nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒10‒15
forty-four papers chosen by
Steve Ross
University of Connecticut

  1. Do local governments tax homeowner communities differently? By Füss, Roland; Lerbs, Oliver
  2. Measuring Mortgage Credit Availability : A Frontier Estimation Approach By Elliot Anenberg; Aurel Hizmo; Edward Kung; Raven S. Molloy
  3. Land-Use Regulations, Property Values, and Rents: Decomposing the Effects of the California Coastal Act By Severen, Christopher; Plantinga, Andrew
  4. Home values and firm behaviour By Bahaj, Saleem; Foulis, Angus; Pinter, Gabor
  5. Are Rising Home Values Restraining Homebuying for Lower-Income Families By Neil Bhutta; Steven Laufer; Daniel R. Ringo
  6. European Disparities in Regional Health R&I Performance By Monica Plechero; Claudio Cozza; Raquel Ortega-Argiles
  7. The impact of the mortgage interest and capital deduction scheme on the Belgian mortgage market By Annelies Hoebeeck; Koen Inghelbrecht
  8. Safe Collateral, Arm’s-Length Credit: Evidence from the Commercial Real Estate Market By Black, Lamont K.; Krainer, John; Nichols, Joseph B.
  9. Localized Knowledge Spillovers: Evidence from the Spatial Clustering of R&D Labs and Patent Citations By Buzard, Kristy; Carlino, Gerald A.; Hunt, Robert M.; Carr, Jake; Smith, Tony E.
  10. Delivering Education to the Underserved Through a Public-Private Partnership Program in Pakistan By Felipe Barrera-Osorio; David S. Blakeslee; Matthew Hoover; Leigh Linden; Dhushyanth Raju; Stephen P. Ryan
  11. Paralyzed by Panic: Measuring the Effect of School Closures during the 1916 Polio Pandemic on Educational Attainment By Keith Meyers; Melissa A. Thomasson
  12. The Role of Startups for Local Labor Markets By Carlino, Gerald A.; Drautzburg, Thorsten
  13. Fiscally Responsible Mafia-clans By Sergio Beraldo; Massimo Bordignon; Simone Pellegrino; Massimiliano Piacenza; Gilberto Turati
  14. Modeling House Prices By Yu Zhu; Randall Wright; Damien Gaumont
  15. What drives migration moves across urban areas in Spain? Evidence from the Great Recession By Celia Melguizo; Vicente Royuela
  16. Educational Choice, Rural-urban Migration and Economic Development: The Role of Zhaosheng in China By Yin-Chi Wang; Ping Wang; Chong Yip; Pei-Ju Liao
  17. Dismantled once, diverged forever? A quasi-natural experiment of Red Army misdeeds in post-WWII Europe By Christian Ochsner
  18. Shared Mobility Simulations for Helsinki By ITF
  19. Commuting, Migration and Local Employment Elasticities By Ferdinando Monte; Stephen Redding; Esteban Rossi-Hansberg
  20. Homeownership, Social Insurance, and Old-Age Security in the United States and Europe By Stipica Mudrazija; Barbara A. Butrica
  21. Globalization, long-haul flights and inter-city connections By Valeria Bernardo; Xavier Fageda
  22. The Effects of Student-Teacher Gender Matching on Students f Performance in Junior High Schools in Japan By Hisanobu Kakizawa
  23. Population Sex-Age Structure in Vietnam: New Evidences from the 2014 Intercensal Population and Housing Survey By Nguyen, Cuong; Nguyen, Phai
  24. The Effect of Job Readiness Programs on Criminal Behavior By Jones, Michael
  25. Immigrants' Residential Choices and their Consequences By Christoph Albert; Joan Monras
  26. The Decline in Lending to Lower-Income Borrowers by the Biggest Banks By Neil Bhutta; Steven Laufer; Daniel R. Ringo
  27. German Model or German Models? The spatial distribution of capital and labour in the corporate governance of stock listed companies By Scholz, Robert
  28. Regional Effects of Publicly Sponsored R&D Grants on SME Performance By Gustavsson Tingvall, Patrik; Videnord, Josefin
  29. Estimating the Local Productivity Spillovers from Science By Subhra Saha; Joseph Staudt; Bruce Weinbergx
  30. Knowledge Accumulation from Public Renewable Energy R&D in the European Union: Converging or Diverging Trends? By Grafström, Jonas; Söderholm, Patrik; Gawel, Erik; Lehmann, Paul; Strunz, Sebastian
  31. Oil Price Shocks and Economic Growth in the Us By Michael Alexeev; Yao-Yu Chih
  32. Federalism: Prospects for the Philippines By Miral, Romulo Jr. E.M.
  33. The Effect of Indian Residential Schools on Height and Body Mass Post-1930 By Donna Feir & M. Chris Auld
  34. Labor Market Outcomes in Metropolitan and Non-Metropolitan Areas : Signs of Growing Disparities By Alison E. Weingarden
  35. Recent Trends and Developments in European Mortgage Markets By Bouyon, Sylvain
  36. Understanding teachers' pedagogical knowledge: report on an international pilot study By Kristina Sonmark; Nóra Révai; Francesca Gottschalk; Karolina Deligiannidi; Tracey Burns
  37. The Effects of Cognitive and Noncognitive Skills on Migration Decisions By Aline Bütikofer; Giovanni Peri
  38. Location Choices of Graduate Entrepreneurs By Larsson, Johan P; Wennberg, Karl; Wiklund, Johan; Wright, Mike
  39. Is Marriage for White People? Incarceration and the Racial Marriage Divide By Nezih Guner; Christopher Rauh; Elizabeth Caucutt
  40. Tax competition among U.S. States: racing to the bottom or riding on a seesaw? By Robert S. Chirinko; Daniel J. Wilson
  41. Sleep and Student Success: The Role of Regularity vs. Duration By Phuc Luong; Lester Lusher; Vasil Yasenov
  42. Lowering the minimum age of criminal responsibility: Consequences for juvenile crime and education By Anna Piil Damm; Britt Østergaard Larsen; Helena Skyt Nielsen; Marianne Simonsen
  43. Recent Trends in Wealth-Holding by Race and Ethnicity : Evidence from the Survey of Consumer Finances By Lisa J. Dettling; Joanne W. Hsu; Lindsay Jacobs; Kevin B. Moore; Jeffrey P. Thompson
  44. Can Talented Pupils with Low Socio-economic Status Shine? Evidence from a Boarding School By Francesca Foliano; Francis Green; Marcello Sartarelli

  1. By: Füss, Roland; Lerbs, Oliver
    Abstract: This paper investigates whether and how strongly the share of homeowners in a community affects residential property taxation by local governments. Different from renters, homeowners bear the full property tax burden irrespective of local market conditions, and the tax is more salient to them. "Homeowner communities" may hence oppose high property taxes in order to protect their housing wealth. Using granular spatial data from a complete housing inventory in the 2011 German Census and historical war damages as a source of exogenous variation in local homeownership, we provide empirical evidence that otherwise identical jurisdictions charge significantly lower property taxes when the share of homeowners in their population is higher. This result is invariant to local market conditions, which suggests tax salience as the key mechanism behind this effect. We find positive spatial dependence in tax multipliers, indicative of property tax mimicking by local governments.
    Keywords: homeownership,public financing,residential property tax,spatial tax mimicking,yardstick competition
    JEL: D72 H20 H31 H71 R31
    Date: 2017
  2. By: Elliot Anenberg; Aurel Hizmo; Edward Kung; Raven S. Molloy
    Abstract: We construct a new measure of mortgage credit availability that describes the maximum amount obtainable by a borrower of given characteristics. We estimate this "loan frontier" using mortgage originations data from 2001 to 2014 and show that it reflects a binding borrowing constraint. Our estimates reveal that the expansion of mortgage credit during the housing boom was substantial for all borrowers, not only for low-score or low-income borrowers. The contraction was most pronounced for low-score borrowers. Using variation in the frontier across metropolitan areas over time, we show that borrowing constraints played an important role in the recent housing cycle.
    Keywords: Constraints ; Construction ; Credit Availability ; Frontier ; House prices ; Mortgages
    JEL: G21 R21 R31 D12 G10 R20
    Date: 2017–09–29
  3. By: Severen, Christopher (Federal Reserve Bank of Philadelphia); Plantinga, Andrew (University of California, Santa Barrbara)
    Abstract: Land-use regulations can lower real estate prices by imposing costs on property owners, but may raise prices by restricting supply and generating amenities. We study the effects of the California Coastal Act, one of the nation’s most stringent land-use regulations, on prices and rents for multifamily housing units. The Coastal Act applies to a narrow section of the California coast, allowing us to compare properties on either side of the jurisdictional boundary. The Coastal Act offers several advantages for measuring the effects of land-use regulations, including plausible exogeneity of the boundary location, which we confirm using historical data on boundary placement, and orthogonality of the boundary to other jurisdictional divisions. Extending previous studies, we decompose the effects of the regulation into a local effect, the net price effect of restrictions on the subject property and its immediate neighbors, and an external effect, the value of amenities generated by restrictions on all properties within the regulated area. Data on multifamily housing rents are used to isolate the effect of restrictions on adjacent properties (the neighbor effect). Our analysis of multifamily housing prices reveals local and external effects of approximately +8% and +5%, respectively. The rent analysis indicates a zero neighbor effect, which suggests that the local benefits of the Coastal Act have not yet materialized but are expected to in the future. This interpretation of our results is supported by additional evidence on building ages and assessed building and land values.
    Keywords: land use regulation; housing prices; California Coastal Commission
    JEL: Q24 R14 R31 R38 R52
    Date: 2017–10–05
  4. By: Bahaj, Saleem (Bank of England); Foulis, Angus (Bank of England); Pinter, Gabor (Bank of England)
    Abstract: The homes of those in charge of firms are an important source of finance for ongoing businesses. We use firm level accounting data, transaction level house price data and loan level residential mortgage data from the United Kingdom to show that a £1 increase in the value of the residential real estate of a firm’s directors increases the firm’s investment and wage bill by £0.03 each. These effects run through smaller firms and are similar in booms and busts. In aggregate, the homes of firm directors are worth 80% of GDP. Using this, a back of the envelope calculation suggests that a 1% increase in real estate prices leads, through this channel, to up to a 0.28% rise in business investment and a 0.08% rise in total wages paid. We complement this with evidence on how a firm responds to changes in the value of its own corporate real estate; we find that, in aggregate, the residential real estate of directors is at least as important for activity. We use an estimated general equilibrium model to quantify the importance of both types of real estate for the propagation of shocks to the macroeconomy.
    Keywords: Housing; personal guarantees; corporate finance; investment; business cycles
    JEL: D22 E32 R30
    Date: 2017–10–06
  5. By: Neil Bhutta; Steven Laufer; Daniel R. Ringo
    Abstract: Since bottoming out in 2012, house prices in the U.S. have recovered rapidly. According to Zillow, the median home value has been growing about 6 percent per year. While incomes have also been recovering, they have not quite kept pace with home prices. This note uses data reported under the Home Mortgage Disclosure Act (HMDA), along with income data from the ACS, and house price data from Zillow, to explore whether families in such areas, particularly lower-income families, are being priced out of homeownership as a result.
    Date: 2017–09–28
  6. By: Monica Plechero (Dept. of Management, Università Ca' Foscari Venice); Claudio Cozza (Istituto Ricerche, AREA Science Park); Raquel Ortega-Argiles (City-REDI, Birmingham Business School)
    Abstract: Health represents one of the thematic priorities for smart specialisation. Until now the difficulty in properly measuring research and innovation (R&I) in Health sector has represented a barrier to address specific policies in favour of less performing regions. This is due to two factors: a lack of available data particularly at regional level; and the difficulty in clearly defining the boundaries of the Health sector. Data provided by European Commission, focusing on Health as FP7 thematic priority, as well as recent data on ongoing clinical trials and Health infrastructure at regional level developed by university of Trieste allow the use of a novel regional and sectorial breakdown to deeper investigate the mechanisms supporting R&I in European Regions. The paper provides an analysis of possible determinants of EU regional Health R&I inequalities, disentangling the factors related to publications propensity from those related to patents propensity. The results show that despite one of the most relevant determinants of R&I in the Health sector remain the level of R&D expenditure, other factors such as the size or degree of Health specialisation of the region should also be taken into account. While patenting activity in this sector remains a prerogative of regions with already technological and industry capacity, publications activities result less context specific being present also in peripheral regions. Our results are in line with the new place-based smart specialisation- type policy thinking.
    Keywords: Health, patents, scientific publications, regions, smart specialisation, Europe
    JEL: O33 O34 R11 R58
    Date: 2017–10
  7. By: Annelies Hoebeeck (Department Public Governance, Management and Finance, Department Financial Economics, Ghent University); Koen Inghelbrecht (Department Financial Economics, Ghent University)
    Abstract: In 2005, mortgage interest, capital deductions and insurance premiums (MICPD) were assembled into one single deduction package to further stimulate home ownership in Belgium. Former research has shown that the MICPD did not raise the probability of becoming a home owner, due to its capitalisation into higher house prices. The objective of this paper is to investigate how the transmission of the capitalisation takes place. The analysis is based on data extracted from the Household Finance and Consumption Survey. The mortgage amount, the mortgage maturity, the interest rate and the house price are estimated simultaneously using a 3-SLS approach. The results suggest that the mortgage deduction does not result in more affordable housing by shortening the mortgage maturity. Most likely, the mortgage deduction results in larger amounts being borrowed, which in turn may indirectly push up house prices, the mortgage maturity and the interest rate as well. Although our estimation sample is rather small, these results suggest that the MICPD might be more beneficial for sellers and mortgage-granting institutions than for home owners.
    Keywords: Mortgages, tax policy, house prices, mortgage interest deduction, household borrowing
    JEL: G21 H24 H31
    Date: 2017–09
  8. By: Black, Lamont K. (DePaul University); Krainer, John (Federal Reserve Bank of San Francisco); Nichols, Joseph B. (Federal Reserve Board of Governors)
    Abstract: There are two main creditors in commercial real estate: arm’s-length investors and banks. We model commercial mortgage-backed securities (CMBS) as the less informed source of credit. In equilibrium, these investors fund properties with a low probability of distress and banks fund properties that may require renegotiation. We test the model using the 2007-2009 collapse of the CMBS market as a natural experiment, when banks funded both collateral types. Our results show that properties likely to have been securitized were less likely to default or be renegotiated, consistent with the model. This suggests that securitization in this market funds safe collateral.
    JEL: G21 G23 G32 R23
    Date: 2017–09–07
  9. By: Buzard, Kristy (Syracuse University); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (The Ohio State University); Smith, Tony E. (University of Pennsylvania)
    Abstract: Patent citations are a commonly used indicator of knowledge spillovers among inventors, while clusters of research and development labs are locations in which knowledge spillovers are particularly likely to occur. In this paper, we assign patents and citations to newly defined clusters of American R&D labs to capture the geographic extent of knowledge spillovers. Our tests show that the localization of knowledge spillovers, as measured via patent citations, is strongest at small spatial scales and diminishes rapidly with distance. On average, patents within a cluster are about three to six times more likely to cite an inventor in the same cluster than one in a control group. At the same time, the strength of knowledge spillovers varies widely between clusters. The results are robust to the specification of patent technological categories, the method of citation matching and alternate cluster definitions.
    Keywords: spatial clustering; geographic concentration; R&D labs; localized knowledge spillovers; patent citations
    JEL: O31 R12
    Date: 2017–10–03
  10. By: Felipe Barrera-Osorio; David S. Blakeslee; Matthew Hoover; Leigh Linden; Dhushyanth Raju; Stephen P. Ryan
    Abstract: We contribute to the school-competition literature by evaluating a program that randomly assigned private schools to underserved villages in Pakistan. Program schools were provided a per-student subsidy to provide tuition-free primary education, with half of the treated villages receiving a higher subsidy for female students. The program increased enrollment by 30 percentage points, and test scores by 0.63 standard deviations. The effects were similar across genders, and across the two subsidy treatments. Program schools were of higher quality than nearby government schools, and a structural model for the supply and demand of school inputs indicates that program schools selected inputs similar to those of a social planner who internalizes all the educational benefits to society.
    JEL: I25 O12
    Date: 2017–09
  11. By: Keith Meyers; Melissa A. Thomasson
    Abstract: We leverage the 1916 polio pandemic in the United States as a natural experiment to test whether short-term school closures result in reduced educational attainment as an adult. With over 23,000 cases of polio diagnosed in 1916, officials implemented quarantines and closed schools. Since the pandemic occurred during the start of the 1916 school year, children of working age may have elected not to return to school. Using state-level polio morbidity as a proxy for schooling disruptions, we find that children ages 14-17 during the pandemic had less educational attainment in 1940 compared to their slightly older peers.
    JEL: I18 N22 N3
    Date: 2017–09
  12. By: Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Drautzburg, Thorsten (Federal Reserve Bank of Philadelphia)
    Abstract: We investigate the dynamic response of local U.S. labor markets to increased job creation by new firms and compare the effects to overall labor demand shocks. To account for both dynamic and spatial dependence we develop a spatial panel VAR that builds on recent advances in the VAR literature to identify structural shocks using external instruments. We find that startup shocks have a small but persistent effect on local employment through population growth. Population growth, in turn, is largely driven by immigration. We also investigate how the responses differ by local characteristics such as population density. Finally, we show that startups are not closely linked to innovation.
    Keywords: Startups; entrepreneurship; local labor markets; proxy VAR; spatial panel VAR
    Date: 2017–09–27
  13. By: Sergio Beraldo (Department of Economics and Statistics, University of Naples “Federico II†(IT), Italy); Massimo Bordignon (Department of Economics and Finance, Catholic University, Milan, Italy); Simone Pellegrino (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Massimiliano Piacenza (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Gilberto Turati (Department of Economics and Finance, Catholic University, Rome, Italy)
    Abstract: To work as an accountability mechanism, fiscal decentralization requires the democratic mechanism to function well. This is generally not the case where the quality of the institutional environment is weak, and local governments might be captured by local oligarchs. We explore this issue by studying how Italian municipalities reacted to an unexpected tax reform reducing tax autonomy at the local level. Focusing on three Southern provinces, where some municipal governments are captured by Camorra clans, our estimates suggest that captured municipalities are less responsive to incentives stemming from re-centralization. We also observe a different recomposition of spending between the two groups, which we interpret - according to our theoretical model - considering the different degrees with which clans can extract rents from public expenditure.
    Keywords: Tax decentralization, Local government accountability, Institutional quality, Mafia-type organizations
    JEL: D73 H40 H71 H72
  14. By: Yu Zhu (Bank of Canada); Randall Wright (University of Wisconsin); Damien Gaumont (CRED)
    Abstract: This paper develops some novel models of housing markets based on price posting, using both noisy search and directed search. The models generate price dispersion and price stickiness -- i.e., they are consistent with the observation that some sellers do not adjust listed prices when market conditions change, something commentators say is puzzling and challenging for standard economic theory. We also contribute to the literature on price dispersion, in general, by considering big-ticket durable goods and agents that trade infrequently. The framework is tractable: comparative statics are characterized and parametric examples are solved explicitly. Using English housing data, we show the empirical relevance of the directed search model. This contributes to the literature of directed-search by showing how to identify and estimate a directed-search model.
    Date: 2017
  15. By: Celia Melguizo (AQR-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.); Vicente Royuela (AQR-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.)
    Abstract: In Spain, economic disparities between regions have traditionally played a relevant role in migration. Nevertheless, during the previous high-instability period, analyses provided conflicting results about the effect of these variables. In this work, we aim to determine the role that labour market factors play in internal migration during the Great Recession, paying special attention to the migration response of the heterogeneous population groups. To do so, we resort to an extended gravity model and we consider as a territorial unit the 45 Spanish Functional Urban Areas. Our results point to real wages as having a significant influence on migration motivations.
    Keywords: Migration, Spanish urban areas, Labour market factors
    JEL: C23 J61 R23
    Date: 2017–10
  16. By: Yin-Chi Wang (Chinese University of Hong Kong); Ping Wang (Washington University in St. Louis); Chong Yip (Chinese University of Hong Kong); Pei-Ju Liao (Institute of Economics, Academia Sinica)
    Abstract: Observing China's rapid skill-enhanced development and urbanization process accompanied by continual reforms of the household registration system, we explore the underlying drivers, highlighting the channel of rural to urban migration. In addition to conventional work-based migration, we incorporate education-based migration by constructing a dynamic spatial equilibrium model of migration decisions with educational choice. We then calibrate our model to fit the data from China over the 1980--2007 period. We find that the effects of education-based migration on total per capita output cannot be ignored. There also exist rich interactions between the two migration channels. Furthermore, our results suggest that the increase in the college admission selectivity for rural students seriously depresses China's development. Policy experiments on migration and labour-market regulations are also conducted to assess their quantitative significance.
    Date: 2017
  17. By: Christian Ochsner
    Abstract: I study the economic consequences of the Red Army’s misdeeds after WWII. I exploit differences in spatial economic activity across the arbitrarily drawn and only for 74 days lasting liberation demarcation line between the Red Army and the Western Allies in South Austria. Dismantling and pillaging, but also (sexual) crimes made regions liberated by the Red Army a less desirable place to live and to start economic activities compared to adjacent regions. Spatial regression discontinuity (RD) estimates show that the liberation causes a relative population decline by around 26 to 31 percent until the present day. Measures of labor productivity also lag behind in Red Army liberated regions. I explain persistence with the selective migration pattern across the demarcation line in the direct aftermath of WWII.
    Keywords: Regional economic activity, population shock, dismantling, Red Army, Austria
    JEL: J11 N14 N94 R12 R23
    Date: 2017
  18. By: ITF
    Abstract: This report examines how the optimised use of new on-demand shared transport modes could change the future of mobility in the Helsinki Metropolitan Area in Finland. Based on simulation, it provides indicators for the impact of shared mobility solutions on accessibility, metro/rail ridership, required parking space, congestion and CO2 emissions. The model also analyses service quality, efficiency and cost competitiveness of the shared solutions. In addition, the report explores the willingness among the citizens of the Helsinki region to adopt shared mobility solutions based on focus group analysis. The findings provide an evidence base for decision makers to weigh opportunities and challenges created by new forms of shared transport services. The work is part of a series of studies on shared mobility in different urban and metropolitan contexts. 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: 2017–10–12
  19. By: Ferdinando Monte (Georgetown University); Stephen Redding (Princeton University); Esteban Rossi-Hansberg (Princeton University)
    Abstract: We provide theory and evidence that the elasticity of local employment to a labor demand shock is heterogeneous depending on the commuting openness of the local labor market. We develop a quantitative general equilibrium model that incorporates spatial linkages in goods markets (trade) and factor markets (commuting and migration). We quantify this model to match the observed gravity equation relationships for trade and commuting. We find that empirically-observed reductions in commuting costs generate welfare gains of around 3.3 percent. We provide separate evidence in support of the model's predictions using decompositions of employment changes, million dollar plants, and trade shocks.
    Keywords: labor supply elasticity, shocks, general equilibrium, spatial linkages
    JEL: F12 F14 R13 R23
    Date: 2017–10
  20. By: Stipica Mudrazija; Barbara A. Butrica
    Abstract: Relatively few Americans have accumulated substantial savings outside of their employer-sponsored retirement plans, yet most own their homes. The traditional view of the retirement income system as a three-legged stool supported by Social Security, private pensions, and savings may be better viewed as being supported by Social Security, pensions, and homeownership. Country-specific economic, social, and political developments throughout modern history mean that homeownership rates and the relative importance of homeownership for old-age security vary widely across developed countries. Many countries, however, are increasingly promoting homeownership as an effective way of building assets, a de facto self-insurance mechanism for old-age security, and a substitute for various social transfers. This paper uses data from the Health and Retirement Study (HRS) and the Survey of Health, Ageing, and Retirement in Europe (SHARE) to better understand the role of homeownership in retirement before and after the Great Recession for the United States and nine Western European countries: Austria, Belgium, Denmark, France, Germany, Italy, the Netherlands, Spain, and Sweden. It begins by comparing trends in homeownership rates among older adults and the key characteristics of housing-related policies and regulations that potentially impact home acquisition. It then examines home equity trends, the prevalence and burden of housing debt, and the relative importance of housing as a source of retirement wealth. Next it provides an overview of equity release options and estimates how much older households could increase their incomes by fully monetizing their housing equity. Finally, the paper discusses the prospects for and limits of home equity release and asset-based welfare policies.
    Date: 2017–10
  21. By: Valeria Bernardo (GiM-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.); Xavier Fageda (GiM-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain. Mail to:)
    Abstract: In this paper, we examine the impact of non-stop flights on the connectivity of European cities with distant locations from the rest of the world. We use data on inter-city passenger flows including non-stop and connecting traffic so that we have a precise measure of the economic and social links between cities. We apply a matching procedure and run regressions using instrumental variables to deal with the potential endogeneity bias of the variables for non-stop flights. We find a strong causal relationship between the amount of total traffic and the supply of non-stop long-haul flights in the considered inter-city markets. Traffic increases from the shift from ‘not having’ to ‘having’ non-stop flights can be more than double. Such increase in the amount of traffic does not seem to be related with a systematic change in fares.
    Keywords: Air transportation; inter-city connections; matching analysis; instrumental variables
    Date: 2017–10
  22. By: Hisanobu Kakizawa (Graduate School of Economics, Osaka University)
    Abstract: This study analyzes the student-teacher gender matching effect on students f academic performance and questioning behavior. The results indicate as follows: 1. Positive effects of same gender teachers on students f performance are observed, especially for girls. 2. The gender-matching effect appears to be most significant in the study of English, followed by math and science. 3. Gender matching has an effect on students f questioning behavior. 4. Changes in questioning behavior may partly explain the improvement in performance. 5. Even when the effects of questioning behavior are controlled for, female teachers still have a positive effect on girls f performance.
    Keywords: Academic performance; Gender-matching effect; Questioning behavior
    JEL: I20 I21
    Date: 2017–09
  23. By: Nguyen, Cuong; Nguyen, Phai
    Abstract: This paper examines the population sex-age structure in Vietnam using data from the 2014 Intercensal Population and Housing Survey. It shows that the proportion of children has declined dramatically over time. The proportion of children 0-4 years old accounted for 14.6% of the population in 1979, dropping to only 9.4% in 1999 and 8.3% in 2014. Low fertility and high life expectancy have caused the population pyramid to appear drum-shaped, meaning Viet Nam's population pyramid in 2014 characterized an aging population. At the same time, the proportion of the population of working age has increased dramatically. The proportion of the population aged 65 years and older also increased, but at a slower pace. As a result, the overall dependency ratio has declined from 89.9% in 1979 to 63.6% in 1999, 46% in 2009 and only 44% in 2014. It is estimated that Viet Nam will complete the period of the golden population structure in 25 years, around 2040. Regarding sex structure, the sex ratio of Viet Nam has continued to increase, from 94.2 in the 1989 census to 97.3 in 2014. The sex ratio in urban areas was lower than in rural areas. Migration has had a large impact on differences in the sex ratio among regions.
    Keywords: Population, demography, age, gender, Vietnam
    JEL: J1 J15
    Date: 2016–12–15
  24. By: Jones, Michael
    Abstract: In this paper, I find that participants in a job-readiness program, Cincinnati Works, in Cincinnati, Ohio are nine percentage points less likely to be charged with a felony compared to non-members. Given that 18 percent of non-members are charged with a felony sometime in the five years after their applications, Cincinnati Works decreases the probability of criminal charges by 50 percent. Moreover, the reduction in crime is driven by those individuals who were not previously felons. Cincinnati Works appears to be more effective at keeping individuals out of the criminal justice system for the first time, compared to reducing the recidivism rate. I find that the taxpayer benefit per Cincinnati Works participant is between $486 and $1,584 a year, depending on whether or not the marginal costs of a prison system include employee compensation. However, because the average cost per participant is $4,669, the program is unlikely to pay for itself based only on a reduction in criminal recidivism.
    Keywords: benefit-cost analysis, labor market, crime, program evaluation
    JEL: J01 J08 J2 J24
    Date: 2017–10–11
  25. By: Christoph Albert (UPF); Joan Monras (CEMFI and CEPR)
    Abstract: This paper investigates the causes and effects of the spatial distribution of immigrants across US cities. We document that: a) immigrants concentrate in large, high-wage, and expensive cities, b) the earnings gap between immigrants and natives is higher in larger and more expensive cities, and c) immigrants consume less locally than natives. In order to explain these findings, we develop a simple quantitative spatial equilibrium model in which immigrants consume (either directly, via remittances, or future consumption) a fraction of their income in their countries of origin. Thus, immigrants not only care about local prices, but also about price levels in their home country. Hence, if foreign goods are cheaper than local goods, immigrants prefer to live in high-wage, high-price, and high-productivity cities, where they also accept lower wages than natives. Using the estimated model we show that current levels of immigration have reduced economic activity in smaller, less productive cities by around 3 percent while they have expanded the activity in large and productive cities by around 4 percent. This has increased total aggregate output per worker by around .15 percent.
    Keywords: Immigration, location choices, spatial equilibrium
    JEL: F22 J31 J61 R11
    Date: 2017–10
  26. By: Neil Bhutta; Steven Laufer; Daniel R. Ringo
    Abstract: Data collected under the Home Mortgage Disclosure Act (HMDA) reveal that the largest banks have significantly reduced their share of mortgage lending to low- and moderate-income (LMI) households in recent years.
    Date: 2017–09–28
  27. By: Scholz, Robert
    Abstract: In the varieties of capitalism literature, Germany is understood as a monolithic model of a coordinated market economy. This analysis shows how institutions for configuring capital and labour at the national level are implemented at state and regional level. By focussing on the labour side this article gives a contribution to the investor dominated shareholder value discussion. It identifies a spatial distinction between capital and labour and concludes a variation of German Models instead of one German Model.
    Keywords: Corporate Governance,Labour-Management Relations,Political Economy,Size and Spatial Distributions of Regional Economic Activity,Unternehmensführung,Arbeitgeber-Arbeitnehmer-Beziehungen,Politische Ökonomie,Räumliche Verteilung regionalökonomischer Aktivitäten
    JEL: G34 J53 P16 R12
    Date: 2017
  28. By: Gustavsson Tingvall, Patrik (The Ratio Institute); Videnord, Josefin (The Ratio Institite)
    Abstract: This paper explores regional variation in the effects of publicly sponsored R&D grants on SME performance. The results suggest that there is no guarantee that the grants will impact firm growth, either positive or negative. Studying the heterogeneity of the results, positive growth effects are most likely to be found for publicly sponsored R&D grants targeting SMEs located in regions abundant with skilled labor, whereas the opposite is found for SMEs located in regions with a limited supply of skilled workers.
    Keywords: R&D grants; SME; Economic growth; Regional growth; Selective policies
    JEL: H81 O18 O38 O40 R11 R58
    Date: 2017–04–18
  29. By: Subhra Saha; Joseph Staudt; Bruce Weinbergx
    Abstract: We estimate the local productivity spillovers from science by relating wages and real estate prices across metros to measures of scienti c activity in those metros. We address three fundamental challenges: (1) factor input adjustments using wages and real estate prices, along with Shepards Lemma, to estimate changes metros' productivity, which must equal changes in unit production cost; (2) unobserved differences in metros/causality using a share shift index that exploits historic variation in the mix of research in metros interacted with trends in federal funding for specific fields as an instrument; (3) unobserved differences in workers using data on the states in which people are born. Our estimates show a strong positive relationship between wages and scientifc research and a weak positive relationship for real estate prices. Overall, we estimate high rate of return to research.
    JEL: J3 R11 O33
    Date: 2017–01
  30. By: Grafström, Jonas (The Ratio Institute); Söderholm, Patrik (Luleå University of Technology); Gawel, Erik; Lehmann, Paul; Strunz, Sebastian
    Abstract: Bottom-up processes of policy convergence are increasingly discussed as a substitute for the absence of supranational energy policy coordination and harmonization in the EU. The overall objective of this paper is to analyse the development of government support to renewable energy R&D across EU countries over time: does the empirical evidence suggest bottom-up convergence? In order to answer this question, we first construct country-specific R&D-based knowledge stocks, and then investigate whether the developments of these stocks tend to converge or diverge across EU countries. A data set covering 12 EU Member States over the time period 1990-2012 is employed to test for the presence of conditional -convergence using a bias-corrected dynamic panel data estimator. The empirical results are overall robust and suggest divergence in terms of public R&D-based knowledge build-up in renewable energy technology. This finding is consistent with free-riding behavior on the part of some Member States, and the presence of industrial policy motives in other States in combination with agglomeration effects in the renewable energy sector. Energy import dependence and electricity regulation are found to influence the growth of the R&D-based knowledge stock, and the deregulation of the EU electricity markets has tended to contribute to a lower speed of divergence.
    Keywords: renewable energy sources; public R&D support; convergence; European Union
    JEL: O44 Q40 Q55
    Date: 2017–09–25
  31. By: Michael Alexeev (Indiana University); Yao-Yu Chih (Texas State University)
    Abstract: We apply both conventional and spatial techniques to panel data for US states to examine the effects of plausibly exogenous oil price shocks on economic growth. Contrary to the oil curse claims, we find that oil price shocks have numerically moderate but highly statistically significant positive direct effects on growth while the indirect effects are insignificant. We also find that positive impact of oil occurs only in states with a high value of the economic freedom index. In a technical contribution to the spatial econometrics literature we propose a procedure for estimating marginal effects of oil price shocks in a model with interaction terms. In addition, we show that the cumulative direct oil price effects on economic growth are persistent over time.
    Keywords: oil curse, regional economic growth, spatial lags
    Date: 2017–10
  32. By: Miral, Romulo Jr. E.M.
    Abstract: The paper aims to consider potential benefits of federalism to the Philippines within the context of two major development constraints, namely, weak economic growth and poverty. The governance and institutional aspects of these development constraints point to how continued centralization of fiscal powers and the resulting common resource pool problem have weakened government capacity to bring about inclusive development. Critical to the success of decentralization and fiscal federalism efforts is a strong middle level government, which is absent in the current setup. The establishment of regional governments, its powers and functions and its relation to the national government and local governments, is the most crucial element in the shift from a unitary to a federal form of government. It is recommended that the proposed shift be carried out in two stages. The first stage will deal with assignment of competencies and the relationship between the national government and regional government, with the power to organize the local governments being one of the competencies exclusively assigned to the latter. The second stage will tackle the regional government and its local governments. Each regional government should come up with its own regional constitution or organic act that could be drafted through a regional constitutional convention.
    Keywords: Philippines, federalism, decentralization, autonomous region, local government
    Date: 2017
  33. By: Donna Feir & M. Chris Auld (Department of Economics, University of Victoria)
    Abstract: We study the effects of Canadian Indian residential schooling on two anthropometric measures of health during childhood: adult height and body weight. We use repeated cross-sectional data from the 1991 and 2001 Aboriginal Peoples Surveys and detailed historical data on school closures and location to identify the effect of residential schooling on these outcomes. We find some evidence that on average residential schooling increases adult height and decreases adult body weight of those that attended. However, these effects are concentrated after the 1950s when the schools were subject to tighter health regulations and students were selected to attend residential school based partly on their need for medical care that was otherwise unavailable. Residential schooling is only one policy in Canada that impacted Status Indian peoples’ health, so our results must be understood in the broader social context. We also document significant increases in height and body weight for Status Indian people born after the 1960s which is suggestive of non-trivial changes in diet and living conditions during this time period.
    Keywords: Indigenous peoples, residential schools, health, stature, weight, identity, schooling
    JEL: I12 I14 I15 I18 N32
    Date: 2017–10–11
  34. By: Alison E. Weingarden
    Abstract: The U.S. unemployment rate has fallen steadily since 2010, indicating broad-based improvement in the labor market. However, disaggregated measures reveal divergences between regions and types of workers. This note documents two geographic disparities in the U.S. labor market.
    Date: 2017–09–25
  35. By: Bouyon, Sylvain
    Abstract: In this ECRI Commentary, Sylvain Bouyon, Research Fellow at ECRI and CEPS, offers an up-to-date analysis of recent trends and developments in European mortgage markets. Ten years ago, persistent dysfunctionalities on mortgage markets inherited from the previous decade greatly contributed to the largest financial crisis in half a century. Since then, significant deleveraging processes have been observed in some EU markets, such as Ireland, Portugal and Spain, where the ratios of outstanding residential lending to household disposable income have contracted markedly. In these economies, the 2016 volumes recorded for both outstanding and gross residential lending were much below 2007 levels, although a timid recovery could be observed in recent years. By contrast, the volume of mortgage activities moved around significant upward paths in Belgium, France, Germany and Sweden, and stagnated somewhat in the Netherlands and Denmark. In terms of products, excluding Sweden, the share of adjustable-rate mortgages (ARMs) for gross residential lending has been moving along downward trends in all the analysed mortgage markets. And these downward trends have deepened in all countries (excluding the UK and Sweden) in the last three years. As a result, the aggregate ARM market share contracted markedly in the last decade. Whereas fluctuations in current spreads between ARM rates and fixed-rate mortgage (FRM) rates appeared overall to be a powerful driver behind the ARM market share over the last decade, this impact seemed to trail off in the last four years. In the current context where FRMs are considered to be historically low, many households are likely to anticipate increases in fixed interest rates on the foreseeable horizon, resulting in greater preference for FRMs, no matter the level of spreads. Other factors related to mortgage and household characteristics could also impact on this preference for FRMs: the average amount of mortgages, evolution of household income, etc. Finally, some encouraging signs of convergence in recent years in spreads, ARM market shares as well as ratios of household residential debt to disposable income could contribute somehow to reinforcing the consistency and efficiency of euro monetary policy.
    Date: 2017–05
  36. By: Kristina Sonmark; Nóra Révai; Francesca Gottschalk; Karolina Deligiannidi; Tracey Burns
    Abstract: What is the nature of teachers’ pedagogical knowledge? The Innovative Teaching for Effective Learning Teacher Knowledge Survey (ITEL TKS) set out to answer this question in a pilot study that ran in five countries: Estonia, Greece, Hungary, Israel and the Slovak Republic. Using convenience samples, the pilot assessed the pedagogical knowledge base of teachers, teacher candidates and teacher educators. Pedagogical knowledge was broken down into the domains of assessment, instructional processes and learning processes. The link between teachers’ knowledge and characteristics of teacher education systems, opportunities to learn and motivational characteristics was also examined. The ITEL TKS pilot demonstrated the feasibility of researching teachers’ pedagogical knowledge profiles across countries, and validated an innovative instrument for assessing general pedagogical knowledge in an internationally comparative way. It also allowed for reflection on potential adaptations to strengthen the design of future work. The results serve as a template for a larger-scale study to explore teacher knowledge and competences in nationally representative samples.
    Date: 2017–10–11
  37. By: Aline Bütikofer; Giovanni Peri
    Abstract: There is growing evidence that cognitive and noncognitive skills affect the economic and social outcomes of individuals. In this paper, we analyze how they affect the migration decisions of individuals during their lifetimes. We use data that combine military enlistment and administrative records for the male population born in 1932 and 1933 in Norway. Records of interviews with a psychologist at age 18 allow us to construct an index of `sociability' and `adaptability' for each individual, as well as an index of cognitive ability, the intelligence quotient. We find that adaptability and cognitive ability have significant and positive impacts on the probability of an individual migrating out of his area, whether this involves rural--urban, long distance, or international migration. Adaptability has a particularly strong impact on migration for individuals with low cognitive skills, implying a strong positive selection of less educated migrants with respect to the (previously unobserved) adaptability skill. We also show that cognitive skills have a strong positive effect on the pre- and post-migration wage differential, whereas adaptability has no significant effect. Moreover, individuals with high cognitive ability migrate to areas with large wage returns to cognitive abilities, whereas this is not true for individuals with high adaptability. This evidence suggests that adaptability reduces the psychological cost of migrating, whereas cognitive skills increase the monetary returns associated with migration.
    JEL: J24 J61 R23
    Date: 2017–09
  38. By: Larsson, Johan P (Jönköping International Business School); Wennberg, Karl (The Ratio Institute); Wiklund, Johan (Whitman School of Management); Wright, Mike (Imperial College London South Kensington Campus)
    Abstract: We review complementary theoretical perspectives on location choices of university graduate entrepreneurs derived from the individual-opportunity nexus and local embeddedness perspectives on entrepreneurship. Analysis of the full population of 215,388 graduates from Swedish institutions of higher education between 2002 and 2006 provides support for both location choice perspectives. Overall, 63 % of graduate entrepreneurs start businesses locally in their region of graduation while 37 % start businesses elsewhere. The likelihood of starting locally is substantially higher in metropolitan regions, if the graduate was born locally or has university peer entrepreneurs and entrepreneurial family members in the region of graduation. Implications for theory and public policy are discussed.
    Keywords: Entrepreneurship; Location choice; Universities
    JEL: J61 M13 O18
    Date: 2017–08–07
  39. By: Nezih Guner (CEMFI); Christopher Rauh (University of Montreal); Elizabeth Caucutt (University of Western Ontario)
    Abstract: The differences between black and white households and family structure have been a concern for policy makers for a long time. The last few decades, however, have witnessed an unprecedented retreat from marriage among black individuals. In 1970, about 89% of black women between ages 25 and 54 were ever married, in contrast to only 51% today. Wilson (1987) suggests that the lack of marriageable black men due to incarceration and unemployment is behind this decline. In this paper, we take a fresh look at the Wilson Hypothesis. We argue that the current incarceration policies and labor market prospects make black men much riskier spouses than white men. They are not only more likely to be, but also to become, unemployed or incarcerated than their white counterparts. We develop an equilibrium search model of marriage, divorce and labor supply that takes into account the transitions between employment, unemployment and prison for individuals by race, education, and gender. We calibrate this model to be consistent with key statistics for the US economy. We then investigate how much of the racial divide in marriage is due to differences in the riskiness of potential spouses, heterogeneity in the education distribution, and heterogeneity in wages. We find that differences in incarceration and employment dynamics between black and white men can account for about 76% of the existing black-white marriage gap in the data. We also study how "The War on Drugs" in the US might have affected the structure of black families, and find that it can account for between 13% to 41% of the racial marriage gap.
    Date: 2017
  40. By: Robert S. Chirinko; Daniel J. Wilson
    Abstract: Dramatic declines in capital tax rates among U.S. states and European countries have been linked by many commentators to tax competition, an inevitable “race to the bottom,” and underprovision of local public goods. This paper analyzes the reaction of capital tax policy in a given U.S. state to changes in capital tax policy by other states. Our study is undertaken with a novel panel data set covering the 48 contiguous U.S. states for the period 1965 to 2006 and is guided by the theory of strategic tax competition. The latter suggests that capital tax policy is a function of “foreign” (out-of-state) tax policy, preferences for government services, home state and foreign state economic and demographic conditions. The slope of the reaction function – the equilibrium response of home state to foreign state tax policy – is negative, contrary to casual evidence and many prior empirical studies of fiscal reaction functions. This result, which stands in contrast to most published findings, is due to two critical elements – allowing for delayed responses to foreign tax changes and for heterogeneous responses to aggregate shocks. Omitting either of these elements leads to a misspecified model and a positively sloped reaction function. Our results suggest that the secular decline in capital tax rates, at least among U.S. states, reflects synchronous responses among states to common shocks rather than competitive responses to foreign state tax policy. While striking given prior empirical findings, these results are fully consistent with the qualitative and quantitative implications of the theoretical model developed in this paper and presented elsewhere in the literature. Rather than “racing to the bottom,” our findings suggest that states are “riding on a seesaw.” Consequently, tax competition may lead to an increase in the provision of local public goods, and policies aimed at restricting tax competition to stem the tide of declining capital taxation are likely to be ineffective.
    Keywords: Tax Competition, State Taxation, Reaction Functions, Capital Taxation
    JEL: H71 H77 H25 H32
    Date: 2017–08
  41. By: Phuc Luong (University of California Davis); Lester Lusher (University of Hawaii at Manoa); Vasil Yasenov (Goldman School of Public Policy, University of California Berkeley)
    Abstract: Recent correlational studies and media reports have suggested that sleep regularity - the variation in the amount of sleep one gets across days - is a stronger determinant of student success than sleep duration - the total amount of sleep one receives. We identify the causal impacts of sleep regularity and sleep duration on student success by leveraging over 165,000 student-classroom observations from a large university in Vietnam where incoming freshmen were randomly assigned into course schedules. These schedules varied significantly: some had the same daily start time across the week, while others experienced extreme shifts. Across a multitude of specifications and samples, we precisely estimate no discernible differences in achievement between students with highly varying start times versus students with consistent schedules. Moreover, we find much smaller gains to delayed school start times compared to previous studies.
    Keywords: School Start Time, Sleep Regularity, Education Policy
    JEL: I20 I21 I23
    Date: 2017–10
  42. By: Anna Piil Damm (Department of Economics and Business Economics, Aarhus University, Denmark); Britt Østergaard Larsen (The Danish Centre for Applied Social Science); Helena Skyt Nielsen (Department of Economics and Business Economics, Aarhus University, Denmark); Marianne Simonsen (Department of Economics and Business Economics, Aarhus University, Denmark)
    Abstract: This paper exploits a Danish policy reform combined with population-wide administrative registers to investigate whether being above the minimum age of criminal responsibility deters juveniles from crime. We study young individuals’ tendency to commit crime as well as their likelihood of recidivism by exploiting police records on offenses committed by the population of children and youth, including those below the minimum age of criminal responsibility. The reform lowered the minimum age of criminal responsibility from 15 to 14 years. We find that the reform did not deter 14-year-olds from committing crime. Moreover, conditional on committing crime in the first place, youths affected by the lower minimum age of criminal responsibility were more likely to recidivate and less likely to be enrolled in the 9th grade, just as they have lower grades at the 9th grade exit exam, conditional on participating. The latter results are consistent with labeling effects of processing in the criminal justice system.
    Keywords: Juvenile delinquency, sanctions, general deterrence, individual deterrence, labeling effects
    JEL: K14 K42 I21
    Date: 2017–10–12
  43. By: Lisa J. Dettling; Joanne W. Hsu; Lindsay Jacobs; Kevin B. Moore; Jeffrey P. Thompson
    Abstract: Data from the newly released 2016 Survey of Consumer Finances show wealth has grown for families across race and ethnicity groups since 2013, but substantial disparities between groups persist.
    Date: 2017–09–27
  44. By: Francesca Foliano (Department of Economics); Francis Green (UCL London); Marcello Sartarelli (Dpto. Fundamentos del Análisis Económico)
    Date: 2017–10

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