nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒11‒12
forty papers chosen by
Steve Ross
University of Connecticut

  1. Income Increase and Moving to a Better Neighbourhood: An Enquiry into Ethnic Differences in Finland By Vaalavuo, Maria; van Ham, Maarten; Kauppinen, Timo M.
  2. The Shadow of Cities: Size, Location and the Spatial Distribution of Population in Spain By Beltràn Tapia, F.; Díez-Minguela, A.; Martinez-Galarraga, J.
  3. The Local Effects of the Texas Shale Boom on Schools, Students, and Teachers By Marchand, Joseph; Weber, Jeremy
  4. Spatial-Ethnic Inequalities: The Role of Location in the Estimation of Ethnic Wage Differentials By Longhi, Simonetta
  5. Toward a Long-term Economic Damage Reduction from an Urban Disaster: Lessons from the 1995 Kobe Earthquake By Toshihisa TOYODA
  6. Getting a foot on the housing ladder: The role of parents in giving a leg-up By Elin Halvorsen; Kjersti-Gro Lindquist
  7. Do Boys Benefit from Male Teachers in Elementary School? Evidence from Administrative Panel Data By Patrick A. Puhani
  8. Local Labor Markets and the Persistence of Population Shocks By Braun, Sebastian Till; Kramer, Anica; Kvasnicka, Michael
  9. The Mortgage Rate Conundrum By Justiniano, Alejandro; Primiceri, Giorgio E.; Tambalotti, Andrea
  10. Stamp duty, mobility and the UK housing crisis By Christian Hilber; Teemu Lyytikäinen
  11. The Impact of Immigration on Wage Dynamics: Evidence from the Algerian Independence War By Anthony Edo
  12. Macroprudential Measures and Irish Mortgage Lending: Insights from H1 2017 By Kinghan, Christina; Lyons, Paul; McCarthy, Yvonne
  13. Impacts of Late School Entry on Children's Cognitive Development in Rural Northwestern China—Does Preprimary Education Matter? By Qihui Chen
  14. Colonial Legacies: Shaping African Cities By Neeraj Baruah; J. Vernon Henderson; Cong Peng
  15. Relationships between Parental Involvement and Adolescents’ Academic Achievement and Aspiration By Midori Otani
  16. A Long-Run Perspective on the Spatial Concentration of Manufacturing Industries in the United States By Nicholas Crafts; Alexander Klein
  17. Bankruptcy Spillovers By Bernstein, Shai; Colonnelli, Emanuele; Giroud, Xavier; Iverson, Benjamin
  18. What Drives Spatial Clusters of Entrepreneurship in China? Evidence from Economic Census Data By Zheng, Liang; Zhao, Zhong
  19. Migration Policy: Lessons from Cooperatives By Margit Osterloh; Bruno S. Frey
  20. Measuring the Spillovers of Venture Capital By Monika Schnitzer; Martin Watzinger
  21. Assessing House Price Developments in the EU By Nicolas Philiponnet; Alessandro Turrini
  22. The Employment Effects of Countercyclical Infrastructure Investments By Lukas Buchheim; Martin Watzinger
  23. Immigrants' Residential Choices and Their Consequences By Albert, Christoph; Monras, Joan
  24. The Matching Process: Search or Mismatch? By Nils Gottfries; Karolina Stadin
  25. Simultaneous Spatial Panel Data Models with Common Shocks By Lu, Lina
  26. Understanding Parental Choices of Secondary School in England Using National Administrative Data By Simon Burgess; Ellen Greaves; Anna Vignoles
  27. The impact of investment in innovation on productivity: firm-level evidence from Ireland By Di Ubaldo, Mattia; Siedschlag, Iulia
  28. Term limits and voter turnout By Francisco José Veiga; Linda Gon¸calves Veiga
  29. Patterns of entry and exit in the deregulated German interurban bus industry By Dürr, Niklas S.; Hüschelrath, Kai
  30. How do teachers become knowledgeable and confident in classroom management?: Insights from a pilot study By OECD
  31. The labour market impact of refugee waves By Michael A. Clemens; Jennifer Hunt
  32. Nighttime Lights as a Proxy for Human Development at the Local Level By Anna Bruederle; Roland Hodler
  33. Travel time variability and rational inattention By Mogens Fosgerau; Gege Jiang
  34. Corporate Tax Competition in the Presence of Unemployment By MORITA Tadashi; OGAWA Yoshitomo; ONO Yoshiyasu
  35. Higher Education Funding Reforms: A Comprehensive Analysis of Educational and Labor Market Outcomes in England By Azmat, Ghazala; Simion, Stefania
  36. Flying Below the Radar: The Harmful Impact of Ontario’s Business Property Tax By Adam Found
  37. Sleep and Student Success: The Role of Regularity vs. Duration By Luong, Phuc; Lusher, Lester; Yasenov, Vasil
  38. Measuring success in education: the role of effort on the test itself By Uri Gneezy; John List; Jeffrey Livingston; Xiangdong Qin; Sally Sadoff; Yang Xu
  39. Population Processes and Establishment-Level Racial Employment Segregation By Ferguson, John-Paul; Koning, Rembrand
  40. Manipulating Fiscal Forecasts: Evidence from the German States By Björn Kauder; Niklas Potrafke; Christoph Schinke

  1. By: Vaalavuo, Maria (National Institute for Health and Welfare); van Ham, Maarten (Delft University of Technology); Kauppinen, Timo M. (National Institute for Health and Welfare)
    Abstract: Concentration to disadvantaged neighbourhoods may hinder immigrants' opportunities for social integration, so equal chances of translating available economic resources into mobility to less disadvantaged neighbourhoods are important. This paper adds to existing research on exits from poor neighbourhoods by focusing on the effects of income increase on residential mobility. We analyse intra-urban residential mobility from low-income neighbourhoods into non-low-income neighbourhoods among immigrants and native-born residents in three urban regions in Finland. We use longitudinal register data for the 2004–2014 period for the full Finnish population, allowing a dynamic analysis of changes in income and neighbourhood of residence. Based on multinomial logit modelling of migration outcomes, we found that an increase in income is associated with moving both to low-income and non-low-income areas even when controlling for initial income level. Upward income mobility was connected to exit from low-income areas in a quite similar way among immigrants and native-born Finns. The findings suggest that policies e.g. improving the labour market opportunities of immigrants are effective in reduction of residential segregation. However, we were not able to completely explain the differences between native-born Finns and immigrants in moving patterns. The differences between the cities were opposite for immigrants and native-born Finns, corresponding to differences in immigration history and levels of ethnic segregation. Therefore, the local context matters for spatial integration outcomes.
    Keywords: immigration, segregation, housing, residential mobility, income mobility, register data, Finland
    JEL: O15 O18 P25 R23
    Date: 2017–10
  2. By: Beltràn Tapia, F.; Díez-Minguela, A.; Martinez-Galarraga, J.
    Abstract: Using a large data set on the population of Spanish municipalities between 1877 and 2001, this paper analyses how their initial size and the presence of neighbouring urban locations influence subsequent population growth and how these links have evolved over time. Our results show that initial size is negatively related to population growth, except in the 1960s and 1970s when this relationship becomes positive. Likewise, the presence of neighbouring urban locations limited local population growth in the late 19th century, a negative effect that persisted, but at a diminishing rate, until the second half of the 20th century. The influence of nearby cities became increasingly positive from then onwards, and especially so during the 1970s.
    Keywords: Agglomeration economies; spatial interactions, regional growth, Spain
    JEL: N93 N94 O18 R11 R12
    Date: 2017–11–01
  3. By: Marchand, Joseph (University of Alberta, Department of Economics); Weber, Jeremy (University of Pittsburgh)
    Abstract: This study explores how the Texas shale boom affected schools, students, and teachers. Using variation in geology across school districts and oil prices over time, the evidence shows that test scores in the average shale district declined despite tripling the tax base and creating a revenue windfall. Greater spending went to capital projects and servicing debt, not to teachers. Higher labor market wages did not affect student completion rates, but a growing gap in wages between the private and education sectors contributed to greater teacher turnover and more inexperienced teachers, which helps explain the decline in test scores.
    Keywords: local labor markets; local public finances; resource booms; schools; students; teachers
    JEL: H70 I22 J24 J40 Q33 R23
    Date: 2017–10–31
  4. By: Longhi, Simonetta (University of Reading)
    Abstract: Analyses of ethnic and racial wage differentials neglect the fact that minorities cluster in urban and in more deprived areas. This paper estimates ethnic wage differentials by comparing minorities to the majority in the same local labour market and therefore facing similar socio-economic conditions. Location is important: in the UK ethnic wage differentials and their variation across areas are partly explained by job characteristics and especially occupation. Since minorities in some areas are worse off compared to minorities in other areas, there may be scope for policy to incentivise mobility of specific groups.
    Keywords: race, ethnicity, wage differentials, spatial location, unequal distribution, multilevel models
    JEL: J31 J71 R10 R23
    Date: 2017–10
  5. By: Toshihisa TOYODA (Graduate School of International Cooperation Studies, Kobe University)
    Abstract: I first present a re-estimation result of the long-term economic damage or the so-called indirect economic loss caused by the 1995 Hanshin-Awaji Earthquake (Hereafter, I call it Kobe Earthquake or Kobe EQ). I define the indirect loss as the difference between the without-disaster trend values of Gross Regional Product (GRP) and the actual GRP in the affected area. I show that the affected regional economy continued to be stagnant for a quite long period, resulting in its total values of indirect loss which exceed the officially announced direct loss values, i.e., ?9.9 trillion. Based on this estimation, I pursue some policy implications to reduce long-term economic damage from future possible great urban disasters in Japan or elsewhere. It is my most significant finding is that, not only the destruction of supply side, but also such demand factors as housing investment and private consumption were major influential factors for the long-term stagnation. Nevertheless, the Kobe experience of its economic recovery after a more than two decades struggle shows that the industrial policy of the local government is very important for a long-term and sustainable recovery from a great urban disaster.
    Keywords: long-term economic damage, indirect damage, economic recovery, 1995 Kobe Earthquake, Policy implications for recover
    Date: 2017–11
  6. By: Elin Halvorsen (Statistics Norway); Kjersti-Gro Lindquist (Norges Bank (Central Bank of Norway))
    Abstract: In this paper we question whether parental resources are important for first-time buyers? We find a nuanced set of results. First, when parents help out financially, it clearly increases the probability of entering the housing market. Furthermore, some of this help is taken out as lower loan-to-value (LTV) and higher house value, and thus gives a head start on the rungs of the housing ladder. On the other hand, own income is economically much more important for first-time buyers than the potential or implicit help through having wealthy parents. Second, along with a growing gap between income and house prices, parental resources have become more important. Homeownership rates for young households with wealthy parents, or parents helping out financially, are increasing relative to young households without wealthy parents. We find no effect on the age of first entry into the housing market, which has declined for all young buyers, or on housing wealth inequality. Finally, we do not find that recent prudent mortgage-lending practices has caused a decline in the probability of entering the housing market, even for those who do not receive financial help from parents. We conclude that in a country like Norway, where there are well functioning credit markets and low intergenerational mobility, homeownership is still achievable without parental help, even under unfavorable conditions.
    Keywords: inter vivos gifts, altruism, housing investment, debt
    JEL: D64 D91 G28 R21
    Date: 2017–11–02
  7. By: Patrick A. Puhani (Leibniz Universität Hannover)
    Abstract: With girls having overtaken boys in many education indicators, the “feminization†of elementary school teaching is causing debates about disadvantages for male students. Using administrative panel data on the universe of students, teachers and schools for a German state, I exploit within school and within teacher variation to determine teacher characteristics’ effects on students’ tracking outcomes. Germany tracks students at age 10 into more or less academic school types. I find hardly any effects of teacher’s gender, age, pay level, qualifications, or working hours on boys’ or girls’ school track recommendations or school choice. Even when following students into middle school, no effects of elementary-school teacher gender on school type change or grade repetition can be detected.
    Keywords: education, gender, identification, fixed effects, teacher quality
    JEL: I21 J45 J71 J78
    Date: 2017–11
  8. By: Braun, Sebastian Till (University of St. Andrews); Kramer, Anica (RWI); Kvasnicka, Michael (Otto-von-Guericke University Magdeburg)
    Abstract: This paper studies the persistence of a large, unexpected, and regionally very unevenly distributed population shock, the inflow of eight million ethnic Germans from Eastern Europe to West Germany after World War II. Using detailed census data from 1939 to 1970, we show that the shock had a persistent effect on the distribution of population within local labor markets, but only a temporary effect on the distribution between labor markets. These results suggest that locational fundamentals determine population patterns across but not within local labor markets, and they can help to explain why previous studies on the persistence of population shocks reached such different conclusions.
    Keywords: population shock, locational fundamentals, agglomeration economies, regional migration, postwar Germany
    JEL: J61 R12 R23 N34
    Date: 2017–10
  9. By: Justiniano, Alejandro (Federal Reserve Bank of Chicago); Primiceri, Giorgio E. (Northwestern University); Tambalotti, Andrea (Federal Reserve Bank of New York)
    Abstract: We document the emergence of a disconnect between mortgage and Treasury interest rates in the summer of 2003. Following the end of the Federal Reserve expansionary cycle in June 2003, mortgage rates failed to rise according to their historical relationship with Treasury yields, leading to significantly and persistently easier mortgage credit conditions. We uncover this phenomenon by analyzing a large dataset with millions of loan-level observations, which allows us to control for the impact of varying loan, borrower and geographic characteristics. These detailed data also reveal that delinquency rates started to rise for loans originated after mid 2003, exactly when mortgage rates disconnected from Treasury yields and credit became relatively cheaper.
    Keywords: Credit boom; housing boom; mortgage loans; securitization; private label; subprime
    JEL: G21 H81 O18
    Date: 2017–08–01
  10. By: Christian Hilber; Teemu Lyytikäinen
    Abstract: The UK's stamp duty land tax raises substantial revenues for the government, but it also contributes to the UK's housing crisis by preventing households from moving to more suitable homes. That is the central conclusion of research by Christian Hilber and Teemu Lyytikäinen. They explain how replacing stamp duty with better-designed local taxes could help to alleviate the country's crisis of housing affordability. Their study shows that stamp duty prevents people moving to a more suitable dwelling in their local area, but it has little impact on long-distance relocation. Abolishing stamp duty could increase the mobility of homeowners substantially.
    Keywords: stamp duty, real estate transfer tax, transaction costs, household mobility
    Date: 2017–10
  11. By: Anthony Edo
    Abstract: This paper investigates the dynamics of wage adjustment to an exogenous increase in labor supply by exploiting the sudden and unexpected inflow of repatriates to France created by the independence of Algeria in 1962. I track the impact of this particular supply shift on the average wage of pre-existing native workers across French regions in 1962, 1968 and 1976. I find that regional wages decline between 1962 and 1968, before returning to their pre-shock level 15 years after. While regional wages recovered, this particular supply shock had persistent distributional effects. By increasing the relative supply of high educated workers, the inflow of repatriates contributed to the reduction of wage inequality between high and low educated native workers over the whole period considered (1962-1976).
    Keywords: labor supply shock, wages, immigration, natural experiment
    JEL: F22 J21 J61
    Date: 2017
  12. By: Kinghan, Christina (Central Bank of Ireland); Lyons, Paul (Central Bank of Ireland); McCarthy, Yvonne (Central Bank of Ireland)
    Abstract: This Economic Letter provides an overview of residential mortgage lending in Ireland in H1 2017 for the five credit institutions reporting loan-level data to the Central Bank of Ireland as part of their compliance with loan-to-value (LTV) and loan-to-income (LTI) macroprudential Regulations. H1 2017 represented the first half year of lending that incorporated the changes announced following the 2016 Review of the Regulations. In total, 14,997 loans were originated totaling €3.05 billion, an increase of 33 (22) per cent on the corresponding value (volume) of lending in H1 2016. Average LTV and LTI ratios rose slightly over the period for both First Time Buyers (FTBs) and Second and Subsequent Buyers (SSBs). Only a limited number (30 loans in total) of FTBs had an allowance to exceed the FTB LTV limit of 90 per cent LTV in H1 2017. In contrast, 20 per cent of the aggregate value of SSB lending in H1 2017 exceeded the 80 per cent LTV limit for that group. Regarding the LTI ratio, 18 per cent of the aggregate lending to both FTBs and SSBs exceeded the limit of 3.5, which represents an increase on the 12 per cent figure recorded in H1 2016. The characteristics of loans and borrowers with LTI allowances in H1 2017 were similar to those observed in H1 2016. Notably, FTBs accounted for the largest share of LTI allowances in H1 2017. On average borrowers with an LTI allowance had a lower income and were younger than borrowers without an LTI allowance. There was also a higher proportion of single borrowers in the ‘with allowance’ group.
    Date: 2017–10
  13. By: Qihui Chen
    Abstract: This article estimates the causal effect of primary school entry age on children's cognitive development in rural northwestern China, using data on nearly 1,800 primary school aged children from the Gansu Survey of Children and Families. Instrumental variable estimates, exploiting the discontinuity structure in children's school entry age around the enrolment cut-off date, indicate that a 1-year delay in school entry reduces children's scores on a cognitive ability test administered when they were aged 9–12 by 0.11–0.16 standard deviations (of the distribution of test scores). The negative late-school-entry effect is significantly larger in villages with no preprimary schools. It also persists as children advance to higher grades. These findings suggest that delayed school entry, even if it may be rural parents' rational response to resource constraints, can be harmful for children's cognitive development in developing areas with underdeveloped preprimary school systems.
    Keywords: school entry age, cognitive development, preprimary school, rural China
  14. By: Neeraj Baruah; J. Vernon Henderson; Cong Peng
    Abstract: Differential institutions imposed during colonial rule continue to affect the spatial structure and urban interactions in African cities. Based on a sample of 318 cities across 28 countries using satellite data on built cover over time, Anglophone origin cities sprawl compared to Francophone ones. Anglophone cities have less intense land use and more irregular layout in the older colonial portions of cities, and more leapfrog development at the extensive margin. Results are impervious to a border experiment, many robustness tests, measures of sprawl, and sub-samples. Why would colonial origins matter? The British operated under indirect rule and a dual mandate within cities, allowing colonial and native sections to develop without an overall plan and coordination. In contrast, integrated city planning and land allocation mechanisms were a feature of French colonial rule, which was inclined to direct rule. The results also have public policy relevance. From the Demographic and Health Survey, similar households which are located in areas of the city with more leapfrog development have poorer connections to piped water, electricity, and landlines, presumably because of higher costs of providing infrastructure with urban sprawl.
    Keywords: colonialism, persistence, Africa, sprawl, urban form, urban planning, leapfrog
    JEL: H7 N97 O1 O43 P48 R5
    Date: 2017–11
  15. By: Midori Otani (Ph.D., Osaka School of International Public Policy (OSIPP))
    Abstract: This study investigates two aspects of maternal and paternal involvement. First, what are the associations of parental involvement with adolescents’ academic achievement? Second, how does adolescent’s educational aspiration mediate the relationship between parental involvement and achievement? Samples of middle school students were analysed separately according to adolescents’ gender. The analyses were conducted by using a generalised structural equation model. The results show that both maternal and paternal involvement is associated with adolescent’s academic outcome even though some differences are also found. Adolescent’s educational aspirations mediate the association between parental involvement and academic grade. Discussion topic that are related to adolescents’ schooling is more significantly and positively associated with grade.
    Keywords: Parental Involvement, Gender, Mother, Father, Middle school, Japan
    JEL: I21 I24
    Date: 2017–10
  16. By: Nicholas Crafts; Alexander Klein
    Abstract: We construct spatially-weighted indices of the geographic concentration of U.S. manufacturing industries during the period 1880 to 1997 using data from the Census of Manufactures and Bureau of Labor Statistics. Several important new results emerge from this exercise. First, we find that average spatial concentration was much lower in the late 20th - than in the late 19th - century and that this was the outcome of a continuing reduction over time. Second, the persistent tendency to greater spatial dispersion was characteristic of most manufacturing industries. Third, even so, economically and statistically significant spatial concentration was pervasive throughout this period.
    Keywords: manufacturing belt; spatial concentration; transport costs
    JEL: N62 N92 R12
    Date: 2017–08
  17. By: Bernstein, Shai (Stanford University); Colonnelli, Emanuele (Stanford University); Giroud, Xavier (MIT); Iverson, Benjamin (Northwestern University)
    Abstract: How do different bankruptcy approaches affect the local economy? Using U.S. Census microdata, we explore the spillover effects of reorganization and liquidation on geographically proximate firms. We exploit the random assignment of bankruptcy judges as a source of exogenous variation in the probability of liquidation. We find that employment declines substantially in the immediate neighborhood of the liquidated establishments, relative to reorganized establishments. The spillover effects are highly localized and concentrate in non-tradable and service sectors, consistent with a reduction in local consumer traffic and a decline in knowledge spillovers between firms. The evidence highlights the externalities that bankruptcy design can impose on non-bankrupt firms.
    Date: 2017–05
  18. By: Zheng, Liang (Central University of Finance and Economics); Zhao, Zhong (Renmin University of China)
    Abstract: Since Chinese government initiated economic reform in the late 1970s, entrepreneurship and private sectors have emerged gradually and played an increasingly important role in promoting economic growth. However, entrepreneurship is distributed unevenly in China. Using micro data from 2008 economic census and 2005 population census, this paper explains spatial clusters of entrepreneurship for both manufacturing and services. For both sectors, entrepreneurship (measured by new private firms) tends to emerge in places with more relevant upstream and downstream firms. Moreover, Chinitz's (1961) theories are also supported for manufacturing: small upstream and downstream firms seem to be more important for manufacturing entrepreneurship. For both sectors, entrepreneurship is positively related to city size, the share of young adults and the elderly population, and foreign direct investment. More migrants are also found to promote service entrepreneurship. Our paper is the first to consider both manufacturing and service entrepreneurship in China and should be of interest to both local and national policymakers who plan to encourage entrepreneurship.
    Keywords: new firm formation, entrepreneurship, Marshallian effect, Chinitz effect, China
    JEL: L26 L60 L80 R10 R12
    Date: 2017–10
  19. By: Margit Osterloh; Bruno S. Frey
    Abstract: We propose an immigration policy based on the model of cooperatives. Incoming migrants have to acquire a participation certificate. In exchange, the immigrants may enter the country of choice without danger. The revenue goes to the country of the recipient nation rather than to human smugglers. The cost would be much lower than today’s efforts to secure the borders. Asylum seekers get back the money paid for the certificate. Immigration is therewith regulated more efficiently than today. Not all entrance barriers and coercive measures to prevent illegal entry would disappear. However, the pressure of illegal migrants is strongly reduced.
    Keywords: immigration, asylum, cooperatives, participation certificates, borders
    JEL: D71 F22 J61
    Date: 2017
  20. By: Monika Schnitzer; Martin Watzinger
    Abstract: We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.
    Keywords: venture capital, spillovers, innovation
    JEL: G24 O30 O31 O32
    Date: 2017
  21. By: Nicolas Philiponnet; Alessandro Turrini
    Abstract: Booms and busts in house prices may have major macro-financial implications. Accordingly, monitoring developments in house prices plays an important role in the assessment of macroeconomic risks. This paper provides a methodology to estimate benchmarks for the assessment of developments in house prices in the EU context. A number of approaches are developed, based on (i) long-term averages for price-to-income ratios, (ii) long-term averages for price-to-rent ratios (iii) predictions from cointegration relationships between real house prices and their demand and supply determinants. With the latter approach, cointegration analysis is carried out both on individual countries' time series and on a panel of EU countries. The paper makes alternative proposals for computing long-term averages for price-to-income and price-to-rent ratios with a view to combining cross-country comparability with representativeness. The various benchmarks are combined to define a single synthetic benchmark based on model averaging techniques.
    JEL: R21 R31 C32 E37
    Date: 2017–05
  22. By: Lukas Buchheim; Martin Watzinger
    Abstract: We estimate the causal impact of a sizable German infrastructure investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instrument for investments. We find that the program was effective, creating one job for one year for each €25’000 of investments. The employment gains reached their peak after nine months and dropped to zero quickly after the program’s completion. The reductions in unemployment amounted to two-thirds of the job creation, and employment grew predominately in the construction and non-tradable industries.
    Keywords: infrastructure investments, job creation, employment dynamics, countercyclical fiscal policy
    JEL: E24 E62 H72 J23
    Date: 2017
  23. By: Albert, Christoph (Pompeu Fabra University); Monras, Joan (CEMFI, Madrid)
    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
  24. By: Nils Gottfries; Karolina Stadin
    Abstract: We examine the matching process using monthly panel data for local labour markets in Sweden. We find that an increase in the number of vacancies has a weak effect on the number of unemployed workers being hired: unemployed workers appear to be unable to compete for many available jobs. Vacancies are filled quickly and there is no (or only weak) evidence that high unemployment makes it easier to fill vacancies; hiring appears to be determined by labour demand while frictions and labour supply play small roles. These results indicate persistent mismatch in the labour market.
    Keywords: structural unemployment, frictional unemployment, matching function, labour demand, labour supply
    JEL: J23 J62 J63 J64
    Date: 2017
  25. By: Lu, Lina (Federal Reserve Bank of Boston)
    Abstract: I consider a simultaneous spatial panel data model, jointly modeling three effects: simultaneous effects, spatial effects and common shock effects. This joint modeling and consideration of cross-sectional heteroskedasticity result in a large number of incidental parameters. I propose two estimation approaches, a quasi-maximum likelihood (QML) method and an iterative generalized principal components (IGPC) method. I develop full inferential theories for the estimation approaches and study the trade-off between the model specifications and their respective asymptotic properties. I further investigate the finite sample performance of both methods using Monte Carlo simulations. I find that both methods perform well and that the simulation results corroborate the inferential theories. Some extensions of the model are considered. Finally, I apply the model to analyze the relationship between trade and GDP using a panel data over time and across countries.
    Keywords: Panel data model; Spatial model; Simultaneous equations system; Common shocks; Simultaneous effects; Incidental parameters; Maximum likelihood estimation; Principal components; High dimensionality; Inferential theory
    JEL: C13 C31 C33 C38 C51
    Date: 2017–08–09
  26. By: Simon Burgess; Ellen Greaves; Anna Vignoles
    Abstract: We study the process of school choice in England, using a new dataset giving all the preferences of all parents seeking a school place in state secondary schools. We set out new facts on the number of choices made, the chance of getting an offer from the first choice, and whether the nearest school is first choice. We use the rich data available to describe these choices by pupil characteristics, school characteristics and neighbourhood characteristics. We show that parents do pro-actively use the choice system, but that the admissions criteria do not work well for poorer families.
    Date: 2017–10–25
  27. By: Di Ubaldo, Mattia; Siedschlag, Iulia
    Abstract: This paper examines the relationship between investment in innovation and productivity across firms in Ireland. We estimate a structural model using information from three linked micro data sets over the period 2005-2012 and identify the relationships between investment in innovation, innovation outputs and productivity. Our results indicate that innovation is positively linked to productivity. This result holds for all types of innovation and for both R&D and non-R&D expenditures. The innovation-related productivity gains range from 16.2 per cent to 35.4 per cent. The strongest link between innovation and productivity is found for firms with R&D spending and with product innovation.
    Date: 2017–09
  28. By: Francisco José Veiga (NIPE/University of Minho); Linda Gon¸calves Veiga (NIPE/University of Minho)
    Abstract: This paper studies the impact of term limits on voter turnout, using the recent introduction of term limits at the local government level in Portugal as a natural experiment. Although instrumental, expressive, and information-based theories of voter participation imply effects of term limits on turnout, this is clearly an under-researched topic. Applying a difference-in-differences approach to data at both the municipal and parish levels, we find strong evidence that the introduction of term limits increased voter participation. Our results contrast with previous findings for California and demonstrate that more research on this topic is clearly necessary.
    Keywords: Term limits, Voter turnout, Local elections, Portugal, Natural experiment
    JEL: D72 H7
    Date: 2017
  29. By: Dürr, Niklas S.; Hüschelrath, Kai
    Abstract: We study patterns of entry and exit in the German interurban bus industry in the first three years after its deregulation in January 2013. Using a comprehensive data set of all firm and route entries and exits, we find that the industry grew much quicker than originally expected - with particularly a few new entrants being most successful in quickly extending their route networks from regional to national coverage. Although the clear majority of routes is operated on a monopoly basis, competition does play a key role on routes with a sufficiently large base of (potential) customers. From a spatial perspective, three years after deregulation, the entire interurban bus network connects 60 percent of all 644 larger German cities - with the intensity of entry being dependent on the number of inhabitants, average income, the share of under 24 years old and the presence of intermodal competition by intercity railway services.
    Keywords: deregulation,interurban bus services,entry,exit,competition
    JEL: L11 L41 L43 L92 K21 K23
    Date: 2017
  30. By: OECD
    Abstract: The Innovative Teaching for Effective Learning (ITEL) Teacher Knowledge Survey is the first international study to explore the nature, function and development of teachers’ pedagogical knowledge, i.e. what teachers know about teaching and learning. In-service and pre-service teachers exhibited higher knowledge on the classroom management portion of the assessment than in other areas related to instructional process, such as teaching methods and lesson planning. Results suggest that the more teachers learn about classroom management, the more confident they feel about mastering the teaching and learning process in general. Classroom management also seems to have a larger impact on self-efficacy than does learning about lesson planning. In-service teachers who report feeling confident about managing classrooms also report higher quality instructional practices in this domain. Knowledge related to learning and development; incorporating aspects of cognitive learning strategies, memory and information processes, is the area with most room for improvement in the pedagogical knowledge base.
    Date: 2017–11–09
  31. By: Michael A. Clemens; Jennifer Hunt
    Abstract: Recent research has challenged the consensus that sudden inflows of refugees have little or no impact on natives' wages and employment, claiming instead that there are uniformly large detrimental effects on natives without school qualifications. Michael Clemens and Jennifer Hunt demonstrate the flaws in this analysis: the labour market impact of immigration is small even on natives with low skill levels.
    Keywords: refugees, immigration, instrumental variables
    Date: 2017–10
  32. By: Anna Bruederle; Roland Hodler
    Abstract: Nighttime lights are increasingly used by social scientists as a proxy for economic activity and economic development in subnational spatial units. However, so far, our understanding of what nighttime lights capture is limited. We construct local indicators of household wealth, education and health from geo-coded Demographic and Health Surveys (DHS) for 29 African countries. We show that nighttime lights are positively associated with these indicators across DHS cluster locations as well as across grid cells of roughly 50 x 50 km. We conclude that nighttime lights are a good proxy for human development at the local level.
    Keywords: nighttime lights, local development, Africa
    JEL: I15 I25 I32 O15 O55
    Date: 2017
  33. By: Mogens Fosgerau (Department of Economics, University of Copenhagen); Gege Jiang (Department of Economics, Hong Kong University of Science and Technology)
    Abstract: This paper sets up a rational inattention model for the choice of departure time for a traveler facing random travel time. The traveler chooses how much information to acquire about the travel time out-come before choosing departure time. This reduces the cost of travel time variability compared to models in which the information is exogenously fixed .
    Keywords: rational inattention; random travel time variability; value of reliability; discrete choice
    JEL: D1 D8 R4
    Date: 2017–09–26
  34. By: MORITA Tadashi; OGAWA Yoshitomo; ONO Yoshiyasu
    Abstract: We analyze the corporate tax competition between two countries in a two-sector model in which one sector is an oligopoly and oligopolists can choose their location between the two countries. Importantly, our model considers imperfect labor markets, where the wage rates in both countries are fixed, causing unemployment to appear. Under such framework, we show that a unique and stable Nash equilibrium of corporate taxes exists and discuss the properties of the equilibrium tax rates. We also examine the relation between the wage rates and equilibrium tax rates as well as that between the share of equities for oligopoly profits and equilibrium tax rates.
    Date: 2017–11
  35. By: Azmat, Ghazala (Sciences Po, Paris); Simion, Stefania (University of Edinburgh)
    Abstract: This paper investigates the impact of changes in the funding of higher education in England on students' choices and outcomes. Over the last two decades – through three major reforms in 1998, 2006 and 2012 – undergraduate university education in public universities moved from being free to students and state funded to charging substantial tuition fees to all students. This was done in conjunction with the government offering generous means-tested maintenance grants and loans. Using detailed longitudinal micro-data that follows all students attending state schools in England (more than 90 percent of all school-aged children) from lower education to higher education, we document the socio-economic distributional effects of the 2006 and 2012 policy reforms on a comprehensive set of outcomes, including enrolment, relocation decisions, selection of institution, program of study, and performance within university. For a subset of students, we track them after completing higher education, allowing us to study the labor market effects of the policy reforms. Despite the substantial higher education funding reforms, we do not find large aggregate effect on student enrolment or on other margins. Moreover, the small negative impacts found on the enrolment were largely borne on those in higher parts of the wealth distribution – reducing the enrolment gap across socio-economic groups.
    Keywords: higher education, tuition fees, means-tested support, career choices, career outcomes
    JEL: I22 I23 I29 J30
    Date: 2017–10
  36. By: Adam Found (Trent University)
    Abstract: Ontario should abolish its harmful business property tax to remove an invisible, heavy burden on business, according to a report from the C.D. Howe Institute. In “Flying Below the Radar: The Harmful Impact of Ontario’s Business Property Tax,” author Adam Found assesses the damage the tax does to business investment and the broader Ontario economy.
    Keywords: Fiscal and Tax Policy
    JEL: H2 H7
    Date: 2017–11
  37. By: Luong, Phuc (University of California, Davis); Lusher, Lester (University of Hawaii at Manoa); Yasenov, Vasil (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
  38. By: Uri Gneezy; John List; Jeffrey Livingston; Xiangdong Qin; Sally Sadoff; Yang Xu
    Abstract: Tests measuring and comparing educational achievement are an important policy tool. We experimentally show that offering students extrinsic incentives to put forth effort on such achievement tests has differential effects across cultures. Offering incentives to U.S. students, who generally perform poorly on assessments, improved performance substantially. In contrast, Shanghai students, who are top performers on assessments, were not affected by incentives. Our findings suggest that in the absence of extrinsic incentives, ranking countries based on low-stakes assessments is problematic because test scores reflect differences in intrinsic motivation to perform well on the test itself, and not just differences in ability.
    Date: 2017
  39. By: Ferguson, John-Paul (Stanford University); Koning, Rembrand (Harvard University)
    Abstract: Racial segregation between American workplaces is greater today than it was a generation ago. This increase has happened alongside the declines in within-establishment occupational segregation on which most prior research has focused. We examine more than 40 years of longitudinal data on the racial employment composition of every large private-sector workplace in the United States and calculate decomposable Theil statistics of segregation to compare and contrast between-area, between-establishment, and within-establishment trends in racial employment segregation over time. We demonstrate that the increase in establishment segregation owes little to within-establishment processes but rather stems from the different birth and death rates of more- and less-homogeneous workplaces. Present research on employment segregation focuses intently on within-firm processes. By doing so, we may be overstating what progress has been made on employment integration and ignoring other avenues of intervention that may give greater leverage for further integrating firms.
    Date: 2017–06
  40. By: Björn Kauder; Niklas Potrafke; Christoph Schinke
    Abstract: We examine whether German state governments manipulated fiscal forecasts before elections. Our data set includes three fiscal measures over the period 1980-2014. The results do not show that electoral motives influenced fiscal forecasts in West German states. By contrast, East German state governments underestimated spending in pre-election years (compared to other years) by about 0.20 percent of GDP, tax revenues by about 0.36 percent of GDP, and net lending by 0.30 percent of GDP. Predicting low levels of spending and tax revenues, East German state governments thus underestimated the size of government in pre-election years.
    Keywords: fiscal forecasts, electoral cycles, East and West Germany
    JEL: H68 E32 E62
    Date: 2017

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