nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒07‒30
thirty-two papers chosen by
Steve Ross
University of Connecticut

  1. Regional Heterogeneity and Monetary Policy By Joseph Vavra; Erik Hurst; Andreas Fuster; Martin Beraja
  2. Do People Respond to the Mortage Interest Deduction? Quasi-Experimental Evidence from Denmark By Jonathan Gruber; Amalie Jensen; Henrik Kleven
  3. The Agglomeration of American Research and Development Labs By Buzard, Kristy; Carlino, Gerald A.; Hunt, Robert M.; Carr, Jake; Smith, Tony E.
  4. Location of the Software & Videogames Industry: an insight into the case of Barcelona using microgeographic data By Méndez Ortega, Carlos
  5. School Infrastructure Spending and Educational Outcomes in Northern Italy By Alessandro Belmonte; Vincenzo Bove; Giovanna D'Inverno; Marco Modica
  6. School Boards and Student Segregation By Hugh Macartney; John D. Singleton
  7. Why Has Regional Income Convergence in the U.S. Declined? By Peter Ganong; Daniel W. Shoag
  8. Immigrant Concentration at School and Natives’ Achievement: Does the Type of Migrants and Natives Matter? By Bossavie, Laurent
  9. What Can Be Learned from Spatial Economics? By Stef Proost; Jacques-Francois Thisse
  10. Additional Career Assistance and Educational Outcomes for Students in Lower Track Secondary Schools By Fitzenberger, Bernd; Licklederer, Stefanie
  11. Additional career assistance and educational outcomes for students in lower track secondary schools By Fitzenberger, Bernd; Licklederer, Stefanie
  12. Not in My Backyard? Not So Fast. The Effect of Marijuana Legalization on Neighborhood Crime By Brinkman, Jeffrey; Mok-Lamme, David
  13. The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy By Meekes, Jordy; Hassink, Wolter
  14. Measuring Social Connectedness By Michael Bailey; Ruiqing (Rachel) Cao; Theresa Kuchler; Johannes Stroebel; Arlene Wong
  15. Discrimination through "Versioning" with Advertising in Random Networks By Antonio Jiménez-Martínez; Óscar González-Guerra
  16. The Value of Redistribution: Natural Resources and the Formation of Human Capital under Weak Institutions By Agüero, Jorge M.; Balcázar, Carlos Felipe; Maldonado, Stanislao; Nopo, Hugo R.
  17. Towards an East German Wage Curve: NUTS Boundaries, Labour Market Regions and Unemployment Spillovers By Kosfeld, Reinhold; Dreger, Christian
  18. Conformism, Social Norms and the Dynamics of Assimilation By Olcina, Gonzalo; Panebianco, Fabrizio; Zenou, Yves
  19. Stability of functional labour market regions By Kropp, Per; Schwengler, Barbara
  20. Cruise Shipping and Urban Development: The case of Piraeus By OECD
  21. Limits to Wage Growth: Understanding the Wage Divergence between Immigrants and Natives By Jain, Apoorva; Peter, Klara Sabirianova
  22. The First 2,000 Days and Child Skills: Evidence from a Randomized Experiment of Home Visiting By Orla Doyle
  23. A Joint Hazard-Longitudinal Model of the Timing of Migration, Immigrant Quality, and Labor Market Assimilation By Jain, Apoorva; Peter, Klara Sabirianova
  24. Knowledge Diffusion Within and Across Firms By Jeremy Lise; Guido Menzio; Gordon Phillips; Kyle Herkenhoff
  25. Do High Speed Railways Lead to Urban Economic Growth in China? By Jack Strauss
  26. Exploring health outcomes by stochastic multi-objective acceptability analysis: an application to Italian regions. By Raffaele Lagravinese; Paolo Liberati; Giuliano Resce
  27. The Geography of Consumption By Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
  28. International tax competition: A reappraisal By Hory, Marie-Pierre; Organització de Cooperació i Desenvolupament Econòmic, Països de l'
  29. Expiring neighborhood: Architecture as a tool for marketing ?home? in Istanbul/Turkey By Naime Esra Akin
  30. Understanding Cultural Persistence and Change By Paola Giuliano; Nathan Nunn
  31. Model averaging in markov-switching models: predicting national recessions with regional data By Pierre Guérin; Danilo Leiva-Leon
  32. Is It Who You Are or Where You Live? Residential Segregation and Racial Gaps in Childhood Asthma By Diane Alexander; Janet Currie

  1. By: Joseph Vavra (University of Chicago); Erik Hurst (University of Chicago); Andreas Fuster (Federal Reserve Bank of New York); Martin Beraja (MIT and Princeton University)
    Abstract: We argue that the time-varying regional distribution of housing equity shapes the aggregate consequences of monetary policy through its influence on mortgage refinancing. Using detailed loan-level data, we begin by showing that: (i) the refinancing response to interest rate cuts is strongly affected by regional differences in housing equity, and (ii) both regional differences in refinancing and overall refinancing vary over time with changes in the regional distribution of house price growth and unemployment. Then, we build a heterogeneous household model of refinancing in order to derive aggregate implications of monetary policy from our regional evidence. We find that the 2008 equity distribution made spending in depressed regions less responsive to interest rate cuts, thus dampening aggregate stimulus and increasing regional consumption inequality, whereas the opposite occurred in some earlier recessions. Taken together, our results strongly suggest that monetary policy makers should track the regional distribution of equity over time.
    Date: 2017
  2. By: Jonathan Gruber; Amalie Jensen; Henrik Kleven
    Abstract: Using linked housing and tax records from Denmark combined with a major reform of the mortgage interest deduction in the late 1980s, we carry out the first comprehensive long-term study of how tax subsidies affect housing decisions. The reform introduced a large and sharp reduction in the mortgage deduction for top-rate taxpayers, while reducing it much less or not at all for lower-rate taxpayers. We present three main findings. First, the mortgage deduction has a precisely estimated zero effect on homeownership. This holds even in the very long run. Second, the mortgage deduction has a sizeable impact on housing demand at the intensive margin, inducing homeowners to buy larger and more expensive houses. Third, the largest effect of the mortgage deduction is on household financial decisions, inducing them to increase indebtedness. These findings suggest that the mortgage interest deduction distorts the behavior of homeowners at the intensive margin, but is ineffective at promoting homeownership at the extensive margin and any externalities that may be associated with it.
    JEL: H24 H31
    Date: 2017–07
  3. By: Buzard, Kristy (Maxwell School, Syracuse University, Syracuse, NY); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (Geography Department, The Ohio State University, Columbus OH); Smith, Tony E. (Department of Electrical and Systems Engineering, University of Pennsylvania, Philadelphia, PA)
    Abstract: We employ a unique data set to examine the spatial clustering of about 1,700 private research and development (R&D) labs in California and across the Northeast corridor of the United States. Using these data, which contain the R&D labs’ complete addresses, we are able to more precisely locate innovative activity than with patent data, which only contain zip codes for inventors’ residential addresses. We avoid the problems of scale and borders associated with using fixed spatial boundaries, such as zip codes, by developing a new point pattern procedure. Our multiscale core-cluster approach identifies the location and size of significant R&D clusters at various scales, such as a half mile, one mile, five miles, and more. Our analysis identifies four major clusters in the Northeast corridor (one each in Boston, New York–Northern New Jersey, Philadelphia–Wilmington, and Washington, D.C.) and three major clusters in California (one each in the Bay Area, Los Angeles, and San Diego).
    Keywords: spatial clustering; geographic concentration; R&D labs; innovation
    JEL: O31 R12
    Date: 2017–07–18
  4. By: Méndez Ortega, Carlos
    Abstract: This paper analyses location patterns of Software and Videogames industries in the Metropolitan Area of Barcelona using microgeographic data. These industries benefit from agglomeration economies, skilled labour and, generally speaking, spillover effects, and tend to cluster in larger metropolitan areas, but less is known about their detailed location patterns inside these areas. We contribute to the empirical literature by identifying how Software and Videogames industries firms are concentrated in some core areas of the metropolitan area. Our empirical application includes using the Nearest Neighbour Index (NNI) and M-functions, as well as local spatial autocorrelation indicators. JEL Codes: R12, C60, L86 Keywords: Software Industry, Videogames Industry, microgeographic data, spatial location patterns, Barcelona
    Keywords: Programari -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Videojocs -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Localització industrial -- Barcelona (Catalunya : Àrea metropolitana), 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2017
  5. By: Alessandro Belmonte (IMT School for advanced studies); Vincenzo Bove (University of Warwick); Giovanna D'Inverno (IMT School for advanced studies); Marco Modica (CNR IRCrES)
    Abstract: We explore whether investment in public school infrastructure affects students' achievement. We use data on extra funding to public high schools after the 2012 Northern Italy earthquake and apply a quasi-experimental design and an instrumental variable strategy. We find that spending on school infrastructure increases standardized test scores in mathematics and Italian language, and the effect is stronger for lower-achieving students and in mathematics. These results provide evidence in favor of a positive impact of capital spending in improving the learning environment and performances of high school students.
    Keywords: education; school infrastructure spending; high school
    JEL: I22 I24 H75
    Date: 2017–07
  6. By: Hugh Macartney; John D. Singleton
    Abstract: This paper provides the first causal evidence about how elected local school boards affect student segregation across schools. The key identification challenge is that the composition of a school board is potentially correlated with unobserved determinants of school segregation, such as the pattern of household sorting and the degree to which boards are geographically constrained in defining zones of attendance. We overcome this issue using a regression discontinuity design at the electoral contest level, exploiting quasi-random variation from narrowly-decided elections. Such an approach is made possible by a unique dataset, which combines matched information about North Carolina school board candidates (including vote shares and political affiliation) with time-varying district-level racial and economic segregation outcomes. Focusing on the political composition of school board members, two-stage least squares estimates reveal that (relative to their non-Democrat counterparts) Democrat board members decrease racial segregation across schools. These estimates significantly differ from their ordinary least squares counterparts, indicating that the latter are biased upward (understating the effects). Our findings suggest that school boards realize such reductions in segregation by shifting attendance zones, a novel measure of which we construct without the need for exact geocoded boundaries. While the effect of adjusting boundaries does not appear to be offset by within-district neighborhood re-sorting in the short run, we uncover causal evidence of “white flight” out of public schools in districts in which boards have acted to reduce segregation.
    JEL: I21 I24 I28
    Date: 2017–07
  7. By: Peter Ganong; Daniel W. Shoag
    Abstract: The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.
    JEL: E24 J23 J24 R14 R23 R52
    Date: 2017–07
  8. By: Bossavie, Laurent
    Abstract: Using a rich dataset of primary school students in the Netherlands, this paper investigates the hetero- geneous effects of immigrant concentration in the classroom on the academic achievement of natives. To identify the treatment effect, it takes advantage of some features of the Dutch primary school system and uses cohort-by-cohort deviations in immigrant concentration within schools. While we report an insignificant impact of the share of immigrant classmates overall, we show that effects are heterogeneous, both in the type of immigrant classmates, and in the type of native students that are affected. Only immigrants that have been living in the country for a short period of time are found to negatively impact natives’ performance. This negative impact is stronger among natives with low parental education. We also report a negative effect of the concentration of migrants with low parental education, while migrants with high parental education are found to have no impact. The importance of taking into account heterogeneity could explain the mixed findings reported by previous literature on the topic.
    Keywords: Immigration, education, peer effects
    JEL: I21 J15
    Date: 2017–07–20
  9. By: Stef Proost (National Research University Higher School of Economics); Jacques-Francois Thisse (National Research University Higher School of Economics)
    Abstract: Spatial economics aims to explain the location of economic activity. While the importance of the proximity to natural resources has declined considerably, distance and location have not disappeared from economic life. Recent work in spatial economics indicates that new forces, hitherto outweighed by natural factors, are shaping an economic landscape that, with its many barriers and large inequalities, is anything but flat. The location of economic activity is the outcome of a trade-off between different types of scale economies and costs generated by the transfer of people, goods, and information. This trade-off is used as a guide in our survey of the main developments in regional and urban economics, which refer to different spatial scales. The role of transport is discussed for each subfield. We briefly survey the ingredients that could be useful for a synthesis of regional and urban economics and conclude with general policy insights.
    Keywords: location, region, city, transport, land, agglomeration.
    JEL: F12 F20 F61 L13 R12 R14
    Date: 2017
  10. By: Fitzenberger, Bernd (Humboldt University Berlin); Licklederer, Stefanie (University of Freiburg)
    Abstract: Based on local policy variation, this paper estimates the causal effect of additional career assistance on educational outcomes for students in Lower Track Secondary Schools in Germany. We find mostly insignificant effects of the treatment on average outcomes, which mask quite heterogeneous effects. For those students, who are taking extra coursework to continue education, the grade point average is unaffected and the likelihood of completing a Middle Track Secondary School degree falls. In contrast, educational outcomes improve for students who do not take extra coursework. Hence, the treatment causes a reversal of educational plans after graduation.
    Keywords: lower track secondary schools, career guidance, educational upgrading
    JEL: I20 J24
    Date: 2017–07
  11. By: Fitzenberger, Bernd; Licklederer, Stefanie
    Abstract: Based on local policy variation, this paper estimates the causal effect of additional career assistance on educational outcomes for students in Lower Track Secondary Schools in Germany. We find mostly insignificant effects of the treatment on average outcomes, which mask quite heterogeneous effects. For those students, who are taking extra cursework to continue education, the grade point average is unaffected and the likelihood of completing a Middle Track Secondary School degree falls. In contrast, educational outcomes improve for students who do not take extra coursework. Hence, the treatment causes a reversal of educational plans after graduation.
    Keywords: lower track secondary schools,career guidance,educational upgrading
    JEL: I20 J24
    Date: 2017
  12. By: Brinkman, Jeffrey (Federal Reserve Bank of Philadelphia); Mok-Lamme, David (Federal Reserve Bank of Philadelphia)
    Abstract: This paper studies the effects of marijuana legalization on neighborhood crime using unique geospatial data from Denver, Colorado. We construct a highly local panel data set that includes changes in the location of marijuana dispensaries and changes in neighborhood crime. To account for endogenous retail dispensary locations, we use a novel identification strategy that exploits exogenous changes in demand across different locations. The change in geographic demand arises from the increased importance of access to external markets caused by a change in state and local policy. The results imply that retail dispensaries lead to reduced crime in the neighborhoods where they are located. Reductions in crime are highly localized, with no evidence of benefits for adjacent neighborhoods. The spatial extent of these effects are consistent with a policing or security response, and analysis of detailed crime categories provides indirect evidence that the reduction in crime arises from a disruption of illicit markets.
    Keywords: legalization; drugs; crime; policy evaluation
    JEL: H73 I18 R50
    Date: 2017–07–18
  13. By: Meekes, Jordy (Utrecht University); Hassink, Wolter (Utrecht University)
    Abstract: We examine the role of the housing market in workers' adjustment to job displacement. Dutch administrative data were used and analysed with a quasi-experimental design involving job displacement. The empirical design eliminates the potential of endogenous selection into labour turnover. The estimates show that displaced workers experience, in addition to substantial losses in employment and wage, an increase in the commuting distance and a decrease in the probability of moving home. These patterns change over the worker's post-displacement period – the negative displacement effect on wages becomes more pronounced, whereas the increase in the commuting distance diminishes. Also, we examine the role of workers' housing tenure in the displacement effects. Compared with displaced tenants and outright owners, we find that more leveraged displaced owners are more rapidly re-employed and experience a smaller increase in the commuting distance, but experience also a higher loss in wage.
    Keywords: commuting distance, geographic mobility, housing tenure, employment, wages
    JEL: J31 J32 J63 J65 R21 R23
    Date: 2017–07
  14. By: Michael Bailey; Ruiqing (Rachel) Cao; Theresa Kuchler; Johannes Stroebel; Arlene Wong
    Abstract: We introduce a new measure of social connectedness between U.S. county-pairs, as well as between U.S. counties and foreign countries. Our measure, which we call the "Social Connectedness Index" (SCI), is based on the number of friendship links on Facebook, the world's largest online social networking service. Within the U.S., social connectedness is strongly decreasing in geographic distance between counties: for the population of the average county, 62.8% of friends live within 100 miles. The populations of counties with more geographically dispersed social networks are generally richer, more educated, and have a higher life expectancy. Region-pairs that are more socially connected have higher trade flows, even after controlling for geographic distance and the similarity of regions along other economic and demographic measures. Higher social connectedness is also associated with more cross-county migration and patent citations. Social connectedness between U.S. counties and foreign countries is correlated with past migration patterns, with social connectedness decaying in the time since the primary migration wave from that country. Trade with foreign countries is also strongly related to social connectedness. These results suggest that the SCI captures an important role of social networks in facilitating both economic and social interactions. Our findings also highlight the potential for the SCI to mitigate the measurement challenges that pervade empirical research on the role of social interactions across the social sciences.
    JEL: D1 E0 F1 I1 J6 O3
    Date: 2017–07
  15. By: Antonio Jiménez-Martínez (Division of Economics, CIDE); Óscar González-Guerra (Division of Economics, CIDE)
    Abstract: This paper proposes a framework of second-degree discrimination with two different versions of a service that are served in random networks with positive externalities. In the model, consumers must choose between purchasing a premium version of the service or a free version that comes with advertising about a certain good (unrelated to the service). The ads attached to the free version influence the free version adopters’ opinions and, given the induced effects on the good sales, they affect the optimal pricing of the premium version. We relate the optimal pricing strategy to the underlying hazard rate and degree distribution of the random network. Under increasing hazard rates, hazard rate dominance always implies higher prices for the service. In some applications of the model, decreasing hazard rates are often associated to extreme situations where only the free version of the service is provided. The model provides foundations for empirical analysis since key features of social networks can be related to their underlying hazard rate functions and degree distributions.
    Keywords: Social networks, second-degree discrimination, advertising, degree distributions, hazard rate
    JEL: D83 D85 L1 M3
    Date: 2016–09
  16. By: Agüero, Jorge M. (University of Connecticut); Balcázar, Carlos Felipe (World Bank); Maldonado, Stanislao (Universidad del Rosario); Nopo, Hugo R. (GRADE)
    Abstract: We exploit time and spatial variation generated by the commodities boom to measure the effect of natural resources on human capital formation in Peru, a country with low governance indicators. Combining test scores from over two million students and district-level administrative data on mining production and the redistribution of mining taxes to local governments, we find no effect from production. However, redistribution of mining taxes increases math test scores by 0.23 standard deviations. We identify the improvements in the quality of teachers and in school infrastructure, together with increases in adult employment and health outcomes of adults and children, as key mechanisms from the redistribution. Policy implications for the avoidance of the natural resource curse are discussed.
    Keywords: resource booms, academic achievement, intergovernmental transfers
    JEL: H7 H23 I25 O15 Q32
    Date: 2017–07
  17. By: Kosfeld, Reinhold (University of Kassel); Dreger, Christian (DIW Berlin)
    Abstract: The relevance of spatial effects in the wage curve can be rationalized by the model of monopsonistic competition in regional labour markets. However, distortions in extracting the regional unemployment effects arise in standard regional (i.e. NUTS) classifications as they fail to adequately capture spatial processes. In addition, the nonstationarity of wages and unemployment is often ignored. Both issues are particularly important in high unemployment regimes like East Germany where a wage curve is difficult to establish. In this paper, labour market regions defined by economic criteria are used to examine the existence of an East German wage curve. Due to the nonstationarity of spatial data, a global panel cointegration approach is adopted. By specifying a spatial error correction model (SpECM), equilibrium adjustments are investigated in time and space. The analysis gives evidence on a locally but not a spatially cointegrated wage curve for East Germany.
    Keywords: wage curve, labour market regions, global cointegration, spatial error-correction model
    JEL: J30 J60 C33 R15
    Date: 2017–07
  18. By: Olcina, Gonzalo; Panebianco, Fabrizio; Zenou, Yves
    Abstract: We consider a model where each individual (or ethnic minority) is embedded in a network of relationships and decides whether or not she wants to be assimilated to the majority norm. Each individual wants her behavior to agree with her personal ideal action or norm but also wants her behavior to be as close as possible to the average assimilation behavior of her peers. We show that there is always convergence to a steady-state and characterize it. We also show that different assimilation norms may emerge in steady state depending on the structure of the network. We then consider an optimal tax/subsidy policy which aim is to reach a certain level of assimilation in the population. We believe that our model sheds light on how the pressure from peers, communities and families affect the long-run assimilation decisions of ethnic minorities.
    Keywords: Assimilation; networks; peer pressure.; Social norms
    JEL: D83 D85 J15 Z13
    Date: 2017–07
  19. By: Kropp, Per (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schwengler, Barbara (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The number of commuters and the distances of home-to-work travel have increased in recent decades. Based on a previous study that proposed a new approach for delineating functional labour market regions, this paper focuses on the temporal stability of delineations of labour market regions in Germany. In a comparison of the best delineations among pooled groups of three years beginning in 1993, regions are classified as core regions, related regions or overlapping regions. The main finding is that regions surrounding important labour market centres form stable labour markets. Over time, most employees belong to the same labour market region or parts of it." (Author's abstract, IAB-Doku) ((en))
    JEL: D85 J61 R23
    Date: 2017–07–19
  20. By: OECD
    Abstract: This report assesses the impacts of cruise shipping on Piraeus. Piraeus is the largest cruise port in Greece, but its growth has slowed recently and the benefits of cruise shipping for the local economy are not as high as they could be. Cruise ship visits also contribute to worsening air quality and road congestion in the city. This study reviews current economic and environmental policies relating to cruise activities and provides recommendations on how Piraeus could better seize opportunities for local development from cruise shipping. This report is part of the International Transport Forum’s Case-Specific Policy Analysis series. These are topical studies on specific issues carried out by the ITF in agreement with local institutions.
    Date: 2017–07–27
  21. By: Jain, Apoorva (University of North Carolina, Chapel Hill); Peter, Klara Sabirianova (University of North Carolina, Chapel Hill)
    Abstract: This study finds evidence of wage divergence between immigrants and natives in Germany using a country-wide household panel from 1984 to 2014. We incorporate the possibility of wage divergence into a two-period model of economic assimilation by modeling the differences in the efficiency of human capital production and prices per unit of human capital between immigrants and natives. Individual rates of wage convergence are found to be higher for immigrants who fled warfare zones, belong to established ethnic networks, and acquired more years of pre-migration schooling. Using a doubly robust treatment effect estimator and the IV method, the study finds that the endogenous post-migration education in the host country contributes substantially to closing the wage gap with natives. The treatment effect is heterogeneous, favoring immigrants who are similar to natives. This paper also addresses the commonly ignored sample selection issue due to non-random survey attrition and employment participation. Empirical evidence favors the "efficiency" over the "discrimination" channels of wage divergence.
    Keywords: migration, assimilation, divergence, wage growth, skill prices, post-migration human capital, discrimination, doubly robust estimator, instrumental variables, panel, Germany
    JEL: J15 J24 J31 J61 F22 I26
    Date: 2017–07
  22. By: Orla Doyle (School of Economics and Geary Institute for Public Policy,University College Dublin)
    Abstract: Using a randomized experiment, this study investigates the impact of sustained investment in parenting, from pregnancy until age five, in the context of extensive welfare provision. Providing the Preparing for Life program, incorporating home visiting, group parenting, and baby massage, to disadvantaged Irish families raises children’s cognitive and socio-emotional/behavioral scores by two-thirds and one-quarter of a standard deviation respectively by school entry. There are few differential effects by gender and stronger gains for firstborns. The results also suggest that socioeconomic gaps in children’s skills are narrowed. Analyses account for small sample size, differential attrition, multiple testing, contamination, and performance bias.
    Keywords: Early childhood intervention; cognitive skills; socio-emotional and behavioral skills; randomized control trial; multiple hypothesis testing; permutation testing; inverse probability weighting.
    JEL: C93 D13 I26 J13
    Date: 2017–07–11
  23. By: Jain, Apoorva (University of North Carolina, Chapel Hill); Peter, Klara Sabirianova (University of North Carolina, Chapel Hill)
    Abstract: This paper develops and estimates a joint hazard-longitudinal (JHL) model of the timing of migration and labor market assimilation – two processes that have been assumed to be independent in the existing literature. The JHL model accounts for the endogenous age of entry in estimating the returns to years since migration by allowing cross-equation correlations of random intercepts with individual rates of wage assimilation. Commonly ignored sample selection issues due to non-random survey attrition and missing wages are also addressed. Using German household panel surveys from 1984 to 2014 and home country-level data from 1961, we find large upward bias in the OLS-estimated average rate of wage assimilation. Our estimates suggest that immigrants with lower unobserved skills and with a higher unobserved propensity to migrate early have a faster assimilation rate.
    Keywords: migration, joint hazard-longitudinal model, mixed effects, random slope, individual-specific wage assimilation, unobserved skills, survival analysis, timing of migration, maximum likelihood, selection due to endogenous entry, Germany
    JEL: J24 J31 J61 N30 C41
    Date: 2017–07
  24. By: Jeremy Lise (University of Minnesota); Guido Menzio (University of Pennsylvania and NBER); Gordon Phillips (Dartmouth University); Kyle Herkenhoff (University of Minnesota)
    Abstract: We develop a large-firm sorting model to study the way knowledge diffuses within and across firms. We build on \citet{shimer2000assortative} and allow for workers within a firm to influence each other's knowledge. In particular, we extend the framework to allow for a given worker's human capital to influence the future path of their coworker's human capital, and vice versa. In contrast to standard sorting models, a firm's type is no longer exogenous; it is given by the distribution of human capital of its workers. Firms are created by workers spinning off and recruiting their own employees which is an important driver of knowledge diffusion. We then use micro wage data and job mobility patterns from the LEHD (the LEHD covers all private sector jobs in the US), as well as startup patterns from the Integrated LBD, to separately estimate the knowledge diffusion process and the degree of worker complementarities in production. The data yield 5 new facts: (1) the number of coworkers has an [X] effect on an individual's wage, (2) the lowest wage coworker has an [X] effect on an individual's wage, (3) the highest wage coworker (superstar) has an [X] effect on an individual's wage, (4) workers with [X] individual wages and [X] coworker wages are more likely to start their own business (explicitly controlling for access to credit), and (5) there are [X] sorting patterns, i.e. workers with higher wages are more likely to move to firms that pay [X] average wages. We use fact (5) to estimate worker complementarities in production and we use facts (1) through (4) to discipline the knowledge diffusion process. We then use the estimated model to study various counterfactuals, including the way labor market distortions, such as firing taxes, impede mobility and affect the diffusion of knowledge.
    Date: 2017
  25. By: Jack Strauss (University of Denver)
    Abstract: This paper investigates the impact of high-speed railroads (HSR) on city-level economic activity using a new dataset for approximately 200 cities in China from 2007-2014. We apply panel Granger causality methods to assess whether increases in a city?s accessibility increases GDP growth, GDP per capita growth and wage growth. Or does causality run the opposite way ? does rising economic growth boost accessibility? Results document that increases in accessibility lead to significant and relatively large increases in GDP growth on the city-level; further, the benefits substantially out-weigh HSR?s fixed costs, depreciation and subsidies. Out-of-sample methods document the importance of increases in HSR in forecasting GDP growth. Monte Carlo simulations document the usefulness of OLS and out-of-sample tests in assessing panel Granger Causality tests.
    Keywords: China Infrastructure, Granger Causality, High Speed Railroads
    Date: 2017–07
  26. By: Raffaele Lagravinese; Paolo Liberati; Giuliano Resce
    Abstract: This paper introduces the Stochastic Multi-Objective Acceptability Analysis (SMAA) in order to investigate the evolution of mortality rates in the Italian regions over the period 1990-2013. We propose to explore the overall outcome of health care by a Composite Index (CI) of mortality based on the combination of standardized mortality rates for seventeen different diseases. From a methodological standpoint, we propose to overcome the arbitrary of the weighting process, by using the SMAA, which is a methodology that allows to rank regions considering the whole set of possible vectors of weights. Moreover, we explore the spatial segregation in health using the multidimensional generalization of the Gini index, and introducing the multidimensional generalization of ANOGI. The unprecedented use of SMAA in health sector allows to explore regional multidimensional paths beyond the order of importance given to the single dimensions. Our analysis shows that in the 24 years considered there has been no convergence path in terms of health care outcome in Italy, neither between nor within regions.
    Keywords: Stochastic Multi-Objective Acceptability Analysis; Composite Indicators;Health; Spatial Inequality; ANOGI
    JEL: H75 I14 C44
    Date: 2017–07
  27. By: Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
    Abstract: We use detailed information from U.S. consumers' credit card purchases to provide the first large-scale description of the geography of consumption. We find that consumers' mobility is quite limited and document significant heterogeneity in the importance of gravity across sectors. We develop a simple model of consumer behavior, emphasizing the role of the durability/storability of products, to organize the main stylized facts. Heterogeneity in the storability of products across sectors generates a positive correlation between the strength of gravity and the frequency of transactions at the sector level; this correlation is a clear feature of the data. Using daily rain precipitation from thousands of weather stations in U.S., we show that shocks to travel costs change the spatial distribution of expenditure, and they do so differentially across sectors: hence, the level and heterogeneity of travel costs shape the level and elasticity of any merchant's demand. This evidence suggests that incorporating the demand-side is essential to analyzing the distributional consequences of local and aggregate shocks across regions. These results also suggest the demand-side is critical to understanding the location of firms and employment in the large and understudied service sector.
    JEL: F1 F14 L8 R1 R2
    Date: 2017–07
  28. By: Hory, Marie-Pierre; Organització de Cooperació i Desenvolupament Econòmic, Països de l'
    Abstract: This paper investigates the interactions between tax policies at the international level (OECD countries). Both contemporaneous and time-delayed tax interactions are considered using Spatial Dynamic Panel Data model from Yu et al. (2008). Moreover, we test if the interdependence between governments exists due to the geographic closeness but also due to the proximity in terms of public investment levels. The results show, on one hand, that there are positive contemporaneous but negative time-delayed interactions. It is compatible with the existence of tax competition in a contemporaneus way, but also with the free-riding phenomena in the time-delayed approach. On the other hand, we show that interactions between countries are higher when they have similar levels of public investment than for the geographical closeness. This last result confirms the theoretical assumption that countries with close infrastructure investment are more likely to achieve tax harmonization. However, the negative time-delayed interactions are not consistent with this hypothesis, proving both tax and infrastructure competition between the OECD countries still exists. JEL Classification: E62, H54, H87 Key Words: Tax Competition; Yardstick Competition; Public Infrastructure Investment; Strategic Interactions; Spatial Dynamic Panel Data model; OECD.
    Keywords: Organització de Cooperació i Desenvolupament Econòmic, Països de l', 339 - Comerç. Relacions econòmiques internacionals. Economia mundial. Màrqueting,
    Date: 2017
  29. By: Naime Esra Akin (Istanbul Kultur University)
    Abstract: Istanbul is one of the metropolitan areas connected to the globe in many ways. Since 1980, Turkey is open to the effects of the consumer culture. TV series, imported goods, brand names, commercials, working practices, etc. changed not only our everyday life, but our values as well. ?Competing?, ?show off? and ?money? are the basic motivation for the society instead of ?solidarity?, ?sensitivity? and ?respect?. Architecture is in use of the economy policy as one of the tools supporting the social change towards a capital oriented mass. The criterion to buy a house is its exchange value instead of its use value as a ?home?. A house is not considered as a ?home ?to enjoy our individual/family life any more. Masses are being manipulated to think the house as an asset for investment on sale. The program and the spatial organization of the houses depend on the rules of marketing, instead of beauty, strength, or use as it used to be in the history of architecture.Considering the percentage of housing in the context of the built environment, and the effect of the space on the human mind/body, it is easy to imagine this consumerist approach of housing will cause a big change on the urban dynamics. The neighborhoods in Istanbul are already under attack of the contractor companies. High-rise residences with some commercial facilities have been constructed and sold for high prices. In a short period, this pattern of production has become a conventional practice of the production of housing. This paper presents a fragment from the current everyday life in Istanbul drifting attention to the contradiction in-between the demands of the housing market and the embedded value of the societal relations at the neighborhoods. The target is showing the upcoming danger of losing the human values, values of architecture and the city as a living organism, and questioning the possibilities for a better future.
    Keywords: Istanbul, neighborhood, housing, gated community, everyday life, consumer thought, society, architecture
    JEL: R31 A12 Z00
    Date: 2017–07
  30. By: Paola Giuliano; Nathan Nunn
    Abstract: When does culture persist and when does it change? We examine a determinant that has been put forth in the anthropology literature: the variability of the environment from one generation to the next. A prediction, which emerges from a class of existing models from evolutionary anthropology, is that following the customs of the previous generation is relatively more beneficial in stable environments where the culture that has evolved up to the previous generation is more likely to be relevant for the subsequent generation. We test this hypothesis by measuring the variability of average temperature across 20-year generations from 500–1900. Looking across countries, ethnic groups, and the descendants of immigrants, we find that populations with ancestors who lived in environments with more stability from one generation to the next place a greater importance in maintaining tradition today. These populations also exhibit more persistence in their traditions over time.
    JEL: N10 Q54 Z1
    Date: 2017–07
  31. By: Pierre Guérin (Bank of Canada); Danilo Leiva-Leon (Banco de España)
    Abstract: This paper introduces new weighting schemes for model averaging when one is interested in combining discrete forecasts from competing Markov-switching models. In the empirical application, we forecast U.S. business cycle turning points with statelevel employment data. We find that forecasts obtained with our best combination scheme provide timely updates of U.S. recessions in that they outperform a notoriously dicult benchmark to beat (the anxious index from the Survey of Professional Forecasters) for short-term forecasts.
    Keywords: business cycles, forecast combination, forecasting, Markov-switching, nowcasting
    JEL: C53 E32 E37
    Date: 2017–07
  32. By: Diane Alexander; Janet Currie
    Abstract: Higher asthma rates are one of the more obvious ways that health inequalities between African American and other children are manifested beginning in early childhood. In 2010, black asthma rates were double non-black rates. Some but not all of this difference can be explained by factors such as a higher incidence of low birth weight (LBW) among blacks; however, even conditional on LBW, blacks have a higher incidence of asthma than others. Using a unique data set based on the health records of all children born in New Jersey between 2006 and 2010, we show that when we split the data by whether or not children live in a “black” zip code, this racial difference in the incidence of asthma among LBW children entirely disappears. All LBW children in these zip codes, regardless of race, have a higher incidence of asthma. Our results point to the importance of residential segregation and neighborhoods in explaining persistent racial health disparities.
    JEL: I14 R23
    Date: 2017–07

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