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on Urban and Real Estate Economics |
| By: | Matthew Davis; Fernando V. Ferreira |
| Abstract: | Median expenditure per student in U.S. public schools grew 41% in real terms from 1990 to 2009. We propose a new mechanism to explain part of this increase: housing disease, a fiscal externality from local housing markets in which unexpected booms generate extra revenues that schools administrators have incentives to spend, independent of local preferences for provision of public goods. We establish the importance of housing disease by: (i) assembling a novel microdata set containing the universe of housing transactions for a large sample of school districts; and (ii) using the timelines of school district housing booms to disentangle the effects of housing disease from reverse causality and changes in household composition. We estimate housing price elasticities of per-pupil expenditures of 0.16-0.20, which accounts for approximately half of the rise in public school spending. School districts did not boost administrative costs with those additional funds. Instead, they primarily increased spending on instruction and capital projects, suggesting that the cost increase was accompanied by improvements in the quality of school inputs. |
| JEL: | H0 I0 J0 R0 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24140&r=ure |
| By: | Mathilde Poulhes (INSEE; CREST) |
| Abstract: | This paper estimates buyers' preferences for dwelling attributes and neighbourhood characteristics. The collected data allows for the simultaneous consideration of a wide range of intrinsic characteristics, such as surface, floor, etc., and neighbourhood characteristics, including noise, crime, school quality, distance to jobs, etc. The marginal willingness to pay is identified from transaction data under the assumptions of the hedonic model described by Rosen (1974). We use very local fixed effects combined when possible with administrative boundaries as geographical discontinuities to isolate the effect of each amenity. Estimation is achieved by using flexible semi-parametric methods. Characteristics explain more than 90% of the variance of dwelling prices, showing a significant positive marginal willingness to pay for job accessibility and school quality, and a negative marginal willingness to pay for a higher crime rate in the area. By contrast, noise level or public transport accessibility have less influence on housing prices. These results are robust to the inclusion of census tract fixed-effects, which also drastically reduces the spatial correlation of the residual prices. |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2017-13&r=ure |
| By: | Kirdan Lees (University of Canterbury) |
| Abstract: | Land use regulations vary in the restrictions and enforcement that applies across time and space. That variation makes it difficult to determine when land use regulations hinder the flexibility of housing supply using a single time series method, so a range of approaches and country case studies may be most appropriate to test impacts. We use four methods to test for impacts of land use regulation in New Zealand and extend existing efforts by utilising unit record data on house sales and construction type. We find: (i) house prices outstrip construction prices in many New Zealand cities; (ii) land with a house is valued 4 and 9 times higher than land with no house attached; (iii) density and house prices are only weakly correlated; (iv) prices of apartments and townhouses are much higher than their construction costs. All four results suggest land use regulations play a material role in constraining housing supply, driving up house prices. Local geography, such as steep terrain, might matter, but relative price differentials between land with a house and land without a house suggest only a minor role for geography. |
| Keywords: | Keywords: housing supply, house prices, land prices, land use regulation |
| JEL: | R31 R52 |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:18/01&r=ure |
| By: | Sa, Filipa |
| Abstract: | I use newly-released administrative data on properties owned by overseas companies to study the effect of foreign investment on the housing market in England and Wales. To estimate the causal e§ect, I construct an instrument for foreign investment based on economic shocks abroad. Foreign investment is found to have a positive e§ect on house price growth. This e§ect is present at di§erent percentiles of the distribution of house prices and is stronger in local authorities where housing supply is less elastic. Foreign investment is also found to reduce the rate of home ownership. There is no evidence of an e§ect on the housing stock or the share of vacant homes |
| Keywords: | foreign investors; house prices |
| JEL: | F21 R21 |
| Date: | 2016–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86173&r=ure |
| By: | Chen, Anping; Dai, Tianshi; Partridge, Mark |
| Abstract: | China is experiencing rapid urbanization with the steady emergence of large cities, leading to policy discussions of the role of large cities in its development. While the consensus is that agglomeration plays an important role in economic development and large cities can act as engines of economic growth, there is relatively little empirical knowledge of the effects of agglomeration on inequality. In this study, we apply panel data from a micro firm-level survey and from city-level data to investigate whether there is a causal relationship between agglomeration and establishment wage dispersion in China. Given potential endogeneity of city size, we employ an instrumental variable regression (IV) approach. We find strong evidence that agglomeration has significant effects on wage dispersion in the short- and long-run. The link between agglomeration and wage dispersion is heterogeneous across regions. The spatially varying results appear to be due to different stages of development. Our results are consistent with two-sided sorting models in that it appears that the most productive and least productive firms are moving from inland cities to the coast. |
| Keywords: | Agglomeration, Wage Dispersion, City Size, Inequality, China |
| JEL: | R1 |
| Date: | 2017–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83516&r=ure |
| By: | Michael Gilraine; Hugh Macartney; Robert McMillan |
| Abstract: | This paper sheds new light on general equilibrium responses to major education reforms, focusing on a sorting mechanism likely to operate whenever a reform improves public school quality significantly. It does so in the context of California's statewide class size reduction program of the late-1990s, and makes two main contributions. First, using a transparent differencing strategy that exploits the grade-specific roll-out of the reform, we show evidence of general equilibrium sorting effects: Improvements in public school quality caused marked reductions in local private school shares, consequent changes in public school demographics, and significant increases in local house prices -- the latter indicative of the reform's full impact. Second, using a generalization of the differencing approach, we provide credible estimates of the direct and indirect impacts of the reform on a common scale. These reveal a large pure class size effect of 0.11 SD (in terms of mathematics scores), and an even larger indirect effect of 0.16 SD via induced changes in school demographics. Further, we show that both effects persist positively, giving rise to an overall policy impact estimated to be 0.4 SD higher after four years of treatment (relative to none). The analysis draws attention, more broadly, to conditions under which the indirect sorting effects of major reforms are likely to be first order. |
| JEL: | H40 I21 I22 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24191&r=ure |
| By: | Huw Lloyd-Ellis (Queen's University); Derek Stacey (Ryerson University); Allen Head (Queen's University) |
| Abstract: | Cross-city variation in the rate of home-ownership and the relative costs of renting and owning are studied using a model of frictional assignment. Houses of different types are built by a competitive construction industry and either rented in Walrasian markets or sold through a process of competitive search to households. Households differ with regard to their permanent income and sort over house types and housing tenure at each point in time. Along a balanced growth path, both the composition of the city's housing stock and the rate of home-ownership depend on the distributions of income, construction costs, and housing amenities. In the absence of either financial frictions or minimum house size requirements, higher income households live in better houses and are more likely on average to be homeowners than lower income ones. A calibrated version illustrates the extent to which income/wealth inequality alone can ac- count for variation in home-ownership and the price-rent ratio both within and across cities. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1336&r=ure |
| By: | Anna Carnegie (Department of Social Policy and Social Work, University of York); Michelle Norris (School of Social Policy, Social Work and Social Justice, University College Dublin, Ireland); Michael Byrne (School of Social Policy, Social Work and Social Justice, University College Dublin, Ireland) |
| Abstract: | Combatting stigma in public housing is a key concern among policy makers in the Republic of Ireland and internationally and this paper critically assesses the mechanism most commonly employed to achieve this – ‘income mixing’ or ‘poverty deconcentration’ of public rented neighbourhoods by encouraging households with a wider mix of incomes to live there. This is most commonly achieved by ‘tenure mixing’ - providing private housing alongside public housing on the grounds that occupants of the former tenure tend to have higher incomes than occupants of the latter. To do this the paper draws together empirical research on three public housing neighbourhoods in Dublin - Ireland’s capital and largest city - and insights from the critical geography and urban studies literature, to critically examine the effectiveness of tenure mixing as a public housing destigmatizing tool. The analysis presented here demonstrates that tenure mixing often produces contradictory results – in terms of reduced external stigma but heightened internal or within neighbourhood stigmatization. It links these outcomes to the policy and socio-economic contextual factors which we argue which play a central but underappreciated role in shaping the implementation of tenure mixing and its impact on public housing stigmatization. |
| Date: | 2018–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201801&r=ure |
| By: | Hana M. Broulíková; Peter Huber (WIFO); Josef Montag; Petr Sunega |
| Abstract: | Homeownership is believed to cause higher unemployment. This is because homeowners face higher mobility costs that limit their job search to local labour markets. Empirical tests of this prediction have yielded mixed results so far, possibly due to the endogeneity of homeownership. This paper documents that the privatisation of public housing in Central and Eastern Europe after the fall of the Iron Curtain resulted in a quasi-experimental assignment of homeownership to individual households. This facilitates a new test of the effects of homeownership on mobility and unemployment. We find only weak evidence that homeowners are less willing to move and no evidence of higher unemployment risks relative to renters. |
| Date: | 2018–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2018:i:548&r=ure |
| By: | Battistin, Erich (Queen Mary, University of London); Neri, Lorenzo (Queen Mary, University of London) |
| Abstract: | We show that grading standards for primary school exams in England have triggered an inflation of quality indicators in the national performance tables for almost two decades. The cumulative effects have resulted in significant differences in the quality signaled to parents for otherwise identical schools. These differences are as good as random, with score inflation resulting from discretion in the grading of randomly assigned external markers. We find large housing price gains from the school quality improvements artificially signaled by inflation as well as lower deprivation and more businesses catering to families in local neighborhoods. The design ensures improved external validity for the valuation of school quality with respect to boundary discontinuities and has the potential for replication outside of our specific case study. |
| Keywords: | house prices, school quality, score inflation |
| JEL: | C26 C31 I2 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11161&r=ure |
| By: | Victor Lavy; Adi Boiko |
| Abstract: | We present evidence about the ways that school superintendents add value in Israel’s primary and middle schools. Superintendents are the CEOs of a cluster of schools with powers to affect the quality of schooling, and we extend the approach used in recent literature to measure teachers’ value added, to assess school superintendents. We exploit a quasi-random matching of superintendent and schools, and estimate that superintendent value added has positive and significant effects on primary and middle school students’ test scores in math, Hebrew, and English. One standard deviation improvement in superintendent value added increases test scores by about 0.04 of a standard deviation in the test score distribution. The effect doesn’t vary with students’ socio-economic background, is highly non-linear, increases sharply for superintendents in the highest-quartile of the value added distribution, and is larger for female superintendents. We explore several mechanisms for these effects and find that superintendents with higher value added are associated with more focused school priorities and more clearly defined working procedures, but no effect on school resources and no effect on total teachers’ on the job and external training, although there is a significant effect on the composition of the former. Another important effect is that schools with higher quality superintendents are more likely to address school climate, violence and bullying, and implement related interventions which lead to lower violence in school. A new superintendent is also associated with a higher likelihood that the school principal is replaced. |
| JEL: | I0 I21 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24028&r=ure |
| By: | Singleton, John |
| Abstract: | Charter school funding is typically set by formulas that provide the same amount for all students regardless of advantage or need. In this paper, I present evidence that this policy skews the distribution of students served by charters towards low-cost populations by influencing where charter schools decide to open and whether they survive. I develop and estimate an empirical model of charter school supply and competition to evaluate the effects of funding policies that aim to correct these incentives. To do this, I recover estimates of cost differentials across student populations by linking charter school effectiveness at raising student achievement with unique records of charter school expenditures gathered from Florida. I then leverage revealed preference with the exit and location choices of charter schools in an entry game to uncover how charter schools respond to competitive and financial incentives. The results indicate that a cost-adjusted funding formula would significantly increase the share of charter schools serving disadvantaged students with little reduction in the aggregate effectiveness of the sector. |
| Keywords: | charter schools, school choice, school finance |
| JEL: | H3 I2 L1 |
| Date: | 2017–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83532&r=ure |
| By: | Patten Priestley Mahler (Centre College) |
| Abstract: | I use a detailed panel of data and a unique modeling specification to explore how public schoolteachers respond to the incentives embedded in North Carolina’s retirement system. Like most public-sector retirement plans, North Carolina’s teacher pension implicitly encourages teachers to continue working until they are eligible for their pension benefits, and then leave soon afterward. I find that teachers with higher levels of quality, as measured by a teacher’s value-added to her students’ achievement test scores, are more responsive to the “pull” of teacher pensions. Younger teachers, those with higher salaries, and nonwhite teachers are also more likely to stay during the pension “pull.” All teachers show a strong response to the pension “push,” with about a quarter of teachers leaving every year once they become eligible for their pension. I depart from other models of teacher retirement by using a Cox proportional hazard model. Given that salaries are generally fixed by the state, I find that the number of years a teacher must work before she is eligible for her full pension benefit is the major driver of variation in pension wealth. This specification has the benefit of a flexible baseline hazard that can easily capture the sharp incentives driving a teacher’s retirement decision that are dependent on her proximity to retirement eligibility, and can flexibly account for differences driven by local labor market conditions. These analyses highlight important unintended effects that inform education policies going forward to ensure the retention of high-quality teachers in all types of schools. |
| Keywords: | Teacher Retirement, Teacher Pensions, Public Expenditure, Public Pensions, State Finance, Nonwage Benefits |
| JEL: | H55 H72 H75 J26 J32 I21 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:18-281&r=ure |
| By: | Florian Oswald (Sciences Po); Costas Meghir (Yale University); Wenli Li (Federal Reserve Bank of Philadelphia) |
| Abstract: | We specify and estimate a rich model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven both by house price shocks and income shocks, while bankruptcy is governed by the basic institutional framework in the US as implied by chpater 7 and chapter 13. The model is estimated using micro data on credit reports and mortgages combined with individual level data from the American Community Survey. We perform several counterfactual experiments with the model which investigate welfare aspects of an important reform of the US consumer bankruptcy code implemented in 2006. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1260&r=ure |
| By: | Miguel Ángel García-López (UAB - Universitat Autònoma de Barcelona [Barcelona], Institut d'Economia de Barcelona, Departament d'Econometria, Estadística i Economia Espanyola - UB - Universitat de Barcelona); Camille Hémet (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, Institut d'Economia de Barcelona, Departament d'Econometria, Estadística i Economia Espanyola - UB - Universitat de Barcelona, CEPR - Center for Economic Policy Research - CEPR); Elisabet Viladecans-Marsal (Institut d'Economia de Barcelona, Departament d'Econometria, Estadística i Economia Espanyola - UB - Universitat de Barcelona, CEPR - Center for Economic Policy Research - CEPR, UB - Universitat de Barcelona) |
| Abstract: | Recent evidence reveals that transportation's improvements within metropolitan areas have a clear effect on population and job decentralization processes. Yet, very little has been said on how these improvements affect the spatial organization of the economic activity in the suburbs. This paper analyses the effects of transportation's changes on employment subcenters formation. Using data from metropolitan Paris between 1968 and 2010, we first show that the spatial pattern of job decentralization is reinforcing the polycentric nature of Paris: the number of subcenters grew from 21 in 1968 to 35 in 2010 and the employment growth was very intense within them. Second, our main contribution is to show that the new rail transit clearly affects the emergence of subcenters: not only does the presence of a rail station increase the probability of a suburban municipality of becoming (part of) a subcenter by 5 to 10%, but a 10% increase in municipality proximity to a suburban station is found to increase its chance to be part of a subcenter by 3 to 5%. |
| Keywords: | Urban spatial structure ,Decentralization,Subcenters Polycentric city,Transportation |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01596269&r=ure |
| By: | Paige Ouimet; Geoffrey Tate |
| Abstract: | We use unique data on employee decisions in the employee stock purchase plans (ESPPs) of U.S. public firms to measure the influence of networks on investment decisions. Comparing only employees within a firm during the same election window and controlling for a metro area fixed effect, we find that the local choices of coworkers to participate in the firm’s ESPP exert a significant influence on employees’ own decisions to participate. Local coworkers’ trading patterns also disseminate to colleagues through the network. In the cross-section, we find that some employees (men, younger workers) are particularly susceptible to peer influence. Generally, we find that more similar employees exert greater influence on each other’s decisions and, particularly, that high (low) information employees are most affected by other high (low) information employees. However, we also find that the presence of high information employees magnifies the effects of peer networks. We trace a value-increasing investment choice through employee networks. Thus, our analysis suggests the potential of networks and targeted investor education to improve financial decision-making. |
| JEL: | D14 G02 G11 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24058&r=ure |
| By: | Nicholas Le (West Virginia University, Department of Economics) |
| Abstract: | Analysis of the benefits and the drawbacks of hosting large-scale sporting events like the Olympics or World Cup frequently ignore the effects of crime due to its relatively small economic impact in comparison to employment and consumption effects. Literature has frequently tied sporting events and tourism to crime, in addition to observing proximity effects on crime during sporting events. This research seeks to confirm both by implementing a difference-in-difference regression that can show whether crime increased during the Olympics, in particular in London boroughs which hosted venues for the Games. Ultimately, the research concludes that crime in London as a whole does increase although it is unable to find statistically significant evidence that crime increased in host boroughs at a magnitude larger than the general increase in crime in the city. Likely reasons we have been unsuccessful in pinpointing the location effects include data limitations (daily data would be superior to monthly data due to the dates during which the event was hosted) and the relatively small geographical size of each host borough, as well as their proximity to one another. |
| Keywords: | sporting events, economics, crime, olympics |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:18-01&r=ure |
| By: | Christian Longhi (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur) |
| Abstract: | The paper aims to identify the forms and dynamics of the organizational structures of high-tech clusters overtime. Since Markusen (1996), it is well acknowledged that diversity is an emergent property of clusters, but the interactions between local and non-local actors of the clusters are difficult to trace because of lack of relevant data. The cluster policies developed to fix the network failures between the heterogeneous actors – large and small firms, universities, research institutes – of the current processes of innovation provide new information opportunities. In France, Competitiveness Clusters work as a “factories of project”; the information they produce on collective R&D projects applying for subsidies provides a proxy of local and non-local relations of the clusters. Social network analysis is used to infer the organizational structure of the collective learning networks and trace their dynamics. The case studies considered are Sophia-Antipolis and Rousset, two high tech clusters which belong to the same Competitiveness Cluster, ‘Secure Communicating Solutions’ in the Provence-Alpes-Côte d’Azur Region. The paper highlights the decoupling of the two clusters overtime as a consequence of distinctive organizational structures. The diversity of the dynamics of the collective learning networks which emerges through the analysis of the collective R&D projects in the two high tech clusters shows that knowledge creation and innovation can follow different paths and questions the public policies implemented. |
| Keywords: | Innovation, Collective Learning Networks, Competitiveness Cluster, Social Network Analysis, Rousset,Cluster Policy, Sophia Antipolis |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01675684&r=ure |
| By: | Manuel Adelino; Kristopher Gerardi; Barney Hartman-Glaser |
| Abstract: | A central result in the theory of adverse selection in asset markets is that informed sellers can signal quality and obtain higher prices by delaying trade. This paper provides some of the first evidence of a signaling mechanism through trade delays using the residential mortgage market as a laboratory. We find a strong relationship between mortgage performance and time to sale for privately securitized mortgages. Additionally, deals made up of more seasoned mortgages are sold at lower yields. These effects are strongest in the "Alt-A" segment of the market, where mortgages are often sold with incomplete hard information, and in cases where the originator and the issuer of mortgage-backed securities are not affiliated. |
| JEL: | D0 G0 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24180&r=ure |
| By: | Tatiana Cesaroni (Bank of England) |
| Abstract: | This study examines the effect of housing credit conditions on the Time on Market for residential properties in Italy, using a unique dataset from the Bank of Italy survey on the Italian housing market. The analysis was carried out on a sample of roughly 1,000 real estate agents over the period 2011-2015 using panel data techniques. The results support the view that an increase in housing market liquidity, measured by the Loan-to-Value Ratio, reduces the average TOM of a property, thus improving the matching process between buyers and sellers. The results are found to be robust to specifications including the traditional determinants of TOM, used as controls (i.e. price revisions, potential buyers, mandates to sell, the role of brokers and so on). The results also show that a higher price reduction, possibly associated with an initial mispricing by the seller when setting the initial listing price, seems to be associated with a higher TOM for residential properties. |
| Keywords: | Time on Market, Loan to Value ratio, brokers, market structure, price revisions, dynamic panel models |
| JEL: | C3 D8 E3 G1 R3 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lui:lleewp:18136&r=ure |
| By: | Rebecca Diamond; Timothy McQuade; Franklin Qian |
| Abstract: | We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase. Using a dynamic, neighborhood choice model, we find rent control offered large benefits to covered tenants. Welfare losses from decreased housing supply could be mitigated if insurance against rent increases were provided as government social insurance, instead of a regulated landlord mandate. |
| JEL: | H0 R0 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24181&r=ure |
| By: | Chao Luo; Yih-Fang Huang; Vijay Gupta |
| Abstract: | This paper presents a multi-stage approach to the placement of charging stations under the scenarios of different electric vehicle (EV) penetration rates. The EV charging market is modeled as the oligopoly. A consumer behavior based approach is applied to forecast the charging demand of the charging stations using a nested logit model. The impacts of both the urban road network and the power grid network on charging station planning are also considered. At each planning stage, the optimal station placement strategy is derived through solving a Bayesian game among the service providers. To investigate the interplay of the travel pattern, the consumer behavior, urban road network, power grid network, and the charging station placement, a simulation platform (The EV Virtual City 1.0) is developed using Java on Repast.We conduct a case study in the San Pedro District of Los Angeles by importing the geographic and demographic data of that region into the platform. The simulation results demonstrate a strong consistency between the charging station placement and the traffic flow of EVs. The results also reveal an interesting phenomenon that service providers prefer clustering instead of spatial separation in this oligopoly market. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.02135&r=ure |
| By: | Veronica Guerrieri (University of Chicago); Alessandra Fogli (Minneapolis Federal Reserve Bank) |
| Abstract: | Over the last 40 years, the US has experienced a large increase in inequality. At the same time there has been a substantial increase in residential segregation by income and education. What is the link between inequality and residential and educational choice? We first document a strong correlation between inequality and residential segregation at the MSA level, especially in MSA with higher percentage of families with children. Then we develop a general equilibrium overlapping generations model where parents choose the neighborhood where they live with their children. The key ingredient of the model is that there is a spillover effect: children's future wage is expected to be higher if they live in richer neighborhoods. We model such a spillover effect as a black box that can be explained by different quality of public schools, peer effect, learning from neighbors' experience and so forth. This generates a general equilibrium effect through which the residential choice amplifies future inequality: the higher is inequality, the higher is residential segregation which, due to the spillover effect, generates higher inequality. Is this the end of the American dream? We then calibrate the model, using the elasticities found in Chetty and Hendren (2016) and quantify how much residential segregation has contributed to increase inequality. (We attach slides of a preliminary version of the paper, as the current version is still on progress). |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1309&r=ure |
| By: | luciene pereira (Fundação Getulio Vargas); Pedro Cavalcanti Ferreira (Fundação Getulio Vargas); Alexander Monge-Naranjo (Federal Reserve Bank of St. Louis) |
| Abstract: | The emergence of slums is a common feature in a country's path towards urbanization, structural transformation and development. Based on salient micro and macro evidence of Brazilian labor, housing and education markets, we construct a simple model to examine the conditions for slums to emerge. We then use the model to examine whether slums are barriers or stepping stones for lower skilled households and for the development of the country as a whole. We calibrate our model to explore the dynamic interaction between skill formation, income inequality and structural transformation with the rise (and potential fall) of slums in Brazil. We then conduct policy counterfactuals. For instance, we find that cracking down on slums could slow down the acquisition of human capital, the growth of cities (outside slums) and non-agricultural employment. The impact of reducing housing barriers to entry into cities and of different forms of school integration between the city and the slums is also explored. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1308&r=ure |
| By: | Mariarosaria Comunale (Bank of Lithuania) |
| Abstract: | In this paper, we examine the relationships between real, credit and house price cycles, by using a synchronicity index, and structural characteristics and macroeconomic variables of 17 EU countries. We find that the cycles between credit variables and the real cycle with the property or equity prices cycles seem relatively well synchronised. Credit and GDP fluctuations seem to be less synchronised, mostly because credit volumes tend to lag the real cycle by several quarters. The high rates of private homeownership tend to be associated with larger cycles in GDP, credit, and house prices. Higher Loan-To-Value ratios, seen as a proxy of borrowing constraints, and a higher percentage of flexible rate mortgages, could also indicate that a country is more sensitive to shocks and possibly increase pro-cyclicality and increase cycle volatility. Finally, the pro-cyclicality of the credit and housing market to the GDP cycle can be linked to the fluctuation in current accounts and their misalignments with respect to the theoretical equilibrium value. The synchronicity and the cycles of credit may also be considered for signaling recessions. |
| Keywords: | cycles, synchronicity, housing market, credit, European Union |
| JEL: | E32 E44 F36 |
| Date: | 2017–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:lie:opaper:15&r=ure |
| By: | Atila Abdulkadiroglu; Joshua D. Angrist; Yusuke Narita; Parag A. Pathak |
| Abstract: | Many centralized matching schemes incorporate a mix of random lottery and non-lottery tie-breaking. A leading example is the New York City public school district, which uses criteria like test scores and interviews to generate applicant rankings for some schools, combined with lottery tie-breaking at other schools. We develop methods that identify causal effects of assignment in such settings. Our approach generalizes the standard regression discontinuity design to allow for many running variables and treatments, some of which are randomly assigned. We show that lottery variation generates assignment risk at non-lottery programs for applicants away from non-lottery cutoffs, while non-lottery variation randomizes applicants near cutoffs regardless of lottery risk. These methods are applied to evaluate New York City’s school progress assessments, which give schools letter grades as a summary measure of quality. Our estimates reveal that although Grade A schools boost achievement, these gains emerge only for students who attend lottery schools. Attendance at a coveted Grade A screened school, including some of the highest performing in the district, generates no measurable effects. Evaluation methods that fail to take advantage of both lottery and non-lottery variation miss this difference in impact. |
| JEL: | C26 I20 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24172&r=ure |
| By: | Bracke, Philippe; Tenreyro, Silvana |
| Abstract: | Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing markets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring. |
| Keywords: | housing market; fluctuations; down-payment effects; reference dependence; anchoring; loss aversion labor market frictions; capital market frictions; volatility; labor market fluidity |
| JEL: | J1 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86176&r=ure |
| By: | Henderson, J. Vernon; Kriticos, Sebastian |
| Abstract: | Sub-Saharan Africa has urbanised at tremendous speed over the last half century, in a process that has dramatically reshaped the economic and spatial profile of the region. Simultaneously, it has challenged much of the conventional empirical wisdom about how and why people move to cities. As we show in this article, the traditional view that countries urbanise alongside struc-tural transformation is challenged in Africa, where urbanisation occurs despite low productivity in agriculture, very limited industrialisation, and a high share of primary sector employment across the urban hierarchy. There appear to be large household income gaps between urban and rural areas inducing migration, and these income premiums apply equally well to farm and non-farm families. Looking across the urban hierarchy, we also discuss how urban primacy can be problematic for economic growth in Africa, how secondary cities are lagging in industrial development, and how growth of employment in tradable services may signal a different path to structural transformation in Africa. |
| Keywords: | Urbanisation; industrialisation; primacy; structural transformation; wage premium; Africa. |
| JEL: | Q15 |
| Date: | 2017–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86349&r=ure |
| By: | Westphal, Matthias |
| Abstract: | In this paper, I evaluate potential side effects of the educational expansion in Germany on the learning outcomes of today's students. The educational expansion was a demand shock in the labor market of teachers, which could have thus encouraged individuals with different teaching abilities to eventually become teachers. I find that replacing a non-affected teacher with an educational expansion teacher leads to a 2 percent reduction in students' test scores. Explorative analyses suggest that these teachers are more extrinsically rather than intrinsically motivated. The results highlight that monitoring and investing in quality is important for future extensions of public institutions. |
| Keywords: | human capital acquisition,teacher effectiveness,educational expansion |
| JEL: | H75 I20 I21 I28 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:721&r=ure |
| By: | Maria Adelaida Lopera; Steeve Marchand |
| Abstract: | We study how social interactions influence entrepreneurs' attitudes toward risk. We conduct two risk-taking experiments within workshops organized for young Ugandan entrepreneurs. Between the two experiments, the entrepreneurs participate in a networking activity where they build relationships and discuss with each other. We collect detailed data on peer network formation and on participants' choices before and after the networking activity. Our design implicitly controls for homophily effects (i.e. the tendency of individuals to develop relationships with people who have similar characteristics). We find that risk aversion is affected by social conformity. Participants tend to become more (less) risk averse in the second experiment if the peers they discuss with are on average more (less) risk averse in the first experiment. This suggests that social interactions play a role in shaping risk preferences. |
| Keywords: | Preference, Risk aversion, Entrepreneur, Social norms |
| JEL: | D03 D81 M13 Z13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2017-21&r=ure |
| By: | Puhani, Patrick A. (Leibniz University of 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: | fixed effects, identification, gender, education, teacher quality |
| JEL: | I21 J45 J71 J78 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11139&r=ure |
| By: | Goerke, Laszlo (IAAEU, University of Trier); Lorenz, Olga (IAAEU, University of Trier) |
| Abstract: | We investigate the causal effect of commuting on sickness absence from work using German panel data. To address reverse causation, we use changes in commuting distance for employees who stay with the same employer and who have the same residence during the period of observation. In contrast to previous papers, we do not observe that commuting distances are associated with higher sickness absence, in general. Only employees who commute long distances are absent about 20% more than employees with no commutes. We explore various explanations for the effect of long distance commutes to work and can find no evidence that it is due to working hours mismatch, lower work effort, reduced leisure time or differences in health status. |
| Keywords: | sickness absence, absenteeism, commuting, health, labour supply |
| JEL: | I10 J22 R2 R40 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11183&r=ure |
| By: | Aydemir, Abdurrahman (Sabanci University); Yazici, Hakki (Sabanci University) |
| Abstract: | This paper provides two contributions to the study of intergenerational mobility. First, we render a thorough characterization of education mobility in Turkey at the national level, including a three-generation mobility analysis. We find that the education mobility is significantly lower in Turkey compared to developed economies. Second, by exploiting large regional variation in the level of economic development across Turkey, we find that intergenerational education persistence is lower for females who grow up in more developed regions. The evidence is mixed for males. Interestingly, the development level of place of residence during earlier stages of childhood has much stronger association with education mobility compared to development level of place of residence during later stages. |
| Keywords: | intergenerational mobility, education, economic development, three generations |
| JEL: | J6 I2 R0 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11164&r=ure |
| By: | Ramina Sotoudeh; Dalton Conley; Kathleen Mullan Harris |
| Abstract: | We introduce a novel use of genetic data for studying social influences on behavior: Using data from the National Longitudinal Study of Adolescent to Adult Health (Add Health), we deploy the distribution of genotypes in a given grade within a school to instrument the influence of peer smoking on an individual’s own smoking behavior. We argue that this design alleviates many problems inherent to estimating peer effects. Using this approach, we find the relationship between peer smoking and individual smoking to be larger than that estimated by prior studies. Further, we explore the reduced form relationship between peer genotypes and ego smoking and find that the impact of peers’ genetic risk for smoking on ego’s smoking behavior is at least half as large as the effect of individual’s own genotype and sex, and 30% the effect of age. Moreover, peer influence on smoking appears heterogeneous by race: although whites and non-whites are equally susceptible to peer influence with respect to smoking, white egos are more likely to be influenced by white alters. This analysis suggests a promising way that genetic information can be leveraged to identify peer effects that avoids the reflection problem, contextual effects and selection into peer groups. |
| JEL: | D79 I12 I20 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24113&r=ure |
| By: | Sarah Cattan (Institute for Fiscal Studies and Institute for Fiscal Studies); Daniel A. Kamhöfer (Institute for Fiscal Studies); Martin Karlsson (Institute for Fiscal Studies); Therese Nilsson (Institute for Fiscal Studies) |
| Abstract: | Instructional time is seen as an important determinant of school performance, but little is known about the effects of student absence. Combining historical records and administrative data for Swedish individuals born in the 1930s, we examine the impacts of absence in elementary school on short-term academic performance and long-term socio-economic outcomes. Our siblings and individual fi xed effects estimates suggest absence has a moderate adverse effect on academic performance. The detrimental effect fades out over time. While absence negatively correlates with fi nal education, income and longevity, we only fi nd robust evidence that it lowers the probability of employment at age 25-30. |
| Keywords: | Absence in school, educational performance, long-term effects, register data |
| JEL: | C23 I14 I21 |
| Date: | 2017–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:17/21&r=ure |
| By: | Becker, Sascha O. (University of Warwick, CAGE and CEPR); Heblich, Stephan (University of Bristol, IZA and SERC); Sturm, Daniel M. (London School of Economics and CEPR) |
| Abstract: | This paper evaluates the impact of public employment on private sector activity using the relocation of the German federal government from Berlin to Bonn in the wake of the Second World War as a source of exogenous variation. To guide our empirical analysis, we develop a simple economic geography model in which public sector employment in a city can crowd out private employment through higher wages and house prices, but also generates potential productivity and amenity spillovers. We find that relative to a control group of cities, Bonn experiences a substantial increase in public employment. However, this results in only modest increases in private sector employment with each additional public sector job destroying around 0.2 jobs in industries and creating just over one additional job in other parts of the private sector. We show how this finding can be explained by our model and provide several pieces of evidence for the mechanisms emphasised by the model. |
| Keywords: | Economic Geography ; Public Employment ; Place-Based Policies ; German Division |
| JEL: | F15 J45 N44 R12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1146&r=ure |
| By: | Costa-Font, Joan (London School of Economics); Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC)) |
| Abstract: | Uniform health care delivered by a mainstream public insurer – such as the National Health Service (NHS), seldom satisfies heterogeneous demands for care, and some unsatisfied share of the population either use private health care, or purchase private insurance (PHI). One potential mechanism to partially satisfy heterogeneous preferences for health care, and discourage the use of private health care, is regional health care decentralisation. We find robust estimates suggesting that the development of regional health services shifted both perceptions of, and preferences for, using the NHS, making it more likely individuals would use public health care and, consequently, reducing the uptake of PHI. These results are heterogeneous by income, education, and age groups; and are robust to placebo and other robustness and falsification checks. |
| Keywords: | National Health Service (NHS), political decentralization, use of private health care, private health insurance, health system satisfaction, demand for private health care |
| JEL: | H7 I18 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11180&r=ure |
| By: | Wildauer, Rafael |
| Abstract: | This paper investigates the factors driving US household borrowing up to 2007. Two popular explanations are tested: First, the expenditure cascades hypothesis based on the assumption of debt-financed expenditures driven by an increasingly polarised distribution of income (‘keeping up with the Joneses’) and second, the hypothesis of Minskyian households which identifies climbing real estate prices as the decisive factor in household debt accumulation (re-mortgaging in order to cash in on capital gains and rising loan-to-value ratios in property purchases). This paper develops a method for obtaining individual household borrowing figures despite the lack of a panel structure from the Survey of Consumer Finances (SCF); it is the first to use the high quality information the SCF provides to investigate the impact of shifts in the income distribution and asset prices on household borrowing. The findings indicate that it is the interaction between the concentration of income at the top of the distribution and rising real estate prices which explains a large fraction of the increase in household borrowing prior to 2008. Therefore, neither the expenditure cascades hypothesis nor the hypothesis of Minskyian households are, in isolation, sufficient in order to understand household debt accumulation and thus the paper calls for a synthesis: future research should analyse the role of the distribution of income and asset prices together rather than separately. |
| Keywords: | household debt; expenditure cascades; wealth effects; Minsky |
| JEL: | H63 |
| Date: | 2016–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:18277&r=ure |
| By: | Fieldhouse, Andrew; Mertens, Karel; Ravn, Morten O. |
| Abstract: | We document the portfolio activity of federal housing agencies and provide evidence on its impact on mortgage markets and the economy. Through a narrative analysis, we identify historical policy changes leading to expansions or contractions in agency mortgage holdings. Based on those regulatory events that we classify as unrelated to short-run cyclical or credit market shocks, we find that an increase in mortgage purchases by the agencies boosts mortgage lending and lowers mortgage rates. Agency purchases influence prices in other asset markets and stimulate residential investment. Using information in GSE stock prices to construct an alternative instrument for agency purchasing activity yields very similar results as our benchmark narrative identification approach. |
| Keywords: | Credit Policy; Monetary Policy; Mortgage Credit; Residential Investment; Government Sponsored Entreprises |
| JEL: | E44 E52 G28 N22 R38 |
| Date: | 2017–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86167&r=ure |
| By: | Abdel Rahmen El Lahga (University of Tunis); Ines Bouassida |
| Abstract: | The dysfunction of the Tunisian labor market is exacerbated particularly by the segmentation between public and private sectors employment. These different segments differ in terms of returns to human capital, social protection and mobility, affecting career development and the wage structure in the economy. In this paper, we present the patterns of wage distribution in Tunisia across important socioeconomic groups and a detailed analysis of the wage gap between public and private sectors. Our results show particularly that while in the bottom of the wage distribution the positive wage gap between public and private sectors mainly attributable to the composition or characteristics of workers, the wage gap in the upper of the distribution is due to returns to characteristics effect. The public-sector wage premium explains the strong preference public positions. |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1168&r=ure |
| By: | Charles Raux (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Ayman Zoubir (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Mirkan Geyik (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper analyzes the socio-demographic profile and travel behavior of the " Velo'v " bike-sharing scheme annual members in Lyon (France). This scheme started in 2005 and has now around 350 stations and 4500 bikes in operation, with more than 50,000 annual members. By the means of an Internet-based survey more than 3,000 respondents were described by their detailed socio-demographic profile, their travel means and habits, a one-day activity-travel diary and additionally a seven days activity-travel diary filled by around 700 volunteers. By this way the survey covers all travel modes and day-today variations in travel behavior beyond the sole use of shared bike. We analyze with a discrete choice model the socio-demographic and spatial factors affecting the probability of being an annual member of the Velo'v scheme. Then we compare with descriptive statistics their daily travel behavior involving as well bike sharing as other traditional modes to the travel behavior of the general population as given with the latest Household Travel Survey available in the Lyon area (2015). The majority of Velo'v annual members are male, younger and hold higher social positions when compared with the Lyon's general population. An individual higher social position and the residential proximity to stations have both separate and positive effects on the probability of being an annual member of the service. Velo'v members are not captive from public transport, a majority of them have access to a car and they are fully multimodal in their day-today travel behavior. Velo'v bikes are used by them for any activity, not necessarily every day, like any other travel mode. The multimodal behavior of Velo'v members shows that Velo'v supply fits especially a demand not satisfied when the public transport station is too distant from home. |
| Keywords: | bike-sharing,Lyon,annual membership,discrete choice model,one week travel diary |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01639787&r=ure |
| By: | José Pedro Pontes; Patrícia Melo |
| Abstract: | The empirical literature on the relationship between labour productivity and urbanisation economies has considered the presence of variable returns to density, but it has not investigated the existence of a heterogeneous relationship according to country size. This paper proposes a theoretical model which can explain why the relationship between regional labour productivity and population density may differ in strength between small and large countries. To test the proposed theory, we carry out an empirical regression analysis using NUTS2-level data on GDP per capita and population density for the EU28 countries. The results from the empirical analysis corroborate the theoretical model and indicate the relationship is linear and stronger for regions in small countries compared to large countries. |
| Keywords: | Labour Productivity; Population Density; Economic Development; Country Size |
| JEL: | O11 O14 O15 R11 R12 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0232018&r=ure |
| By: | PHOLO Alain; TENIKUE Michel; NAFARI Baraka |
| Abstract: | The impact of agglomeration economies in African urban development has not been clearly measured yet. To inform the debate on their existence and their intensity, there is a need for empirical studies providing new evidence on agglomeration effects in the African region. In this research we contribute in bridging this gap by investigating, through a structural estimation approach, the impact of agglomeration economies and forward linkages on the localization of French affiliates in Africa. Using a sample of French subsidiaries in Africa, we compare the theoretically derived measure of market potential with the standard form used by geographers and with a measure of local demand. Our results show that Market Potential matters for location choice. However, the semi-elasticity estimates suggest that the intensity of demand linkages in Africa is lower than what has been observed in the European Union. Moreover, their effects seem to be insignificant when we consider the spillover variables. These spillover effects have a positive and significant impact on location which suggests that agglomerations effects are at play throughout Africa. |
| Keywords: | agglomeration economics; location of firms; market potential |
| JEL: | F12 F15 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2017-19&r=ure |
| By: | Brainard, Lael (Board of Governors of the Federal Reserve System (U.S.)) |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgsq:983&r=ure |
| By: | Pieterse, Marius |
| Abstract: | SECO Working Paper 22/2017 by Marius Pieterse |
| Abstract: | While both international trade law and regional trade agreements in the SADC region are typically focused on nation states, it is cities that produce the bulk of economic goods and services in the region and that, in effect, are the main actors in terms of trade agreements. Similarly, regional trade is facilitated by inter-city infrastructure, connectivity, transport routes and so forth. Indeed, both formal and informal trade in the region predominantly take place on an inter-city level, yet this is seldom perceived or structured by applicable legal regimes. Changes in the legal and/or regulatory landscape in one city may thus have regional trade implications across the region, without these visibly triggering international or regional trade laws or agreements. |
| Date: | 2018–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1148&r=ure |
| By: | Cellini, Roberto; Cuccia, Tiziana |
| Abstract: | The purpose of this paper is to investigate the relation between the economic resilience and cultural behaviour, resorting to the evidence provided by the 20 Italian regions at the time of the Great recession. We consider specific cultural behaviours, which provide a specific meaning of culture; its relation with the resilience ability of regions is analysed. We document that higher level of supplied and demanded quantity of cultural goods in a region associate with higher regional economic resilience as measured by the ability of limiting employment drop; the relation with the considered cultural behaviours is weaker in the case of economic resilience as measured by the ability of limiting income drop. We propose possible explanations for this asymmetry. |
| Keywords: | Regions, Economic resilience, Great Recession, Cultural goods, Italy |
| JEL: | R39 Z10 |
| Date: | 2018–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83904&r=ure |
| By: | Balestra, Simone; Eugster, Beatrix; Liebert, Helge |
| Abstract: | Children starting school at older ages consistently exhibit better educational outcomes. In this paper, we underscore child development as a mechanism driving this effect. We study the causal effect of school starting age on a child's probability of developing special educational needs in early grades. We find that starting school at a relatively older age decreases the probability of developing special needs by approximately 6 percentage points. This decrease is due to a lower incidence of various behavioral and learning impairments. Importantly, the effect is not driven by non-expert over-referrals of relatively younger children to special needs services. The effect is persistent throughout compulsory schooling, resulting in higher test scores in grade eight. Although these performance differentials are significant, they do not affect labor market entry. |
| Keywords: | child development; school starting age; special needs |
| JEL: | I14 I21 J13 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12515&r=ure |
| By: | Hellmann, Tim (Center for Mathematical Economics, Bielefeld University); Panebianco, Fabrizio (Center for Mathematical Economics, Bielefeld University) |
| Abstract: | We study a model of transmission of continuous cultural traits across generations where children learn their cultural trait from their parents and their social environment modeled by a network. Parents can engage in the socialization process of their children by biasing links in the network in order for their children to adopt a cultural trait similar to their own. In this endogenous network, we study the emergence of positive and negative role models, the existence of a steady state cultural trait, its characterization in terms long-run influence of each dynasty, and the speed of convergence. |
| Keywords: | Cultural transmission, Social networks, Persistence of cultural traits, Network Formation |
| Date: | 2018–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:579&r=ure |
| By: | Nicolas Gendron-Carrier; Marco Gonzalez-Navarro; Stefano Polloni; Matthew A. Turner |
| Abstract: | We investigate the relationship between the opening of a city’s subway network and its air quality. We find that particulate concentrations drop by 4% in a 10km radius disk surrounding a city center following a subway system opening. The effect is larger near the city center and persists over the longest time horizon that we can measure with our data, about eight years. We estimate that a new subway system provides an external mortality benefit of about $594m per year. Although available subway capital cost estimates are crude, the estimated external mortality effects represent a significant fraction of construction costs. |
| JEL: | L91 R11 R14 R4 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24183&r=ure |
| By: | E. Mark Curtis; Ryan Decker |
| Abstract: | Entrepreneurship plays a vital role in the economy, yet there exists little well-identified research into the effects of taxes on startup activity. Using recently developed county-level data on startups, we examine the effect of states' corporate, personal and sales tax rates on new firm activity and test for cross-border spillovers in response to these policies. We find that new firm employment is negatively—and disproportionately—affected by corporate tax rates. We find little evidence of an effect of personal and sales taxes on entrepreneurial outcomes. Our results are robust to changes in the tax base and other state-level policies. |
| Keywords: | Labor supply and demand ; Entrepreneurship ; Firm dynamics ; Taxation |
| JEL: | L26 D22 H71 H25 J23 |
| Date: | 2018–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2018-03&r=ure |
| By: | Libman, Alexander; Obydenkova, Anastassia |
| Abstract: | The goal of the paper is to systematically review the variety of arguments describing how the Soviet past influences the development of the Eurasian regionalism. While many references to the ‘post-Soviet’ regionalism imply that history should matter substantially for its evolution, to our knowledge, the arguments about particular effects of the historical legacies are scattered throughout the literature and rarely compared with each other. We argue that the historical legacies can matter for the Eurasian regionalism in two instances: by affecting the environment for the development of regional organizations and through the path-dependent evolution of organizations themselves. The paper concludes that the development of the Eurasian regionalism should indeed differ from that observed in many other parts of the world because of the Soviet legacies. |
| Keywords: | Eurasian regionalism, historical legacies, historical institutionalism |
| JEL: | F15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83506&r=ure |
| By: | Laurent Franckx |
| Abstract: | Transport models used for long-term projections should reflect the impact of shared, automated and electric mobility modes. The objective of the current paper is to derive lessons from the existing literature on vehicle ownership modelling to find options to further improve the PLANET model, which is used for projections of transport demand in Belgium.PLANET is already well equipped to represent the impacts of shared and automated cars on the opportunity cost of travel time, the load factors and the annual mileage of cars. |
| Keywords: | Transport demand, Long-term forecasting, Technology diffusion, Car ownership, Automated vehicles, Electric vehicles, Shared mobility, Integrated energy-transport modelling |
| JEL: | H23 C25 L62 L9 O3 Q47 Q5 R4 |
| Date: | 2017–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1708&r=ure |
| By: | Amat Adarov (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The study estimates aggregate financial cycles and segment-specific cycles for credit, equity, bond and housing markets of the USA, the UK, Germany and Japan over the period 1960-2015 using dynamic factor models with state-space techniques based on a range of variables conveying market price, quantity and risk dynamics. The analysis reveals a highly persistent and recurring nature of financial cycles reflecting the build-up of financial imbalances in each segment with an estimated average cycle duration of about ten years. The significant co-movements and spillovers that we find among many of the segment-specific cycles suggest that well-diversified financial systems are prone to the risks associated with the mutual amplification of nominal shocks via linkages between financial market segments, which needs to be taken into account in the design of policies addressing asset bubbles and financial imbalances. |
| Keywords: | financial cycles, asset bubbles, financial stability, housing prices, equity, debt securities, credit, capital markets, spillovers, Kalman filter, factor models |
| JEL: | E44 E50 F37 G15 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:140&r=ure |
| By: | Hidetada Higashi (CEAFJP - Centre d’études avancées franco-japonais de Paris - FFJ - Fondation France-Japon de l'EHESS - EHESS - École des hautes études en sciences sociales) |
| Abstract: | This article proposes the selection model of optimal powertrain for usage conditions especially between Internal Combustion Engine Vehicles (ICE vehicles) and Battery Electric Vehicles (BEVs), which is possible “Disruptive Innovation” stated by Christensen (1997). Using the statistics provided by official data of Japan, author estimated the average of actual maximum driving range of ICE vehicle currently sold. The analysis revealed that the actual fuel efficiency and maximum driving range of ICE vehicles is much lower than nominal one published by OEMs. After that, citing two cases of Japan, author examines the fit between the usage pattern and the choice of power train. Discussing these cases and analysis, the author concludes that that the driving range of BEV dose not solely matter for optimal choice of powertrain. Rather, the driving range and the fit between usage patterns and the availability of “charging place” jointly affect to the optimal choice. |
| Keywords: | Innovation,Disruptive Innovation,Value proposition,Diffusion of innovation,Automotive industry,Innovative power train,Fuel efficiency,Driving range,Electric vehicle,Urban mobility |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01670912&r=ure |
| By: | Lee, Neil; Morris, Katy; Kemeny, Thomas |
| Abstract: | Popular explanations of the Brexit vote have centred on the division between cosmopolitan internationalists who voted Remain, and geographically rooted individuals who voted Leave. In this paper, we conduct the first empirical test of whether residential immobility – the concept underpinning this distinction – was an important variable in the Brexit vote. We find that locally rooted individuals – defined as those living in their county of birth – were 7 percent more likely to vote Leave. However, the impact of immobility was filtered by local circumstances: immobility only mattered for respondents in areas experiencing relative economic decline or increases in migrant populations |
| Keywords: | Brexit; globalisation; mobility; populism |
| JEL: | D72 J61 R23 |
| Date: | 2018–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86367&r=ure |
| By: | Philipp Ager; Markus Brueckner |
| Abstract: | This paper examines the relationship between immigrants’ genetic diversity and economic development in the United States during the late 19th and the beginning of the 20th centuries, a period commonly referred to as the age of mass migration from Europe to the New World. Our panel model estimates show that during this period, immigrants’ genetic diversity is significantly positively correlated with measures of US counties’ economic development. There exists also a significant positive relationship between immigrants’ genetic diversity in 1870 and contemporaneous measures of US counties’ average income. Our findings demonstrate that a significant relationship between genetic diversity and economic growth does not imply that economic development outcomes are deterministic. Episodes of mass immigration, as experienced in the United States during the 19th century, can significantly change the genetic diversity of countries; and by doing so, they affect countries’ development path. |
| Keywords: | Economic Growth, Genetic Diversity, Immigration, Melting Pot |
| JEL: | J11 O51 Z13 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:061&r=ure |
| By: | Brown, Jason (Federal Reserve Bank of Kansas City); Maloney, Maeve (Federal Reserve Bank of Kansas City); Rappaport, Jordan (Federal Reserve Bank of Kansas City); Smalter Hall, Aaron (Federal Reserve Bank of Kansas City) |
| Abstract: | Centralized employment remains a benchmark stylization of metropolitan land use.To address its empirical relevance, we delineate "central employment zones" (CEZs)- central business districts together with nearby concentrated employment|for 183 metropolitan areas in 2000. To do so, we first subjectively classify which census tracts in a training sample of metros belong to their metro's CEZ and then use a learning algorithm to construct a function that predicts our judgment. {{p}} Applying this prediction function to the full cross section of metros estimates the probability we would judge each census tract as belonging to its metro's CEZ. Using a high probability threshold for tract inclusion conservatively delineates a predicted CEZ for each metro. On average, the conservatively predicted CEZs account for only 12 percent of metropolitan employment in 2000. But the distribution of shares is positively skewed, with the conservatively predicted CEZs accounting for at least 20 percent of employment in 29 metros. Employment centralization is considerably higher for agglomerative occupations|those that arguably bene t most from face-to-face contact. The conservatively predicted CEZs account for at least 33 percent of agglomerative employment in 24 metros and at least 50 percent of legal employment in 79 metros. |
| Keywords: | Central business districts; Employment density; Metropolitan land use |
| JEL: | C45 R12 R32 |
| Date: | 2017–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp17-16&r=ure |
| By: | Dimitriou , Dimitrios J.; Sartzetaki, Maria F. |
| Abstract: | Air connectivity is a key driver for growth, especially for the attractive tourist destinations. Even though the benefits of the air transport are essential, limited research is published regarding the linkage of air connectivity and other business sectors (such as tourism), t he spillover effects on regional economy and the overall contribution of air connectivity to socioeconomic development. Especially for Mediterranean countries air transport for leisure purposes is the most important enabler to achieving economic growth and development. Air transport facilitates integration into the economy and provides vital connectivity on a national, regional, and international scale between countries, promoting tourism growth, and create employment opportunities in tourist destinations. The assessment concept and methodology are given, providing an essential tool for planners, economists, analysts and researchers. The application results are essential for comparisons with other destinations and provide key messages regarding the relations hip of air connectivity and air transport connectivity development in remote tourist destinations especially in Mediterranean region. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:18_1&r=ure |
| By: | Alexandrov, Alexei; Bedre-Defolie, Özlem; Grodzicki, Daniel |
| Abstract: | We estimate how demand for credit card transacting, borrowing, and late payment responds to the interest rate and late payment fee. We find that lower rates increase borrowing and lower fees increase late payments. Prime cardholders demand for all services is decreasing in any price. In contrast, subprime cardholders borrow less when fees drop, a response consistent with models of limited attention. We calculate that a 2 percentage point rise in the Federal Funds rate decreases borrowing by 16 percent, or $130 billion, that this effect is greater in higher income communities, and that it exhibits geographic agglomeration. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12506&r=ure |
| By: | François-Xavier De Vaujany (Université Paris-Dauphine, PSL Research University) |
| Date: | 2016–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01616870&r=ure |
| By: | Cesa-Bianchi, Ambrogio; Ferrero, Andrea; Rebucci, Alessandro |
| Abstract: | House prices and exchange rates can potentially amplify the expansionary effect of capital inflows by inflating the value of collateral. We first set up a model of collateralized borrowing in domestic and foreign currency with international financial intermediation in which a change in leverage of global intermediaries leads to an international credit supply increase. In this environment, we illustrate how house price increases and exchange rates appreciations contribute to fueling the boom by inflating the value of collateral. We then document empirically, in a Panel VAR model for 50 advanced and emerging countries estimated with quarterly data from 1985 to 2012, that an increase in the leverage of US Broker-Dealers also leads to an increase in cross-border credit flows, a house price and consumption boom, a real exchange rate appreciation and a current account deterioration consistent with the transmission in the model. Finally, we study the sensitivity of the consumption and asset price response to such a shock and show that country differences are associated with the level of the maximum loan-to-value ratio and the share of foreign currency denominated credit. |
| Keywords: | Capital Flows; Credit Supply Shock; Cross-border claims; Exchange Rates; House Prices; International Financial Intermediation.; leverage |
| JEL: | C32 E44 F44 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12501&r=ure |
| By: | Bertoli, Simone (CERDI, University of Auvergne); Murard, Elie (IZA) |
| Abstract: | Household composition is traditionally regarded as exogenous in economic analyses. The migration literature typically assumes that the migration of a household member is not associated with further variations in co-residence choices. We rely on a large Mexican panel survey to provide novel evidence on the correlation between the occurrence of an international migration episode and additional changes in household composition. Migrant households have a 34.5 percent higher probability of receiving a new member within one year after the migration episode. Attrition is significantly higher among migrant households, and we provide suggestive evidence that this is due to the dissolution of the household of origin of the migrant, with all its members left behind joining another household. The endogeneity of co-residence choices has implications for survey-based measurement of migration flows, for the analysis of selection into migration, and for the effects of migration on the individuals left behind. |
| Keywords: | international migration, household composition, gender, remittances |
| JEL: | F22 J12 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11172&r=ure |
| By: | Hunt Allcott; Rebecca Diamond; Jean-Pierre Dubé |
| Abstract: | We study the causes of “nutritional inequality”: why the wealthy tend to eat more healthfully than the poor in the U.S. Using two event study designs exploiting entry of new supermarkets and households' moves to healthier neighborhoods, we reject that neighborhood environments have economically meaningful effects on healthy eating. Using a structural demand model, we find that exposing low-income households to the same food availability and prices experienced by high-income households would reduce nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand. In turn, these income-related demand differences are partially explained by education, nutrition knowledge, and regional preferences. These findings contrast with discussions of nutritional inequality that emphasize supply-side issues such as food deserts. |
| JEL: | D12 I12 I14 L81 R20 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24094&r=ure |
| By: | Trevon D. Logan |
| Abstract: | This paper exploits the history of Reconstruction after the American Civil War to estimate the causal effect of politician race on public finance. I overcome the endogeneity between electoral preferences and black representation using the number of free blacks in the antebellum era (1860) as an instrument for black political leaders during Reconstruction. IV estimates show that an additional black official increased per capita county tax revenue by $0.20, more than an hour's wage at the time. The effect was not persistent, however, disappearing entirely at Reconstruction's end. Consistent with the stated policy objectives of black officials, I find positive effects of black politicians on land tenancy and show that exposure to black politicians decreased the black-white literacy gap by more than 7%. These results suggest that politician race has large effects on public finance and individual outcomes over and above electoral preferences for redistribution. |
| JEL: | H2 H7 J1 N3 R5 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24190&r=ure |
| By: | Martino N. Ricci; Patrizio Tirelli |
| Keywords: | Housing, Mortgage default, subprime risk, DSGE. |
| JEL: | E32 R31 G01 E44 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:gri:epaper:economics:201709&r=ure |
| By: | Greco, Salvatore; Ishizaka, Alessio; Resce, Giuliano; Torrisi, Gianpiero |
| Abstract: | The multidimensional measures of well-being, such as the OECD Better Life Index (BLI), are receiving considerable attention. We introduce a composite index that, departing from the current practice, accounts for societal relative appreciation for the considered dimensions. We apply our methodology to the BLI using the data on preferences gathered from the OECD website. Our analysis signals pervasive differences in the country-level performances that cannot be compensated through differences in local preferences. Furthermore, individual preferences exacerbate multidimensional inequality between countries. Hence, we conjecture that better performing countries offer a policy mix better tailored to fit citizens’ preferences. |
| Keywords: | Well-Being; Better Life Index; Composite Index; Local Preferences; Stochastic Multi-Objective Acceptability Analysis |
| JEL: | C44 H11 I31 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82718&r=ure |