nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2018‒02‒26
fifty-two papers chosen by
Steve Ross
University of Connecticut

  1. Fundamental determinants of real estate prices: A panel study of German regions By Belke, Ansgar; Keil, Jonas
  2. Do Discrete Choice Approaches to Valuing Urban Amenities Yield Different Results Than Hedonic Models? By Paramita Sinha; Martha L. Caulkins; Maureen L. Cropper
  3. Is my rental price overestimated? A small area index for Germany By Eilers, Lea
  4. Delineating Functional Territories From Outer Space By Julio A. Berdegué; Tatiana Hiller; Juan Mauricio Ramírez; Santiago Satizábal; Isidro Soloaga; Juan Soto; Miguel Uribe; Milena Vargas
  5. The long-term relationship between economic development and regional inequality: South-West Europe, 1860-2010 By Alfonso Díez-Minguela; Rafael González-Val; Julio Martinez-Galarraga; M. Teresa Sanchis; Daniel A. Tirado
  6. The efficient use of infrastructure – is Sweden pricing traffic on its roads, railways, waters and airways at marginal costs? By Nilsson , Jan-Eric Nilsson; Isacsson , Gunnar; Haraldsson, Mattias; Nerhagen, Lena; Odolinski, Kristofer; Swärdh, Jan-Erik; Vierth, Inge; Yarmukhamedov, Sherzod; Österström, Johannes
  7. Shift-Share Instruments and the Impact of Immigration By David A. Jaeger; Joakim Ruist; Jan Stuhler
  8. The Effect of Relative School Starting Age on Having an Individualized Curriculum in Finland By Kivinen, Aapo
  9. Unity in Diversity? How Intergroup Contact Can Foster Nation Building By Samuel Bazzi; Arya Gaduh; Alexander Rothenberg; Maisy Wong
  10. Can Technology Undermine Macroprudential Regulation? Evidence from Peer-to-Peer Credit in China By Braggion, Fabio; Manconi, Alberto; Zhu, Haikun
  11. The dynamic impact of monetary policy on regional housing prices in the US: Evidence based on factor-augmented vector autoregressions By Manfred M. Fischer; Florian Huber; Michael Pfarrhofer; Petra Staufer-Steinnocher
  12. Who are the people in my neighborhood? The ‘contextual fallacy’ of measuring individual context with census geographies By Christopher S. Fowler; Nathan Frey; David C. Folch; Nicholas Nagle; Seth Spielman
  13. Small and Medium Cities and Development of Mexican Rural Areas By Julio Berdegué; Isidro Soloaga
  14. How Do Foreclosures Exacerbate Housing Downturns? By Adam M. Guren; Timothy J. McQuade
  15. Growth and agglomeration in the heterogeneous space: A generalized AK approach By Boucekkine, R.; Fabbri, G.; Federico, S.; Gozzi, F.
  16. Mortgage Finance & Housing Reform: A Historical Context By R. Christopher Whalen
  17. Who's the customer ?How the supply-side turn of regional policy neglects the spatial production-consumption patterns of regional economic activity By Moritz Lennert
  18. Can digital technologies help reduce the immigrant-native educational achievement gap? By Margarida Rodrigues
  19. Place-based entrepreneurship and innovation policy for industrial diversification By Grillitsch, Markus
  20. The Micro-Geography of Academic Research:How Distinctive is Economics? By John Gibson
  21. Hard Traveling: Commuting Costs and Urban Unemployment with Deficient Labor Demand By Alexei Abrahams
  22. Better Together? Social Networks in Truancy and the Targeting of Treatment By Magdalena Bennett; Peter Leopold S. Bergman
  23. Homophily and the Persistence of Disagreement By Isabel Melguizo
  24. A spatial analysis of youth livelihoods and rural transformation in Ghana: By Diao, Xinshen; Silver, Jed
  25. The Impact of Public Employment: Evidence from Bonn By Becker, Sascha O.; Heblich, Stephan; Sturm, Daniel M.
  26. Tourism and Economic Development: Evidence from Mexico's Coastline By Faber, Benjamin; Gaubert, Cécile
  27. Long-Term Effects of Childhood Nutrition: Evidence from a School Lunch Reform By Alex-Petersen, Jesper; Lundborg, Petter; Rooth, Dan-Olof
  28. Seeking price and macroeconomic stabilisation in the euro area: The role of house prices and stock prices By Imran Hussain Shaha; Simón Sosvilla-Rivero
  29. Intergenerational Effects of Incarceration By Manudeep Bhuller; Gordon B. Dahl; Katrine V. Løken; Magne Mogstad
  30. Reputations and credit ratings-evidence from commercial mortgage-backed securities By Baghai, Ramin P.; Becker, Bo
  31. Does Labor Market Tightness Affect Ethnic Discrimination in Hiring? By Carlsson, Magnus; Fumarco, Luca; Rooth, Dan-Olof
  32. The influence of non-cognitive skills on wages within and between firms : evidence from Bangladesh's formal sector By Nomura,Shinsaku; Adhikari,Samik
  33. Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages? By Efraim Benmelech; Nittai Bergman; Hyunseob Kim
  34. Improving quality of life through sustainable energy and urban infrastructure in Africa By Mutanga, Shingirirai Savious; Quitzow, Rainer; Steckel, Jan Christoph
  35. Does Early Child Care Affect Children's Development? By Felfe, Christina; Lalive, Rafael
  36. The impact of a new airport on international tourism: the case of Ragusa (Sicily) By Francesco David; Giuseppe Saporito
  37. Job Market Outcomes of IDPs: The Case of Georgia By Torosyan, Karine; Pignatti, Norberto; Obrizan, Maksym
  38. Women and Migration By Antman, Francisca M.
  39. Making Big Decisions: The Impact of Moves on Marriage among U.S. Army Personnel By Payne Carter, Susan; Wozniak, Abigail
  40. The effect of schooling age on fertility By Schaffner, Sandra; Siebert-Meyerhoff, Andrea
  41. Sustainable Financial Management of Local Capital Markets: A Cross-National Comparison between China, Mexico, South Korea and the United States By Heid Jane Smith; Sanghee Park; Liguang Liu
  42. The long-term effects of long terms: Compulsory schooling reforms in Sweden By Fischer, Martin; Karlsson, Martin; Nilsson, Therese; Schwarz, Nina
  43. Ice(berg) transport costs By Bosker, Maarten; Buringh, Eltjo
  44. Agricultural Productivity Shocks, Labor Reallocation, and Rural-Urban Migration in China By Luigi Minale
  45. Do Different Types of Assets Have Differential Effects on Child Education? Evidence from Tanzania By Kafle, Kashi; Jolliffe, Dean; Winter-Nelson, Alex
  46. Approaching regional openness through measures of specialization and spatial market shares: experimentations with micro-data on enterprises By Moritz Lennert
  47. Supply Shocks in the Market for Apprenticeships: Evidence from a German High School Reform By Dietrich, Hans; Muehlemann, Samuel; Pfann, Gerard Antonie; Pfeifer, Harald
  48. Skilled Migration Policy and the Labour Market Performance of Immigrants By Tani, Massimiliano
  49. Immigration into Prejudiced Societies: Segregation and Echo Chambers effects By Levy, Gilat; Razin, Ronny
  50. A Density-based Estimator of Core/Periphery Network Structures: Analysing the Australian Interbank Market By Anthony Brassil; Gabriela Nodari
  51. Reconciling Results on Racial Differences in Police Shootings By Roland G. Fryer, Jr
  52. City Networks and Para-Diplomacy creating new Global Public Policy By Heidi Jane Smith

  1. By: Belke, Ansgar; Keil, Jonas
    Abstract: This paper aims at establishing empirical facts on the fundamental determinants of real estate prices. It contributes to the literature by analysing a unique panel dataset covering a wide range of real estate market data and other economic variables for nearly 100 German cities. Several robust fundamental determinants are identified, among them the supply-side factors construction activity and housing stock as well as the demandside factors apartment rents, market size, age structure, local infrastructure and rental prices. Results suggest that these factors are robustly linked to fundamental real estate prices and thus can be used to detect misalignments of market prices.
    Keywords: real estate market,fundamental prices,regional data,panel study
    JEL: R21 R31
    Date: 2017
  2. By: Paramita Sinha; Martha L. Caulkins; Maureen L. Cropper
    Abstract: Amenities that vary across cities are typically valued using either a hedonic model, in which amenities are capitalized into wages and housing prices, or a discrete model of household location choice. In this paper, we use the 2000 Public Use Microdata Sample (PUMS) to value climate amenities using both methods. We compare estimates of marginal willingness to pay (MWTP), first assuming homogeneous tastes for climate amenities and then allowing preferences for climate amenities to vary by location. We find that mean MWTP for warmer winters is about four times larger using the discrete choice approach than with the hedonic approach; mean MWTP for cooler summers is twice as large. The two approaches also differ in their estimates of taste sorting. The discrete choice model implies that households with the highest MWTP for warmer winters locate in cities with the mildest winters, while the hedonic model does not. Differences in estimates are due to three factors: (1) the discrete choice model incorporates the psychological costs of moving from one’s birthplace, which the hedonic models do not; (2) the discrete choice model allows for city-specific labor and housing markets, rather than assuming a national market; (3) the discrete choice model uses information on market shares (i.e., population) in estimating parameters, which the hedonic model does not.
    JEL: Q51 Q54
    Date: 2018–02
  3. By: Eilers, Lea
    Abstract: Real estate prices are central to a range of themes that are, e.g., relevant for monetary policy, community development, environmental valuation, and economic planning more generally. This paper developes a real estate index based on apartment offer prices on the post code level for Germany, taking into accout apartment heterogeneity and small sample sizes within regional areas as well as spatial and temporal dependencies. In a first step, a hedonic price function is estimated. In a second step, the residuals calculated from the hedonic function are used as direct estimates in a small area estimation (SAE). This technique is designed to yield estimates with a smaller variance in the context of small samples. The results show similarities between the estimates obtained from the residuals and SAE estimates. But the SAE models show non-negligible gains in accuracy for the coefficient of variance, i.e. the estimates are stabilized.
    Keywords: housing market,hedonic,small area estimation
    JEL: R23 C01 R30
    Date: 2017
  4. By: Julio A. Berdegué (Centro Latinoamericano para el Desarrollo Rural, RIMISP); Tatiana Hiller (Universidad Iberoamericana); Juan Mauricio Ramírez (Centro Latinoamericano para el Desarrollo Rural, RIMISP); Santiago Satizábal (Centro Latinoamericano para el Desarrollo Rural, RIMISP); Isidro Soloaga (Universidad Iberoamericana, Ciudad de México); Juan Soto (Centro Latinoamericano para el Desarrollo Rural, RIMISP); Miguel Uribe (Food and Agriculture Organization, FAO-United Nations); Milena Vargas (Centro Latinoamericano para el Desarrollo Rural, RIMISP)
    Abstract: The delimitation of functional spatial units or functional territories is an important topic in regional science and economic geography since the empirical verification of many causal relationships is affected by the size and shape of these areas. Most of the literature on the delimitation of these functional territories is based on developed countries, usually using contemporary and updated information of commuting flows. Conversely, in developing countries the technical contributions have been incipient. This paper proposes a complementary step in the delimitation of functional territories, combining stable satellite night lights and commuting flows, with applications for Mexico, Colombia and Chile. This method leads to a more accurate definition of functional territories, especially in cases where official data for commuting flows are unreliable and/or outdated, as is the case of several developing and underdeveloped countries. We exploit important advances associated with the use of satellite images, and specifically, the use of night lights as a source of information for the delimitation of metropolitan areas and urban settlements.
    JEL: R10 R12 R23
    Date: 2017–09–15
  5. By: Alfonso Díez-Minguela (Universitat de València); Rafael González-Val (Universidad de Zaragoza, IEB); Julio Martinez-Galarraga (Universitat de València); M. Teresa Sanchis (Universitat de València); Daniel A. Tirado (Universitat de València)
    Abstract: This paper analyses the long-term relationship between regional inequality and economic development. Our data set includes information on national and regional per-capita GDP for four countries: France, Italy, Portugal and Spain. Data are compiled on a decadal basis for the period 1860-2010, thus enabling the evolution of regional inequalities throughout the whole process of economic development to be examined. Using parametric and semiparametric regressions, our results confirm the rise and fall of regional inequalities over time, i.e. the existence of an inverted-U curve since the early stages of modern economic growth, as the Williamson hypothesis suggests. We also find evidence that, in recent decades, regional inequalities have been on the rise again. As a result, the long-term relationship between national economic development and spatial inequalities describes an elephant-shaped curve.
    Keywords: Economic development, regional inequalities, Kuznets curve, Europe, economic history
    JEL: N9 O18 R1
    Date: 2017–12
  6. By: Nilsson , Jan-Eric Nilsson (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Isacsson , Gunnar (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Haraldsson, Mattias (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Nerhagen, Lena (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Odolinski, Kristofer (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Swärdh, Jan-Erik (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Vierth, Inge (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Yarmukhamedov, Sherzod (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Österström, Johannes (CTS - Centre for Transport Studies Stockholm (KTH and VTI))
    Abstract: This review summarizes recent information about the marginal costs for using Sweden’s infrastructure and the relationship between the sum of marginal costs and charges for each mode. It is demonstrated that the tax on petrol used by private cars is higher than the marginal costs for emissions, accident risk and road wear and tear. The diesel tax is, on the other hand, not sufficient for internalization of heavy vehicles’ externalities. Neither trains nor aircraft or ships pay for their marginal costs. For railways, this confirms previous observations that Swedish track user charges are low in an international context. Except for a low level of charges, several examples are given of the strong motives for differentiation of charges in time and geography. The rapid technical development makes the cost motive for not differentiating the charges increasingly irrelevant.
    Keywords: Marginal cost pricing; roads; railways; waterway infrastructure; air infrastructure
    JEL: R10 R40 R41 R48
    Date: 2018–02–19
  7. By: David A. Jaeger; Joakim Ruist; Jan Stuhler
    Abstract: A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants' location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants' past geographic distribution. We present evidence that estimates based on this "shift-share" instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a "multiple instrumentation" procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.
    JEL: C36 J15 J21 J61
    Date: 2018–02
  8. By: Kivinen, Aapo
    Abstract: In Finland, a child in special education receives an individualized curriculum when standard support does not suffice. One factor that may have an impact on the assignment of an individualized curriculum is the relative age of the child. Due to the cutoff date of school starting age, there is an age gap of roughly one year in each class. This difference in relative age can affect through few possible mechanisms: difference in absolute age, peer effects, and the optimal school starting age. In this paper, I study how relative school starting age affects the probability of having an individualized curriculum. I use regression discontinuity design and individual level register data for middle school graduates in 1998–2014 to estimate the causal effect of relative school starting age. Relatively younger graduates are 1.4 percentage points more likely to have a partially individualized curriculum than graduates who are a year older. Respectively, older graduates are 1.8 percentage points more likely to have a regular curriculum. The results are robust and they hold for multiple specifications. I also find that the relative age effect is stronger for girls and students with lower educated parents. Furthermore, when studying temporal variation of the effect, I observe a significant effect only from 2005 onwards. This may be partly explained by the curriculum reform in 2004. My research contributes to the areas of special education and relative age effect. The results are in line with prior literature of relative age.
    Keywords: Special Education, Relative Age Effect,
    Date: 2018
  9. By: Samuel Bazzi (Boston University and CEPR); Arya Gaduh (University of Arkansas); Alexander Rothenberg (RAND Corporation); Maisy Wong (University of Pennsylvania)
    Abstract: Throughout history, many governments have introduced policies to unite diverse groups through a shared sense of national identity. However, intergroup relationships at the local level are often slow to develop and confounded by spatial sorting and segregation. We shed new light on the long-run process of nation building using one of history's largest resettlement programs. Between 1979 and 1988, the Transmigration program in Indonesia relocated two million voluntary migrants from the Inner Islands of Java and Bali to the Outer Islands, in an effort to integrate geographically segregated ethnic groups. Migrants could not choose their destinations, and the unprecedented scale of the program created hundreds of new communities with varying degrees of diversity. We exploit this policy-induced variation to identify how diversity shapes incentives to integrate more than a decade after resettlement. Using rich data on language use at home, marriage, and identity choices, we find stronger integration in diverse communities. To understand why changes in diversity did not lead to social anomie or conflict, we identify mechanisms that influence intergroup relationships, including residential segregation, cultural distance, and perceived economic and political competition from migrants. Overall, our findings contribute lessons for the design of resettlement policies and provide a unique lens into the intergenerational process of integration and nation building.
    Keywords: Diversity, Identity, Language, Cultural Change, Migration, Nation Building
    JEL: D02 D71 J15 O15 R23
  10. By: Braggion, Fabio; Manconi, Alberto; Zhu, Haikun
    Abstract: We study whether and to what extent peer-to-peer (P2P) credit helps circumvent loan-to-value (LTV) caps, a key macroprudential tool to contain household leverage. We exploit the tightening of mortgage LTV caps in a number of cities in China in 2013 as our testing ground, in a difference-in-differences setting, and we base our tests on a novel, hand-collected database covering all lending transactions at RenrenDai, a leading Chinese P2P credit platform. P2P loans increase at the cities affected by the LTV cap tightening relative to the control cities, consistent with borrowers tapping P2P credit to circumvent the regulation. The granularity of our data allows us to separate credit demand from credit supply effects, with a fixed effects strategy. Our results also indicate that P2P lenders do not adjust their pricing and screening to the influx of new borrowers after 2013, despite the fact that their loans ex post have higher delinquency and default rates. Symmetric effects are associated with a loosening of mortgage LTV caps in 2015. Our test provides empirical evidence on the capacity of P2P credit to undermine LTV caps. More broadly, our analysis informs the debate on the challenges posed by the interaction between FinTech and credit regulation.
    Keywords: peer-to-peer credit; household leverage; macroprudential regulation; loan-to-value caps
    JEL: G01 G23 G28
    Date: 2018–01
  11. By: Manfred M. Fischer; Florian Huber; Michael Pfarrhofer; Petra Staufer-Steinnocher
    Abstract: In this study interest centers on regional differences in the response of housing prices to monetary policy shocks in the US. We address this issue by analyzing monthly home price data for metropolitan regions using a factor-augmented vector autoregression (FAVAR) model. Bayesian model estimation is based on Gibbs sampling with Normal-Gamma shrinkage priors for the autoregressive coefficients and factor loadings, while monetary policy shocks are identified using high-frequency surprises around policy announcements as external instruments. The empirical results indicate that monetary policy actions typically have sizeable and significant positive effects on regional housing prices, revealing differences in magnitude and duration. The largest effects are observed in regions located in states on both the East and West Coasts, notably California, Arizona and Florida.
    Date: 2018–02
  12. By: Christopher S. Fowler; Nathan Frey; David C. Folch; Nicholas Nagle; Seth Spielman
    Abstract: Scholars deploy census-based measures of neighborhood context throughout the social sciences and epidemiology. Decades of research confirm that variation in how individuals are aggregated into geographic units to create variables that control for social, economic or political contexts can dramatically alter analyses. While most researchers are aware of the problem, they have lacked the tools to determine its magnitude in the literature and in their own projects. By using confidential access to the complete 2010 U.S. Decennial Census, we are able to construct—for all persons in the US—individual-specific contexts, which we group according to the Census-assigned block, block group, and tract. We compare these individual-specific measures to the published statistics at each scale, and we then determine the magnitude of variation in context for an individual with respect to the published measures using a simple statistic, the standard deviation of individual context (SDIC). For three key measures (percent Black, percent Hispanic, and Entropy—a measure of ethno-racial diversity), we find that block-level Census statistics frequently do not capture the actual context of individuals within them. More problematic, we uncover systematic spatial patterns in the contextual variables at all three scales. Finally, we show that within-unit variation is greater in some parts of the country than in others. We publish county-level estimates of the SDIC statistics that enable scholars to assess whether mis-specification in context variables is likely to alter analytic findings when measured at any of the three common Census units.
    Keywords: context, race, census data
    Date: 2018–02
  13. By: Julio Berdegué (Centro Latinoamericano para el Desarrollo Rural, RIMISP); Isidro Soloaga (Universidad Iberoamericana, Ciudad de México)
    Abstract: Like the rest of Latin America, Mexico is a highly-urbanized country. Yet rural populations, geographies and economic activities continue to play a significant role in national development, while there are persistent and large rural-urban inequalities in well-being and opportunities. Promoting rural-urban linkages has been proposed as a strategy to reduce spatial inequalities, but there is much academic and policy debate about whether urban development has positive (spread) or negative (backwash) effects on rural development. This could translate into synergistic or predatory urban-rural linkages. This studyexamines how proximity to cities, and population and per capita income in cities, affectpopulation growth and welfare in ruralplaces in Mexico. Using data for 2000 and 2010, our findings include: (a) 75% of rural people live within 90 minutes of an urban area, and 60% within 60 minutes; (b) proximity to a city increases rural population growth and welfare; (c) adverse (backwash) effects on rural areasdue to increases in urban per capita income are very small and of no economic significance; (d) cities with populations in the 350,000 to 500,000 range appear to have more positive effects on rural areas than smaller or larger cities; (e) rural localitiesinteract with multiple urban places simultaneously.
    JEL: J10 O10 O18 O54 R10
    Date: 2017–09–15
  14. By: Adam M. Guren (Boston University); Timothy J. McQuade (Stanford University)
    Abstract: We present a dynamic search model in which foreclosures exacerbate housing busts and delay the housing market;s recovery. By eroding lender equity, destroying the credit of potential buyers, and making buyers more selective, foreclosures freeze the market for non-foreclosures can cause price-default spirals that amplify an initial shock. To quantitatively asses these channels, the model is calibrated to the recent bust. The amplification is significant: ruined credit and choosey buyers account for 22.5 percent of the total decline in non-distressed prices and lender losses account for an additional 30 percent. We use our model to evaluate foreclosure mitigation policies and find that payment reduction is quite effective, but creating a single seller of foreclosures that holds them off the market until demand picks up is the most effective policy. Policies that slow down the pace of foreclosures can be counterproductive.
    Keywords: Housing Prices & Dynamics, Foreclosures, Search, Great Recession
    JEL: E30 R31
  15. By: Boucekkine, R.; Fabbri, G.; Federico, S.; Gozzi, F.
    Abstract: We provide an optimal growth spatio-temporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. The technology is AK, K being broad capital. The social welfare function is Benthamite. In sharp contrast to the related literature, which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology and population. Both the transitional spatio-temporal dynamics and the asymptotic spatial distributions are computed in closed form. Concerning the latter, we find, among other results, that: (i) due to inequality aversion, the consumption per capital distribution is much atter than the distribution of capital per capita; (ii) endogeneous spillovers inherent in capital spatio-temporal dynamics occur as capital distribution is much less concentrated than the (pre-specified) technological distribution; (iii) the distance to the center (or to the core) is an essential determinant of the shapes of the asymptotic distributions, that is relative location matters.
    JEL: R1 O4 C61
    Date: 2018
  16. By: R. Christopher Whalen
    Abstract: Since the collapse of the U.S. financial markets in 2008, Congress and the policy community have been engaged in a broad-based discussion about the housing market reform, including making significant changes to the operations of government sponsored entities (GSEs) such as Fannie Mae, Freddie Mac and Ginnie Mae, which insure investors against the credit risk of most residential mortgages issued in the US. Over the past decade, the Senate and the House of Representatives have both put forward proposals to alter or eliminate one or more of the GSEs and expand the role of private capital in supporting the housing market, but no proposal has yet gained sufficient political support to pass Congress. Indeed, given the political gulf that exists between the two major political parties, it seems likely that there will be no meaningful housing legislation passed by Congress for years to come. This paper examines the debate over housing financial reform in historical context and then offers some suggests on how to move the debate forward to a conclusion in terms of reforming the GSEs.
    Keywords: housing, financial reform
    JEL: G21 G28 H8
    Date: 2018–02
  17. By: Moritz Lennert
    Abstract: Just as general economic theory and policy, regional economic development policy has undergone a strong supply-side turn in the last decades. While this approach has allowed to better understand what drives differences in regional capacity to engage in successful development trajectories, it completely neglects the question of the location and spatial scale of the demand for a region's production. One reason for this neglect lies in the absence of empirical data on regional export activity and the fairly crude methods used to model it. This paper presents the results of a new model that provides more fine-grained data on regional exports and thus allows a first approach of the spatial patterns of production-consumption relationships at regional scale. Analysis of these results reinforces the notion that different regions have different export spaces and thus need differentiated policies. It also highlights, however, the importance of demand-side policies at different scales for the development of regional economies.
    Keywords: regional development; regional exports; supply-side; demand-side; economic modelisation
  18. By: Margarida Rodrigues (European Commission - JRC)
    Abstract: This report analyses the use of digital technologies by immigrant students and examine whether digital technologies play a role in the existent immigrant-native educational achievement gap and whether they could contribute to its reduction. PISA 2015 data are used for this purpose. We find evidence that ICT-related policies have the potential to decrease immigrant-native achievement gap, among which those targeting the use of ICT seem the most promising. In particular, our findings purport that the immigrants' achievement could be improved by a more intense use of ICT at home for schoolwork and for general purposes. At school, the evidence indicates that immigrant students may be overusing ICT at school for educational purposes, suggesting that the use of ICT by immigrants needs to be balanced with other face-to-face interactions and support. There are significant cross-country differences in our results, which should be taken into account to guide policy actions.
    Keywords: digital technology, immigrants, educational achievement, PISA
    Date: 2018–01
  19. By: Grillitsch, Markus (Lund University)
    Abstract: This paper proposes a conceptual and analytical framework for the development of place-based entrepreneurship and innovation policies aiming at industrial diversification. The starting point for this paper is the entrepreneurial ecosystem concept, which is frequently used to inform such policies. However, this concept does not specify the causal mechanisms driving industrial diversification. Furthermore, it remains questionable to what extent the concept can be applied to different regional contexts. In order to address these shortfalls, this paper i) discusses the barriers and opportunities for industrial diversification in different regional contexts, and ii) introduces a place-based policy framework for new industrial path development through entrepreneurship and innovation policies.
    Keywords: economic diversification; new industrial path development; innovation; entrepreneurship; entrepreneurial ecosystems; place-based policy
    JEL: L50 O10 O30 O38 R10 R58
    Date: 2018–02–06
  20. By: John Gibson (University of Waikato)
    Abstract: This study examines micro-geographic clustering of academic research, focusing on economics. Three U.S. ZIP codes are associated with articles in the top five economics journals that garnered one-half of all citations to the articles published in these journals over 2000 to 2015. This remarkable degree of micro-geographic concentration is not apparent in any other discipline. Outside of economics the top three ZIP codes are associated with just 12% of citations to their top five journals, on average. Concentration of citations to economics articles whose authors are associated with a few key ZIP codes has strengthened over time, even as it has weakened for other disciplines. This distinctively high level of spatial concentration in economics research is not consistent with hypotheses about disciplinary differences stemming from market forces or from reliance on research infrastructure located in specific locations.
    Keywords: citations; economics; micro-geography; scientometrics; spatial concentration
    JEL: A12 R12
    Date: 2018–02–21
  21. By: Alexei Abrahams (Princeton University)
    Abstract: To alleviate urban unemployment, the urban labor literature advocates facilitating labor flow from residential neighborhoods to commercial centers. This supply-side solution reflects the literature's pervasive assumption of robust labor demand. There are many contexts, however, particularly in the developing world, where labor demand is deficient. Local improvements to connectivity, we argue, will then struggle to stimulate employment. Conversely, local adverse shocks to connectivity will not exacerbate unemployment, since the preexisting stock of unemployed laborers will absorb the shocks distributionally. We demonstrate this latter claim with geospatial data from the West Bank, where the overall political milieu plausibly inhibits labor demand. We ï¬ nd the deployment of Israeli army checkpoints and roadblocks obstructed peri-urban Palestinian commuters from accessing commercial centers, causing employment losses that were offset by employment gains among their more centrally located competitors. The ï¬ nding casts doubt on the efficacy of connectivity initiatives to mitigate urban unemployment absent concomitant efforts to unshackle demand.
    Keywords: West Bank, Palestine, Israel, Urban unemployment, connectivity, MENA, distributional impacts
    JEL: O18 R40 J61
  22. By: Magdalena Bennett; Peter Leopold S. Bergman
    Abstract: Truancy correlates with many risky behaviors and adverse outcomes. We use detailed administrative data on by-class absences to construct social networks based on students who miss class together. We simulate these networks and use permutation tests to show that certain students systematically coordinate their absences. Leveraging a parent-information intervention on student absences, we find spillover effects from treated students onto peers in their network. We show that an optimal-targeting algorithm that incorporates machine-learning techniques to identify heterogeneous effects, as well as the direct effects and spillover effects, could further improve the efficacy and cost-effectiveness of the intervention subject to a budget constraint.
    Keywords: social networks, peer effects, education
    JEL: D85 I20
    Date: 2018
  23. By: Isabel Melguizo (Universidad Iberoamericana. Economics Department.)
    Abstract: We study a dynamic model of attitude formation in which individuals average others' attitudes to develop their own. We assume that individuals exhibit homophily in sociodemographic exogenous attributes, that is, the attention they pay to each other is based on whether they possess similar attributes. We also assume that individuals exhibit homophily in attitudes, at the group level. Specifically, attributes that are salient, that is, that exhibit a substantial difference in attitudes between the groups of individuals possessing and lacking them, deserve high attention. Since we allow attention to evolve over time we prove that when there is, initially, a unique most salient attribute, it deserves growing attention overtime in detriment of the remaining ones. As a result, individuals eventually interact only with others similar to them across this attribute and disagreement persists. It materializes in two groups of thinking defined according to this attribute.
    JEL: D83 D85 Z13
    Date: 2017–03–31
  24. By: Diao, Xinshen; Silver, Jed
    Abstract: Ghana’s population is becoming younger and increasingly urbanized – by 2010, over half the population lived in urban settlements of more than 5,000 people – raising concerns among policy makers regarding the location and types of jobs required to employ the youth. The slow creation of for-mal urban jobs has particularly strong implications for young people entering the labor force: they are more educated than the older generation, with greater aspirations for non-farm employment and urban lifestyles (Anyidoho, Leavy, and Asenso-Okyere 2012). Without rapid industrialization to create more formal manufacturing and other non-agricultural jobs, youth in Ghana who leave the agricultural sector are increasingly likely to resort to informal services in both rural and urban areas. While much youth-related research has focused on changes in youth employment and livelihoods through rural-urban migration, a re-cent IFPRI Discussion Paper focuses on youth in the rural non-farm economy (Diao et al. 2017).
    Keywords: urbanization, youth, employment, off farm employment, nonfarm income, livelihoods, youth,
    Date: 2017
  25. By: Becker, Sascha O. (University of Warwick); Heblich, Stephan (University of Bristol); Sturm, Daniel M. (London School of Economics)
    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: 2018–01
  26. By: Faber, Benjamin; Gaubert, Cécile
    Abstract: Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new em- pirical strategy to study the long-term economic consequences of tourism both locally and in the aggregate. We find that tourism causes large and significant local economic gains relative to less touristic regions that are in part driven by significant positive spillovers on manufacturing. In the aggregate, however, these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from trade in tourism are mainly driven by a classical market integration effect.
    Keywords: economic development; Gains from trade; spatial equilibrium; Tourism
    JEL: F15 O24
    Date: 2018–01
  27. By: Alex-Petersen, Jesper (Lund University); Lundborg, Petter (Lund University); Rooth, Dan-Olof (Stockholm University)
    Abstract: We examine the long-term impact of a policy that introduced free and nutritious school lunches in Swedish primary schools. For this purpose, we use historical data on the gradual implementation of the policy across municipalities and employ a difference- in-differences design to estimate the impact of this lunch policy on a broad range of medium and long-term outcomes, including lifetime income, health, cognitive skills, and education. Our results show that the school lunch program generated substantial long-term benefits, where pupils exposed to the program during their entire primary school period have 3 percent greater life-time earnings. In addition, we find the effect to be greater for pupils that were exposed at earlier ages and for pupils from poor households. Finally, exposure to the school lunch program had substantial effects on educational attainment and health and these effects can explain a large part of the return to school lunches.
    Keywords: nutrition, early life, childhood, long-term, income, causal
    JEL: I12 I38 J24
    Date: 2017–12
  28. By: Imran Hussain Shaha (Department of Economics, University of Bath, Bath, UK.); Simón Sosvilla-Rivero (Instituto Complutense de Estudios Internacionales (ICEI). Universidad Complutense de Madrid.)
    Abstract: We propose an Economic Stability Index (ESI) incorporating house prices and stock prices as components of the measure of the inflation rate in order to allow the European Central Bank (ECB) to achieve both price and macroeconomic stability. We use an optimisation approach to estimate target weights for different sectoral prices in the broader price index, which depend on sectoral parameters other than those used to compute the Harmonised Index of Consumer Prices applied by the ECB to gauge price stability in the euro area (EA). Our results suggest that if the ECB had targeted the ESI, it would have implemented a different monetary policy which would had increased stability in the EA’s economic activity and would have helped to create adequate preconditions for sustainable economic growth and job creation.
    Keywords: Stock prices; House prices; Inflation targeting; Macroeconomic stabilization; Euro area.
    JEL: C32 D53 E31 E52 E58 G12 O52 R31
    Date: 2017
  29. By: Manudeep Bhuller; Gordon B. Dahl; Katrine V. Løken; Magne Mogstad
    Abstract: An often overlooked population in discussions of prison reform is the children of inmates. How a child is affected depends both on what incarceration does to their parent and what they learn from their parent's experience. To overcome endogeneity concerns, we exploit the random assignment of judges who differ in their propensity to send defendants to prison. Using longitudinal data for Norway, we find that imprisonment has no effect on fathers’ recidivism but reduces their employment by 20 percentage points. We find no evidence that paternal incarceration affects a child's criminal activity or school performance.
    JEL: J24 J62 K42
    Date: 2018–01
  30. By: Baghai, Ramin P.; Becker, Bo
    Abstract: We study the dynamics of credit ratings after Standard & Poor's (S&P) was shut out of a large segment of the commercial mortgage-backed securities (CMBS) ratings market following a procedural mistake. Exploiting the fact that most CMBS securities have ratings from multiple agencies, we show that S&P subsequently eased its standards compared to other raters, in particular in large deals and deals from important issuers. This coincided with a partial recovery in volume. The results are consistent with the view that an agency can regain market share after suffering reputational damage by issuing optimistic ratings.
    Keywords: commercial mortgage-backed securities; Competition; Credit ratings; information quality; reputation
    JEL: G20 G24 G28
    Date: 2018–01
  31. By: Carlsson, Magnus (Linnaeus University); Fumarco, Luca (Linnaeus University); Rooth, Dan-Olof (Stockholm University)
    Abstract: Several studies using observational data suggest that ethnic discrimination increases in downturns of the economy. We investigate whether ethnic discrimination depends on labor market tightness using data from correspondence studies. We utilize three correspondence studies of the Swedish labor market and two different measures of labor market tightness. These two measures produce qualitatively similar results, and, opposite to the observational studies, suggests that ethnic discrimination in hiring decreases in downturns of the economy.
    Keywords: hiring discrimination, ethnic discrimination, labor market tightness, the business cycle, correspondence studies, field experiments, ranking models, screening models
    JEL: C93 J15 J21 J71
    Date: 2018–01
  32. By: Nomura,Shinsaku; Adhikari,Samik
    Abstract: Many employers and employees believe that non-cognitive skills are an important contributor to labor market success. This study has assessed the empirical evidence for such a claim in the case of Bangladesh by evaluating unique employer-employee matched labor market data. The analysis is based on data collected from 6,981 workers in 500 formal sector firms in Bangladesh's five largest formal economic sectors. Using ordinary least squares and firm fixed-effect models, the study assesses correlations between wages and the so-called"big five"personality traits, and augments the analysis with the latent personality scores captured by the Rasch model. Comparing the ordinary least squares and fixed-effect models reveals statistically significant correlations between personality traits and wages, within and across firms. The results appear to indicate that non-cognitive skills are correlated with a worker's likelihood of achieving success in the labor market. Although many of the findings are consistent with the literature, the analysis reveals specific patterns that appear to be unique to Bangladesh, including a positive correlation between ?emotional stability? and wages and a negative correlation between"grit"and wages, especially among manufacturing workers. Differences across firms could indicate that firms that offer higher wages may tend to attract workers with distinct types of non-cognitive skills, whereas differences within firms may indicate that variations in non-cognitive skills are associated with disparities in firm-level wage structures. Correlations between wages and personality traits are more prominent among large firms than among small or medium-sized firms.
    Keywords: Rural Labor Markets,Educational Populations,Education for Development (superceded),Education For All
    Date: 2017–05–04
  33. By: Efraim Benmelech; Nittai Bergman; Hyunseob Kim
    Abstract: We analyze the effect of local-level labor market concentration on wages. Using Census data over the period 1977–2009, we find that: (1) local-level employer concentration exhibits substantial cross-sectional and time-series variation and increases over time; (2) consistent with labor market monopsony power, there is a negative relation between local-level employer concentration and wages that is more pronounced at high levels of concentration and increases over time; (3) the negative relation between labor market concentration and wages is stronger when unionization rates are low; (4) the link between productivity growth and wage growth is stronger when labor markets are less concentrated; and (5) exposure to greater import competition from China (the “China Shock”) is associated with more concentrated labor markets. These five results emphasize the role of local-level labor market monopsonies in influencing firm wage-setting behavior and can potentially explain some of the stagnation of wages in the United States over the past several decades.
    JEL: E24 J21 J23 J31 J42
    Date: 2018–02
  34. By: Mutanga, Shingirirai Savious; Quitzow, Rainer; Steckel, Jan Christoph
    Abstract: Focusing on critical aspects of infrastructure, such as energy, this paper argues that African countries, and African cities in particular, need infrastructure that advances both basic needs and industrialization, and avoids a lock-in of unsustainable, high-carbon technologies. G20 countries can promote and support quality of life in African countries by: (1) aligning and cementing the G20 Agenda for Africa with African initiatives, SDGs and the Paris Agreement, (2) mitigating economic risks of climate change through supporting low carbon development pathways in Africa, (3) creating and enabling a level playing field for low carbon technologies, which includes integrated strategies for derisking renewable energy investments, and (4) supporting smart and sustainable urban planning.
    Keywords: sustainable development,climate policy,Africa
    JEL: Q01 Q54 H23 R11
    Date: 2018
  35. By: Felfe, Christina; Lalive, Rafael
    Abstract: We study how early child care (ECC) affects children's development in a marginal treatment effect framework that allows for rich forms of observed and unobserved effect heterogeneity. Exploiting a reform in Germany that induced school districts to expand ECC at different points in time, we find strong but diverging effects on children's motor and socio-emotional skills. Children who were most likely to attend ECC benefit in terms of their motor skill development. Children who were least likely to attend ECC gain in terms of their socio-emotional skill development, especially boys and children from disadvantaged families, such as those with low education or migration backgrounds. Simulating expansions of ECC, we find that a moderate expansion fosters motor skills for all children and language skills for boys and immigrant children. A progressive expansion of ECC improves all children's socio-emotional development but neither their motor skills nor their language skills.
    Keywords: child development; early child care; marginal treatment effects; rationing
    JEL: I21 I38 J13
    Date: 2018–02
  36. By: Francesco David (Bank of Italy); Giuseppe Saporito (Bank of Italy)
    Abstract: Airports play a crucial role in connecting places and boosting local economic development; notwithstanding this, empirical evidence on the subject is relatively limited. This paper estimates the impact of a new airport in Ragusa, in southeastern Sicily, on international tourism flows in the area, using a synthetic control approach. Connecting by air a relatively peripheral and isolated area of Sicily with a high tourism potential has made it possible to increase by about one fifth the number of nights spent by foreign tourists (for over 5,100 additional nights), generating €434 thousand more in tourist expenditure per month.
    Keywords: air transport,international tourism,synthetic control approach
    JEL: R40 L83
    Date: 2017–12
  37. By: Torosyan, Karine (ISET, Tbilisi State University); Pignatti, Norberto (ISET, Tbilisi State University); Obrizan, Maksym (Kyiv School of Economics)
    Abstract: Internally displaced people (IDPs) constitute a serious economic, social and cultural problem for many countries, including countries in transition. Despite the importance of the problem, there are only a handful of previous studies investigating the issue of labor market outcomes of IDPs. We aim to fill this gap in the literature using 13 years of Integrated Household Surveys over 2004-2016 from Georgia, which experienced large flows of internal migrants from the early 1990s until now. Our analyses indicate that the labor market outcomes of IDPs are much worse than those of local residents. Specifically, IDPs are 3.9 to 11.2 percentage points less likely to be in the labor force, depending on the period and duration of IDP status. IDPs are also up to 11.6 percentage points more likely to be unemployed, sometimes even after 20 years of forced displacement. Finally, IDPs residing in a locality for more than 5 years receive persistently lower wages than local residents with similar characteristics, with the gap widening over time, reaching some 16 percentage points in the last period under analysis.
    Keywords: conflict, internally displaced people, IDPs, labor market outcomes, transition countries
    JEL: D74 J21 O15 P23 R23
    Date: 2018–01
  38. By: Antman, Francisca M. (University of Colorado, Boulder)
    Abstract: While scholars have long studied the economics of migration, increasing waves of international and regional migration around the world have placed greater focus on the varied impacts of migration in recent years. Critical to this line of research is an examination of the important role that women play in both sending and destination areas. This chapter addresses various aspects of the relationship between women and migration, including key ways in which non-migrant women are affected by migration, as well as how female migrants affect families and labor markets in both source and destination communities. Selection factors and determinants of female migration, as well as the gendered impacts of migrant networks, are also discussed.
    Keywords: migrant selection, women, left behind, gender, migration, networks
    JEL: F22 O15 R23 J16
    Date: 2018–01
  39. By: Payne Carter, Susan (U.S. Military Academy, West Point); Wozniak, Abigail (University of Notre Dame)
    Abstract: We use exogenously determined, long-distance relocations of U.S. Army soldiers to investigate the impact of moving on marriage. We find that marriage rates increase sharply around the time of a move in an event study analysis. Reduced form exposure analysis reveals that an additional move over a five year period increases the likelihood of marriage by 14 percent. Moves increase childbearing by a similar magnitude, suggesting that marriages induced by a move are formed with long-term intentions. These findings are consistent with a model where the marriage decision is costly and relocation lowers the costs to making this decision. Our results have implications for understanding how people make major life decisions such as marriage, as well as the cost of migration.
    Keywords: marriage, migration, relocation, decision-making costs
    JEL: J12 J61
    Date: 2018–01
  40. By: Schaffner, Sandra; Siebert-Meyerhoff, Andrea
    Abstract: Fertility rates decline in most developed countries. This is especially true for Germany. Fertility is highly correlated with the skill level of women. The age at school enrolment and therefore the age at graduation depends on the month of birth. Children born before the cut-off date start school earlier than children born after the cut-off date. Therefore, there are also age differences at graduation. These differences can have an effect on the age at first birth and therefore the number of children. We analyze the effects of age at school enrolment on fertility in Germany. Our results suggest that women that are older at graduation are somewhat older at the age of first birth but do not have less children than younger women. Although, the effects on fertility are small we observe negative life-time earning effects of late enrolment for women in East-Germany.
    Keywords: fertility,education,regression discontinuity
    JEL: I21 J13
    Date: 2017
  41. By: Heid Jane Smith (Universidad Iberoamericana. Economics Department.); Sanghee Park (Boise State University); Liguang Liu (Central University of Finance and Economics, China)
    Abstract: This study aims to explore what determines subnational debt levels and sovereign financial sustainability. Scholars argue that subnational fiscal capacity help local governments deliver better public services and provide public goods, which in turn helps to promote economic growth. The paper comprised of two parts: The first provides solid understanding about the characteristics of administrative structure, management of subnational government debt, and structure of debt portfolio of each country. In the second part, we test our hypotheses focused on the distinct types of administrative structures, fiscal capacity, and political-economic factors that may affect the probability of profligate debt spending by local governments. Our findings show when central governments have clear rules to intergovernmental transfers in place and more liberal policies, lower amounts of profligate debt spending occur. Consistent with other studies (Canuto and Liu 2010), when local governments have more fiscal capacity (per capita) and high unemployment rates, they are likely to have higher amounts of debt at the local level. Suggesting the need for more authority and control by the central government, even when decentralization has been implemented (Smith and Revell 2016).
    Date: 2017–05–15
  42. By: Fischer, Martin; Karlsson, Martin; Nilsson, Therese; Schwarz, Nina
    Abstract: We evaluate the impact on earnings, pensions, and further labor market outcomes of two parallel educational reforms increasing instructional time in Swedish primary school. The reforms extended the annual term length and compulsory schooling by comparable amounts. We find striking differences in the effects of the two reforms: at 5%, the returns to the term length extension were at least half as high as OLS returns to education and benefited broad ranges of the population. The compulsory schooling extension had small (2%) albeit significant effects, which were possibly driven by an increase in post-compulsory schooling. Both reforms led to increased sorting into occupations with heavy reliance on basic skills.
    Keywords: educational reforms,compulsory schooling,term length,returns to education
    JEL: J24 J31 I28
    Date: 2017
  43. By: Bosker, Maarten; Buringh, Eltjo
    Abstract: Iceberg transport costs are one of the main ingredients of modern trade and economic geography models: transport costs are modelled by assuming that a fraction of the goods shipped "melts in transit''. In this paper, we investigate whether the iceberg assumption applies to the costs of transporting the only good that literally melts in transit: ice. Using detailed information on Boston's nineteenth-century global ice trade, we show that ice(berg) transport costs in practice were a combination of a true ad-valorem iceberg cost: melt in transit, and freight, (off)loading and insurance costs. The physics of the melt process and the practice of insulating the ice in transit imply an immediate violation of the iceberg assumption: shipping ice is subject to economies scale.
    Keywords: Boston; ice trade; iceberg transport costs
    JEL: F1 N51 N7
    Date: 2018–01
  44. By: Luigi Minale (Universidad Carlos III de Madrid)
    Abstract: This paper analyses the way households in rural China use rural-urban migration and off-farm work as a response to negative productivity shocks in agriculture. I employ various waves of a longitudinal survey to construct a panel of individual migration and labour supply histories, and match them to detailed weather information, which I use to instrument agricultural productivity. For identification, I exploit the year-by-county variation in growing season rainfalls to explain within-individual changes in labor allocation. Data on days of work supplied to each sector allow to study the responses to weather shocks along both the participation and the intensive margin. Results suggest that farming activity decreases by 4.5% while migration increases by about 5% in response to a 1-standard deviation negative rainfall shock. Increment in rural-urban migration derives from both longer spells in the city as well as raise in the likelihood to participate in the urban sector. I find interesting heterogeneous responses across generations driven by age-specific migration costs and changes in the relative productivity of sectors. Finally, land tenure insecurity seems to partially prevent households from freely reallocating labor away from farming in bad times.
    Keywords: Agricultural productivity, Labor supply, Rural-urban migration, China
    JEL: J22 R23 J61
    Date: 2018–02
  45. By: Kafle, Kashi (International fund for Agricultural Development (IFAD)); Jolliffe, Dean (World Bank); Winter-Nelson, Alex (University of Illinois)
    Abstract: This analysis is motivated by recognition that anti-poverty interventions often affect both the level and composition of assets held by beneficiaries. To assess the conventional view that assets uniformly improve childhood development through wealth effects, we use three waves of panel data from Tanzania and test whether different types of assets have differential effects on children's educational out-comes. Our results indicate that household durables and housing quality have positive effects, but agricultural assets have adverse effects on children's highest grade completed and exam performances. We use a Hausman-Taylor instrumental variable (HTIV) panel data estimator to identify the effects of both time-varying and time-invariant endogenous variables. We find that the negative effect of agricultural assets is driven by large agricultural equipment and livestock ownership and the negative effect is more pronounced among rural children, poor children, and children from farming households, presumably due to the higher opportunity cost of schooling.
    Keywords: LSMS-ISA, Tanzania, asset ownership, child education, highest grade completed, school performance
    JEL: I25 J22 D13 O12
    Date: 2017–12
  46. By: Moritz Lennert
    Abstract: In this paper, I present the results of ongoing experimentations with micro-data data of firms in order to develop better insights into the economic specialization and openness to trade of regions. Using newly developed indicators, one based on Huff-like models and another on Marcon and Puech's M function, I explore the possibilities offered by building analyses on the basis of point data instead of the classic regional aggregations.
    Keywords: Economic geography; Spatial concentration; Regional trade; Location quotient; Micro-data
    JEL: R12 F17 R15 R10
    Date: 2017
  47. By: Dietrich, Hans; Muehlemann, Samuel; Pfann, Gerard Antonie; Pfeifer, Harald
    Abstract: This paper studies the effects of the G8 high school reform in Germany. The reform reduced minimum duration to obtain a high school degree (Abitur) from 9 to 8 years. First, we present a simple model based on a CES technology with heterogeneous inputs to conjecture possible effects of a supply shock of high education apprenticeships. Implementation of the reform across states (Länder) has been realized in different years. A difference-in-differences estimation strategy is used to identify the effects of one-time supply shock in market for high-educated apprentices. Training firms almost fully and immediately absorbed the additional supply of high school graduates in the apprenticeship market. No evidence is found for substitution effects between low and high education apprenticeships. The model explains that these effects may be due to sticky and too low collectively bargained wages for high education apprenticeships relative to their productivity. This renders the market for apprenticeships inefficient.
    Keywords: Apprenticeship market; G8 reform; labor supply shock
    JEL: I21 J20
    Date: 2018–01
  48. By: Tani, Massimiliano (University of New South Wales)
    Abstract: This paper studies whether migration policy, besides managing a country's population size, is a suitable tool to influence immigrants' labour market outcomes. To do so, it uses a migration policy change that occurred in Australia in the late 1990s and data collected by the Longitudinal Survey of Migrants to Australia. The statistical techniques employed in the empirical analysis consistently reveal that the policy change has no detectable impact on the employment rate, wages, over-education, occupational downgrading, and (self-reported) use of skills for male immigrants, who account for about 75% of the sample, while they have a modest short-term positive impact on female immigrants. These results support the view that migration policy is an ineffective policy tool to influence migrants' labour market outcomes. However, the economic relevance of making an effective use of migrants' skills provides scope for close coordination between immigration and employment policy to ensure that efforts in attracting foreign talent are not dissipated by labour market frictions and other inefficiencies.
    Keywords: skilled immigration, labour market, over-education, immigration policy
    JEL: J15 J24
    Date: 2017–12
  49. By: Levy, Gilat; Razin, Ronny
    Abstract: We analyze the dynamic short and long-run effects of immigration waves on attitudes towards immigrants and social cohesion. We consider a model in which both the home society and the immigrants have the same levels of cultural capacity for cooperation and mutual trust, but individuals in the home society have different degrees of prejudice about the culture of the immigrants. Prejudice is modelled as the beliefs of individuals in the home society about the immigrants' capacity for cooperation. We analyze social interactions in the presence of prejudice when individuals in the home society can segregate away from immigrants. We show that in societies with high levels of prejudice, segregation, by providing information about prejudice, can enhance cooperation in the short-term. However, when individuals learn and update their beliefs based on their experiences, segregation induces polarisation. Moreover, when individuals also socialise and exchange information in segregated communities, echo-chamber effects arise and imply that segregation reduces welfare and trust in society.
    Date: 2018–01
  50. By: Anthony Brassil (Reserve Bank of Australia); Gabriela Nodari (Reserve Bank of Australia)
    Abstract: The market for unsecured overnight interbank loans in Australia is a pivotal financial market; it is the first step in the transmission of monetary policy to the rest of the financial system and broader economy. Understanding the network of relationships between borrowers and lenders in this market, and how it changes during periods of stress, is crucial for understanding the resilience of the market. However, a difficulty with analysing this market is that existing methods of determining which banks are in the core of the network can be highly inaccurate when the network is either highly connected relative to the true proportion of banks in the core, or relatively sparsely connected (a novel finding). We derive a 'density-based' estimator of core/periphery network structures that is designed to overcome these inaccuracies. And we show that our estimator outperforms the commonly used estimators in numerical simulations. These results have broad applicability to the network analysis literature. We then use our density-based estimator to analyse the Australian overnight interbank market, focusing on the 2007–08 financial crisis. Our results suggest that the crisis had a large and long-lasting effect on this market. In particular, we find that the typical core size fell from eight to five banks during the crisis, because of large reductions in the number of lending relationships between some banks. Compared with the pre-crisis period, the remaining core lent much less to the periphery, while the periphery lent more to the core; these changes are consistent with models of precautionary liquidity demand.
    Keywords: network; core/periphery; interbank
    JEL: C13 D85 G01 G10 G21 L14
    Date: 2018–02
  51. By: Roland G. Fryer, Jr
    Abstract: Police use of force – particularly lethal force – is one of the most divisive issues of the twenty-first century. To understand the nexus of race, criminal justice, and police brutality, academics and journalists have begun to amass impressive datasets on Officer-Involved-Shootings (OIS). I compare the data and methods of three investigative journalism articles and two publications in the social sciences on a set of five rubrics and conclude that the stark differences between their findings are due to differences in what qualifies for a valid research design and not underlying differences in the datasets.
    JEL: J0 K0
    Date: 2018–01
  52. By: Heidi Jane Smith (Universidad Iberoamericana. Economics Department.)
    Abstract: Mayors, local legislators, governors and other subnational elected officials have traditionally engaged in international activities for their own trade promotion and economic development through city to city exchanges, business study groups and youth exchanges, known as paradiplomacy. Recent acknowledgement of the raise of urbanization around the world by the United Nations has increased subnational actors interest in policy dialogues on issues of climate change, health and social welfare and infrastructure finance. Subnational global engagement can change national diplomatic efforts, but it may also increase the administrative and management burden of cities as they face the world stage. Often business is conducted through global networks such as the World Conference of Mayors, the United Cities and Local Governments (UCLG), C-40, and Local Governments for Sustainability (ICLEI). With the escalation of these networks for global governance, there should also be arise and effort to increase city?s internally capacity to implement and manage global policies. This chapter focuses on the raise of subnational actors in global diplomacy efforts, their main functions, and associations within national government and international organizations. The chapter will describe competing agendas for global actors and the increase participation of city networks within global policy and ransnational administration.
    Date: 2017–03–31

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