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on Urban and Real Estate Economics |
| By: | Stijn Van Nieuwerburgh (New York University); Jack Favilukis (University of British Columbia) |
| Abstract: | The major cities of the world have attracted a flurry of interest from out-of-town (OOT) home buyers. Such capital inflows in local real estate have implications for affordability through their effects on prices and rents, but also for construction, local labor markets, the spatial distribution of residents, and ultimately economic welfare. We develop a spatial equilibrium model of a city that features heterogeneous households that make optimal decisions on consumption, savings, labor supply, tenure status, and location. The model generates realistic wealth accumulation and home ownership patterns over the life-cycle and in the cross-section. An inflow of OOT real estate buyers pushes up prices, rents, and wages. It increases the concentration of young, high-productivity, and wealthy households in the city center (gentrification). When OOT investors buy 10% of the housing stock, city welfare goes down by 0.3% of permanent consumption levels. The average renter suffers a large welfare loss while the average owner gains modestly. We adapt the model to the New York metro area, obtain detailed data on OOT purchases, and find that the observed increase in OOT purchases is associated with a 0.1% welfare loss. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:486&r=ure |
| By: | Greg Kaplan; Kurt Mitman; Giovanni L. Violante |
| Abstract: | We build a model of the U.S. economy with multiple aggregate shocks (income, housing finance conditions, and beliefs about future housing demand) that generate fluctuations in equilibrium house prices. Through a series of counterfactual experiments, we study the housing boom and bust around the Great Recession and obtain three main results. First, we find that the main driver of movements in house prices and rents was a shift in beliefs. Shifts in credit conditions do not move house prices but are important for the dynamics of home ownership, leverage, and foreclosures. The role of housing rental markets and long-term mortgages in alleviating credit constraints is central to these findings. Second, our model suggests that the boom-bust in house prices explains half of the corresponding swings in non-durable expenditures and that the transmission mechanism is a wealth effect through household balance sheets. Third, we find that a large-scale debt forgiveness program would have done little to temper the collapse of house prices and expenditures, but would have dramatically reduced foreclosures and induced a small, but persistent, increase in consumption during the recovery. |
| JEL: | D10 D31 E21 E30 E40 E51 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23694&r=ure |
| By: | Dusan Paredes (Departamento de Economía, Universidad Católica del Norte, Chile); Mark Skidmore (Mishigan State University) |
| Abstract: | We conduct an analysis of the costs and benefits of public investment in demolishing dilapidated residential housing in Detroit. While we estimate a positive net impact of teardowns on nearby property values, we also calculate a low marginal impact on local property tax collections. Under existing housing market conditions in Detroit, demolition costs exceed the present value of additional property tax revenues resulting from demolitions over 50 years. Using efficiency as the criteria for justifying spending public funds on demolition, average property values would have to increase by a factor of five to justify the demolition program. |
| Keywords: | Detroit, housing market, dilapidated properties, spatial density, hedonic prices, spatial heterogeneity, multilevel regression, spatial econometrics. |
| JEL: | R21 R31 R38 R52 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cat:dtecon:dt201607&r=ure |
| By: | Werner Troesken; Randall Walsh |
| Abstract: | This paper develops and tests a simple model to explain the origins of municipal segregation ordinances. Passed by cities between 1909 and 1917, these ordinances prohibited members of the majority racial group on a given city block from selling or renting property to members of another racial group. Our results suggest that prior to these laws cities had created and sustained residential segregation through private norms and vigilante activity. Only when these private arrangements began to break down during the early 1900s did whites start lobbying municipal governments for segregation ordinances. |
| JEL: | H1 K11 N32 N92 R14 R31 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23691&r=ure |
| By: | Neil Bhutta; Daniel R. Ringo |
| Abstract: | We study the effect of interest rates on the housing market by taking advantage of a sudden and unexpected price change in a large government mortgage program. The Federal Housing Administration (FHA) insures most mortgages to lower-downpayment, lower credit score borrowers, including a majority of first-time homebuyers. The FHA charges borrowers an annual mortgage insurance premium (MIP), and in January, 2015 the FHA abruptly reduced the MIP, and thus FHA borrowers’ effective interest rate, by 50 basis points. Using a regression discontinuity design, we find that the MIP reduction increased the number of home purchase originations among the FHA-reliant population by nearly 14 percent. The response to the premium cut was negatively correlated with borrower income, with no observable response among relatively high income borrowers. We trace part of the jump in home buying to the MIP reduction helping ease binding debt payment-to-income ratio limits thus allowing more applications to be approved. Finally, we find no evidence that the MIP reduction increased house prices. |
| Keywords: | Interest rates ; Mortgages and credit ; Residential real estate |
| JEL: | R21 R28 E52 G18 |
| Date: | 2017–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-86&r=ure |
| By: | Pedro S. Martins |
| Abstract: | Non-cognitive skills programs may be an important policy option to improve the academic outcomes of adolescents. In this paper, we evaluate experimentally the EPIS program, which is based on bi-weekly individual or small-group non-cognitive mediation short meetings with low-performing students. Our RCT estimates, covering nearly 3,000 7th- and 8th-grade students across over 50 schools and a period of two years, indicate that the program increases the probability of progression by 11% to 22%. The e ects are stronger amongst older students, girls, and in language subjects (compared to maths). JEL codes: I20, I24, J08 |
| Keywords: | student achievement, non-cognitive skills, RCT, gender |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp614&r=ure |
| By: | Peters, Jan Cornelius |
| Abstract: | This paper provides empirical evidence that individual labor productivity significantly depends on the size of the local labor market in which a worker previously acquired work experience. The analysis uses German micro data from the Institute for Employment Research (IAB) on transitions to employment within the period 2005 to 2011 and individual employment biographies from 1975 onwards. Analyzing the wages associated with the newly established employment relationships, suggests that dynamic agglomeration economies in general, and learning externalities in particular, play an important role in explaining individual labor productivity. Workers receive a significantly higher wage after acquiring experience in urban than in non-urban labor markets. Doubling local employment in all labor markets in which experience was acquired, increases the productivity of a worker with two years of work experience by more than 0.7 percent. After 10 years of experience the corresponding gain amounts to about three percent, after 30 years to about four percent. |
| Keywords: | Agglomeration economies,Human capital externalities,Learning,Regional disparities,Urban wage growth premium,Transition to employment |
| JEL: | R10 R23 J31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201706&r=ure |
| By: | Ferrari, Stijn; Pirovano, Mara; Rovira Kaltwasser, Pablo |
| Abstract: | In December 2013 the National Bank of Belgium introduced a sectoral capital requirement aimed at strengthening the resilience of Belgian banks against adverse developments in the real estate market. This paper assesses the impact of this macroprudential measure on mortgage lending. Our results indicate that the sectoral capital requirement on average did not affect IRB banks’ mortgage rates and mortgage loan growth. However, the findings do indicate that IRB banks may have reacted heterogeneously to the introduction of the measure: capital-constrained banks with more exposures to the segment targeted by the additional requirement tended to respond stronger in terms of mortgage lending. |
| Keywords: | Systemic risk, macroprudential policy, bank capital requirements, real estate. |
| JEL: | E44 E58 G21 G28 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80821&r=ure |
| By: | Andrew Foote; Mark J. Kutzbach; Lars Vilhuber |
| Abstract: | This paper evaluates the use of commuting zones as a local labor market definition. We revisit Tolbert and Sizer (1996) and demonstrate the sensitivity of definitions to two features of the methodology. We show how these features impact empirical estimates using a well-known application of commuting zones. We conclude with advice to researchers using commuting zones on how to demonstrate the robustness of empirical findings to uncertainty in definitions. |
| Keywords: | Local labor markets; commuting; measurement error |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:17-49&r=ure |
| By: | Giorgio Primiceri (Northwestern University); Andrea Tambalotti (Federal Reserve Bank of New York); Alejandro Justiniano (Federal Reerve Chicago) |
| Abstract: | We document the emergence of a disconnect between mortgage and Treasury interest rates in the summer of 2003. Following the end of the Federal Reserve easing cycle in June 2003, mortgage rates failed to rise according to their historical relationship with Treasury yields, leaving mortgage rates persistently depressed. We label this phenomenon the “mortgage rate conundrum,” because it echoes the under-reaction of long-term Treasury rates to the rise in the Federal Funds rate during the subsequent tightening cycle highlighted by Alan Greenspan. We uncover this phenomenon by analyzing a large dataset with millions of loan-level observations. These detailed data allow us to control for a variety of loan, borrower and geographic characteristics, guaranteeing that the low level of mortgage rates after mid 2003 was not just due to a change in observable risk factors. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:471&r=ure |
| By: | Christian Krekel |
| Abstract: | We study whether raising instructional time can crowd out student pro-social behaviour. To this end, we exploit a large educational reform in Germany that has raised weekly instructional hours for high school students by 12.5% as a quasi-natural experiment. Using a difference-in-differences design, we find that this rise has a negative and sizeable effect on volunteering, both at the intensive and at the extensive margin. It also affects political interest. There is no similar crowding out of scholastic involvement, but no substitution either. Impacts seem to be driven by a reduction in available leisure time as opposed to a rise in intensity of instruction, and to be temporary only. Robustness checks, including placebo tests and triple differencing, confirm our results. |
| Keywords: | instructional time, student pro-social behaviour, volunteering, scholastic involvement, political interest, quasi-natural experiment, “G8” reform, SOEP |
| JEL: | I21 I28 D01 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1495&r=ure |
| By: | Marco Pecoraro; Didier Ruedin |
| Abstract: | This paper examines the relationship between attitudes towards foreigners and the share of foreigners at the occupational level. Using a question on equal opportunities for foreigners from the Swiss House-hold Panel, ordered probit regressions with standard controls show that: (a) there is a negative association between the share of foreigners in one's occupation and positive attitudes towards foreigners; (b) there is a positive association between the share of recently arrived foreigners and positives attitudes towards foreigners. This suggests that workers are at the same time wary of competition with foreigners, and welcome their contribution to overcome labour shortages. Adding the occupational unemployment rate to the model indicates that objective competition may be as relevant as perceptions of competition. Controlling for other occupational characteristics establishes that the associations in (a) and (b) are probably caused by sorting on job quality. All results are robust to the potential endogeneity of the share of foreigners at the occupational level. |
| Keywords: | Immigration, attitudes towards foreigners, labour market, occupational classication, ethnic concentration, unemployment, instrumental variables |
| JEL: | F22 J24 J61 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:17-06&r=ure |
| By: | Edward L. Glaeser; Giacomo A.M. Ponzetto |
| Abstract: | Will politics lead to over-building or under-building of transportation projects? In this paper, we develop a model of infrastructure policy in which politicians overdo things that have hidden costs and underperform tasks whose costs voters readily perceive. Consequently, national funding of transportation leads to overspending, since voters more readily perceive the upside of new projects than the future taxes that will be paid for distant highways. Yet when local voters are well-informed, the highly salient nuisances of local construction, including land taking and noise, lead to under-building. This framework explains the decline of urban mega-projects in the US (Altshuler and Luberoff 2003) as the result of increasingly educated and organized urban voters. Our framework also predicts more per capita transportation spending in low-density and less educated areas, which seems to be empirically correct. |
| JEL: | D72 D82 H54 H76 R42 R53 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23686&r=ure |
| By: | Silvana Tenreyro; Philippe Bracke (Bank of England) |
| Abstract: | Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing markets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:423&r=ure |
| By: | Ben Klemens (U.S. Treasury) |
| Abstract: | This paper considers the methods by which some existing laws and proposals offer different tax rates to different types of capital, a scheme variously known as a patent box, innovation box, or intellectual property box (IP box). It presents a model of international tax competition—what tax experts call a race to the bottom and competition experts call Bertrand competition—with some capital fixed and some easily moved across borders. The model finds that the highest expected tax revenue from mobile IP for a country hosting a large amount of fixed, non-IP capital comes from assigning a single tax rate to all types of capital—that is, from not implementing an IP box. In the context of Bertrand competition, firms optimize revenue when not engaging in price discrimination across types of customers. As a research and development (R&D) credit, several examples show that the IP box is more easily manipulated than a traditional credit on R&D expenses. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ceq:wpaper:1703&r=ure |
| By: | Andreas Fuster; Stephanie H. Lo; Paul S. Willen |
| Abstract: | The U.S. mortgage market links homeowners with savers all over the world. In this paper, we ask how much of the flow of money from savers to borrowers goes to the intermediaries that facilitate these transactions. Based on a new methodology and a new administrative dataset, we find that the price of intermediation, measured as a fraction of the loan amount at origination, is large—142 basis points on average over the 2008–2014 period. At daily frequencies, intermediaries pass on price changes in the secondary market to borrowers in the primary market almost completely. At monthly frequencies, the price of intermediation fluctuates significantly and is highly sensitive to volume, likely reflecting capacity constraints: a one standard deviation increase in applications for new mortgages leads to a 30–35 basis point increase in the price of intermediation. Additionally, over 2008–2014, the price of intermediation increased about 30 basis points per year, potentially reflecting higher mortgage servicing costs and an increased legal and regulatory burden. Taken together, the sensitivity to volume and the positive trend led to an implicit total cost to borrowers of about $135 billion over this period. Finally, increases in application volume associated with “quantitative easing” (QE) led to substantial increases in the price of intermediation, which attenuated the benefits of QE to borrowers. |
| JEL: | E44 E52 G21 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23706&r=ure |
| By: | Martins, Pedro S. |
| Abstract: | Do investments in soft skills pay off in terms of student achievement? This paper evaluates a large private-sector program in this area, EPIS, based on individual and small-group sessions of mediators that seek to improve the non-cognitive skills (e.g. motivation, self-esteem, conscientiousness) of selected students. Our quasi-experimental evidence is drawn from rich longitudinal student data and the different timings of the roll-out of the program, within and across schools. The results highlight the potential of targeted, small-group, non-cognitive interventions, as we find that the EPIS program reduced grade retention by at least 10 percentage points and did so in a cost-effective manner. |
| Keywords: | Student achievement,Non-cognitive skills,Matched School-Student Data |
| JEL: | I20 J08 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:105&r=ure |
| By: | Orla Doyle |
| 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 J13 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201715&r=ure |
| By: | Barrot, Jean-Noël (MIT Sloan School of Management); Loualiche, Erik (MIT Sloan School of Management); Plosser, Matthew (Federal Reserve Bank of New York); Sauvagnat, Julien (Bocconi University) |
| Abstract: | We analyze the effect of import competition on household balance sheets from 2000 to 2007 using individual data on consumer finances. We exploit variation in exposure to foreign competition using industry-level shipping costs and initial differences in regions’ industry specialization. We show that household debt increased significantly in regions where manufacturing industries are more exposed to import competition. A one standard deviation increase in exposure to import competition explains 30 percent of the cross-regional variation in household leverage growth, and is mostly driven by home equity extraction. Our results highlight the distributive effects of globalization and their consequences for household finances. |
| Keywords: | trade; household finance; mortgages |
| JEL: | D14 G21 |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:821&r=ure |
| By: | Ambra, Poggi; Piergiovanna, Natale |
| Abstract: | In this paper, we highlight knowledge as specific channel through which labour mobility affects conditional within-firm wage dispersion. We present a model in which workers acquire knowledge on the job and firms pursue a policy of learning-by-hiring. The latter generates workers flows that connect directly and indirectly firms in a network. The model predicts that firms central to the network, those with the most heterogeneous workforce in terms of past employers, have the highest wage dispersion. Using 1990-2001 Veneto (a region of Italy) matched employer-employee data, we map workers flows between firms and build the network formed by all the firms. For each firm, we assess its network centrality. In our data conditional within-firm wage dispersion turns out to be increasing in network centrality, confirming the prediction of the model. |
| Keywords: | Wage dispersion; Labour mobility, Network; Knowledge transfer |
| JEL: | J31 J62 L14 |
| Date: | 2017–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:369&r=ure |
| By: | Calem, Paul S. (Federal Reserve Bank of Philadelphia); Lambie-Hanson, Lauren (Federal Reserve Bank of Philadelphia); Nakamura, Leonard I. (Federal Reserve Bank of Philadelphia) |
| Abstract: | Home appraisals are produced for millions of residential mortgage transactions each year, but appraised values are rarely below the purchase contract price. We argue that institutional features of home mortgage lending cause much of the information in appraisals to be lost: some 30 percent of recent appraisals are exactly at the home price (with less than 10 percent below it). We lay out a novel, basic theoretical framework to explain how lenders’ and appraisers’ incentives lead to information loss in appraisals (that is, appraisals set equal to the contract price). Such information loss is more common at loan-to-value boundaries where mortgage insurance rates increase and appears to be associated with a higher incidence of mortgage default, after controlling for pertinent borrower and loan-level characteristics. Appraisals do, in some cases, improve default risk measurement, but they are less informative than automated valuation models. An important benefit of appraisals reported below the contract price is that they help borrowers renegotiate prices with sellers. |
| Keywords: | Information; Mortgage; Regulation; Appraisal; Mortgage Default; Foreclosure |
| JEL: | D81 G14 G21 G28 L85 |
| Date: | 2017–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:17-23&r=ure |
| By: | Jing Chen (Regional Research Institute, West Virginia University) |
| Abstract: | This document provides an overview of two approaches to treat Virginia’s independent cities in county-level data sets. Then, issues of spatial aggregation and geographical division change are introduced respectively. A Python function for spatial aggregation is also provided. Although this document focuses on independent cities and counties in Virginia, it can be extended into other regions for spatial aggregation. |
| Keywords: | spatial aggregation, Virginia, independent cities, Phthon |
| JEL: | R00 Y10 |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2017td03&r=ure |
| By: | Albanesi, Stefania; De Giorgi, Giacomo; Nosal, Jaromir |
| Abstract: | A broadly accepted view contends that the 2007-09 financial crisis in the U.S. was caused by an expansion in the supply of credit to subprime borrowers during the 2001- 2006 credit boom, leading to the spike in defaults and foreclosures that sparked the crisis. We use a large administrative panel of credit file data to examine the evolution of household debt and defaults between 1999 and 2013. Our findings suggest an alternative narrative that challenges the large role of subprime credit in the crisis. We show that credit growth between 2001 and 2007 was concentrated in the prime segment, and debt to high risk borrowers was virtually constant for all debt categories during this period. The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors. We argue that previous analyses confounded life cycle debt demand of borrowers who were young at the start of the boom with an expansion in credit supply over that period. Moreover, a positive correlation between the concentration of subprime borrowers and the severity of the 2007-09 recession found in previous research may be driven by the high prevalence of young, low education, minority individuals in zip codes with large subprime population. |
| Keywords: | subprime debt; credit boom; housing crisis; financial crisis |
| JEL: | D14 E01 E21 G01 G1 G18 G20 G21 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12230&r=ure |
| By: | Cavaille, Charlotte (Georgetown University); Ferwerda, Jeremy (Dartmouth College) |
| Abstract: | To what extent does immigration drive support for anti-immigrant populist parties and candidates? Previous research has hypothesized the existence of a welfare channel, in which individuals exposed to the potential fiscal costs of immigration, in the form of higher taxes and lower benefits, will be more supportive of anti-immigration parties. But evidence in support of this argument is scant. This paper builds on existing work in two ways. Theoretically, we distinguish between the cash and the in-kind components of public transfers, and argue that the latter are especially prone to generating distributional conflicts. Empirically, we leverage an EU legal directive that resulted in an exogenous increase in the intensity of competition between immigrants and natives over public housing in Austria. Our findings indicate that support for anti-immigrant parties is highly responsive to perceived scarcity resulting from immigrant receipt of in-kind benefits. More broadly, the findings suggest that the confluence of austerity measures and free movement in the EU may explain the far-right’s recent electoral gains beyond its historic voting bloc. |
| Keywords: | JEL Classification: |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:328&r=ure |
| By: | Sumit Agarwal (Georgetown University); J. Bradford Jensen (Georgetown University); Ferdinando Monte (Georgetown University) |
| 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. |
| Keywords: | consumer demand, geographic mobility, spatial distribution of expenditures |
| JEL: | R10 R20 F10 F14 L80 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-062&r=ure |
| By: | Sónia Araújo (OECD) |
| Abstract: | Despite significant progress made, improving skills remains one of Portugal’s key challenges for raising growth, living standards and well-being. Upskilling the adult population remains a priority and lifelong learning activities should focus more on the low skilled. While active labour market policies have increased their training content in recent years, spending per unemployed is still low. A systematic monitoring of the different programmes would allow concentrating resources on the policies that are more effective in raising skills and employment prospects. In the education system, successive increases in compulsory education have not eliminated early school leaving, and a significant share of youth is left without completed secondary education, thus facing poor labour market prospects and a risk of falling into poverty. Another challenge for the education system is to reduce the link between learning outcomes and socio-economic backgrounds. This could be achieved by providing earlier and individualised support to students at risk of falling behind, strengthening teachers and principals training and exposure to best practices, and creating incentives to attract the more experienced teachers to disadvantaged schools. Vocational education and training (VET) has received less attention than general education until recent years and has suffered from fragmented management. This has curtailed the employment prospects of youth not wishing to pursue tertiary education. Establishing a single VET system and reinforcing work-based learning in companies would address this issue. Tertiary education has expanded considerably over recent years but could have a stronger focus on labour market needs, including by developing tertiary technical education. Enhanced support for business research activities could be coupled with strengthening management skills and the ties between businesses and researchers, for example by creating incentives for academics to cooperate with the private sector. This Working Paper relates to the 2017 OECD Economic Survey of Portugal (www.oecd.org/eco/surveys/economic-surve y-portugal.htm). |
| Keywords: | Adult Education and Training, Education System, Labour Market Segmentation, Vocational Education and Training, Youth Unemployment, |
| JEL: | I24 I25 I28 J24 |
| Date: | 2017–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1405-en&r=ure |
| By: | John Cawley; Euna Han; Jiyoon (June) Kim; Edward C. Norton |
| Abstract: | Estimating peer effects is notoriously difficult because of the reflection problem and the endogeneity of peer group formation. This paper tests for peer effects in obesity in a novel way that addresses these challenges. It addresses the reflection problem by using the alter’s genetic risk score for obesity, which is a significant predictor of obesity, is determined prior to birth, and cannot be affected by the behavior of others. It addresses the endogeneity of peer group formation by examining peers who are not self-selected: full siblings. Using data from the National Longitudinal Survey of Adolescent Health, we find evidence of positive peer effects in weight and obesity; having a sibling with a high genetic predisposition raises one’s risk of obesity, even controlling for one’s own genetic predisposition to obesity. Implications of the findings include that peer effects may be an explanation for continued worldwide increases in weight, and that, because of social multipliers, the cost-effectiveness of obesity treatment and prevention programs may have been underestimated. |
| JEL: | D1 I1 I12 I18 J1 Z18 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23719&r=ure |
| By: | Fenske, James (Harrison, Mark); Kala, Namrata (Harvard University) |
| Abstract: | We collect data on grain and salt prices, as well as language, for more than 200 South Asian markets in the 19th and early 20th centuries. Conditional on a rich set of controls and fixed effects, we find that linguistically distant markets are less integrated as measured by the degree of price correlation. While linguistically distant markets exhibit greater genetic distance, greater differences in literacy, and fewer railway connections, these factors are not sufficient statistics for the negative correlation between linguistic distance and market integration. Our results indicate that a one standard deviation increase in linguistic distance predicts a reduction in the price correlation between two markets of 0.121 standard deviations for wheat, 0.167 standard deviations for salt, and 0.088 standard deviations for rice. These differences are substantial relative to other factors such as physical distance that hinder market integration. |
| Keywords: | JEL Classification: |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:331&r=ure |