio-economic circumstances are most likely to keep children out of school.
    Keywords: poverty, NGO, non-formal school, madrasa, Bangladesh
    JEL: I21 L31
    Date: 2016–10
  3. By: Jinke Li (School of Management, University of Swansea); Geoffrey Meen (Department of Economics, University of Reading)
    Abstract: Agent-based models (ABMs) have a long history, but are gradually being introduced as a technique into mainstream economics. ABMs are perhaps best known as a tool for explaining the spatial structure of cities, including patterns of segregation, using cellular automata. In this context ABMs can be used to demonstrate self-organisation and phases of transition, arising from interdependencies in behaviour. A key feature of ABMs is that they relax the traditional assumption of representative agents, used in macroeconomic models, so that agents are heterogeneous in behaviour. This has profound implications for the structure of models of financial and housing markets. In the standard pricing model, where house prices are modelled as the discounted stream of future rental payments, outcomes depend on the choice of the discount rate, which in the case of housing is the user cost of capital. But the user cost of capital requires a measure of house price expectations. Where agents have heterogeneous expectations, the model cannot be solved for the standard rational expectations outcomes and different approaches are required. It cannot be assumed that all agents’ expectations are determined by the true model determining prices. The question asked in this paper is what effect on aggregate housing market fluctuations occurs from heterogeneous expectations across agents compared with more conventional representative agent models. The starting point is the Artificial Stock Market Model first developed in the 1990s by Arthur et al., arising from the research programme in complex systems at the Santa Fe Institute, which we adapt to a housing market context and simulate on UK data.
    Keywords: agent based models, heterogeneity, expectations, volatility
    JEL: E32 E37 R21
    Date: 2016–07–05
  4. By: Caterina Calsamiglia (Universitat Autònoma de Barcelona); Annalisa Loviglio (Universitat Autonoma de Barcelona and Barcelona GSE)
    Abstract: Student access to education levels, tracks or bachelor specialties is usually determined by their previous performance, measured either by internal exams, designed and graded by teachers in school, or external exams, designed and graded by central authorities. We say teachers in school grade on a curve whenever having better performing peers harms the grade obtained and hence the evaluation of a given student. We use rich administrative records from public schools in Catalonia to provide evidence that teachers indeed grade on a curve, leading to negative peer effects. We find suggestive evidence that these negative effects impact school choice only the year when internal grades have an impact on future prospects.
    Keywords: peer effects, grades, School Choice
    JEL: I21 I28 H75
    Date: 2016–11
  5. By: David C. Maré (Motu Economic and Public Policy Research)
    Abstract: This study estimates differences in productivity (mfp) across New Zealand urban areas, with a focus on the size of Auckland’s productivity premium. The estimates are based on analysis of firm-level data from Statistics New Zealand’s Longitudinal Business Database. The methods used in the paper overcome some of the biases that arise in standard approaches to spatial productivity estimation - biases arising from imperfect competition, spatial price variation, firm heterogeneity, and labour-sorting across cities. Ignoring these factors leads to biased estimates of the Auckland’s relative productivity performance. The study also investigates industry differences in spatial productivity patterns.
    Keywords: Urban productivity; agglomeration; production function estimation; imperfect competition; input price variation
    JEL: D24 R30
    Date: 2016–11
  6. By: Merlino, Luca Paolo (Université Paris 1 Panthéon-Sorbonne); Steinhardt, Max F. (Helmut Schmidt University, Hamburg); Wren-Lewis, Liam (Paris School of Economics)
    Abstract: This paper investigates the impact of individuals' school peers on their adult romantic relationships. In particular, we consider the effect of quasi-random variation in the share of black students within an individual's cohort on the percentage of adults' cohabiting partners that are black. We find that more black peers leads to more relationships with blacks later in life. The results are similar whether relationships begun near or far from school, suggesting that the racial mix of schools has an important and persistent impact on racial attitudes.
    Keywords: assortative matching, romantic relationships, race
    JEL: J12 J15 J16
    Date: 2016–10
  7. By: Furlong, Frederick T. (Federal Reserve Bank of San Francisco); Takhtamanova, Yelena (Federal Reserve Bank of San Francisco); Lang, David (Stanford University, Center for Education Policy Analysis)
    Abstract: Previous research provides rationales for and evidence of a link between house price appreciation and mortgage choice, with higher appreciation associated with higher take-up rates for adjustable-rate mortgages relative to fixed-rate mortgages. Research also finds mortgage interest rates and their underlying components to be important determinants of mortgage financing choices. In this paper we extend the earlier research and show that house price appreciation can have important interactive effects with those other determinants of mortgage financing choices. The analysis focuses on the period from 2000 to 2007, an episode marked by rapid house price appreciation along with a persistent and notable increase in the use of adjustable-rate mortgage financing, including alternative mortgage products. We find that higher house price appreciation dampened the estimated sensitivity of take-up rates among mortgage financing options to the underlying mortgage pricing components. The results, which are especially robust for fixed-rate and adjustable-rate mortgages that are fully amortized, were not driven solely by observations in markets with especially high rates of house price appreciation. Moreover, after taking into account the interactive effects with mortgage pricing components, house price appreciation is estimated to have had relatively little additional effect on take-up rates among mortgage financing options.
    JEL: D01 G11 G21 R20
    Date: 2016–11–10
  8. By: Frank M. Fossen; Thorsten Martin
    Abstract: Entrepreneurship is a local and dynamic phenomenon. We jointly investigate spatial spillovers and time persistence of regional new business formation. Using panel data from all 402 German counties for 1996-2011, we estimate dynamic spatial panel models of business creation in the high-tech and manufacturing industries. We consider regions of different sizes and systematically search for the most suitable spatial weighting matrices. We find substantial spatial spillovers as well as time persistence of start-up activity, especially in the high-tech industry. This indicates that entrepreneurship is deeply rooted in regions and underlines the importance of local entrepreneurship culture for new business formation.
    Keywords: Entrepreneurship, new business formation, spatial spillovers, path dependency, persistence, spatial panel
    JEL: L26 C23 R12 O30
    Date: 2016
  9. By: Disney, Richard; Gathergood, John
    Abstract: We examine the impact of house prices on labour supply decisions using UK micro data. We combine household survey data with local level house price measures and controls for local labour demand. Our micro data also allows us to control for individual level income expectations. We find significant house price effects on labour supply, consistent with leisure being a normal good. Labour supply responses to house prices are concentrated among young married female owners and older owners. This finding suggests house prices affect the decisions of marginal workers in the economy. Our estimates imply house prices are economically important for the participation decisions for these workers.
    Keywords: Labour supply,Wealth effects,House prices
    JEL: D12 E21 J22
    Date: 2016
  10. By: Barua, Rashmi (Jawaharlal Nehru University); Vidal-Fernández, Marian (University of Sydney)
    Abstract: Since the late 1980s, several U.S. states have set minimum academic requirements for high school students to apply for and retain their driving licenses. These laws popularly known as "No Pass No Drive" (NPND), encourage teenagers with a preference for driving to stay in school beyond the minimum dropout age. Using Federal Bureau of Investigation (FBI) arrest data, we exploit state, time and cohort variation to show that having an NPND law in place is associated with a significant decrease in arrests due to violent, drug-related and property crime among males between 16 to 18 years of age. We argue that our findings are driven by an increase in education rather than incapacitation and that NPND laws are a relatively low cost policy that generates positive externalities beyond and in addition to the minimum dropout age.
    Keywords: No Pass No Drive laws, juvenile crime, education
    JEL: K14 J24 J18
    Date: 2016–11
  11. By: Fasani, Francesco
    Abstract: Do general amnesty programs lead to reductions in the crime rate among immigrants? We answer this question by exploiting both cross-sectional and time variation in the number of immigrants legalized generated by the enactment of repeated amnesty programs between 1990 and 2005 in Italy. We address the potential endogeneity of the "legalization treatment'' by instrumenting the actual number of legalized immigrants with alternative predicted measures based on past amnesty applications patterns and residential choices of documented and undocumented immigrants. We find that, in the year following an amnesty, regions in which a higher share of immigrants obtained legal status experienced a greater decline in non-EU immigrant crime rates, relative to other regions. The effect is statistically significant but relatively small and not persistent. In further results, we fail to find any evidence of substitution in the criminal market from other population groups - namely, EU immigrants and Italian citizens - and we observe a small and not persistent reduction in total offenses.
    Keywords: illegal migration; legalization; migration policy
    JEL: F22 J61 K37
    Date: 2016–11
  12. By: Andrew Eyles; Stephen Machin; Sandra McNally
    Abstract: The change of government in 2010 provoked a large structural change in the English education landscape. Unexpectedly, the new government offered primary schools the chance to have 'the freedom and the power to take control of their own destiny', with better performing schools given a green light to convert to become an academy school on a fast track. In England, schools that become academies have more freedom over many ways in which they operate, including the curriculum, staff pay, the length of the school day and the shape of the academic year. However, the change to allow primary school academisation has been controversial. In this paper, we study the effect for the first primary schools that became academies. While the international literature provides growing evidence on the effects of school autonomy in a variety of contexts, little is known about the effects of autonomy on primary schools (which are typically much smaller than secondary schools) and in contexts where the school is not deemed to be failing or disadvantaged. The key finding is that schools did change their modes of operation after the exogenous policy change, but at the primary phase of schooling, academisation did not lead to improved pupil performance.
    Keywords: academies, pupil performance
    JEL: I20 I21 I28
    Date: 2016–11
  13. By: Edward Glaeser; Wei Huang; Yueran Ma; Andrei Shleifer
    Abstract: Chinese housing prices rose by over 10 percent per year in real terms between 2003 and 2014, and are now between two and ten times higher than the construction cost of apartments. At the same time, Chinese developers built 100 billion square feet of residential real estate. This boom has been accompanied by a large increase in the number of vacant homes, held by both developers and households. This boom may turn out to be a housing bubble followed by a crash, yet that future is far from certain. The demand for real estate in China is so strong that current prices might be sustainable, especially given the sparse alternative investments for Chinese households, so long as the level of new supply is radically curtailed. Whether that happens depends on the policies of the Chinese government, which must weigh the benefits of price stability against the costs of restricting urban growth.
  14. By: Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Marco Tonello
    Abstract: The diffusion of evaluation programs, along with the higher stake they account for, has also increased the prevalence of opportunistic behavior and cheating practices. This paper investigates the efficacy of different policy measures aimed at fighting cheating behaviors in schools. We exploit a classroom-based randomized experiment in Italian public schools, which assigned an external inspector to monitor the administration and marking of the tests, as well as different sanctioning mechanisms for schools suspect of cheating. We find that higher monitoring is effective in deterring cheating at all grades, while sanctions in general have no effect, and, under specific circumstances, may also trigger schools’ strategic behaviors, such as selective pooling. The ineffectiveness of sanctioning schemes is explained by the fact that they are not embedded in a proper school accountability system.
    Keywords: cheating, monitoring, incentives.
    JEL: I21 I28 K42
    Date: 2016–10
  15. By: Ferdinand Rauch; Christopher Parsons
    Abstract: Under apartheid, black South Africans were severely restricted in their choice of location and many were forced to live in homelands. Following the abolition of apartheid they were free to migrate. Given gravity, a town nearer to the homelands can be expected to receive a larger inflow of people than a more distant town following the removal of mobility restrictions. Exploting this exogenous variation, we study the effect of migration on urbanisation and the distribution of population. In particular, we test if migration inflows led to displacement, path dependence, or agglomeration in destination areas. We find evidence for path dependence in the aggregate, but substantial heterogeneity across town densities. An exogenous population shock leads to an increase of the urban relative to the rural population, which suggests that exogenous migration shocks can foster urbanisation in the medium run.
    Keywords: Economic geography, migration, urbanisation, natural experiment
    JEL: R12 R23 N97 O18
    Date: 2016–07–28
  16. By: Terrier, Camille (Massachusetts Institute of Technology)
    Abstract: I use a combination of blind and non-blind test scores to show that middle school teachers favor girls when they grade. This favoritism, estimated in the form of individual teacher effects, has long-term consequences: as measured by their national evaluations three years later, male students make less progress than their female counterparts. Gender-biased grading accounts for 21 percent of boys falling behind girls in math during middle school. On the other hand, girls who benefit from gender bias in math are more likely to select a science track in high school.
    Keywords: teachers, gender biases, progress, achievement inequalities
    JEL: I21 I24 J16
    Date: 2016–11
  17. By: Carlo Drago (University of Rome “Niccolò Cusano”)
    Abstract: Regarding complex networks, one of the most relevant problems is to understand and to explore community structure. In particular it is important to define the network organization and the functions associated to the different network partitions. In this context, the idea is to consider some new approaches based on interval data in order to represent the different relevant network components as communities. The method is also useful to represent the network community structure, especially the network hierarchical structure. The application of the methodologies is based on the Italian interlocking directorship network.
    Keywords: Complex Networks, Community Detection, Communities, Interval Data, Interlocking Directorates
    JEL: C4 C60 L14
    Date: 2016–09
  18. By: Emilyn Ruble Whitesell; Leanna Stiefel; Amy Ellen Schwartz
    Abstract: In this article, the authors use a rigorous causal identification strategy and rich longitudinal data on fourth- through eighth-grade students in the New York City (NYC) public schools to estimate the impact of exposure to mid-year entry on the achievement of stable students.
    Keywords: student mobility, mid-year entry, spillover effects, peer effects
    JEL: I
  19. By: Marco van der Leij; Daan in 't Veld; Cars Hommes
    Abstract: Recent empirical evidence suggests that financial networks exhibit a core-periphery net- work structure. This paper aims at giving an explanation for the emergence of such a structure using network formation theory. We propose a simple model of the overnight interbank lending market, in which banks compete for intermediation benefits. Focusing on the role of bank heterogeneity, we find that a core-periphery network cannot be unilaterally stable when banks are homogeneous. A core-periphery network structure can form endogenously, however, if we allow for heterogeneity among banks in size. Moreover, size heterogeneity may arise endogenously if payoffs feed back into bank size.
    Keywords: financial networks; core-periphery structure; network formation models; over-the-counter markets; interbank market
    JEL: D85 G21 L14
    Date: 2016–10
  20. By: Rycx, Francois (Free University of Brussels); Saks, Yves (National Bank of Belgium); Tojerow, Ilan (Free University of Brussels)
    Abstract: This paper is one of the first to estimate how the region in which an establishment is located affects its productivity, wage cost and cost competitiveness (i.e. its productivity-wage gap). To do so, we use detailed linked employer-employee panel data for Belgium and rely on methodological approaches from both Hellerstein and Neumark (1995) and Bartolucci (2014) to estimate dynamic panel data models at the establishment level. Our findings show that interregional differences in productivity and wages are significant but vanish almost totally, both in industry and services, when controlling for a wide range of covariates, establishment fixed effects and endogeneity. Thus, our results suggest that wage cost and productivity differentials are ceteris paribus relatively well aligned across regions.
    Keywords: regions, productivity, labour costs, linked panel data
    JEL: C33 J24 J31 R30
    Date: 2016–10
  21. By: Ludwig von Auer; Andranik Stepanyan; Mark Trede
    Abstract: When some industries are overrepresented in urban areas (urban concentration), some other industries must be overrepresented in rural areas (rural concentration). Existing measures of concentration do not distinguish between these different types of concentration. Instead, they rank industries according to their degree of concentration. However, knowing the concentration type is important, when investigating the forces of agglomeration that shape the geographical distribution of an industry. Therefore, the present paper proposes a new statistical approach that classifies each industry into one of seven different geographical patterns, five of which represent different types of concentration. The statistical identification of each industry’s geographical pattern is based on two Goodman-Kruskal rank correlation coefficients. The power of our approach is illustrated by German employment data on 613 different industries in 412 regions.
    Keywords: Geographical Concentration, Archetypes, Confidence Region, Goodman-Kruskal Coefficient
    JEL: R10 R12
    Date: 2016
  22. By: Michael Reiter (Institute for Advanced Studies); Philipp Hergovich (University of Vienna)
    Abstract: We study the redistributive effects of monetary policy in the framework of a large OLG model, with endogenous housing choice, downpayment constraints, and different types of shocks. We pay special attention to the structure of debt, whether it is short-term or long-term, nominal or real. We find that monetary policy shocks have long-lasting effects on the inter-generational wealth distribution. While the debt structure only has a mild effect on aggregate statistics, it matters a lot for how different types of shocks under different monetary policy regimes affect the distribution.
    Date: 2016
  23. By: Harounan Kazianga (Oklahoma State University); Leigh Linden (University of Texas at Austin); Ali Protik (Mathematica Policy Research); Matt Sloan (Mathematica Policy Research)
    Abstract: We evaluate the long-term effect of a “girl-friendly†primary school program in Burkina Faso, using a regression discontinuity design. The intervention consisted of upgrading existing three-classroom schools to six-classroom schools to accommodate more grades. After six years, the program increased enrollment by 15.5 percentage points and increased test scores by 0.29 standard deviations. Students in treatment schools progress further through the grades, compared to students in non-selected schools. These upgraded schools are effective at getting children into school, getting children to start school on time, and keeping children in school longer. Overall, we find that the schools sustain the large impacts observed about three years earlier, with enrollment declining slightly from 18.5 to 14.9 for the cohorts of children who were exposed to both the first and second phases of the intervention.
    Keywords: Africa, Education, Gender Inequality, Infrastructures
    JEL: I24 I25 I28 O15
    Date: 2016–11–11
  24. By: Hotchkiss, Julie L. (Federal Reserve Bank of Atlanta); Rupasingha, Anil (U.S. Department of Agriculture)
    Abstract: We make use of predicted social and civic activities (social capital) to account for selection into "social" occupations. Individual selection accounts for more than the total difference in wages observed between social and nonsocial occupations. The role that individual social capital plays in selecting into these occupations and the importance of selection in explaining wage differences across occupations is similar for both men and women. We make use of restricted data from the 2000 decennial census and the 2000 Social Capital Community Benchmark Survey. Individual social capital is instrumented by distance-weighted surrounding census tract characteristics.
    Keywords: social capital; wage differentials; occupational choice; switching regression; nonpublic data; factor analysis
    JEL: C34 J24 J31
    Date: 2016–11–01
  25. By: OECD
    Abstract: Regions and cities play a growing role in tourism development and policy design. The economy-wide effects of tourism are significant and vary a lot from one territory to another in terms of number of visitors, type of tourism, seasonality patterns, revenues and added value per visitor or jobs generated. This OECD review supports a better measurement of the various impacts of tourism at sub-national level by the sharing of good and innovative country statistical initiatives. The review will contribute to the development of reliable data and analysis at regional and local levels for business and policy decision making. The review presents statistical initiatives for Australia, Austria, Canada, Denmark, Finland, France, Ireland, New Zealand, Spain, Switzerland and the United Kingdom. The initiatives focus on a wide range of issues such as total economic impact of tourism; direct economic impacts of tourism; tourism-related employment; enterprise demographics; tourism spending/revenues and high yield visitors, data visualization; regional competitiveness; and sustainability.
    Date: 2016–11–18
  26. By: Daniel Sanchez-Serra
    Abstract: This paper applies the OECD-EU methodology to identify the functional urban areas (FUAs) in Colombia. Using the municipal boundaries, population grid data and inter-municipalities commuting flows from the 2005 population census, the paper identifies 53 FUAs accounting for 27 million people, or 63% of the national population. The resulting FUAs are then compared with the existing national definition (Misión del Sistema de Ciudades) and the legally constituted metropolitan areas in Colombia. Finally, using the OECD-EU methodology already applied to OECD countries, the eight largest FUAs in Colombia are compared with the 281 largest FUA in OECD countries, through a set of economic, social and environmental indicators. The application of the OECD-EU methodology allows to identify the whole system of urban areas in Colombia, with the same criterion; it thus provides a complementary tool to the national and city government to better plan and design future urban policy strategies. For example, this paper finds that metropolitan areas in Colombia have smaller commuting areas relative to OECD average and that improvements in the transport infrastructure may strengthen the economic integration of Colombian metropolitan areas.
    Keywords: GIS, metropolitan areas
    JEL: R12 R23
    Date: 2016–11–15
  27. By: Gluschenko, Konstantin; Karandashova, Maria
    Abstract: Based on price levels (cost-of-living indices) across Russian cities that are published by the Russian Statistical Agency, regional price levels relative to the national average are computed over 2009–2015. Results obtained are compared with approximate estimates of regional price levels that are based on the cost of the fixed basket of goods and services for cross-region comparison of population’s purchasing capacity (many publications use such estimates). This comparison makes it possible to conclude that the crude method provides an acceptable accuracy. Regional price levels obtained are applied to estimating real (i.e. comparable between regions) incomes per capita relative to the national average.
    Keywords: cost-of-living index spatial price index fixed basket of goods and services real income
    JEL: D31 R10
    Date: 2016–11–12
  28. By: Pinotti, Paolo
    Abstract: We estimate the effect of immigrant legalization on the crime rate of immigrants in Italy by exploiting an ideal regression discontinuity design: fixed quotas of residence permits are available each year, applications must be submitted electronically on specific ``Click Days'', and are processed on a first-come, first-served basis until the available quotas are exhausted. Matching data on applications with individual-level criminal records, we show that legalization reduces the crime rate of legalized immigrants by 0.6 percentage points on average, on a baseline crime rate of 1.1 percent.
    Keywords: crime; legal status; regression discontinuity design
    JEL: J61 K37 K42
    Date: 2016–11
  29. By: Umakrishnan Kollamparambil
    Abstract: The impact of internal migration on regional income inequality of the receiving areas has hitherto gone largely unstudied. This dearth of literature is especially surprising because income inequality and in-migration into urban centres of growth are two issues that many developing economies are faced with and tackling these issues effectively involves understanding the interactions between these two related phenomena. This study is therefore a first attempt to analyse the impact of internal in-migration on receiving areas and is placed in the context of South Africa. Based on a conceptual analysis the study argues that In-migration into formal sector of the receiving areas will in general reduce inequality while in-migration into informal or unemployed sector increases inequality. Using individual panel data the study further tests empirically at the district level the impact of in-migration and finds that rising urban inequality in the urban areas can be attributed at least in part to rural-urban migration. This works through both the wage as well as employment channel. The employment channel can be said to have a stronger impact than the wage channel as indicated by the coefficients estimated through our system GMM regression analysis.
    Keywords: internal migration, In-migration, Income Inequality
    JEL: O15 R23
    Date: 2016–10
  30. By: Olivier De Groote; Koen Declercq
    Date: 2016–10
  31. By: Mark Merante; Keren Mertens Horn
    Date: 2016–11
  32. By: Jan Brzozowski (Cracow University of Economics); Nicola Daniele Coniglio (Università degli Studi di Bari "Aldo Moro”)
    Abstract: The existing economic literature focuses on the benefits that return migrants offer to their home country in terms of entrepreneurship, human and financial capital accumulation. However, return migration can have modest or even some detrimental effects if the migration experience was unsuccessful and/or if the migrant fails to reintegrate into the home country's economy. In our paper, we empirically show which factors - both individual characteristics and features related to the migration experience - influence the likelihood of a sub-optimal employment of returnees' human capital employing an original dataset on a representative sample of return migrants in Silesia (Poland).
    Keywords: return migration; international migration; economic performance; regional development
    JEL: O15 F22 J24 R23
    Date: 2016–11
  33. By: Bertola, Giuseppe
    Abstract: This paper uses a large and detailed dataset to characterize the enrolment and educational performance of regulated and subsidized French private schools. Individual ability reduces the probability of private secondary schooling. Structural models indeed find that both observable and unobservable initial ability matter less in private than in State schools for successful secondary school completion and access to tertiary education.
    Keywords: Education financing; Family background; School selection.
    JEL: I22 I24
    Date: 2016–11
  34. By: Kjetil Bjorvatn (NHH Norwegian School of Economics); Nicola Daniele Coniglio (Università degli Studi di Bari "Aldo Moro"); Hiroshi Kurata (Tohoko Gakuin University)
    Abstract: We analyze the impact of globalization on the incentive to strengthen regional integration. In a simple three-country oligopolistic trade model, we demonstrate that increased external competitive pressure may induce governments, ináuenced by producer interests, to lower intra-regional trade costs in order to mitigate the effects of external competition on local businesses.
    Keywords: Regional integration; Globalization; Cournot competition
    JEL: F12 F15 F6
    Date: 2016–11
  35. By: Rémi BAZILLIER; Daniel MIRZA; Francesco MAGRIS
    Date: 2016
  36. By: Petreski, Marjan (University American College Skopje); Mojsoska-Blazevski, Nikica (University American College Skopje); Bergolo, Marcelo (IECON, Universidad de la República)
    Abstract: The objective of this study is to assess how the duration of the unemployment spell of Macedonia youth affects later employment (the employment 'scarring' effect) and wage outcomes (the wage 'scarring' effect). To that end, we first devise a model in which the unemployment spell is determined by individual and household characteristics and work attitudes and preferences. Discrete-time duration method is used to estimate this model. Then, we rely on a standard employment and Mincer earnings functions. We repeatedly impute missing wages to address the selection on observables, and use the regional unemployment rate when individual finished school as an instrument to mitigate the selection on unobservables. The School to Work Transition Survey 2012 is used. Results robustly suggest a presence of employment scar as those young persons who stay unemployed over a longer period of time were found to have lower chances to find a job afterwards. On the other hand, the study does not provide evidence for the existence of the wage scar.
    Keywords: employment scarring, wage scarring, extremely high unemployment, Macedonia
    JEL: E24 J24 J64
    Date: 2016–11
  37. By: Zhang, Fan; Polyakov, Maksym; Fogarty, James; Pannell, David
    Abstract: This work has been published in the Journal of Hydrology. A pre-print version is available at Please cite the article version of this work as: Zhang, F., Polyakov, M., Fogarty, J. and Pannell, D.J. (2015) The capitalized value of rainwater tanks in the property market of Perth, Australia. Journal of Hydrology, 522:317-325.
    Keywords: economic valuation, urban rainwater collection, spatial hedonic model, misclassification error, Environmental Economics and Policy, Q25, Q51, R30,
    Date: 2016–10–26
  38. By: Constant, Amelie F. (UNU-MERIT, and Princeton University); Krause, Annabelle (IZA Bonn); Rinne, Ulf (IZA Bonn); Zimmermann, Klaus F. (UNU-MERIT, and Princeton University)
    Abstract: We analyse the reservation wages of first- and second-generation migrants, based on rich survey data of the unemployed in Germany. Our results confirm the hypothesis that reservation wages increase over migrant generations and over time, suggesting that the mobility benefit of immigration may be limited in time.
    Keywords: Migration, Unemployment, Job Search, Reservation Wages
    JEL: J15 J61 J64
    Date: 2016–09–14
  39. By: Poot, Jacques (University of Waikato); Alimi, Omoniyi (University of Waikato); Cameron, Michael P. (University of Waikato); Maré, Dave C. (Motu Economic and Public Policy Research Trust)
    Abstract: For at least half a century, and building on observations first made a century earlier, the gravity model has been the most commonly‐used paradigm for understanding gross migration flows between regions. This model owes its success to, firstly, its intuitive consistency with migration theories; secondly, ease of estimation in its simplest form; and, thirdly, goodness of fit in most applications. While fitting gravity models of aggregate migration flows started taking backstage to microdata analysis in the 1980s, a recent comeback has resulted from increasing applications to international migration and from the emergence of statistical theories appropriate for studying spatial interaction. In this paper we review the status quo and argue for greater integration of internal and international migration modelling. Additionally we revisit the issues of parameter stability and distance deterrence measurement by means of a New Zealand case study. We argue that gravity modelling of migration has a promising future in a multi‐regional stochastic population projection system – an area in which the model has been to date surprisingly underutilised. We conclude with outlining current challenges and opportunities in this field.
    Keywords: gravity model, internal migration, international migration, population projection
    JEL: F22 J61 R23
    Date: 2016–10
  40. By: Mohamed Arouri (Faculté des Sciences Economiques et de Gestion); Adel Ben Youssef (Economic Research Forum); Cuong Nguyen-Viet (Mekong Development Research Institute and National Economics University, Hanoi, Vietnam); Agnès Soucat (World Health Organisation)
    Abstract: JEL Codes:
    Date: 2016–10
  41. By: Rodríguez Alcantud, José Carlos; Laruelle, Annick
    Abstract: In this paper we study ternary trichotomous rules, that allows for three levels of input, positive, neutral and negative and three levels of output, positive, undetermined and negative. We illustrate the interest of such rules on collective identity functions that deal with formation of clubs. Usually the question addressed is whether the individual quali es or does not, and the answer is either positive or not. In some situations it may be relevant to distinguish between unquali cation and disquali cation.
    Keywords: voting, rules, club, formation
    JEL: D71
    Date: 2016–10–10
  42. By: van Ours, Jan C.; Yao, Yuxin
    Abstract: Our paper studies the effects of dialect-speaking on job characteristics of Dutch workers, in particular on their hourly wages. The unconditional difference in median hourly wages between standard Dutch speakers and dialect speakers is about 10.6% for males and 6.7% for females. If we take into account differences in personal characteristics and province fixed effects male dialect speakers earn 4.1% less while for females this is 2.8%. Using the geographic distance to Amsterdam as an instrumental variable to dialect-speaking, we find that male workers who speak a dialect earn 11.6% less while for female workers this is 1.6%. Our main conclusion is that for male workers there is a significant wage penalty of dialect-speaking while for female workers there is no significant difference.
    Keywords: Dialect-speaking; wage penalty
    JEL: I2 J24
    Date: 2016–11
  43. By: Javier Changoluisa (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We investigate the relationship between new business formation and the level of competitive pressure perceived by manufacturing incumbent establishments. The perceived pressure of competition is stronger the higher the level of entries in the respective industry. This relationship holds not only for start-ups located in the same region of the incumbent, but also for start-ups across all regions of Germany. The productivity level of an incumbent moderates the extent of the perceived competitive pressure from start-ups. Highly productive incumbents are less threatened by new business formation. Such a moderating effect cannot be found for incumbent size and regional population density.
    Keywords: New business formation, competitive pressure, regional competition, incumbent firms, manufacturing industries
    JEL: L26 L60 D20 O12 R11
    Date: 2016–11–14
  44. By: Borghans, Lex (Maastricht University); Golsteyn, Bart H.H. (Maastricht University); Heckman, James J. (University of Chicago); Humphries, John Eric (University of Chicago)
    Abstract: Intelligence quotient (IQ), grades, and scores on achievement tests are widely used as measures of cognition, yet the correlations among them are far from perfect. This paper uses a variety of data sets to show that personality and IQ predict grades and scores on achievement tests. Personality is relatively more important in predicting grades than scores on achievement tests. IQ is relatively more important in predicting scores on achievement tests. Personality is generally more predictive than IQ of a variety of important life outcomes. Both grades and achievement tests are substantially better predictors of important life outcomes than IQ. The reason is that both capture personality traits that have independent predictive power beyond that of IQ.
    Keywords: IQ, achievement tests, grades, personality traits
    JEL: J24 D03
    Date: 2016–11
  45. By: Gray Kimbrough
    Abstract: A wealth of research has shown that the commutes of American women are shorter, both in time and distance, than those of American men. This study takes advantage of a large, nationally representative dataset, the American Time Use Survey (ATUS), to examine gender differences in commute character and time. A method of calculating commuting time that accounts for stops along the journey is applied to ATUS data; analysis of gender differences in the number, type, and length of stops demonstrates the need for this commuting measure. Explanations for womenâs shorter commutes are reviewed and tested alongside predicted relationships from a simple labor supply model. Controlling for marital status and the presence of children, women are more likely to be accompanied by children for their commute, and women tend to make longer stops than men. Multivariate regression results support two previously proposed explanations for the gender commuting time gap, based on gender differences in wages and types of jobs held. Contrary to the previously proposed Household Responsibility Hypothesis, this analysis provides evidence that greater household responsibility does not explain womenâs shorter commutes.
    JEL: J22 R41 J16
    Date: 2016–11–11
  46. By: Davide Consoli; Mabel Sánchez-Barrioluengo
    Abstract: This paper analyses the long-term transformations of local labor markets in fifty Spanish provinces to identify the extent and the drivers of employment polarization. We find that the decline of ‘routine’ mid-skill jobs is strongly driven by technology adoption and, also, that it is a strong predictor of the expansion of low-skill service employment. These results are not specific to large metropolitan areas, and are robust to various controls and instrumental variables that account for long-term industry specialisation. We also find a positive, albeit small, local multiplier effect of high-skilled workers on the demand for non-tradable service jobs.
    Keywords: Local labor market, Polarization, Multiplier
    JEL: J23 J24 R23
    Date: 2016–11
  47. By: Xavier Chojnicki; Anthony Edo; Lionel Ragot
    Abstract: The question of whether migration can serve as a channel for regional adjustment to asymmetric shocks is crucial in an economic and monetary union. It is of particular interest within the Eurozone where countries do not have flexible exchange rates as an adjustment mechanism. By moving from countries with high unemployment to countries with better employment prospects, intra-European migrants should help countries to adjust to asymmetric shocks and lead to a more efficient allocation of resources within the free migration regime. This policy brief exploits the 2008 economic crisis to investigate how labor market disparities between EU15 countries affected intra-European migration. Our main contributions are threefold. First, over the period 2000-2013, we find that intra-European migration indeed responds to regional differences in employment conditions: a rise in unemployment differences between two EU15 countries fosters migration to the country with the better employment conditions. Second, we find that the 2008 economic crisis led to a strong reallocation of individuals within the EU15 between the southern countries (Greece, Italy, Portugal and Spain) which were the most affected by the crisis and the least affected countries, such as Denmark and the UK. Third, our results indicate that responsiveness to regional employment disparities is far greater among non-EU15 immigrants, compared to European-born people. This finding suggests that the mobility of Europeans within the EU15 could be greater, a hypothesis that is consistent with the higher mobility observed in the United States. Improving cross-country portability of social rights within the EU could thus be a relevant reform to foster intra-EU mobility.
    Keywords: Intra-European Migration;Labor mobility;Regional adjustment;Regional shocks;European Union;Employment;Economic crisis
    JEL: F22 J61 J68
    Date: 2016–10
  48. By: Banchongsan Charoensook (Keimyung Adams College, Keimyung University)
    Abstract: This paper studies a noncooperative model of network formation. Built upon the two-way flow model of Bala and Goyal (2000a), it assumes that information decay as it flows through each agent, and the decay is increasing and concave in the number of his links. This assumption results in the fact that a large set of Nash networks are disconnected and consist of components of different sizes, a feature that resembles that of real-world networks. Discussions on this insight are provided.
    Keywords: Two-way Flow Network, Network Formation, Information Network
    JEL: C72 D85
    Date: 2016–11
  49. By: Hirano, Tomohiro; Yanagawa, Noriyuki
    Abstract: This paper analyzes the existence and the effects of bubbles in an endogenous growth model with nancial frictions and heterogeneous investments. Bubbles are likely to emerge when the degree of pledgeability is in the middle range, implying that improving the nancial market might increase the potential for asset bubbles. Moreover, when the degree of pledgeability is relatively low, bubbles boost long-run growth; when it is relatively high, bubbles lower growth. Furthermore, we examine the effects of a bubble burst, and show that the effects depend on the degree of pledgeability, i.e., the quality of the nancial system. Finally, we conduct a full welfare analysis of asset bubbles.
    Keywords: Asset Bubbles, Endogenous Growth, Pledgeability, bubble burst, welfare effects of bubbles
    Date: 2016–10
  50. By: Sylvain Weber (University of Neuchatel, Institute of Economic Research, Rue Abram-Louis Breguet 2, 2000 Neuchtel, Switzerland.); Martin Peclat (University of Neuchatel, Institute of Economic Research, Rue Abram-Louis Breguet 2, 2000 Neuchtel, Switzerland and University of Applied Sciences Western Switzerland (HES-SO Geneva), Rue de la Tambourine 17, 1227 Carouge, Switzerland.)
    Abstract: Obtaining the routing distance between two addresses should not be a hassle in the current state of technology. This is unfortunately more complicated than it first seems. Recently, several Stata commands have been implemented for this purpose (traveltime, traveltime3, mqtime, osrmtime), but most of them went out of order only a few months after their introduction or appear as complicated to use. In this paper, we introduce the new command georoute to retrieve travel distance and travel time between two points, defined either by their addresses or by their geographical coordinates. Compared to other existing commands, we argue it is simple to use, efficient in terms of computational speed, and versatile regarding the information that can be provided as input.
    Keywords: Stata, geocoding, travel distance, travel time.
    JEL: C87 R41
    Date: 2016–11
  51. By: Takaaki Masaki
    Abstract: Do intergovernmental transfers reduce revenues collected by local government authorities (LGAs)? There is already a well-established body of literature in public finance, which argues that intergovernmental grants ‘crowd out’ local revenues. Most existing studies, however, explore the fiscal implications of intergovernmental transfers in high-income countries where sound fiscal systems are taken for granted. In this paper, I explore the impact of intergovernmental transfers on local revenues in sub-Saharan Africa, a region where local fiscal capacity is limited and endogenously determined by financial support from international donors and the central government. I argue that in places where the existing capacity of LGAs to administer tax collection is weak and political costs of enforcing taxation are low—which are perennial features of many rural districts in Africa—intergovernmental transfers facilitate local revenue generation instead of undermining it. Analysing newly available quarterly fiscal data on local revenues in Tanzania, I show that intergovernmental grants improve the mobilization of local revenues, and also that the positive effect of fiscal transfers on local revenue collection is particularly pronounced in rural districts.
    Keywords: public finance, intergovernmental grants, crowding out, sub-Saharan Africa, fiscal capacity, tax collection, local revenues, Tanzania
    Date: 2016
  52. By: James Malcomson; Timothy Besley
    Abstract: In spite of a range of policy initiatives in sectors such as education, health care and legal services, whether choice and competition is valuable remains contested territory. This paper studies the impact of choice and competition on different dimensions of quality, examining the role of not-for-profit providers. We explore two main factors which determine whether an alternative provider enters the market: cost efficiency and the preferences of an incumbent not-for-profit provider (paternalism). The framework developed can incorporate standard concerns about the downside of choice and competition when consumer choice is defective (an internality) or choice imposes costs on those who do not switch (an externality). The paper considers optimal funding levels for incumbents and entrants showing when the “voucher” provided for consumers to move to the incumbent should be more or less generous than the funding for consumers who remain with the incumbent. Finally, the model also offers an insight into why initiatives are frequently opposed by incumbent providers even if the latter have not-for-profit objectives.
    Keywords: Choice, Competition, Public Service, Not-for-profit
    Date: 2016–08–15
  53. By: Mohamed Arouri (Faculté des Sciences Economiques et de Gestion); Adel Ben Youssef (Economic Research Forum); Cuong Nguyen-Viet (Mekong Development Research Institute and National Economics University, Hanoi, Vietnam)
    Abstract: Urbanization and poverty have a two-way relationship. Using fixed-effects regression and panel data from household surveys, we estimate the effect of urbanization on welfare and poverty of rural households in Vietnam. We find that urbanization tends to increase landlessness of rural households and to reduce their farm income. However, urbanization helps rural households increase their wages and non-farm incomes. As a result, total income and consumption expenditure of rural households tend to be increased with urbanization. Then we find that urbanization also helps rural households decrease the expenditure poverty rate, albeit at a small magnitude. JEL Codes: O18, I30, R11
    Keywords: urbanization, household welfare, rural poverty, impact evaluation, household surveys, Vietnam, Asia
    Date: 2016–10
  54. By: Elina Pradhan (Harvard T. H. Chan School of Public Health); David Canning (Harvard T.H. Chan School of Public Health, Department of Global Health and Population)
    Abstract: We investigate the effect of female schooling on teenage fertility using an education reform in Ethiopia in 1994 as a natural experiment that led to a jump in female school enrollment and about 0.74 years of additional schooling for the first two exposed cohorts. Using a regression discontinuity approach we find that each additional year of schooling lowers the probability of both teenage marriage and teenage childbearing by about six percentage points. This casual estimate is consistent with the steep gradient of teenage marriage and fertility with education observed in the data. JEL Codes:
    Keywords: Ethiopia; Education Policy; Fertility; Female Education; Age at Marriage; Regression Discontinuity.
    Date: 2016–10
  55. By: Lionel Fontagné; Gianluca Santoni
    Abstract: A large portion of productivity differentials among locations is related to density. Firms located in denser areas are more productive due to agglomeration economies (Combes et al., 2012a). We provide in this paper an explanation of such economies: lower input misallocation. The distribution of resources among heterogeneous fi rms has relevant consequences on allocative effi ciency and denser areas provide a more favorable environment for dynamic matching between employers and employees. Using a methodology proposed by Petrin and Sivadasan (2013) we are able to assess the degree of resource misallocation among fi rms within sectors for each of the 96 French “Départements” and 347 Employment Areas (commuting zones). Based on fi rm-level productivity estimates, we identify in the gap between the value of the marginal product and marginal input price the degree of inputs allocation at the fi rm level. Over the period 1993-2007 the average gap at fi rm level is around 9 thousands euro, showing a relevant increase starting from the early 2000s. Importantly, fi rms’ misallocations are lower in denser areas, suggesting that the matching mechanism is playing a role in explaining the productivity premium of agglomerated locations.
    Keywords: Misallocation;Agglomeration;Productivity;Firm Level Data
    JEL: D24 R12 L25 O47
    Date: 2016–11

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