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on Urban and Real Estate Economics |
| By: | Grégory Claeys; Konstantinos Efstathiou; Dirk Schoenmaker |
| Abstract: | This paper is accompanied by an online annex Housing bubbles are a well-known source of financial instability. In addition, given the importance of this sector to the economy, the collapse of such bubbles tends to be followed by deeper recessions and slower recoveries than other crises, as the recent boom-bust housing cycles in many countries have clearly demonstrated. In the European Union, the policy instruments available to address this and to prevent future housing bubbles are implemented either at the national level (macroprudential policies) or at the euro-area level (monetary policy). However, recent research suggests that house price developments and bubbles are above all a local phenomenon. There are significant regional differences in house price developments within EU countries, in particular between capital cities and other regions. Our results suggest that house price fluctuations in capital cities tend to be more volatile and stronger than in the rest of the countries, warranting more targeted measures at the local level. The authors propose to use differentiated macroprudential policy at the regional level. This could be done with the application of different loan-to-value (LTV) or debt-to-income (DTI) limits for mortgages in capital cities and in the rest of the countries, in order to tighten policy more quickly in areas more prone to overheating. This type of policy has already been successfully applied in Korea. Competent authorities in the EU should consider adding this instrument to their toolkits in order to increase the precision, and therefore the effectiveness, of their policies. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:22404&r=ure |
| By: | Frattini, Tommaso (University of Milan); Meschi, Elena (Università Ca’ Foscari di Venezia) |
| Abstract: | This paper provides new evidence on how the presence of immigrant peers in the classroom affects native student achievement. The analysis is based on longitudinal administrative data on two cohorts of vocational training students in Italy's largest region. Vocational training institutions provide the ideal setting for studying these effects because they attract not only disproportionately high shares of immigrants but also the lowest ability native students. We adopt a value added model, and exploit within-school variation both within and across cohorts for identification. Our results show small negative average effects on maths test scores that are larger for low ability native students, strongly non-linear and only observable in classes with a high (top 20%) immigrant concentration. These outcomes are driven by classes with a high average linguistic distance between immigrants and natives, with no apparent role played by ethnic diversity. |
| Keywords: | immigration, education, peer effects, vocational training, language |
| JEL: | I20 J15 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11027&r=ure |
| By: | Rodríguez-Pose, Andrés; von Berlepsch, Viola |
| Abstract: | Does population diversity matter for economic development in the long-run? Does the impact of diversity differ over time? This paper traces the short-, medium-, and long-term economic impact of population diversity resulting from the big migration waves of the late 19th and early 20th centuries to the United States (US). Using census data from 1880, 1900, and 1910, the settlement pattern of migrants across the counties of the 48 US continental states is tracked in order to construct measures of population fractionalisation and polarisation at county level. Factors which may have influenced both the individual settlement decision at the time of migration as well as county-level economic development in recent years are controlled for. The results of the analysis show that high levels of population fractionalisation have a strong and positive influence on economic development in the short-, medium-, and long-run. High levels of polarisation, by contrast, undermine development. Despite a stronger effect on income levels in the first 30 years, these relationships are found to be extremely long-lasting: counties with a more heterogeneous population composition over 130 years ago are significantly richer today, whereas counties that were strongly polarised at the time of the migration waves have endured persistent negative economic effects. |
| Keywords: | Counties; diversity; economic development; Fractionalisation; Polarisation; USA |
| JEL: | J15 J61 O43 R11 R23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12347&r=ure |
| By: | Marco Modica (CNR IRCrES); Alessandro Belmonte (IMT Lucca); Vincenzo Bove (University of Warwick); Giovanna D’Inverno (IMT Lucca) |
| Abstract: | We explore whether investment in public school infrastructure affects students’ achievement. We use data on extra funding to public high schools after the 2012 Northern Italy earthquake and apply a quasi-experimental design and an instrumental variable strategy. We find that spending on school infrastructure increases standardized test scores in mathematics and Italian language, and the effect is stronger for lower-achieving students and in mathematics.These results provide evidence in favor of a positive impact of capital spending in improving the learning environment and performances of high school students. |
| Keywords: | Living standards; Wages; Multipliers; High-technology; Cities; Inequality |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2017-20&r=ure |
| By: | Mark J. Chin; Thomas J. Kane; Whitney Kozakowski; Beth E. Schueler; Douglas O. Staiger |
| Abstract: | In 2011-12, Newark launched a set of educational reforms supported by a gift from Facebook CEO Mark Zuckerberg and Priscilla Chan. Using data from 2009 through 2016, we evaluate the change in Newark students’ achievement growth relative to similar students and schools elsewhere in New Jersey. We measure achievement growth using a “value-added” model, controlling for prior achievement, demographics and peer characteristics. By the fifth year of reform, Newark saw statistically significant gains in English and no significant change in math achievement growth. Perhaps due to the disruptive nature of the reforms, growth declined initially before rebounding in recent years. Aided by the closure of low value-added schools, much of the improvement was due to shifting enrollment from lower- to higher-growth district and charter schools. Shifting enrollment accounted for 62 percent of the improvement in English. In math, such shifts offset what would have been a decline in achievement growth. |
| JEL: | H41 H43 I21 I24 I28 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23922&r=ure |
| By: | Jaegeum Lim; Jonathan Meer |
| Abstract: | Obesity among children is an important public health concern, and social networks may play a role in students' habits that increase the likelihood of being overweight. We examine data from South Korean middle schools, where students are randomly assigned to classrooms, and exploit the variation in peer body mass index. We use the number of peers' siblings as an instrument to account for endogeneity concerns and measurement error. Heavier peers increase the likelihood that a student is heavier; there is no spurious correlation for height, which is unlikely to have peer contagion. Public policy that targets obesity can have spillovers through social networks. |
| JEL: | I12 J13 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23901&r=ure |
| By: | Bazzi, Samuel; Gaduh, Arya; Rothenberg, Alexander; Wong, Maisy |
| Abstract: | Throughout history, many governments have introduced policies to unite diverse groups through a shared sense of national identity. However, intergroup relationships at the local level are often slow to develop and confounded by spatial sorting and segregation. We shed new light on the long-run process of nation building using one of history's largest resettlement programs. Between 1979 and 1988, the Transmigration program in Indonesia relocated two million voluntary migrants from the Inner Islands of Java and Bali to the Outer Islands, in an effort to integrate geographically segregated ethnic groups. Migrants could not choose their destinations, and the unprecedented scale of the program created hundreds of new communities with varying degrees of diversity. We exploit this policy-induced variation to identify the nonlinear ways in which diversity shapes incentives to integrate more than a decade after resettlement. Using rich data on language use at home, marriage, and identity choices, we find stronger integration in diverse communities. To understand why changes in diversity did not lead to social anomie or conflict, we identify mechanisms that influence intergroup relationships, including residential segregation, cultural distance, and perceived economic and political competition from migrants. Overall, our findings contribute lessons for the design of resettlement policies and provide a unique lens into the intergenerational process of integration and nation building. |
| Keywords: | Cultural change; diversity; identity; Language; migration; Nation building |
| JEL: | D02 D71 J15 O15 R23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12377&r=ure |
| By: | Pei-Ju Liao; Ping Wang; Yin-Chi Wang; Chong Kee Yip |
| Abstract: | Observing rapid structural transformation accompanied by a continual process of rural to urban migration in many developing countries, we construct a micro founded dynamic framework to explore how important education-based migration is, as opposed to work-based migration, for economic development, urbanization and city workforce composition. We then calibrate our model to fit the data from China over the period from 1980 to 2007, a developing economy featuring not only large migration flows but major institutional reforms that may affect work and education based migration differently. We find that, although education-based migration only amounts to one-fifth of that of work-based migration, its contribution to the enhancement of per capita output is larger than that of work-based migration. Moreover, the abolishment of the government job assignment for college graduates and the relaxation of the work-based migration have limited effects on economic development and urbanization. Furthermore, the increase in college admission selectivity for rural students plays a crucial but negative role in China's development, lowering per capita output and worsening the high-skilled employment share in urban areas. |
| JEL: | O15 O53 R23 R28 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23939&r=ure |
| By: | Thiemann, Petra (Lund University) |
| Abstract: | This paper demonstrates that short-term peer exposure can generate achievement effects which persist for several months and years. I study a mandatory freshmen week for first-year undergraduates and exploit the random assignment of students to freshmen teams. I find that the freshmen week contributes to the formation of persistent social ties. Furthermore, peers' observable characteristics impact college achievement for up to three years. Ability peer effects are non-linear, i.e. very high or low levels of average peer ability in a group harm students' grades. These effects are most pronounced for low-ability students. |
| Keywords: | peer effects, higher education, natural experiment, gender, region of origin, ability |
| JEL: | I21 I23 J24 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11024&r=ure |
| By: | Girsberger, Esther Mirjam (University of Lausanne) |
| Abstract: | I study individual location, education and work decisions in a dynamic life-cycle model in a developing country. I estimate the model exploiting panel data on migrants and stayers in Burkina Faso, and cross-sectional data on permanent emigrants. Individuals self-select into migration and locations based on education. Migration to urban centres increases with education, while migrants at the extremes of the education distribution tend to move abroad. Local unemployment rates, skilled work opportunities and returns to education result in differential expected income gains across locations and hereby explain the complex migration pattern observed. Large income gains from migration are partially offset by direct and indirect migration costs, as well as by higher investment in education (for rural migrants). Migration prospects to urban centres drive education choices of rural individuals. Hence, migration policies can be used to stimulate educational attainment in rural regions. |
| Keywords: | migration, education, life-cycle model, simulated method of moments, Burkina Faso |
| JEL: | J61 O15 R58 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11028&r=ure |
| By: | McIndoe-Calder, Tara (Central Bank of Ireland) |
| Abstract: | Households reduced their debt levels by a fifth between 2008 and 2014. This pattern of deleveraging differs markedly across the age distribution. Young borrowers (born after 1970) reduced their debt levels by 13% compared to 35% for Older borrowers (born before 1960). The difference arises because Young borrowers have larger mortgages - and longer remaining loan durations, and therefore a greater share of repayments is an interest payment. Mortgage repayments for the typical tracker borrower have fallen by 34% since 2008. SVR borrowers’ repayments have fallen by just 9%. Relative to Older borrowers, Young borrowers are more likely to be on a tracker rate, reflecting the mortgage products available at loan origination. However, Young borrowers continue to face a heavy debt-burden and are at risk of higher interest rates in the future. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:11/el/17&r=ure |
| By: | Sergio Rebelo (Northwestern University); Arlene Wong (Federal Reserve Bank of Minneapolis); Eric Anderson (Northwestern University) |
| Abstract: | How does the margin of price over costs vary across firms and products? How does the price margin vary over the business cycle? Do firms adjust their mark-ups or other dimensions of production in response to different types of aggregate shocks? Answering these questions is crucial for distinguishing between different macro models of firm dynamics, and for understanding the nature of business cycles and employment dynamics. In this paper, we provide direct evidence on the cross-sectional distribution and cyclicality of price margins, rather than relying on parametric assumptions on production functions and demand systems. We use a unique data source of prices and marginal costs from a large U.S. retailer, as well as firm-level data on gross margins and profits for large firms in the retail sector. We describe a simple geography model in the spirit of Melitz (2003) that is consistent with our empirical findings. We discuss the implications of these models for spatial variation, employment and regional inequality following aggregate economic shocks. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:899&r=ure |
| By: | ISHIKAWA Yoshifumi; NAKAMURA Ryohei |
| Abstract: | Various types of policies related to economic promotion and population growth have been implemented for regional revival. The economic effects of these policies are generally estimated using an intra-regional input-output model, and these policies are evaluated by indexes such as production, value added, and labor income. However, one major issue with the intra-regional model commonly used is how to endogenize private household consumption that can be linked to labor income. Labor income estimated by the conventional model is not the net regional income, but rather, the gross regional income. That is, the gross regional income is distributed to the other region due to interregional commuting, and some part of the consumption demand of households living in a region is allocated to the other region. Therefore, the conventional model may overestimate the economic effects of the own region. In this study, we developed an interregional input-output model with interregional commuting and consuming regions and considered a new method for analyzing the economic effects of such promotion policies for a small region. As an example, we analyzed the effects of some regional policies for Fuji City using this model and found that analysis using the conventional model overestimates the economic effects of Fuji City. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:17061&r=ure |
| By: | Ruediger Bachmann; Sebastian Rüth |
| Abstract: | What are the macroeconomic consequences of changing aggregate lending standards in residential mortgage markets, as measured by loan-to-value (LTV) ratios? In a structural VAR, GDP and business investment increase following an expansionary LTV shock. Residential investment, by contrast, falls, a result that depends on the systematic reaction of monetary policy. We show that, historically, the Fed tended to respond directly to expansionary LTV shocks by raising the monetary policy instrument, and, as a result, mortgage rates increase and residential investment declines. The monetary policy reaction function in the US appears to include lending standards in residential markets, a finding we confirm in Taylor rule estimations. Without the endogenous monetary policy reaction residential investment increases. House prices and household (mortgage) debt behave in a similar way. This suggests that an exogenous loosening of LTV ratios is unlikely to explain booms in residential investment and house prices, or run ups in household leverage, at least in times of conventional monetary policy. |
| Keywords: | loan-to-value ratios, monetary policy, residential investment, structural VAR, Cholesky identification, Taylor rules |
| JEL: | E30 E32 E44 E52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6458&r=ure |
| By: | Mense, Andreas |
| Abstract: | The German Energy Performance of Buildings Directive requires sellers on the housing market to provide detailed information on expected yearly energy consumption per square meter. This paper uses variation in local fuel prices and climate, fuel types, and building ages to analyze the relationship between expected energy cost savings from energy efficient building structure and house prices in Germany. Results suggest that heating cost considerations are less relevant than previously thought. |
| JEL: | R21 R31 Q40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168212&r=ure |
| By: | Eder, Christoph; Halla, Martin |
| Abstract: | After World War II, Austria was divided into four occupation zones for 10 years. We exploit the migration shock out of the Soviet zone to understand why economic activity is distributed unevenly in space. We show that the distorted population distribution has fully persisted until now. More direct measures of economic activity show an even higher concentration in the former non-Soviet zone. This gap in economic activity is growing over time, mainly due to commuting out of the former Soviet zone. |
| JEL: | R12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168127&r=ure |
| By: | Rybicki, Jakub |
| Abstract: | This paper analyses the effect of migration on other adaptation measures and on mitigation from a political economy perspective. Mitigation is represented by an ecotax while adaptation is represented by a dike. In our model, we focus on a coastal region where individuals are heterogeneous in income and location and where flood risk exists. A main result is that the option to move away decreases the political support for mitigation while the effect on adaptation can be positive or negative. |
| JEL: | D70 Q54 R23 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168190&r=ure |
| By: | Jahn, Vera |
| Abstract: | German politicians frequently emphasize the importance of Mittelstand firms for the economy, thereby particularly referring to their enormous engagement in training apprentices. However, there is yet almost no empirical evidence on the question whether Mittelstand firms are in fact excessively active in training apprentices. We study whether the relative importance of owner-managed small and medium sized enterprises has an effect on firms' apprenticeship activity on the county level. |
| JEL: | C21 D23 I21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168260&r=ure |
| By: | Joan Monras (CEMFI and CEPR); Javier Vázquez-Grenno (Universitat de Barcelona and IEB); Ferran Elias (University of Copenhagen) |
| Abstract: | This paper investigates the consequences of the legalization of around 600,000 immigrants by the unexpectedly elected Spanish government of Zapatero following the terrorist attacks of March 2004 (Garcia-Montalvo, 2011). Using detailed data from payroll-tax revenues, we estimate that each newly legalized immigrant increased local social-security revenues by 3,504 Euros on average. This estimate is only 49 percent of what we would have expected from the size of the newly documented immigrants, which suggests that newly legalized immigrants probably earned lower wages than, and maybe affected the labor-market outcomes of, other workers. We estimate that the policy change deteriorated the labor-market outcomes of some low-skilled natives and immigrants and improved the outcomes of highskilled natives and immigrants. This led some low-skilled immigrants to move away from high-immigrant locations. Correcting for internal migration and selection, we obtain that each newly legalized immigrant increased payroll-tax re nues by 4,368 Euros or 25 percent more than the raw payroll-tax revenue data estimates. This shows the importance of looking both at public revenue data and the labor market to understand the consequences of amnesty programs fully. |
| Keywords: | Immigration, undocumented immigrants, public policy evaluation |
| JEL: | F22 J31 J61 R11 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1708&r=ure |
| By: | Andersson , Henrik (Toulouse School of Economics); Hultkrantz , Lars (Örebro University); Lindberg , Gunnar (The Institute of Transport Economics, Norway); Nilsson , Jan-Eric (VTI) |
| Abstract: | Beginning as a planning tool within the national road administration in the early 1970s, benefit-cost analysis (BCA) became a pillar of national transport policy because of strategic choices made by the national parliament. The Transport Policy Act of 1979 established marginal instead of average cost as the overarching principle for pricing of transport. The subsequent 1988 Act separated rail infrastructure from train-service provision. Both policy updates made it necessary to widen the analysis of costs to include also externalities and a foregone conclusion was that efficient investment priorities should be made based on BCA. But no one asked whether the political decision makers or the BCA models were apt to that task. This paper reviews the current state of BCA for transport infrastructure investment and considers design issues that have been and still are debated, also providing a benchmark description of how these issues have been addressed elsewhere. Moreover, the role of BCA as a platform for prioritization of investment project is reviewed. |
| Keywords: | Benefit-cost analysis; Rail; Road; Sweden; Transport |
| JEL: | H43 H54 R42 |
| Date: | 2017–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2017_012&r=ure |
| By: | José Garcia Montalvo; Marta Reynal-Querol |
| Abstract: | The relationship between ethnic heterogeneity and economic growth is complex. Empirical research working with cross-country data nds a negative, or statistically insignificant, relationship. However, research at the city level usually finds a positive relationship between diversity and wages/productivity. Generally, the trade-off between the economic benefits of diversity and the costs of heterogeneity implies that the relationship between diversity and growth depends on the size of the area used as the unit of observation. In this paper we perform a systematic analysis of the effect of the size of geographical units on the relationship between ethnic diversity and growth. We nd a positive relationship for small geographical areas and no effect for large areas and countries. There are potentially different mechanisms that can explain this result depending on the structure of the economy and its level of development. In the case of Africa, we argue that a possible explanation of the positive relationship between diversity and growth is the increase in trade at the boundaries between ethnic groups due to ethnic specialization. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1585&r=ure |
| By: | Zhou, Haiwen |
| Abstract: | This paper studies a general equilibrium model of rural-urban migration in which manufacturing firms engage in oligopolistic competition and choose increasing returns technologies to maximize profits. Urban residents incur commuting costs to work in the Central Business District. Surprisingly a change in the size of the population or an increase in the exogenously given wage rate will not affect a manufacturing firm’s choice of technology. This helps to explain why firms in developing countries may not adopt labor intensive technologies even under abundant labor supply. An increase in the number of manufacturing firms increases both the employment rate and the level of employment in the manufacturing sector. However, manufacturing firms choose less advanced technologies. Capital accumulation leads manufacturing firms to choose more advanced technologies, but may not increase employment in the manufacturing sector. |
| Keywords: | Economic development, the choice of technology, rural-urban migration, increasing returns, urbanization |
| JEL: | O14 O18 R14 |
| Date: | 2017–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48295&r=ure |
| By: | Tung Manh Ho; Hong Kong Nguyen-To; Thu-Trang Vuong; Quan-Hoang Vuong |
| Abstract: | The study examines the co-authoring behaviors of 412 Vietnamese social scientists over the 2008-2017 period via a new method – social network analysis – to determine if these researchers have formed sustainable scientific communities, using Scopus data. The dataset provides an insightful look into the predominant form of collaboration, i.e. co-authorship, within the Vietnamese social science research communities. Through basic network metrics such as density and clustering coefficient, the study hypothesizes that the socially sustainable research communities are those with low clustering and high density. As any scholar’s position in a network can be specified by three quantities: number of publications, connections, and years in research, the distance metrics from the most productive to the rest are computed and compared. The study hypothesizes that if the distance is too large; it reflects the socially unsustainable situation in the network. The results indicate that certain level of social unsustainability exists in social sciences groups in Vietnam. Though the results are only indicative, it has opened up a fertile space for future enquiry into this matter. |
| Keywords: | publishing behavior; co-authoring behavior; sustainable scientific communities; social sustainability distance; social network analysis |
| JEL: | D85 D91 Q01 |
| Date: | 2017–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/260048&r=ure |
| By: | Januschke, Oskar; Egg, Jakob; Mairhofer, Michael; Wimmer, Thomas; Reichl, Wolfgang; Ruhle, Ernst-Olav |
| Abstract: | The region of Lienz in Eastern Tyrol is a pioneer in municipal broadband networks and the activities take place in a state which itself also has a pioneering role in terms of how the public sector understands broadband issues. Over the last years, the 15 municipalities in the area of Lienz have initiated a project against the background of the following setting: 1. The municipalities in the region have taken the responsibility for deploying the passive network (ducts and fibers) based on a FTTB(H concept, partly supported by state aid. 2. The municipalities are confronted with a large number of tasks for the deployment and the operation and maintenance of the network. The selection of network providers for the active network and the provision of services has attracted wider interest. 3 active operators ensure competition in the end user market. The key aspects that remain as tasks for the municipality are network operation, maintenance, installation, fault repair, inspection and documentation. A number of lessons learnt can be listed especially with respect to processes for network deployment, maintenance, inspection etc. Municipalities have to dive into detailed operational details in order to achieve successful project results. Such detailed aspects of the project contain e.g. the fiber concept, the connections to the buildings, a delineation between tasks of operators and municipalities, inspection, documentation and operation and maintenance. A key factor is that projects tend to be small and struggle to achieve economies of scale |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse17:169468&r=ure |
| By: | Peter Leopold S. Bergman; Eric W. Chan |
| Abstract: | While leveraging parents has the potential to increase student performance, programs that do so are often costly to implement or they target younger children. We partner text-messaging technology with school information systems to automate the gathering and provision of information to parents at scale. In a field experiment across 22 middle and high schools, we used this technology to send automated text-message alerts to parents about their child’s missed assignments, grades and class absences. We pre-specified five primary outcomes. The intervention reduces course failures by 38% and increases class attendance by 17%. Students are more likely to be retained in the district. The positive effects are particularly large for students with below-average GPA and students in high school. There are no effects on standardized test scores however. We randomly chose either the mother or the father to receive the alerts, but there were no differential effects across these subgroups. As in previous research, the intervention appears to change parents’ beliefs about their child’s performance and increases parent monitoring. Our results show that this type of automated technology can improve student effort relatively cheaply and at scale. |
| Keywords: | education, information, experiments |
| JEL: | I20 I21 I24 I28 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6493&r=ure |
| By: | Xenia Frei; Sebastian Langer; Robert Lehmann; Felix Rösel |
| Abstract: | Party performance in state and federal elections is highly interdependent. Federal elections impact regional voting dynamics and vice versa (electoral externalities). We quantify the extent of simultaneous electoral externalities between two layers of government. We apply vector autoregressions with predetermined variables to unique opinion poll data for the German state of Berlin and the federal level in Germany. State voting intentions for the state and for the federal parliament are the endogenous variables; the federal election trend is treated as predetermined. Our results suggest that shocks in federal parliament voting intention impact state parliament voting intention, but – as a new finding – to the same extent also vice versa. Externalities account for around 10% to 30% of variation at the other level of government. The effects differ across parties. Electoral externalities are less pronounced for the conservative party, but increase in times of government. The opposite holds true for left-wing parties. |
| Keywords: | elections, opinion polls, time series, party vote shares, federalism |
| JEL: | D72 H77 C32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6375&r=ure |
| By: | Christopher Blattman; Donald Green; Daniel Ortega; Santiago Tobón |
| Abstract: | Bogotá intensified state presence to make high-crime streets safer. We show that spillovers outweighed direct effects on security. We randomly assigned 1,919 “hot spot” streets to eight months of doubled policing, increased municipal services, both, or neither. Spillovers in dense networks cause “fuzzy clustering,” and we show valid hypothesis testing requires randomization inference. State presence improved security on hot spots. But data from all streets suggest that intensive policing pushed property crime around the corner, with ambiguous impacts on violent crime. Municipal services had positive but imprecise spillovers. These results contrast with prior studies concluding policing has positive spillovers. |
| JEL: | C93 K42 O10 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23941&r=ure |
| By: | Cooper, Daniel H. (Federal Reserve Bank of Boston); Luengo-Prado, Maria Jose (Federal Reserve Bank of Boston); Parker, Jonathan A. (Massachusetts Institute of Technology) |
| Abstract: | This paper examines the effect of minimum wage changes on local aggregate inflation and consumption growth. The paper utilizes variation in state-level minimum wages across locations and finds that minimum wage increases have a relatively modest effect on both city-level inflation and spending growth over the years following the change. The most noticeable effects are for food consumed at home and away from home—industries that typically employ a large share of low-wage and minimum-wage workers. Interestingly, consumers adjust their real food consumption when minimum wages rise, suggesting that some workers benefit from minimum wage changes. |
| Keywords: | minimum wage increases; prices; consumption; local aggregate effects |
| JEL: | E21 E31 E64 |
| Date: | 2017–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:17-8&r=ure |
| By: | Schneider, Andrea |
| Abstract: | Reforms are often introduced in one region and afterwards adapted by other regions. This paper analyzes a model where policy diffusion can be explained by competition for mobile resources. I provide conditions under which initially symmetric regions realize reforms sequentially and a reform initiated in one region is afterwards adapted by another region. Forward-looking agents anticipate the policy convergence and respond less to the reform than the current difference in policies would imply. |
| JEL: | D78 F23 H77 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168203&r=ure |
| By: | Agha Ali Akram; Shyamal Chowdhury; Ahmed Mushfiq Mobarak |
| Abstract: | Rural to urban migration is an integral part of the development process, but there is little evidence on how out-migration transforms rural labor markets. Emigration could benefit landless village residents by reducing labor competition, or conversely, reduce productivity if skilled workers leave. We offer to subsidize transport costs for 5792 potential seasonal migrants in Bangladesh, randomly varying saturation of offers across 133 villages. The transport subsidies increase beneficiaries’ income due to better employment opportunities in the city, and also generate the following spillovers: (a) A higher density of offers increases the individual take-up rate, and induces those connected to offered recipients to also migrate. The village emigration rate increases from 35% to 65%. (b) This increases the male agricultural wage rate in the village by 4.5-6.6%, and the available work hours in the village by 11-14%, which combine to increase income earned in the village, (c) There is no intra-household substitution in labor supply, but primary workers within households earn more during weeks in which many of their village co-residents moved away. (d) The wage bill for agricultural employers increases, which reduces their profit, with no significant change in yield. (e) Food prices increase by 2.7% on net, driven by an increase in the price of (fish) protein, and offset by (f) a decrease in the price of non-tradables like prepared food and tea. Seasonal migration subsidies not only generate large direct benefits, but also indirect spillover benefits by creating slack in the village-of-origin labor market during the lean season. |
| JEL: | J43 J61 O1 O18 R13 R23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23929&r=ure |
| By: | Yutao Han (Department of Economics, University of International Business and Economics); Zhen Song (CEMA, Central University of Finance & Economics) |
| Abstract: | This paper investigates the economic impacts of regional integration on a small jurisdiction in a dynamic fiscal competition environment. The tradeoffs between the economic benefits and the loss of policy flexibility resulting from integration are analyzed from the perspectives of fiscal revenue and GDP per capita. Our results show that the small jurisdiction's loss of flexibility in policy making can dominate the other effects of integration. Specifically, if the small jurisdiction's efficiency in providing public inputs is originally sufficiently high (low), regional integration always reduces (improves) its net revenue, independently of the extent of efficiency improvement due to integration. However, when the small jurisdiction's efficiency is originally intermediate, the impact on net revenue crucially depends on the magnitude of the efficiency effect. Our analysis also characterizes the tradeoffs resulting from integration between policy flexibility on the one hand and capital mobility and fiscal equalization on the other. |
| Keywords: | regional integration; policy flexibility; fiscal revenue; differential game |
| JEL: | R12 H87 C73 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:600&r=ure |
| By: | Jorge García Hombrados (Department of Economics, University of Sussex) |
| Abstract: | Using household data from two districts in northern Ghana, this study examines how cognitive skills affect the allocation of schooling across the children of a household. The analysis reveals that relative to the rest of the siblings in the household, an increase of one standard deviation in the score of cognitive tests increases by 0.128-0.178 the number of years of schooling attended in the following three years, depending on the cognitive test used. These results are interpreted as empirical evidence for the main prediction of the theoretical model for intra-household allocation of resources developed in the seminal paper A Treatise on the Family (Becker, 1981): parents reinforce cognitive differences between siblings through allocating more human capital resources to the more able siblings. The study also explores whether the effect of cognitive skills on the allocation of schooling across siblings depends on the gender of the child or on household level characteristics. On the one hand, I find weak evidence suggesting that the effect of cognitive skills on schooling investments seems larger for boys than for girls although the results are not conclusive. On the other hand, the analysis suggests that polygyny, household size and household wealth do not affect relevantly the magnitude of this effect. |
| Keywords: | cognitive skills; investments in education; intra-household allocation of resources |
| JEL: | D13 I21 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:1817&r=ure |
| By: | Oomens, Ivette M. F.; Sadowski, Bert M. |
| Abstract: | Within the growing literature on smart cities, much research has focused on issues related to the formation stage and the roles of different actors in these initiatives. The large number of failures of smart city initiatives, however, points at an existing gap between the understanding of the formation of these initiatives and the practice of their management. In this context, the purpose of this paper is to address this research gap by discussing determinants of smart city initiatives and the experiences in smart city management. By taking an innovation ecosystem perspective, the paper focuses on the management experiences of four smart city initiatives (WoonConnect, Mobilty Portal, Vehicle2Grid, Straatkubus) in the Netherlands. The empirical research has been undertaken during the period May and June 2016. In linking to the discussion on smart cities, the research shows that most studies on smart cities have focused on the formation stage of the initiative and the roles of partners in these initiatives. In order to better understand problems surrounding smart city projects, it is necessary to examine the fundamental business model underlying these initiatives (i.e. processes of value creation and appropriation) and the role of business partners in these ventures. By using an innovation ecosystem perspective, the paper is able to identify shortcomings of existing approaches in smart city research related to the (static) form of analysis and the firm-level type of analysis. For smart city managers, key issues related to smart city projects are rooted in the second stage of managing these ventures (i.e. the coordination stage) and the role of private firms in this stage. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse17:169491&r=ure |
| By: | Junxue Jia (Renmin University of China); Yongzheng Liu (School of Finance, Renmin University of China); Jorge Martinez-Vazquez (Department of Economics, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University); Kewei Zhang (Boston University) |
| Abstract: | Using a nationwide city-level panel dataset for China for the years 1999-2009, this paper examines the effects of vertical fiscal imbalances (VFI) on local fiscal discipline, and explicitly explores the institutional conditions under which these effects may take place. We find that higher VFI levels induce fiscal indiscipline by reducing tax effort of local governments. We exploit the unique Chinese fiscal institution of assigning taxing power for local taxes and shared taxes to two separate authorities (i.e., the local tax bureau and the central tax bureau, respectively) in several ways. We show that local governments respond to the presence of the VFI by lowering their tax effort on local taxes, but do not do so for shared taxes. In addition, we show that the (in)disciplining effect of the VFI is not present for extra-budgetary revenues, which reflects the institutional fact that extra-budgetary revenues are not considered for the determination of central fiscal transfers to local governments, thus creating no incentive for local governments to respond in this area. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1717&r=ure |
| By: | Gregory Sutton; Dubravko Mihaljek; Agnė Subelytė |
| Abstract: | This paper estimates the response of house prices to changes in short- and long-term interest rates in 47 advanced and emerging market economies. We use data that statistical authorities selected as their best house price series, covering almost half a century of quarterly observations for the United States and over 1,000 annual observations for the rest of the sample. We find a surprisingly important role for short-term interest rates as a driver of house prices, especially outside the United States. Our interpretation is that this reflects the importance of the bank lending channel of monetary policy in house price fluctuations, especially in countries where securitisation of home mortgages is less prevalent. In addition, we document substantial inertia in house prices and find that changes in interest rates and other determinants affect house prices gradually rather than on impact. This suggests that modest cuts in policy rates are not likely to rapidly fuel house price increases. Finally, we find that US interest rates seem to affect house prices outside the United States. |
| Keywords: | interest rates, house prices, monetary policy, bank lending channel, random walk, house price bubble, United States, advanced economies, emerging market economies |
| JEL: | E39 E43 E58 G12 R31 R32 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:665&r=ure |
| By: | Brunnermeier, Markus K; Rother, Simon; Schnabel, Isabel |
| Abstract: | This paper empirically analyzes the effects of asset price bubbles on systemic risk. Based on a broad sample of banks from 17 OECD countries between 1987 and 2015, we show that asset price bubbles in stock and real estate markets raise systemic risk at the bank level. The strength of the effect depends strongly on bank characteristics (bank size, loan growth, leverage, and maturity mismatch) as well as bubble characteristics (length and size). These findings suggest that the adverse effects of bubbles can be mitigated substantially by strengthening the resilience of financial institutions. |
| Keywords: | Asset price bubbles; CoVaR; Credit Booms; Financial crises; systemic risk |
| JEL: | E32 G01 G12 G20 G32 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12362&r=ure |