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on Urban and Real Estate Economics |
| By: | Caterina Calsamiglia (Universitat Autònoma de Barcelona); Francisco Martínez-Mora (University of Leicester); Antonio Miralles (Universitat Autonoma de Barcelona) |
| Abstract: | We show that the widely used Boston Mechanism (BM) fosters ability and socioeconomic segregation across otherwise identical public schools, even when schools do not have priorities over local students. Our model includes an endogenous component of school quality--determined by the peer group--and an exogenous one. If there is an exogenously worse public school, BM generates sorting of types between a priori equally good public schools: an elitist public school emerges. A richer model with some preference for closer schools and flexible residential choice does not eliminate this effect. It rather worsens the peer quality of the non-elitist school. The existence of private schools makes the best public school more elitist, while reducing the peer quality of the worst school. The main alternative assignment mechanism, Deferred Acceptance, is resilient to such sorting effects. |
| Keywords: | School Choice, mechanism design, peer effects, local public goods |
| JEL: | I21 H40 D78 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-015&r=ure |
| By: | Tripathi, Sabyasachi; Kaur, Shupinder |
| Abstract: | India’s current haphazard unplanned urbanization has brought in its wake myriad problems like increase in number of vehicles, energy consumption, air pollution, noise pollution, violence, traffic congestion, traffic injuries and fatalities etc. In this perspective, the present paper tries to analyze and evaluate the trends and patterns of the different forms of urban negative externalities. It also measures the impact of negative externalities on city population agglomeration in India. In the absence of reliable city level data, the paper focuses only on 42 class I (population one lakh or more) cities in India and bases the analysis on four types of urban negative externalities i.e., number of registered motor vehicles, air pollution, road accidents, and crimes. The trends and patterns analysis suggests that urban India is currently witnessing a higher increase in the number and density of registered vehicles, air pollution, road accidents and also crimes. The OLS regression results show that negative externalities such as city wise air pollution, number of registered motor vehicles (measured by tractors and trucks density), and city-wise number of crimes have a negative effect on city population agglomerations. However, number of accidents, car density and total number of buses show a positive effect on city population agglomerations. Finally, this paper seeks to highlight the role of eco friendly public transport systems funded by the government in curbing urban negative externalities in India. |
| Keywords: | Urbanization, negative externalities, economic growth, India. |
| JEL: | R11 R12 R40 |
| Date: | 2017–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76897&r=ure |
| By: | Huang, Daisy J.; Leung, Charles Ka Yui; Tse, Chung-Yi |
| Abstract: | We build an on-the-house-search model and show analytically that the rent-to-price ratio (or rental yield) and turnover rate, which are frequently used metrics for the housing market, are jointly determined in equilibrium. We therefore adopt a simultaneous equation approach on matched sale-rental pairs in our empirical investigation, as a housing unit cannot be owner-occupied and renter-occupied at the same time. Our empirical results confirm a higher turnover rate is associated with a lower rent-to-price ratio, as predicted by the model. Furthermore, our results suggest a form of “dichotomy” in the empirical determinants of rental yield and turnover at the real-estate-development (RED) level: the demographic structure, and past return performance affect its turnover rate, while popularity, human capital environment, mortgage burden, and long run rent growth determine the rental yield. No evidence of “thick market effect” is found. The robustness of our results are established through a series of tests. In addition to these findings, our tractable search-theoretic model, a ranking of more than 130 RED in Hong Kong based on the popularity index we construct, and the estimated brand-premium for different major real estate developers may also carry independent research and practical interests. |
| Keywords: | housing rental yield, turnover rate, bootstrap, leave-one-out cross validation (LOOCV), matching estimator, 3 stages least squares (3SLS) |
| JEL: | D10 G10 R21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76864&r=ure |
| By: | Leshui He (Bates College); Stephen L. Ross (University of Connecticut) |
| Abstract: | This paper examines peer effects in a Chinese middle school where: 1. classes are randomly assigned to teachers, and 2. student quality across classes varies because student assignment is based on a noisy measure of student quality. Peer effects are concentrated primarily on math scores, as opposed to Chinese or English scores. Improvements in peers at the bottom of the distribution of ability leads to improvements in student performance both for the student’s own class and for sibling classes that share the same teachers, but are not connected in any other way. For middle and top tercile peers, improvements in peers appear to reduce student test scores. The positive effects of peers at the bottom of the distribution are primarily associated with the ability of boys in the class and the sibling class, while the negative effect of peers seems to be driven by same gender peers. Finally, the positive own class and sibling class peer effects arise primarily when the head teacher of the class or the sibling class, respectively, teaches math. |
| Keywords: | peer effects, teachers, middle school, Chinese education |
| JEL: | I21 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-014&r=ure |
| By: | Riccardo Borgoni (DEMS - University of Milan-Bicocca); Giacomo Degli Antoni (University of Parma, Department of Law); Marco Faillo (University of Trento); Alessandra Michelangeli (DEMS - University of Milan-Bicocca) |
| Abstract: | The literature on the hedonic price approach applied to housing highlights the existence of natives’ preferences against living in high-dense immigrant urban areas. At the same time, empirical and experimental evidence show that ethnic fragmentation reduces cooperation at the community level. Mainly because of the difficulty to measure cooperation at the level of neighborhood, the correlation between these two phenomena is still largely unexplored. In this paper, we propose to investigate this issue by combining the hedonic price approach and a framed field experiment that allows us to collect a measure of cooperation at the neighborhood level. We show how this methodology may be implemented by carrying out a pilot study for the city of Milan. The purpose is to pave the way for further research aiming at disentangling between alternative explanations of natives’ preferences for living in homogeneous communities. |
| Keywords: | Cooperative behavior; framed field experiment, revealed preferences |
| JEL: | C93 J15 R10 R21 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp62&r=ure |
| By: | Benedek, József; Hărănguș, Iulia; Man, Titus |
| Abstract: | The study examines the spatial and economic characteristics of commuting to work in one of the most dynamic areas of Romania, Cluj County. Based on the 2011 census data, the study reveals a strong connection between accessibility and commuting intensity, while the urban network determines the spatial orientation of the dominant commuting flows. However, we found no significant relation between dynamic economic performance and commuting intensity |
| Keywords: | commuting to work accessibility economic development Cluj County |
| JEL: | D00 J61 R11 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76807&r=ure |
| By: | Norris, Jonathan (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | An adolescent’s family and peers, impart incentives on education through social identity shaping attitudes about school and performance. I model identity related mechanisms from family and peer ideals about education in a network model of adolescent effort in school and link it empirically with spatial econometrics. Both groups influence attitudes and changes in family ideals create spill-overs in attitudes. Attitudes impact performance in school, and changes in attitudes influence performance over the network. us, targeting family and peer ideals and attitudes about school can positively impact an adolescent’s educational traits and outcomes; effects that in turn ripple across a school. |
| Keywords: | Identity Economics; Peer Effects; Spatial Econometrics; Friendship Network |
| JEL: | C21 I21 J13 Z13 |
| Date: | 2017–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2017_001&r=ure |
| By: | Cinnirella, Francesco; Schueler, Ruth |
| Abstract: | Decentralization is expected to improve the provision of public goods as it can better respond to people’s preferences. In this paper we argue that decentralization of education policy in a context of heterogeneous local preferences and with high coordination costs can lead to underprovision of education. To test this hypothesis we analyze the provision of public education in nineteenth-century Prussia which was characterized by a decentralized education system and a linguistically polarized society. Using unique county-level data on education expenditure we show that linguistic polarization had a negative impact on local spending. Instrumental variable estimates using distance to the eastern border suggest that the negative relationship can be interpreted as causal. Fixed-effect estimates exploiting a policy change in education spending show that centralization increased the provision of teachers in more linguistically polarized counties. Overall our results are consistent with the interpretation that decentralization can have heterogeneous effects. |
| JEL: | H75 N33 N13 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145832&r=ure |
| By: | Muinelo-Gallo, Leonel; Rodriguez-Miranda, Adrián; Castro-Scavone, Pablo |
| Abstract: | In this paper we explore the bidirectional relationship between intergovernmental transfers and regional income inequalities in Uruguay. Based on the construction of a simultaneous equations model, that accounts for the joint determination of these two variables, and by using a panel of departments (regions) over the period 1990-2012, our empirical results show that the central government transfers to regional governments does not have a significant impact on regional income inequalities levels. In fact, these transfers are strongly determined by the historical validation of public expenditure executed by regional governments but not by regional income disparities levels. Our results are consistent with the lack of territorial cohesion criteria in the normative governing the allocation of these transfers in Uruguay. Finally, these results have clear policy implications based on the necessary revision of the normative scheme of intergovernmental regional transfers in Uruguay if the objective is to arrive to a country with a higher degree of territorial cohesion. |
| Keywords: | intergovernmental transfers, regional inequalities, panel data, simultaneous equations, Uruguay |
| JEL: | C33 H77 R11 |
| Date: | 2017–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76983&r=ure |
| By: | Weinhardt, Felix; Murphy, Richard |
| Abstract: | This paper establishes a new fact about educational production: ordinal academic rank during primary school has long-run impacts on later achievement that are independent from underlying ability. Using data on the universe of English school students, we examine a setting in which the same baseline score on a national tandardized test can correspond to different ranks among students situated in different primary school classes, where we calculate ranks using this baseline score. Institutional factors cause students to be re-assigned to a new set of secondary school peers and teachers that are unaware of the student’s prior ranking. We find large and significant positive effects on test scores and subject choices during secondary school from experiencing a high primary school rank, conditional on the underlying primary baseline score. The effects are especially large for boys, contributing to an observed gender gap in end-of-high school STEM subject choices. Merged survey data suggest that the development of confidence is a likely mechanism. |
| JEL: | I21 J24 I28 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145626&r=ure |
| By: | Xinying Fu (VU Amsterdam, The Netherlands); Vincent A.C. van den Berg (VU Amsterdam, Tinbergen Institute, The Netherlands); Erik T. Verhoef (VU Amsterdam, Tinbergen Institute, The Netherlands) |
| Abstract: | We study different mixes of private and public supply of roads in a network with bottleneck congestion and heterogeneous users. In our setting, there are two parallel links for one origin and destination pair and two groups of travellers, where the group with higher value of time also has higher schedule delay value. Previously scholars have argued that as travellers become more heterogeneous, they benefit more from product differentiation, and thus private supply of roads becomes more efficient. However, we find that local monopoly power might also increase, i.e. the private supplier can increase the toll on his link without worrying that travellers will move to the other link. This can undermine the efficiency of private supply of roads. The problem is especially severe with flat tolls, where travellers in equilibrium tend to travel on separate roads. With queue-eliminating tolls, however, both types tend to travel on both roads in equilibrium, and the competition between road providers remains relatively intense. |
| Keywords: | Congestion Pricing; Bottleneck Model; Heterogeneity; Private Supply |
| JEL: | R41 R42 R48 |
| Date: | 2017–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170025&r=ure |
| By: | Wix, Carlo; Schüwer, Ulrich |
| Abstract: | This paper explores how credit demand affects the pass-through of monetary policy to bank lending. We employ a novel identification strategy based on exploiting exogenous cross-sectional variation in local mortgage credit demand across U.S. counties following the occurrence of large natural disasters. First, we show that large natural disasters cause increased local credit demand in the short-term and reduced local credit demand in the medium-term, which we interpret as intertemporal substitution. We then test whether the effect of monetary policy on bank lending is different for unaffected counties and counties subject to an exogenously reduced credit demand following a natural disaster. We find that credit growth associated with a one percentage point decrease in the federal funds rate is 9 percentage points higher in counties with reduced credit demand relative to unaffected counties. Hence, our results suggest that monetary policy is more effective when credit demand is low. |
| JEL: | E52 G21 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145943&r=ure |
| By: | Tao Jin; Huang Xiaoyu; Jin Chao; Zheng Siqi |
| Abstract: | The booming real estate industry and rapidly increasing housing prices give birth to heated debates on real estate tax reform in China. As the fiscal reform that replaces business taxes with value-added taxes will be expanded nationwide, it is imperative to further promote the real estate tax reform. This paper analyzes the effects of real estate taxes on reducing enterprises? tax burden, improving fiscal and taxation systems of local government, transformation of government responsibilities, and income redistribution. We also point out that during the process of real estate tax reform, much importance should be attached to coordination with existing real estate tax systems, reinforcement of pilot reform, and potential financial stability risks. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:501291&r=ure |
| By: | Bleemer, Zachary (University of California, Berkeley); Van der Klaauw, Wilbert (Federal Reserve Bank of New York) |
| Abstract: | Federal disaster insurance–in the form of national flood insurance, the Federal Emergency Management Agency (FEMA), and other programs–is designed to nationally-distribute large geography-specific shocks like earthquakes and hurricanes. This study examines the local longrun net impact of Hurricane Katrina and the subsequent policy response on impacted residents. Using a unique fifteen-year panel of five percent of adult Americans’ credit reports, we find higher rates of insolvency and lower homeownership among inundated residents of New Orleans ten years after the storm, relative to their non-flooded neighbors. Residents of mostly-white and mostly-black neighborhoods obtain similar short- and long-term outcomes, though residents of white neighborhoods are more likely to migrate out of the city. Inundated New Orleans residents appear more likely to have migrated to neighboring states, but substantially less likely than nonflooded residents to have migrated north. However, we find that residents of the large Gulf Opportunity Zone surrounding New Orleans, who were also eligible for various federal programs, obtained net financial benefits in the years after Katrina; a decade later, those residents have higher rates of consumption and homeownership and lower rates of bankruptcy and foreclosure than residents outside the GO Zone. These net gains are found to be progressive–favoring young and low-income residents–and are broadly similar across black and white neighborhoods. |
| Keywords: | disaster insurance; household finances; homeownership; migration |
| JEL: | D14 H84 Q54 R11 R23 |
| Date: | 2017–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:807&r=ure |
| By: | García, Jorge Luis (University of Chicago); Heckman, James J. (University of Chicago); Leaf, Duncan Ermini (University of Southern California); Prados, Maria José (University of Southern California) |
| Abstract: | This paper estimates the long-term benefits from an influential early childhood program targeting disadvantaged families. The program was evaluated by random assignment and followed participants through their mid-30s. It has substantial beneficial impacts on health, children's future labor incomes, crime, education, and mothers' labor incomes, with greater monetized benefits for males. Lifetime returns are estimated by pooling multiple data sets using testable economic models. The overall rate of return is 13.7% per annum, and the benefit/cost ratio is 7.3. These estimates are robust to numerous sensitivity analyses. |
| Keywords: | childcare, early childhood education, long-term predictions, gender differences in responses to programs, health, quality of life, randomized trials, substitution bias |
| JEL: | J13 I28 C93 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10456&r=ure |
| By: | Raymond Owens III; Esteban Rossi-Hansberg; Pierre-Daniel Sarte |
| Abstract: | We study the urban structure of the City of Detroit. Following several decades of decline, the city's current urban structure is clearly not optimal for its size, with a business district immediately surrounded by a ring of largely vacant neighborhoods. We propose a model with residential externalities that features multiple equilibria at the neighborhood level. In particular, developing a residential area requires the coordination of developers and residents, without which it may remain vacant even if its fundamentals are sound. We embed this mechanism in a quantitative spatial economics model and use it to rationalize current city allocations. We then use the model to examine existing strategic visions to revitalize Detroit. We also explore alternative plans that rely on development guarantees, and find that they could result in greater population growth and land price appreciation than existing plans. The widespread effects of these policies underscore the importance of using a general equilibrium framework to evaluate policy proposals. |
| JEL: | F0 H0 R0 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23146&r=ure |
| By: | Benjamin Feigenberg; Steven Rivkin; Rui Yan |
| Abstract: | In 2008, Chile implemented a targeted voucher program that increased voucher values for disadvantaged students at participating schools by approximately 50%. Although disadvantaged students made substantial fourth grade test score gains that other studies have attributed to the program, our analysis raises serious doubts that the program had a substantial effect on cognitive skills. First, there was only a minor reduction in class size and little evidence of increases in any inputs. An audit showed that many schools were not using additional revenues for permitted expenditures, and estimates that exploit a discontinuity in the revenues allocated to schools show no evidence of positive effects of allocated funds on achievement growth. In addition, there is limited evidence of competitive or incentive effects on school quality or that disadvantaged students transitioned to higher quality schools. The much smaller gains made by disadvantaged students in low-stakes eighth grade test scores along with an increased rate of missing scores on fourth grade tests is consistent with extensive strategic behavior by schools. In contrast, increases in parental education and income among disadvantaged children indicate a primary role for improvements in family circumstances of tested students in explaining the meaningful decline in the achievement gap. |
| JEL: | I21 I24 I25 O15 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23178&r=ure |
| By: | Ruhose, Jens; Hanushek, Eric A.; Woessmann, Ludger |
| Abstract: | Although many U.S. state policies presume that human capital is important for state economic development, there is little research linking better education to state incomes. We develop detailed measures of skills of workers in each state based on school attainment from census micro data and on cognitive skills from state- and country-of-origin achievement tests. These new measures of knowledge capital permit development accounting analyses calibrated with standard production parameters. We find that differences in knowledge capital account for 20-35 percent of the current variation in per-capita GDP among states, with roughly even contributions by school attainment and cognitive skills. Similar results emerge from growth accounting analyses, emphasizing the importance of appropriately measuring worker skills. These estimates support emphasis on school improvement as a strategy for state economic development. |
| JEL: | O47 I25 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145641&r=ure |
| By: | Benner, Maximilian; Hirth, Jana; Kraatz, Fabian; Ludwig, Katja; Schrade, Jessi |
| Abstract: | Regional development occurs in the larger context of national economies. Thus, the elaboration of regional economic development strategies cannot be separated from higher-level economic policy which frames and conditions opportunities and risks for regional development. As a Southern European country undergoing a process of profound structural economic reform, Cyprus provides a case for a policy context aiming towards the emergence of a new model of economic growth. Within this context, the Limassol region as one of the country’s major economic centers with a number of comparatively strong industries can serve as an example of how to promote regional development in the framework of national reform priorities such as moving the national economy closer towards a knowledge- and innovation-driven model. The present study analyses current reform priorities on the national and supra-national level, takes stock of the regional economic structure of Limassol district, and presents some preliminary ideas that could be further explored if and when a comprehensive regional economic development strategy for Limassol were to be elaborated. |
| Keywords: | regional development; regional policy; smart specialisation; smart specialization; clusters; tourism; economic reform; Limassol; Lemesos; Cyprus; European Union |
| JEL: | L52 L53 L66 L83 L85 L86 L88 O14 O25 O31 O38 O52 Q18 R11 R30 R58 |
| Date: | 2017–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76834&r=ure |
| By: | Michelle Norris (School of Social Policy, Social Work and Social Justice and Geary Institute for Public Policy,University College Dublin); Michael Byrne (School of Social Policy, Social Work and Social Justice) |
| Abstract: | Since the 1970s the prevalence and duration of housing market booms has increased in developed countries as has the busts which followed them. These developments and particularly their occurrence in a large number of countries simultaneously were key contributors to the global financial crisis of 2008. The literature on this crisis has focused primarily on the role of mortgage markets and home-ownership in driving housing booms and busts and also on the countries which have experienced the strongest busts, particularly in the English-speaking world. Despite the large number of social rented dwellings in Western Europe, the role of this sector has been largely neglected in the literature. This paper aims to address these omissions by the interaction of social housing and the housing market in Ireland, which experienced a specular housing market boom in the 1990s and strong bust in the 2000s and Austria which has a long tradition of housing market stability. It argues that social housing played a central but contrasting role shaping the housing market dynamics in these two countries. In Ireland social housing was pro-cyclical – it accelerated the housing market boom and intensified the bust - whereas Austrian social housing had a counter cyclical impact on the housing market and thereby helped to promote price stability. These outcomes were partially reflected in the different social housing policy regimes in use in these countries - Austria represents a ‘unitary’ and Ireland a ‘dualist’ housing regime in housing regime in Kemeny’s (1995) typology. In addition, the sources of finance for social housing and the use of demand-side or supply-side subsidies were also important drivers of these contrasting outcomes. |
| Date: | 2017–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201705&r=ure |
| By: | Shai Bernstein; Emanuele Colonnelli; Xavier Giroud; Benjamin Iverson |
| Abstract: | How do different bankruptcy approaches affect the local economy? Using U.S. Census microdata at the establishment level, we explore the spillover effects of reorganization and liquidation on geographically proximate firms. We exploit the random assignment of bankruptcy judges as a source of exogenous variation in the probability of liquidation. We find that within a five-year period, employment declines substantially in the immediate neighborhood of the liquidated establishments, relative to reorganized establishments. Most of the decline is due to lower growth of existing establishments and, to a lesser extent, reduced entry into the area. The spillover effects are highly localized and concentrate in the non-tradable and service sectors, particularly when the bankrupt firm operates in the same sector. These results suggest that liquidation leads to a reduction in consumer traffic to the local area and to a decline in knowledge spillovers between firms. The evidence is inconsistent with the notion that liquidation leads to creative destruction, as the removal of bankrupt businesses does not lead to increased entry nor the revitalization of the area. |
| JEL: | G33 R12 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23162&r=ure |
| By: | Di Liberto, Adriana (University of Cagliari); Casula, Laura (University of Cagliari) |
| Abstract: | We study if Italian teachers do apply gender discrimination when judging students. To this aim, we use a difference-in-differences approach that exploits the availability of both teachers (non-blind) and standardized test (blind) scores in math and language that Italian students receive during the school year. Using data for all sixth graders, descriptives show that in both scores girls are better than boys in the language scores, while in math boys perform better than girls in the blind test. Moreover, our analysis suggest that boys are always discriminated by teachers in both subjects. This result holds also when we control for class fixed effects, students noncognitive skills, gender specific-attitude towards cheating and possible cultural differences towards gender attitudes in math or language. |
| Keywords: | schooling outcomes, discrimination, gender stereotypes |
| JEL: | L2 I2 M1 O32 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10458&r=ure |
| By: | Mayer, Eric; Maas, Daniel; Rüth, Sebastian |
| Abstract: | We investigate the negative correlation between housing markets and the current account in Spain. By employing robust sign restrictions, which we derive from a DSGE model for a currency union, we analyze the effects of Spanish pull and Eurozone push factors in a mixed frequency VAR framework. Savings glut, risk premium, and housing bubble shocks are capable of generating the negative co-movement of housing markets and the current account in the data. In contrast, and counterfactual to the housing boom, financial easing shocks in Spain predict a decline in, both, residential investment and house prices. Among the four identifed shocks, savings glut shocks have most explanatory power for real house prices, whereas risk premium shocks account for most of the variation in residential investment. Financial easing shocks explain fluctuations to a similar extend as savings glut and risk premium shocks, while housing bubble shocks explain slightly less variance in the data. |
| JEL: | E32 F32 F45 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145824&r=ure |
| By: | Gerhards, Leonie; Gravert, Christina |
| Abstract: | Various empirical paper have shown that peers affect productivity and behavior in the workplace. However, the mechanisms through which peers influence each other are still largely unknown. In this laboratory experiment we study a situation in which individuals might look at their peers' behavior to motivate themselves to endure in a task that requires perseverance. We test the impact of unidirectional peer effects under individual monetary incentives, controlling for ability and tactics. We find that peers significantly increase their observers' perseverance, while knowing about being observed does not significantly affect behavior. In a second experiment we investigate the motives to self-select into the role of an observing or an observant subject and what kind of peers individuals deliberately choose. Our findings from this treatment provide first insights on the perception of peer situations by individuals and new empirical evidence on how peer groups emerge. |
| JEL: | C91 M50 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145691&r=ure |
| By: | Bratti, Massimiliano (University of Milan); Fiore, Simona (University of Bologna); Mendola, Mariapia (University of Milan Bicocca) |
| Abstract: | This paper examines the causal effects of family size and demographic structure on offspring's international migration. We use rich survey data from Mexico to estimate the impact of sibship size, birth order and sibling composition on teenagers' and young adults' migration outcomes. We find no empirical support for the hypothesis that high fertility drives migration. The positive correlation between sibship size and migration disappears when endogeneity of family size is addressed using biological fertility (miscarriages) and infertility shocks. Yet, the chances to migrate are not equally distributed across children within the family. Older siblings, especially firstborn males, are more likely to migrate, while having more sisters than brothers may increase the chances of migration, particularly among girls. |
| Keywords: | international migration, Mexico, family size, birth order, sibling rivalry |
| JEL: | J13 F22 O15 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10462&r=ure |
| By: | John Lynham (University of Hawaii at Manoa, Department of Economics; University of Hawaii Economic Research Organization) |
| Abstract: | Fishers pay attention to where other fishers are fishing, suggesting the potential for peer effects. But peer effects are difficult to identify without an exogenous shifter of peer group membership. We propose an identification strategy that exploits a shifter of peer group membership: gold rushes of new entrants. Following an exchange-rate-induced gold rush in an American fishery, we find that new entrants are strongly influenced by the location choices of their peers. Over-identification tests suggest that the assumptions underlying identification hold when new entrants are inexperienced but identification is lost as new entrants start to potentially influence their peers. |
| Keywords: | Peer Effects, Gold Rushes, Resource Extraction |
| JEL: | J0 Q0 D8 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2016-15&r=ure |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper reviews the empirical evidence of persistent levels of regional self-employment and new business formation and the effect this persistence has on development. It is argued that a regional culture of entrepreneurship plays an important role in explaining persistence of entrepreneurship. We discuss possible explanations for the emergence of a culture of entrepreneurship, and how it becomes self-perpetuating over time. Finally, we draw policy implications and identify some promising avenues for further research. |
| Keywords: | Entrepreneurship, economic development, entrepreneurship culture, institutions |
| JEL: | L26 R11 O11 |
| Date: | 2017–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2017-003&r=ure |
| By: | Pekkala Kerr, Sari; Kerr, William; Özden, Çağlar; Parsons, Christopher |
| Abstract: | This paper reviews recent research regarding high-skilled migration. We adopt a data-driven perspective, bringing together and describing several ongoing research streams that range from the construction of global migration databases, to the legal codification of national policies regarding high-skilled migration, to the analysis of patent data regarding cross-border inventor movements. A common theme throughout this research is the importance of agglomeration economies for explaining high-skilled migration. We highlight some key recent findings and outline major gaps that we hope will be tackled in the near future. |
| JEL: | F15 F22 J15 J31 J44 L14 L26 O31 O32 O33 |
| Date: | 2017–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2017_007&r=ure |
| By: | Fleischer, Tamás; Tir, Melinda |
| Abstract: | Do we save time with our faster transport modes? The answer is, no. The authors answered this question after comparing the average daily per capita transport time-use based on the 1986/87, the 1999/00, and the 2009/10 Hungarian time-budget survey. The average time-use remained between 60 and 65 minutes, same as it was in 1977. During the period studied, the share of the motor/car time-use approximately doubled in the total transport time-use, while the other modes (walking, cycling, and public transports) decreased proportionally. In the same period, there was a wide distribution in the per capita daily transport time-use data influenced by geographical destination choice (in space and time)—and by demographic (age, gender), spatial (county, settlement status), and social (activity, qualification) variables. The paper analysed the effect of the latter explanatory variables on the heterogeneity of the transport time-use. The gender and activity variables can explain motor/car time-use differences; geography and settlement status the bicycle-, and the settlement status also the public transport time-use differences. However, all the explanatory variables analysed could only explain 10% of the divergences. |
| Keywords: | transport time-use time-budget survey Hungary trends distributions transport modes |
| JEL: | O18 R41 R42 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76851&r=ure |
| By: | Maier, Carl |
| Abstract: | The main message of recent evaluations of decentralization efforts around the world is that these efforts were unable to generate the beneficial effects they were thought to induce. This finding constitutes a contrast to the rich body of literature on centralization and decentralization which was itself one driving factor of these efforts of decentralization. By arguing that (local) public goods can be viewed as perfect substitutes, this paper provides an explanation for these recent empirical findings and helps to reintegrate them into the theoretical literature on the subject. The main finding of this paper is that centralized and decentralized structures can induce identical provision levels of public goods. This ambivalence is generated by the interaction between electorates and representatives. Whereas both of these actors behave differently in the two scenarios, the overall outcomes are identical due to the leveling effects of strategic delegation. This finding is robust with respect to the assumption of a multistage government. |
| JEL: | H41 H77 C72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145928&r=ure |
| By: | Karla Münzel; Wouter Boon; Koen Frenken; Taneli Vaskelainen |
| Abstract: | Carsharing provides an alternative to private car ownership by allowing car use temporarily on an on-demand basis. Operators provide carsharing services using different business models and ownership structures. We distinguish between cooperative, business-to-consumer (B2C) roundtrip and one-way, as well as peer-to-peer (P2P) carsharing. This paper characterizes these different types of business models and compares their success in terms of diffusion using a comprehensive database of all 101 German carsharing providers in 2016. The key results hold that fleet size is significantly different across business models ranging from a few cars (cooperatives in small towns), to a few hundred (B2C roundtrip in larger cities), to over a thousand (B2C one-way in largest cities), up to multiple thousands (P2P across the country). By analyzing for each operator the number of cars per capita in the city they operate in, we do not find significant differences across business models indicating the viability of each separate business model type. Hence, we conclude that business models will continue to co-exist for a while, although some of the business models may well converge in the longer run due to Internet-of-Things applications and the introduction of self-driving cars.Creation-Date: 2017-02 |
| Keywords: | Carsharing; sharing economy; platform economy; on-demand mobility services; business models; future mobility |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:uis:wpaper:1702&r=ure |
| By: | Schreiber, Sven; Beblo, Miriam |
| Abstract: | We revisit the alleged retirement consumption puzzle. According to the life-cycle theory, foreseeable income reductions such as those around retirement should not affect consumption. However, we first recall that given higher leisure endowments after retirement, the theory does predict a fall of total market consumption expenditures. In order not to mistake this predicted drop for a puzzle we focus on housing consumption which can be plausibly regarded as complementary to leisure, and we control for the leisure change in our empirical specifications, using micro data for Germany (SOEP), where housing expenditures are observable as rents for the majority (60%), as well as dwelling relocations. We still find significant negative impacts of the retirement status on housing consumption, which is hard to reconcile with the life-cycle theory. For retirees we also find significant effects of the income reduction at retirement on housing. However, the effects are small in quantitative terms, given the lock-in nature of past housing decisions. |
| JEL: | D91 E21 J22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145924&r=ure |
| By: | Kincses, Áron; Bálint, Lajos |
| Abstract: | Looking at the relationship between the place of birth and current residential locations of foreign citizens arriving in Hungary from the neighbouring countries, in general, we establish that smaller migration distance involves migrants with a lower level of education, while preference for longer distances is determined by higher qualifications of migrants. The potential impact area of migrants grows in line with the education attainments of migrants. A scale-free settlement topology can be seen from the neighbouring countries of immigration to Hungary. This means that most of the settlements of Hungary have just a few links to settlements of neighbouring countries, from a migration point of view, while few Hungarian settlements have many connections. This finding also means that, instead of the national migration strategy, the subsidiary and the regional strategies can play a decisive role in the management of the international migration process |
| Keywords: | international migration Carpathian Basin network analysis |
| JEL: | F50 J61 R12 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76852&r=ure |
| By: | Horbach, Jens; Janser, Markus |
| Abstract: | The environmental sector is supposed to yield a dual benefit: its goods and services are in-tended to tackle environmental challenges and its establishments should create new jobs. However, it is still unclear in empirical terms whether that really is the case. This paper investigates to what extent employment growth in establishments with green products and services is higher compared to other establishments. Furthermore, the main factors determining labor demand in this field are analyzed. We use linked employment and regional data for Germany. The descriptive results show that the environmental sector is characterized by disproportionately high employment growth. The application of a generalized linear mixed model reveals that especially innovation and industry agglomeration foster employment growth in establishments in the environmental sector. Establishments without green products and services show a smaller increase in employment, even if they are also innovative. |
| JEL: | J21 Q55 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145500&r=ure |
| By: | Rüth, Sebastian; Bachmann, Rüdiger |
| Abstract: | What are the macroeconomic consequences of changes in residential mortgage market loan-to-value (LTV) ratios? In a structural VAR, real GDP and business investment increase significantly following an expansionary LTV shock. The impact on residential investment, however, is contingent on the systematic reaction of monetary policy. Historically, the FED responded directly to lower collateral requirements by significantly raising the policy instrument, thereby increasing mortgage rates and reducing residential investment. In a counterfactual policy experiment, where the Federal Funds rate remains constant after the shock, the reaction of non-residential GDP components is magnified and residential investment increases significantly. While firms increase their borrowing after a relaxation of bank lending standards, whether monetary policy reacts endogenously or is held constant, household debt only increases in an environment of a counterfactually constant Federal Funds rate. |
| JEL: | E30 E44 E52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145826&r=ure |
| By: | Felipe Carozzi; Luca Repetto |
| Abstract: | We study the allocation of investment projects by municipal governments across groups of voters using data from a fiscal stimulus program carried out in Spain between 2009 and 2011. This program provided municipalities with a large endowment to spend in public investments and required the geocoding of each individual project. Combining these data with disaggregated election information at the census area level, we study whether politicians use expenditures to target their supporters or to raise turnout. Estimates from regression, matching and RDD methods show no evidence of local governments targeting areas of core support. Instead, investment goes disproportionately to low turnout areas, suggesting that politicians use funds to increase participation. We confirm this hypothesis by showing that, in the following elections, turnout is increased in areas that received more investment. Our results suggest that mobilization can be a force in shaping the allocation of resources across voter groups within cities. |
| Keywords: | political economy, distributive politics, core voters, turnout, partisan alignment |
| JEL: | R53 H76 D72 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0212&r=ure |
| By: | Nicolas González Pampillón (Universitat de Barcelona & IEB); Jordi Jofre-Monseny (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB & CEPR) |
| Abstract: | This paper assesses the impact on neighborhood population dynamics of a major urban renewal policy implemented in Catalonia (Spain) between 2004 and 2010. Some of the most deprived neighborhoods in the region received large investments in their public spaces and facilities with the aim of attracting natives and high income individuals and of reducing the concentration of poverty and immigration. The control group comprises rejected projects and projects accepted towards the end of the program that, due to a fall in public tax revenues, were never executed. The results suggest that the urban renewal projects had little (if any) effects on population dynamics, suggesting that substantial investment in deprived neighborhoods is insufficient to attract natives and/or high income households. Interestingly, the sole exception were the interventions made in Barcelona’s historic districts, where the policy seems to have augmented ongoing processes of urban revival into its most deprived neighborhoods furthering processes of gentrification. |
| Keywords: | Place-based policies, income mixing, neighborhood segregation |
| JEL: | R23 R30 R58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2017-01&r=ure |
| By: | Vaclav Korbel (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic); Michal Paulus (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | Recent studies emphasize the importance of socio-emotional skills for the success in school as well as for later economic outcomes. However, little is known how practices used by teachers everyday in classrooms impact socio-emotional skills. We show that modern practices such as working in small groups improve them. Especially intrinsic motivation and self-confidence are positively affected. Moreover, modern practices have no adverse effects on test scores. Standard practices such as lecturing or memorizing have no impact on socio-emotional skills. Splitting the sample reveals detrimental effects of standard practices on socio-emotional outcomes of boys and positive for high-achieving girls. On the contrary, both genders gain similarly from modern practices. |
| Keywords: | Teaching practices, socio-emotional skills, between-subject variation |
| JEL: | I21 C23 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2017_04&r=ure |
| By: | Paul Corrigan |
| Abstract: | Terms-of-trade shocks are known to be key drivers of business cycles in open economies. This paper argues that terms-of-trade shocks were also important for house price fluctuations in a panel of developed countries over the 1994–2015 period. In a panel vector error-correction model of house prices, household debt and real tradable prices, terms-of-trade shocks explain between 16 and 41 per cent of the long-run variance in house price growth in a typical country, and from 45 to 85 per cent of the long-run variance of the ratio of house prices to non-housing consumption. Most of the variation in the house price/consumption ratio is associated with changes in real import prices, with idiosyncratic shocks to real export prices playing a minor role. On average, a permanent 1 per cent decline in real import prices raises the ratio of real house prices to non-housing consumption by about 0.9 per cent. |
| Keywords: | Financial stability, Housing, International topics |
| JEL: | C32 E32 E51 F36 F41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:17-1&r=ure |
| By: | Schmidt, Tobias; Alik-Lagrange, Arthur |
| Abstract: | We analyze the link between homeownership and the net wealth distribution using household-level micro data from Germany and the US. We are particularly interested in the effect of the pattern of ownership across cohorts. Given that wealth accumulates over the life-cycle and that owners are wealthier than renters, past tenure choices, affecting today’s share of owners for different cohorts, should be related to current wealth levels and inequality. In order to gauge the effect of the ownership structure over cohorts on the distribution of net wealth we impose the homeownership pattern of the US on Germany. This leads to a large increase in the German median net wealth and reduces wealth inequality. Past tenure choice seems to affects today’s net wealth distribution. Some of the effects can be attributed to the difference in ownership shares between old cohorts in Germany and the US, but this effect appears to be less pronounced than expected. |
| JEL: | D31 D30 D10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145604&r=ure |
| By: | Swamy, Vighneswara |
| Abstract: | The wealth effects on consumption are a subject of continuing interest to economists. The conventional wisdom states that fluctuations in household wealth have caused major fluctuations in economic activity. This study analyses the macroeconomic dynamics of wealth effects in India and examines the nexus between the changes in housing wealth, financial wealth, and consumer spending. Using the quarterly data for the period 2005:1–2016:1, I estimate vector autoregression models and vector error-correction models, relating consumption to income and wealth measures. I find a statistically significant and rather large effect of housing wealth upon household consumption. The results show that (i) wealth effects are statistically significant and comparatively substantial in magnitude (ii) housing wealth effects tend to be greater while stock market wealth effects are considerable (iii) private consumption responses to the shocks to housing market wealth are relatively stronger than to the shocks in stock market wealth. There is a bidirectional causality running from private consumption to the two wealth forms and vice versa. Overall, the private consumption expenditure response to the changes in different wealth forms is observed to be substantial and significant. |
| Keywords: | wealth effects; consumption; stock price; housing price; economic growth; inflation; fiscal deficit; exchange rate |
| JEL: | E21 E31 F31 G12 H62 O4 R3 |
| Date: | 2017–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76836&r=ure |
| By: | Daniel M. Hungerman; Kevin J. Rinz; Jay Frymark |
| Abstract: | Governments have used vouchers to spend billions of dollars on private education; much of this spending has gone to religiously-affiliated schools. We explore the possibility that vouchers could create a financial windfall for religious organizations operating private schools and in doing so impact the spiritual, moral, and social fabric of communities. We use a dataset of Catholic-parish finances from Milwaukee that includes information on both Catholic schools and the parishes that run them. We show that vouchers are now a dominant source of funding for many churches; parishes in our sample running voucher-accepting schools get more revenue from vouchers than from worshipers. We also find that voucher expansion prevents church closures and mergers. Despite these results, we fail to find evidence that vouchers promote religious behavior: voucher expansion causes significant declines in church donations and church spending on non-educational religious purposes. The meteoric growth of vouchers appears to offer financial stability for congregations while at the same time diminishing their religious activities. |
| JEL: | H4 I2 Z12 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23159&r=ure |
| By: | Kahanec, Martin (Central European University); Guzi, Martin (Masaryk University) |
| Abstract: | The economic literature starting with Borjas (2001) suggests that immigrants are more flexible than natives in responding to changing sectoral, occupational, and spatial shortages in the labor market. In this paper, we study the relative responsiveness to labor shortages by immigrants from various origins, skills and tenure in the country vis-à-vis the natives, and how it varied over the business cycle during the Great Recession. We show that immigrants in general have responded to changing labor shortages across EU member states, occupations and sectors more fluidly than natives. This effect is especially significant for low-skilled immigrants from the new member states or with the medium number of years since immigration, as well as with high-skilled immigrants with relatively few (1-5) or many (11+) years since migration. The relative responsiveness of some immigrant groups declined during the crisis years (those from Europe outside the EU or with eleven or more years since migration), whereas other groups of immigrants became particularly fluid during the Great Recession, such as those from new member states. Our results suggest immigrants may play an important role in labor adjustment during times of asymmetric economic shocks, and support the case for well-designed immigration policy and free movement of workers within the EU. Paper provides new insights into the functioning of the European Single Market and the roles various immigrant groups play for its stabilization through labor adjustment during times of uneven economic development across sectors, occupations, and countries. |
| Keywords: | immigrant worker, labor supply, skilled migration, labor shortage, wage regression, Great Recession |
| JEL: | J24 J61 J68 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10443&r=ure |
| By: | Broekel, Tom; Boschma, Ron |
| Abstract: | Firms’ embeddedness in knowledge networks has received much attention in literature. However, little is known about the structure of firms’ knowledge exchange with respect to different types of proximities. Based on survey data of 295 firms in 8 European regions, we show that firms’ knowledge exchange systematically differs in their geographical and cognitive dimensions. We find that firms’ innovation performance is enhanced if the firm primarily links to technologically related as well as technologically similar organizations. Connecting with organizations at different geographical levels yields positive effects as well. |
| Keywords: | geographical proximity knowledge networks technological relatedness innovation performance |
| JEL: | D85 O18 O33 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76805&r=ure |
| By: | Duca, John V. (Federal Reserve Bank of Dallas); Hendershott, Patric H. (University of Aberdeen); Ling, David C. (University of Florida) |
| Abstract: | We document the evolution of U.S. tax law regarding commercial real estate (CRE) since 1975, noting changes in income and capital gains tax rates and tax depreciation methods. The most prominent changes were the 1981 and 1986 Tax Acts, but numerous significant changes occurred in the last dozen years. We then compute the present value of tax depreciation per dollar of acquisition price and an effective tax rate for CRE. We explain the quarterly variation in CRE capitalization rates using an error correction framework and find that the long run estimates are statistically significant in the way theory would suggest. Moreover, the required financial asset return and the tax depreciation variable temporally predict (“cause”) capitalization rates in the long run, but not vice versa. |
| JEL: | G12 H20 H30 R30 |
| Date: | 2017–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1703&r=ure |
| By: | Hopp, Daniel; Kriebel, Michael |
| Abstract: | This paper studies the impact of majority voting on interregional competition for firms. We model the competition as a first-price sealed bid auction under full information between two regions inhabited by low- and high-skilled individuals. The firm's location causes an increase in wages for the high-skilled. A region's bid is determined by the median voter's preference. We derive two results. First, the location decision may be inefficient because the firm may not locate in the region that benefits most. Second, if regional differences are sufficiently small and the median voter of the successful region is high-skilled, the winning region suffers a loss of aggregated income as subsidies exceed the surplus created by a firm's location. This implies that restricting inter-regional competition for firms, e.g. banning subsidies, may prevent inefficient location decisions. |
| JEL: | H23 H25 H31 P16 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145693&r=ure |
| By: | Dalmeijer, K.; Spliet, R. |
| Abstract: | This paper presents a branch-and-cut algorithm for the Time Window Assignment Vehicle Routing Problem (TWAVRP), the problem of assigning time windows for delivery before demand volume becomes known. A novel set of valid inequalities, the precedence inequalities, is introduced and multiple separation heuristics are presented. In our numerical experiments the branch-and-cut algorithm is 3.8 times faster when separating precedence inequalities. Furthermore, in our experiments, the branch-and-cut algorithm is 193.9 times faster than the best known algorithm in the literature. Finally, using our algorithm, instances of the TWAVRP are solved which are larger than the small scale instances previously presented in the literature. |
| Keywords: | Vehicle Routing, Time Window Assignment, Precedence Inequalities, 90B06 (Transportation), 90C11 (Mixed integer programming), 90C57 (Branch-and-cut) |
| Date: | 2016–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:97802&r=ure |
| By: | María Dolores Gadea-Rivas (UNIVERSIDAD DE ZARAGOZA); Ana Gómez-Loscos (Banco de España); Danilo Leiva-Leon (Banco central de Chile) |
| Abstract: | This paper studies the dynamics of the propagation of regional business cycle shocks in Europe and uncovers new features of its underlying mechanisms. To address the lack of high frequency data at the regional level, we propose a new method to measure timevarying synchronization in small samples that combines regime-switching models and dynamic model averaging. The results indicate that: (i) in just two years, the Great Recession synchronized Europe twice as much as the European Union integration process did over several decades; (ii) Ile de France is the region acting as the main channel for the transmission of business cycle shocks in Europe; followed by Inner London and Lombardia; and (iii) we identify a nonlinear relationship between sectoral composition and regional synchronization, which was amplified in the wake of the Great Recession. Similarities in services sectors are primarily responsible for this nonlinear relationship. |
| Keywords: | business cycle, sectoral composition, regime-switching, model averaging. |
| JEL: | C31 C32 E32 R11 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1705&r=ure |
| By: | Xavier Giroud; Holger M. Mueller |
| Abstract: | This paper shows that firms spread the adverse impacts of local employment shocks across regions through their internal networks of establishments. Linking confidential micro data at the establishment level from the U.S. Census Bureau’s Longitudinal Business Database to ZIP code-level variation in house price changes during the Great Recession, we find that local establishment-level employment responds strongly to employment shocks in other regions in which the firm has establishments. Consistent with theory, the elasticity of establishment-level employment with respect to shocks in other regions is increasing with firms’ financial constraints. Moreover, establishments belonging to more expansive firm networks exhibit smaller employment elasticities with respect to their own local shocks. To account for the impacts of general equilibrium adjustments, we examine aggregate employment at the county level. Similar to what we found at the establishment level, we obtain large elasticities of county-level employment with respect to employment shocks in other counties linked through firms’ internal networks. Overall, our results suggest that firms play an important role in the provision of regional risk sharing and the propagation of local employment shocks across different U.S. regions. |
| JEL: | D24 D85 E24 E32 G31 J21 J63 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23176&r=ure |
| By: | Nazmun Ratna, R. Quentin Grafton, Hang To |
| Abstract: | We evaluate the economic significance of linguistic barriers to communication in 226 US cities from 1980 to 2010. We address the question: to what extent do linguistic barriers across social groups inhibit the benefits of knowledge exchange? The empirical results show that linguistic, racial and composite diversity increase the average income of working age population in American cities. This positive effect of diversity, however, diminishes the higher is the proportion of foreign-born population who lack English fluency. We call this the ‘paradox of diversity’. Overall, our findings provide important policy insights about how social diversity may enhance economic performance within cities. |
| Keywords: | diversity, economic performance, wages, cities, immigrants |
| Date: | 2017–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201702&r=ure |
| By: | S. Avouyi-Dovi; C. Labonne; R. Lecat; S. Ray |
| Abstract: | Through a time-varying VAR model with drifting parameters and stochastic volatilities (Cogley and Sargent, 2005, Primiceri, 2005), we explore nonlinearities on the French housing and credit markets, which give rich insights on the persistent bubble of the 2000s. While the price increase took place during a period of low shock variance, shock persistence increased during this period, as well as the elasticity relative to demography and income. Low reactivity of the housing stock to housing prices may create construction bottlenecks and explain these nonlinearities. However, even though our framework is very flexible, part of the price increase remains unexplained. |
| Keywords: | housing bubble; housing credit; housing demand; housing supply; time-varying VAR, stochastic volatility |
| JEL: | R20 G21 C32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:620&r=ure |
| By: | Andrew J. Fieldhouse; Karel Mertens |
| Abstract: | This paper provides a narrative analysis of regulatory policy changes affecting the purchases and holdings of mortgages and related securities of five US government entities over the 1968–2014 period. We focus on federal government policies that aim to influence the allocation and/or volume of the supply of residential mortgage credit. We use contemporary primary sources and various institutional histories to identify significant policy interventions, to document their economic and regulatory context, surrounding motives, and pertinent timing, as well as to quantify projected impacts on agencies’ mortgage holdings. Finally, we classify each significant policy change as either “cyclically motivated” or “unrelated to the business and/or financial cycle.” |
| JEL: | E44 G28 N22 R38 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23165&r=ure |
| By: | Teng Wang |
| Abstract: | Exploiting the heterogeneity in legal constraints on local bank employees' mobility, I show that access to local information influences banks' modes of expansion. Banks entering a new market typically establish new branches directly when interbank labor mobility is less restrictive but acquire incumbent branches otherwise. The treatment effect is strengthened when information asymmetries between local and entrants are severe. Furthermore, I find a surge in the total amount of local small business and mortgage loans granted, a higher mortgage approval rate, and a reduction of mortgage rates by surrounding incumbent branches, precisely around the period of entrants establishing new branches, which indicate intensified competition among banks. |
| Keywords: | Credit market development ; Labor mobility ; Local information |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-13&r=ure |
| By: | Gluschenko, Konstantin |
| Abstract: | This paper studies integration of regional goods markets in Russia over 2001–2015 with the use of time series analysis, based on the law of one price as the criterion of market integration. The cost of a staples basket is used as a price representative. The analysis involves all pairs of country’s regions, thus providing a comprehensive pattern of market integration. The region pairs are classified as belonging to one of four groups: integrated, conditionally integrated, not integrated but tending towards integration, and neither integrated nor tending towards integration. The results suggest that only less than a quarter of region pairs fall into the fourth category. |
| Keywords: | regional goods markets, Russian regions, law of one price, price convergence |
| JEL: | L81 R15 R19 |
| Date: | 2017–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76995&r=ure |
| By: | Nemitz, Janina |
| Abstract: | This study analyzes the effect of all-day (AD) primary school programs on maternal labor supply. To account for AD school selectivity and selection into AD primary school programs I estimate bivariate probit models. To identify these models I exploit variation in the allocation of investments to AD primary schools across time and counties. This variation results from the public investment program “Future Education and Care” (IZBB) which was introduced by the German federal government in 2003. My results indicate for mothers with primary school-aged children in Germany (excluding Bavaria) a significantly positive effect of AD primary school programs on labor supply at the extensive margin. On average, mothers who make use of AD primary school programs are 26 ppts more likely to be employed than mothers who do not make use of these programs. This large effect is robust to alternative specifications and estimation methods and mainly concentrated in states with AD primary school student shares of up to 20%. On the contrary, there is no evidence for an impact of these programs on maternal labor supply at the intensive margin (full-time vs. part-time). |
| JEL: | J13 J21 J22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145528&r=ure |
| By: | Andrew Fieldhouse; Karel Mertens; Morten O. Ravn |
| Abstract: | We document the portfolio activity of federal housing agencies and provide evidence on its impact on mortgage markets and the economy. Through a narrative analysis, we identify historical policy changes leading to expansions or contractions in agency mortgage holdings. Based on those regulatory events that we classify as unrelated to short-run cyclical or credit market shocks, we find that an increase in mortgage purchases by the agencies boosts mortgage lending and lowers mortgage rates. Agency purchases influence prices in other asset markets and stimulate residential investment. Using information in GSE stock prices to construct an alternative instrument for agency purchasing activity yields very similar results as our benchmark narrative identification approach. |
| JEL: | E44 E5 G28 R38 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23154&r=ure |