nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2018‒03‒12
53 papers chosen by
Steve Ross
University of Connecticut

  1. The Housing Crisis, Foreclosures, and Local Tax Revenues By James Alm; J. Sebastian Leguizamon
  2. The Origins of the Racial Gap in School Suspension and Expulsion By Jayanti Owens; Sara McLanahan
  3. School Performance, Score Inflation and Economic Geography By Erich Battistin; Lorenzo Neri
  4. The Prevalence of Housing Eviction among Children Born in American Cities By Ian Lundberg; Louis Donnelly
  5. Who, What, Where? Residential Property Investment in Australia By Dungey, Mardi; Wright, Danika; Yanotti, Maria
  6. Local Economic Consequences of Investment in Children: Capitalization of Child Care Services By Lars-Erik Borge; Jørn Rattsø
  7. Is there a market value for energy performance in a local private housing market? An efficiency analysis approach By Déborah Leboullenger; Frédéric Lantz; Catherine Baumont
  8. The Geography of Opportunity: Developmental Trajectories of Children in Baltimore By Elia De la Cruz Toledo; Irwin Garfinkel; Christopher. Wimer
  9. Neighborhood Connectivity and Residential Circumstances: Understanding the Role of Public and Private Support By Ellen Whitehead
  10. When Regional Policies Fail An Evaluation of Indonesia's Integrated Economic Development Zones By Alexander D. Rothenberg; Samuel Bazzi; Shanthi Nataraj; Amalavoyal V. Chari
  11. Policing America's Children: Police Contact and Consequences Among Teens in Fragile Families By Amanda Geller
  12. Spatial perspectives on knowledge brokers: Evidence from Brussels By Nicola Francesco Dotti; André Spithoven
  13. What are Teacher Residency Programs? By Mid-Atlantic Regional Educational Laboratory
  14. Is there an optimal size for local governments? A spatial panel data model approach. By Miriam Hortas-Rico; Vicente Ríos
  15. Creative and science-oriented employees and firm-level innovation By Birkeneder, Antonia; Brunow, Stephan; Rodríguez-Pose, Andrés
  16. The Protective Effects of Housing Assistance Programs on Eviction By Louis Donnelly; Jeanne Brooks-Gunn; Sara McLanahan; Irwin Garfinkel
  17. Long-term outcomes of FHA first-time homebuyers By Lee, Donghoon; Tracy, Joseph
  18. Housing Market Dynamics with Search Frictions By Victor Ortego-Marti; Miroslav Gabrovski
  19. Assessing the Spatial Concentration of Indonesia's Manufacturing Sector Evidence from Three Decades By Alexander D. Rothenberg; Samuel Bazzi; Shanthi Nataraj; Amalavoyal V. Chari
  20. Early Exclusionary School Discipline and Adolescent Wellbeing By Nayan Ramirez; Garrett Pace; Gerardo Cuevas; Wade Jacobsen
  21. The Geography of Talent: Development Implications and Long-Run Prospects By Michal burzynski; Christoph Deuster; Frédéric Docquier
  22. How do mortgage refinances affect debt, default, and spending? Evidence from HARP By Abel, Joshua; Fuster, Andreas
  23. A relative measure of urban sprawl for Italian municipalities using satellite Light Images By Bergantino, Angela Stefania; Di Liddo, Giuseppe; Porcelli,Francesco
  24. Simulated geo-coordinates as a tool for map-based regional analysis By Groß, Marcus; Rendtel, Ulrich; Schmid, Timo; Bömermann, Hartmut; Erfurth, Kerstin
  25. Value of commuting time saving in Beijing: a stated preference study By Yin, Hang
  26. Shift-Share Instruments and the Impact of Immigration By Jaeger, David A; Ruist, Joakim; Stuhler, Jan
  27. Credit risk transfer and de facto GSE reform By Finkelstein, David; Strzodka, Andreas; Vickery, James
  28. Beyond Tracking and Detracking The Dimensions of Organizational Differentiation in Schools By Thurston Domina; Andrew McEachin; Paul Hanselman; Priyanka Agarwal; NaYoung Hwang; Ryan Lewis
  29. Identifying Productivity Spillovers Using the Structure of Production Networks By Samuel Bazzi; Amalavoyal V. Chari; Shanthi Nataraj; Alexander D. Rothenberg
  30. The Effect of School Starting Age on Special Needs Incidence and Child Development into Adolescence By Simone Balestra; Beatrix Eugster; Helge Liebert
  31. The Native-Migrant Gap in the Progression into and through Upper-Secondary Education By Stefan C. Wolter; Maria Zumbuehl
  32. Job market outcomes of IDPs: the case of Georgia By Karine Torosyan; Norberto Pignatti; Maksym Obrizan
  33. Religious Tolerance as Engine of Innovation By Francesco Cinnirella; Jochen Streb
  34. Housing Environmental Risk in Urban Areas: Cross Country Comparison and Policy Implications By Bruno Chiarini; Antonella D'Agostino; Elisabetta Marzano; Andrea Regoli
  35. Does the Earned Income Tax Credit Reduce Housing Instability? By Natasha Pilkauskas; Katherine Michelmore
  36. Access to Long Term Care After a Wealth Shock: Evidence from The Housing Bubble and Burst By Joan Costa-i-Font; Richard G. Frank; Katherine Swartz
  37. The Impact of Public Employment: Evidence from Bonn By Sascha Becker; Stephan Heblich; Daniel Sturm
  38. High-Frequency Impact of Monetary Policy and Macroeconomic Surprises on US MSAs and Aggregate US Housing Returns and Volatility: A GJR-GARCH Approach By Wendy Nyakabawo; Rangan Gupta; Hardik A. Marfatia
  39. A School-to-Prison Pipeline? Locating the Link Between Exclusionary School Discipline and Juvenile Justice Contact By Joel Mittleman
  40. Decentralisation in a Globalised World: Consequences and Opportunities By Robin Boadway; Sean Dougherty
  41. Is the education of local children influenced by living nearby a refugee camp? Evidence from host communities in Rwanda By Özge Bilgili; Sonja Fransen; Craig Loschmann; Melissa Siegel
  42. The Long-run Effects of Teacher Strikes: Evidence from Argentina By David Jaume; Alexander Willén
  43. Decentralization and electoral swings. By Ignacio Lago; André Blais
  44. Fiscal decentralisation and the distributive incidence of the great recession. By Pablo Beramendi; Melissa Rogers
  45. In the Line of Fire: Political Violence and Decentralization in Colombia By Mario Chacon
  46. On the direct and indirect real effects of credit supply shocks By Laura Alfaro; Manuel García-Santana; Enrique Moral-Benito
  47. Following in their footsteps: an analysis of the impact of successive migration on rural household welfare in Ghana By Eva-Maria Egger; Julie Litchfield
  48. Does Birth Weight Influence Grit or Can Grit Be Learned After Birth? By Leah Gillion
  49. Do active labour market policies for welfare recipients in Germany raise their regional outflow into work? : A matching function approach By Wapler, Rüdiger; Wolf, Katja; Wolff, Joachim
  50. A Tale of Two Tails: Commuting and the Fuel Price Response in Driving By Kenneth Gillingham; Anders Munk-Nielsen
  51. Neighborhood Air Pollution and Children’s Cognitive Development By Brandon Wagner; Louis Donnelly; Sara McLanahan; Irwin Garfinkel; Jeanne Brooks-Gunn
  52. Regional Consumption Responses and the Aggregate Fiscal Multiplier By Dupor, William D.; Karabarbounis, Marios; Kudlyak, Marianna; Mehkari, M. Saif
  53. Importance of EU Regional Support Programmes for Firm Performance By Konstantins Benkovskis; Olegs Tkacevs; Naomitsu Yashiro

  1. By: James Alm (Department of Economics, Tulane University); J. Sebastian Leguizamon (Western Kentucky University)
    Abstract: The housing crisis that began with the "Great Recession" led to a dramatic increase in home foreclosures, and these foreclosures likely had subsequent impacts on local government tax revenues. We investigate the impacts of foreclosures on local government tax revenues, using a reduced form estimation approach that relates changes in foreclosures to changes in local government tax revenues. Unlike most previous work, we examine the nationwide revenue impacts of foreclosures, using data across all local governments in the entire United States during the worst years of the Great Recession. We also examine the impacts of foreclosures on other local government sources of revenues beyond property tax revenues, including revenue sources that were likely affected by the impacts of foreclosures both on household wealth and on other forms of economic activity. Further, we focus in some specifications on the revenue effects for school districts only. Finally, we extend our analysis to the impacts of foreclosures on state governments revenues (and expenditures). Throughout, we use an instrumental variable approach to control for possible endogeneity of foreclosures and housing prices. Overall, we find evidence that the foreclosures created by the Great Recession had a direct, negative, but small effect on total tax revenues at the local level, although there is only weak evidence that this impact can be attributed to declines in local property taxes. However, we find that foreclosures had an indirect and negative impact on local governments via declines in state government funding. We suggest that foreclosures may have affected the real economy, thereby reducing the state government revenues dependent on real economic activity that were used to finance transfers to local governments.
    Keywords: Foreclosures, property taxation, local government, intergovernmental transfers
    JEL: H2 H7 R3 R5
    Date: 2018–03
  2. By: Jayanti Owens (Brown University); Sara McLanahan (Princeton University)
    Abstract: In spite of widespread recognition that racial disparities in suspension and expulsion perpetuate racial inequality, why racial disparities exist remains an open empirical question. Using a dataset of 5,000 children in 2,560 schools across 20 cities, we provide the first analysis to jointly parse the relative contributions of four of the most prominent structural and social-psychological explanations. Highlighting the contextually-dependent nature of these disparities, we find that the concentration of Black youth in majority-minority schools and the harsher sanctioning of Black boys from father-absent families account for the majority of the race gap. Contrary to popular belief, racial differences school-entry behavioral development, family social class, and harsher punishment for the same misbehaviors are secondary contributors. Consequently, we argue that while open displays of racism have become less common, racism has morphed, presenting through punitive discipline in many minority-serving schools, and, interpersonally, through negative stereotyping of Black boys from father-absent families.
    JEL: I21 J15
    Date: 2017
  3. By: Erich Battistin (Queen Mary University of London); Lorenzo Neri (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 manipulation resulting from discretion in the grading of randonly assigned external markers. We find large housing price gains from the school quality improvements artificially signaled by manipulation as well as lower deprivation and more businesses catering to families in local neighbourhoods. 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 manipulation
    JEL: C26 C31 I2
    Date: 2017–10–24
  4. By: Ian Lundberg (Princeton University); Louis Donnelly (Princeton University)
    Abstract: Recent research suggests that housing eviction is a common hardship for many poor urban families and may play an important role in the reproduction of urban poverty. The proportion of children affected by housing eviction, however, remains largely unknown. Using a population-based panel study of children born in 20 large U.S. cities between 1998-2000, this research presents representative estimates of the proportion of urban American children to experience an eviction for nonpayment of rent or mortgage by age 15: about 1 in 7. Rates of eviction are substantial across all cities and demographic groups studied, but children most likely to experience eviction are from disadvantaged backgrounds. Among those born into deep poverty, about 1 in 4 were evicted by age 15. Given prior evidence that forced moves have negative consequences for children, we conclude that the high prevalence and social stratification of housing eviction are sufficient to play an important role in the reproduction of poverty and warrant greater policy attention.
    JEL: R21 J13
    Date: 2017
  5. By: Dungey, Mardi (Tasmanian School of Business & Economics, University of Tasmania); Wright, Danika (University of Sydney, Business School); Yanotti, Maria (Tasmanian School of Business & Economics, University of Tasmania)
    Abstract: Affordable housing includes the provision of affordable rental options. In Australia government incentives, which purport to increase the availability of rental housing through taxation offsets, may actually contribute to decreasing affordability as housing prices increase. This project studies Australian residential property investors accessing finance with the purpose of exploring residential investors, behaviour, characteristics and motivations in the supply of housing. We study the determining factors for accessing finance for residential investment purposes as opposed to owner-occupation purposes, focusing on the investment motive of housing demand. We document investor profile, investment location and characteristics of the dwelling purchase using a rich individual level dataset. Specifically, we explore the investors decisions at entery into the residential property investment market and the characteristics of the dwelling types and mortgage choice variables.
    Keywords: Housing supply, residential property investors, Mortgage Choice, real estate
    Date: 2018
  6. By: Lars-Erik Borge; Jørn Rattsø
    Abstract: Recent analyses of intergenerational mobility show that investments in children pay big dividends. The priority of resources in early childhood also affects the working of the local economy. Geographic variation in child care services motivates location of families and thereby influences housing markets. In this paper we analyze this local dimension of universal child care during a period of national reform to raise and equalize the child care coverage across Norway. We apply a rich dataset of housing transactions and characteristics for six years (2001-2006) and combine them with local government level data about quantity and quality of child care and various community controls. Given a reform driving the expansion of child care coverage with central government financing, we investigate the relationship between child care and housing prices using a variety of panel models. The robustness of the results are studied under the stronger assumption that only changes in coverage were mandated. The results show that housing prices respond to child care and are consistent with the recent literature on capitalization of schooling. In the first difference model, 10% increase in child care coverage, about one standard deviation, raises house prices by 3%. We conclude that child care reform initiates adjustments at housing markets and confirms the role of geographic sorting as part of local fiscal allocations.
    Keywords: capitalization, child care, housing prices, local government
    JEL: H71 H75 R21 R23 R32
    Date: 2017
  7. By: Déborah Leboullenger; Frédéric Lantz; Catherine Baumont
    Abstract: This paper aims to find evidence of a “green value†in a local housing market using notarial data on a small urban area in France. We use frontier functions, an original approach that departs from customary hedonistic regressions, to model housing market prices as a production set bordered by an efficiency frontier estimated by Data Envelopment Analysis (DEA). The paper tests if difference in prices (i.e. the distance from the frontier) can be explained by energy performance measured as a normalized categorical ascending kWh/m²/year grade (or Energy Performance Certificate -EPC). We show that there is significative evidence for energy performance's market value. The “Green Property Value†is estimated to range between 1% and 3% of the price for medium-high performance buildings. Our findings are robust to the specifications of the first (frontier estimation) and the second stage (residual analysis). We then propose a cost-benefit analysis to evaluate the return on retrofit investment a household would get from higher market value. We find that housing green property value accounts for a part, between 4.6% in houses and 6.6% in collective dwellings, of the real terms investment in energy retrofit. We interpret our findings with regard to spatial dependencies that affect the market and the heterogeneity between the private and the public social housing stocks.
    Keywords: Residential Housing Market, Energy Retrofit, Green Value, Efficiency Analysis, Frontier Functions, Data Envelopment Analysis, Energy Performance Certificates
    JEL: C5 Q41 Q51 R15
    Date: 2018
  8. By: Elia De la Cruz Toledo (Columbia University); Irwin Garfinkel (Columbia University); Christopher. Wimer (Columbia University)
    Abstract: Neighborhood disadvantage across America affects children in several domains. Geographic differences that result from racial and economic segregation have the potential to change life paths. Using the Fragile Families and Child Well-Being Study we estimated behavior, cognitive and health trajectories of children transitioning into adolescence born in Baltimore, and we compared their trajectories to those of children born in other urban cities. To account for neighborhood effects, we matched different measures of inequality at the county level. Results showed that early on children in Baltimore had less behavioral problems, better cognitive health outcomes, in comparison to children born in other cities. Through time, there was a convergence of means, which resulted from a worsening situation for children in Baltimore and improvements for children elsewhere. Once we incorporated measures of neighborhood inequality, we observed an improvement in the developmental trajectories of children in Baltimore, and larger positive changes among black girls.
    Keywords: Maryland
    JEL: J13 R23
    Date: 2017
  9. By: Ellen Whitehead (Rice University)
    Abstract: Neighborhood social cohesion has well-established implications for the well-being of families, yet residential status shapes these levels of community engagement and connectivity. Most of what is known focuses on those receiving public support (e.g. public housing or housing vouchers), with little focus on those residing with relatives or friends. Using data from the Fragile Families and Child Wellbeing Study Year 5 Follow-Up (n=3,523), I examine how interactions with neighbors, perceptions of collective efficacy, and participation in neighborhood organizations vary by whether an individual is a homeowner, renter, or receives a public or private form of housing assistance. Multivariate analyses reveal that individuals receiving private support do not differ from homeowners in their interactions with neighbors or perceptions of collective efficacy, but report lower levels of participation in community organizations. This study suggests that those receiving public versus private support differ in how they perceive and interact with their neighborhood.
    JEL: R23
    Date: 2017
  10. By: Alexander D. Rothenberg; Samuel Bazzi; Shanthi Nataraj; Amalavoyal V. Chari
    Abstract: Throughout the developing world, many countries have created special economic zones to attract investment and spur industrial growth. In some cases, these zones are designed to promote development in poorer regions with limited market access and lower quality infrastructure, an example of a "big push" development strategy. In this paper, we study the effects of Indonesia's Integrated Economic Development Zone (KAPET) program. This program provided substantial tax-breaks for firms that locate in certain districts in the Outer Islands of Indonesia, a country with large regional differences in per-capita income and a history of policies to promote inclusive growth. We find that along many dimensions, KAPET districts experienced no better development outcomes, and in some cases fared even worse, than their non-treated counterparts. If anything, the strongest finding is that firms in KAPET districts paid lower taxes, but these tax reductions neither encouraged greater firm entry, increased migration, nor raised local measures of output or welfare. Overall, the KAPET program does not appear to have achieved the intended outcome of promoting growth in lagging regions. While there are many possible reasons that the KAPET program failed, our findings suggest caution in spending scarce resources to subsidize development in lagging regions.
    JEL: R12 R32 O14
    Date: 2017–02
  11. By: Amanda Geller (New York University)
    Abstract: Recent high-profile incidents of police violence and misconduct have brought widespread attention to long-standing tensions between police departments and the communities they serve. Policy shifts over the past 20 years have led to the broad adoption of "proactive" policing, which emphasizes active engagement of citizens at low levels of suspicion. Police use investigative stops, citations, and arrests to detect and disrupt low-level disorder or other circumstances interpreted as indicia that crime is afoot. However, these encounters rarely uncover illegal activity, and in many cities are characterized by stark racial disparities. Such encounters threaten the health and wellbeing of individuals and communities targeted. Due largely to data constraints, little is known about the experiences of youth stopped by the police, and the current national picture of policing and its implications for youth is unclear. I use new data from the Fragile Families and Child Wellbeing Survey (FFCWS) to measure the extent, nature, and health implications of police contact among a cohort of contemporary urban teenagers. I find that FFCWS teens have extensive police exposure: more than 75% report a police officer stationed at their school, and more than 25% report personal experience with the police. This contact is racially disparate, and often severe. Observed racial disparities in both a binary indicator of stop experience and a measure of police intrusion are robust to controls for adolescent behavior and their peer context. Further, I find that adolescents' experiences with the police are significantly associated with multiple indicators of adverse mental health, suggesting that police contact has the potential to drive or exacerbate health disparities among urban teens.
    JEL: D63 K14 K42
    Date: 2017–05
  12. By: Nicola Francesco Dotti; André Spithoven
    Abstract: Knowledge brokers have emerged as a new type of actors shaping scientific production, influencing science–policy relationships, and thereby contributing to regional competitiveness. Yet, the spatial dimension of these knowledge brokers has received little attention. Using Framework Programme participations in European cities, we analyse and discuss the location strategy of knowledge brokers, highlighting the importance of co-location with the funding source. Our findings show that knowledge brokers are clustered in Brussels, and not elsewhere, to be closer to the European Commission in order to access strategic, informal and tacit information, while contributing to the construction of transnational R&D networks. While this ‘local buzz’ has positive side effects on the regional innovation system of Brussels; knowledge brokers emerge as a new type of spatially clustered actors shaping the distribution of EU funding for ‘European knowledge pipelines’.
    Keywords: Brussels; Europe; Framework Programme; Knowledge brokers; local buzz
    Date: 2017–10
  13. By: Mid-Atlantic Regional Educational Laboratory
    Abstract: The School District of Philadelphia began its teacher residency program in the 2016–2017 school year to attract teaching candidates of diverse backgrounds, improve teacher retention, and ultimately produce improved outcomes for students. This fact sheet summarizes characteristics of existing teacher residency programs and related research.
    Keywords: TRPs, teacher recruitment, teacher retention
    JEL: I
  14. By: Miriam Hortas-Rico; Vicente Ríos
    Abstract: The paper presents a framework for determining the optimal size of local jurisdictions. To that aim, we first develop a theoretical model of cost eficiency that takes into account spatial interactions and spillover effects among neighbouring jurisdictions. The model solution leads to a Spatial Durbin panel data specification of local spending as a non-linear function of population size. The model is tested using local data over the 2003-2011 period for two aggregate (total and current) and four disaggregate measures of spending. The empirical findings suggest a U-shaped relationship between population size and the costs of providing public services that varies depending on (i) the public service provided and (ii) the geographical heterogeneity of the territory.
    Keywords: Optimal Government Size, Spatial Panels, Spanish Municipalities.
    JEL: H11 H72 H77 R12
    Date: 2018–02
  15. By: Birkeneder, Antonia; Brunow, Stephan; Rodríguez-Pose, Andrés
    Abstract: This paper examines the link between innovation and the endowments of creative and science-oriented STEM - Science, Technology, Engineering and Mathematics - workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.
    Keywords: Creative workers; Germany; Innovation; Smart Cities; Spillover; STEM workers
    JEL: J24 R23
    Date: 2018–02
  16. By: Louis Donnelly (Princeton University); Jeanne Brooks-Gunn (Teachers College and the College of Physicians and Surgeons at Columbia University); Sara McLanahan (Princeton University); Irwin Garfinkel (Columbia School of Social Work)
    Abstract: Recent research highlights that housing eviction in common in the lives of low-income families, especially urban mothers. Housing assistance programs are expected support residential stability, but little is known about their protective effects on eviction. In this study, we use 15 years of panel data on a diverse sample of urban families from all regions of the U.S. to compare the likelihood of eviction between low-income mothers who reside in public housing, private housing subsidized through a voucher program, and non-subsidized private housing. Findings show that eviction is not uncommon among those who participate in housing assistance programs; annual risk of eviction is between 2 and 3 percent. However, low-income mothers' receipt of public housing and voucher assistance reduces their likelihood of eviction substantially; comparable low-income mothers who do not receive assistance are around 1.7 percentage points (or 40%) more likely to experience an eviction in a given year.
    JEL: I38 R31 R23
    Date: 2017
  17. By: Lee, Donghoon (Federal Reserve Bank of New York); Tracy, Joseph (Federal Reserve Bank of Dallas)
    Abstract: The Federal Housing Administration (FHA) has stated that its goal is to foster sustainable homeownership. In this paper, we propose some metrics for evaluating the degree to which the FHA is attaining this goal for first-time homebuyers. This work uses New York Fed Consumer Credit Panel data to examine the long-term outcome for households that make the transition from renting to owning using an FHA-insured mortgage. In addition to calculating the fraction of these borrowers whose FHA homeownership experience ends in default, we measure the degree to which these borrowers successfully remain homeowners after paying off their credit risk to the FHA. For the 2001 and 2002 cohorts, which were less impacted by the financial crisis than later cohorts, we find that 12 percent had their homeownership experience end in default while around 55 percent sustained their homeownership without the need for an FHA mortgage. Another 20 percent are either in their original home or have moved but continue to use an FHA mortgage.
    Keywords: FHA mortgages; first-time homebuyers; Federal Housing Administration
    JEL: G21 G28 R31
    Date: 2018–02–01
  18. By: Victor Ortego-Marti (Department of Economics, University of California Riverside); Miroslav Gabrovski (UC Riverside)
    Abstract: This paper develops a business cycle model of the housing market with search frictions and entry of both buyers and sellers. The housing market exhibits a well-established cyclical component, which features three stylized facts: prices move in the same direction as sales and the number of houses for sale, but opposite to the time it takes to sell a house. These stylized facts imply that in the data vacancies and the number of buyers are positively correlated, i.e. that the Beveridge Curve is upward sloping. A baseline search and matching model of the housing market is unable to match these stylized facts because it inherently generates a downward sloping Beveridge Curve. With free entry of both buyers and sellers, our model reproduces the positive correlation between prices, sales, and housing vacancies, and matches the stylized facts qualitatively and quantitatively.
    Keywords: Housing market; business cycles; search and matching; Beveridge Curve
    JEL: E2 E32 R21 R31
    Date: 2018–03
  19. By: Alexander D. Rothenberg; Samuel Bazzi; Shanthi Nataraj; Amalavoyal V. Chari
    Abstract: Beyond the role of economic forces, many theories of economic geography emphasize the way politics can shape the spacial configuration of economic activity. We investigate the impact of changes in political regimes on industrial concentration using 30 years of data on Indonesian manufacturers. These data span both the reign of Suharto, one of the strongest central governments in Southeast Asia, and its collapse and the subsequent decentralization of power. Using the canonical measure of Ellison and Glaeser, we show that in the mid 1980s, Indonesia's firms exhibited a similar degree of agglomeration as seen in the United States. Spatial concentration then declined until the 1998 Asian Financial Crisis, and has since begun to rise during the decentralization period. We also measure concentration using the continuous measure developed by Duranton and Overman (2005 ), and find that the agglomeration exhibited by Indonesian firms is also broadly similar to that documented by Duranton and Overman (2005 ) for the United Kingdom, although localization drops off more gradually in Indonesia than in the United Kingdom. Using this continuous measure of agglomeration, we identify 32 manufacturing clusters in Indonesia, and investigate the correlates of concentration. We find that the most robust drivers of agglomeration have been natural resources and supply chain linkages, especially with respect to explaining long-term changes in spatial concentration.
    Date: 2017–01
  20. By: Nayan Ramirez (Pennsylvania State University); Garrett Pace (University of Michigan); Gerardo Cuevas (Pennsylvania State University); Wade Jacobsen (Pennsylvania State University)
    Abstract: Exclusionary school discipline is a common experience among US children. In an earlier paper, we find high suspension or expulsion rates even in elementary school, particularly among racial minorities and the poor. Moreover, such discipline is associated with increased physical aggression by age nine. In the current analysis, we extend this work in two ways. First, we examine the association between early suspension or expulsion on externalizing behavior problems six years later, when children are in high school. Second, given that mental health problems are more common in adolescence than at younger ages, we examine the association between early school discipline and adolescent internalizing behavior problems. Because school discipline is most concentrated among racial minorities and the poor, our findings have important implications for the role of school discipline policy in educational inequality. Early suspension or expulsion may have unintended negative consequences for child wellbeing that persist into middle adolescence.
    JEL: I21 I31
    Date: 2017
  21. By: Michal burzynski (University of Luxembourg, CREA); Christoph Deuster (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Universidade Nova de Lisboa, Portugal); Frédéric Docquier (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), National Fund for Scientific Research (FNRS), Belgium and Université d'Auvergne, FERDI, France)
    Abstract: This paper characterizes the recent evolution of the geographic distribution of talent, and studies its implications for development inequality. Assuming the continuation of recent educational and immigration policies, it produces integrated projections of income, population, urbanization and human capital for the 21st century. To do so, we develop and parameterize a two-sector, two-class, world economy model that endogenizes education decisions, population growth, labor mobility, and income disparities across countries and across regions/sectors (agriculture vs. nonagriculture). We find that the geography of talent matters for global inequality, whatever the size of technological externalities. Low access to education and the sectoral allocation of talent have substantial impacts on inequality, while the effect of international migration is small. We conclude that policies targeting access to all levels of education and sustainable urban development are vital to reduce demographic pressures and global inequality in the long term.
    Keywords: human capital, migration, urbanization, growth, inequality
    JEL: E24 J24 O15
    Date: 2018–02–20
  22. By: Abel, Joshua (Harvard University); Fuster, Andreas (Federal Reserve Bank of New York)
    Abstract: We use quasi-random access to the Home Affordable Refinance Program (HARP) to identify the causal effect of refinancing a mortgage on borrower balance sheet outcomes. We find that on average, refinancing into a lower-rate mortgage reduced borrowers' default rates on mortgages and nonmortgage debts by about 40 percent and 25 percent, respectively. Refinancing also caused borrowers to expand their use of debt instruments, such as auto loans, home equity lines of credit (HELOCs), and other consumer debts that are proxies for spending. All told, refinancing led to a net increase in debt equal to about 20 percent of the savings on mortgage payments. This number combines increases (new debts) of about 60 percent of the mortgage savings and decreases (paydowns) of about 40 percent of those savings. Borrowers with low FICO scores or low levels of unused revolving credit grow their auto and HELOC debt more strongly after a refinance but also reduce their bank card balances by more. Finally, we show that take-up of the refinancing opportunity was strongest among borrowers that were in a relatively better financial position to begin with.
    Keywords: mortgages; refinancing; monetary policy transmission; heterogeneity; HARP
    JEL: D14 E21 G21
    Date: 2018–02–01
  23. By: Bergantino, Angela Stefania; Di Liddo, Giuseppe; Porcelli,Francesco
    Abstract: At the local level, the lower the urban density, the higher the per-capita length of collector roads and the area covered by buildings and infrastructures. It follows that the lower the urban density, the higher the municipal luminosity. For this reason, night-time light is often used in order to evaluate the degree of urbanization and urban sprawl in a specific territory by means of specific indicators. However, to the best of our knowledge, these indicators are based on an absolute evaluation of the urban sprawl, without taking into account the peculiar economic and demographic characteristics of the urban centres. In this paper we propose a regression-based measure of urban sprawl “relative” to the economic activity and to other socio-demographic characteristics of municipalities. We apply this methodology to the Italian context, considering all Italian municipalities inside the 15 ordinary regions over the period 2004-2012. The measure we propose, thus, takes into account also a time element.
    Date: 2018
  24. By: Groß, Marcus; Rendtel, Ulrich; Schmid, Timo; Bömermann, Hartmut; Erfurth, Kerstin
    Abstract: Map-based regional analysis is interested to detect areas with a large concentration of certain populations. Here kernel density estimates (KDE) offer advantages over classical choropleth maps. However, kernel density estimation needs exact geo-coordinates. In a recent paper Groß et al. (2017) have proposed a measurement error model which uses local aggregates for kernel density estimation. Their algorithm simulates "exact" geo-coordinates which reflect the information on the aggregates. In this article we suggest two extensions of this approach. First, we consider boundary constraints, which are usually ignored in the KDE framework. This concerns not only the outer limits of a municipality but also unsettled regions within a city like parks, lakes and industrial areas. Without a boundary correction standard KDEs underestimate the density in the vicinity of boundaries. Here we propose a modification of the original algorithm which uses rescaled kernel functions. Regional maps often display local percentages, for example, voters for a special party among all voters in each voting district. Here we derive a smooth representation of percentages which is based on the ratio of two densities. Again, the original algorithm is modified to cope with the estimation of a ratio of two densities. Our empirical examples refer to voting results from Berlin. It is shown that the proposed methodology reveals a lot of regional insight which is not produced by standard choropleth maps.
    Keywords: Regional Analysis,Choropleths,Kernel Density Estimation,Geo-Coordinates,Open data
    Date: 2018
  25. By: Yin, Hang (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We estimate the value of travel time savings with a discrete choice model using data from choice experiments on both car drivers and public transport users in Beijing. We find that, compared with public transport users, car drivers would be willing to pay more to save one hour during their commute; crowding inside the bus and subway carriage is very important for public transport users; the value of time saving is higher in the morning than in the evening; and the marginal willingness to pay for commuting time savings varies according to gender, income, education, and time flexibility. Moreover, we compare results from a model addressing attribute non-attendance and a standard model. The results from the model addressing non-attendance are more plausible, with higher consistency in estimated parameters and lower standard deviations.
    Keywords: Value of commuting time; attribute non-attendance; preference heterogeneity
    JEL: C25 R41
    Date: 2018–03
  26. By: Jaeger, David A; Ruist, Joakim; Stuhler, Jan
    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.
    Keywords: Immigration; past settlement instrument; shift-share instrument; spatial correlation
    JEL: C36 J15 J21 J61
    Date: 2018–02
  27. By: Finkelstein, David (Annaly Capital Management); Strzodka, Andreas (Annaly Capital Management); Vickery, James (Federal Reserve Bank of New York)
    Abstract: We summarize and evaluate Fannie Mae and Freddie Mac’s credit risk transfer (CRT) programs, which have been used since 2013 to shift a portion of credit risk on more than $1.8 trillion of mortgages to private sector investors. We argue that the CRT programs have been successful in reducing the exposure of the federal government to mortgage credit risk without disrupting the liquidity or stability of mortgage secondary markets. In the process, the programs have created a new financial market for pricing and trading mortgage credit risk, which has grown in size and liquidity over time. The CRT programs provide an important building block to help facilitate reform of the U.S. housing finance system.
    Keywords: mortgage; credit risk transfer; securitization; Fannie Mae; Freddie Mac; GSE
    JEL: G10 G18 G21 G23 G28
    Date: 2018–02–01
  28. By: Thurston Domina; Andrew McEachin; Paul Hanselman; Priyanka Agarwal; NaYoung Hwang; Ryan Lewis
    Abstract: Schools utilize an array of strategies to match curricula and instruction to students' heterogeneous skills. While generations of scholars have debated "tracking" and its consequences, the literature fails to account for diversity of school-level sorting practices. In this paper we draw upon the work of Sorenson (1970) to articulate and develop empirical measures of five distinct dimensions of school cross-classroom tracking systems: (1) the degree of course differentiation, (2) the extent to which sorting practices generate skills-homogeneous classrooms, (3) the rate at which students enroll in advanced courses, (4) the extent to which students move between tracks over time, and (5) the relation between track assignments across subject areas. Analyses of longitudinal administrative data following 24,000 8th graders enrolled in 23 middle schools through the 10th grade indicate that these dimensions of tracking are empirically separable and have divergent effects on student achievement and the production of inequality.
    Date: 2016–07
  29. By: Samuel Bazzi; Amalavoyal V. Chari; Shanthi Nataraj; Alexander D. Rothenberg
    Abstract: Despite the importance of agglomeration externalities in theoretical work, evidence for their nature, scale, and scope remains elusive, particularly in developing countries. Identification of productivity spillovers between firms is a challenging task, and estimation typically requires, at a minimum, panel data, which are often not available in developing country contexts. In this paper, we develop a novel identification strategy that uses information on the network structure of producer relationships to provide estimates of the size of productivity spillovers. Our strategy builds on that proposed by Bramoulle et al. (2009) for estimating peer effects, and is one of the first applications of this idea to the estimation of productivity spillovers. We improve upon the network structure identification strategy by using panel data and validate it with exchange-rate induced trade shocks that provide additional identifying variation. We apply this strategy to a long panel dataset of manufacturers in Indonesia to provide new estimates of the scale and size of productivity spillovers. Our results suggest positive productivity spillovers between manufacturers in Indonesia, but estimates of TFP spillovers are considerably smaller than similar estimates based on firm-level data from the U.S. and Europe, and they are only observed in a few industries.
    Date: 2017–03
  30. By: Simone Balestra; Beatrix Eugster; Helge Liebert
    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: school starting age, special needs, child development
    JEL: I14 I21 J13
    Date: 2017
  31. By: Stefan C. Wolter; Maria Zumbuehl
    Abstract: In this paper we follow the students that took the PISA 2012 test in Switzerland and analyze their transition into and progress in upper-secondary education. We observe a substantive difference in the rate of progress between natives and students with a migration background. One year after leaving compulsory school, the gap between the natives and migrants that are on-track - entering the second year of upper-secondary education - is 15 percentage points. Observable differences in cognitive and non-cognitive skills can explain the gap in the success rate within upper-secondary education, but cannot fully explain the difference in the transition rate into upper-secondary education. More refined analyses present results that are consistent with the hypotheses of differences in tastes, aspirations and incomplete or inaccurate information about the education system explaining the gap in the transition into post-compulsory education.
    Keywords: education, migration, occupational choice
    JEL: I24 J15 J24 J62 J71
    Date: 2017
  32. By: Karine Torosyan (International School of Economics at Tbilisi State University); Norberto Pignatti (International School of Economics - Tbilisi); Maksym Obrizan (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: 2018–03
  33. By: Francesco Cinnirella; Jochen Streb
    Abstract: We argue that, for a given level of scientific knowledge, tolerance and diversity are conducive to technological creativity and innovation. In particular, we show that variations in innovation within Prussia during the second industrial revolution can be ascribed to differences in religious tolerance that developed in continental Europe from the Peace of Westphalia onwards. By matching a unique historical dataset about religious tolerance in 1,278 Prussian cities with valuable patents for the period 1877-1890, we show that higher levels of religious tolerance are strongly positively associated with innovation during the second industrial revolution. Religious tolerance is measured through population’s religious diversity, diversity of churches, and diversity of preachers and religious teachers, respectively. Endogeneity issues are addressed using local variation across cities, within counties. Estimates using preindustrial levels of religious tolerance address issues of reverse causality. As for the channels of transmission, we find significant complementarity between religious tolerance and human capital. Furthermore, we find that cities with higher levels of religious tolerance attracted a larger share of migrants. Finally, higher levels of religious diversity in the population translated into higher levels of religious diversity in the workforce by industrial sector. This result suggests that religious diversity did not generate labor market segmentation by denomination but might have fostered interaction of different denominations.
    Keywords: tolerance, openness, pluralism, diversity, innovation, patenting activity
    JEL: N13 N33 O14 O31 Z12
    Date: 2017
  34. By: Bruno Chiarini; Antonella D'Agostino; Elisabetta Marzano; Andrea Regoli
    Abstract: The main aim of this paper is to assess whether there is a statistically significant environmental impact of cities within European countries. Second, starting from the estimated environmental impact of cities within European countries, the paper investigates whether cross-country variation can be explained by macro-economic factors and government policies which can play a role in mitigating such an impact. We start from individual evidence (EU-SILC data) to obtain a measure of the environmental impact of cities within countries, and then correlate the latter with macro variables to explain European heterogeneity. These estimates confirm that the environmental risk for households is particularly perceived in more densely populated urban agglomerations, although the marginal effects are quite heterogeneous between countries. Macroeconomic factors such as inequality, wealth, taxation and public spending on the environment, and macroeconomic constraints such as the public finance disequilibrium produce a strong heterogeneity between countries in determining the marginal effects of urban metropolises on household environmental risk.
    Keywords: household environmental risk, sustainable cities, bivariate probit model, cross-country heterogeneity
    JEL: Q51 Q53 R21 I31 C35
    Date: 2017
  35. By: Natasha Pilkauskas (University of Michigan); Katherine Michelmore (Syracuse University)
    Abstract: Housing instability (inability to pay rent, frequent moves, doubling up, eviction, or homelessness) is common among low-income households and is linked with a host of negative outcomes for families and children. As rents have risen and wages have not kept pace, housing affordability has declined over the last 15 years, increasing rates of housing instability. In this study, we examine whether the Earned Income Tax Credit (EITC), a key US social welfare policy and one of the largest cash transfer programs in the US, reduces housing instability. Using longitudinal data from the Fragile Families and Child Wellbeing Study and the Survey of Income and Program Participation, we employ a simulated instruments strategy to examine whether policy-induced expansions in the EITC reduce housing instability. Results suggest that a $1,000 increase in the EITC reduces doubling up (living with other non-nuclear family adults) 3 to 5 percentage points. We find some suggestive evidence that the EITC decreases the average number of moves per year (0.05 moves). While our results suggest that the EITC does decrease certain, less severe forms of housing instability, we find no evidence that the EITC decreases more extreme (and rarer) forms of housing instability: eviction or homelessness.
    JEL: H24 I21 R21 R31
    Date: 2017–08
  36. By: Joan Costa-i-Font; Richard G. Frank; Katherine Swartz
    Abstract: Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.
    Keywords: long term care, housing equity, housing bubble, informal care, home health care, nursing home care
    JEL: I18 J14
    Date: 2017
  37. By: Sascha Becker; Stephan Heblich; Daniel Sturm
    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 emphasized by the model.
    Keywords: economic geography, public employment, place-based policies, German division
    JEL: F15 J45 N44 R12
    Date: 2018
  38. By: Wendy Nyakabawo (Department of Economics, University of Pretoria, Pretoria, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Hardik A. Marfatia (Department of Economics, Northeastern Illinois University, Chicago, USA)
    Abstract: This paper explores the impact of monetary policy and macroeconomic surprises on the U.S housing market returns and volatility at the Metropolitan Statistical Area (MSA) and aggregate level using a Glosten–Jagannathan-Runkle generalized autoregressive conditional heteroscedasticity (GJR-GARCH) model. Using daily data and sampling periods which cover both the conventional and unconventional monetary policy periods, empirical results show that monetary policy surprises have a greater impact on the volatility of housing market returns across time with particularly pronounced effect during the conventional monetary policy period. We also show that macroeconomic surprises do not have a significant impact on housing returns for most MSAs for the full sample, conventional and unconventional monetary policy periods
    Keywords: Monetary policy and macroeconomic surprises, Asymmetric GARCH, Housing market returns and volatility
    JEL: C32 E32 E44 E52 R31
    Date: 2018–03
  39. By: Joel Mittleman (Princeton University)
    Abstract: There is growing concern that exclusionary school discipline promotes a "school-to-prison pipeline," disrupting children’s lives in ways that increase their risk of coming into contact with the justice system. Empirical validations of this argument, however, face a fundamental challenge: both school sanctions and legal sanctions respond to the same behavioral risk factors and concentrate in the same disadvantaged contexts. To address this challenge, the current study combines survey data from the Fragile Families and Childhood Wellbeing Study with administrative data on children’s schools and neighborhoods. Following children from birth through adolescence, I demonstrate that children removed from school at a young age face substantially higher risks of later legal entanglement than their peers. Moreover, the consequences of discipline vary by children’s preexisting propensity for sanction. For every outcome considered, exclusionary discipline is most consequential for those children who were otherwise least likely to come into contact with the justice system.
    Keywords: incarceration; incarcerated
    JEL: I21 I28 K42
    Date: 2017
  40. By: Robin Boadway; Sean Dougherty
    Abstract: Globalisation accompanied by the growing importance of information technology and knowledge-based production pose challenging problems for federations. We summarise the difficulties that traditional decentralised federations face in addressing problems of competitiveness, innovation and inequality brought on by globalisation. Adapting to these challenges involves rethinking the roles of various levels of government and rebalancing them appropriately. On the one hand, responding to inequality enhances the policy role of the federal government. On the other hand, state and local governments must respond to the imperative of providing education and business services to equip citizens and firms to compete in the knowledge economy. Perhaps most important, large urban governments are best placed to provide the physical and social capital to support innovation hubs. A key challenge for fiscal federalism is to facilitate the decentralisation of responsibilities to urban governments. This entails new thinking about revenue decentralisation, policy harmonisation and the structure of intergovernmental transfers so that cities can implement their policies effectively and accountably.
    Keywords: decentralisation, fiscal federalism, globalisation
    JEL: H73 H77
    Date: 2018–02–27
  41. By: Özge Bilgili; Sonja Fransen; Craig Loschmann; Melissa Siegel
    Abstract: This paper studies to what extent and in what ways access to educational services and schooling outcomes of local children are influenced by the presence of a refugee camp in or around their community. Taking the case of Congolese refugees in Rwanda and relying on household survey data collected in 2016, we investigate the availability of schools, schooling rates and access to school-based feeding programs in communities closer to and further away from three refugee camps: Gihembe, Kiziba and Kigeme. Furthermore, we conduct a cohort analysis to compare the years of schooling and primary school completion of Rwandans residing at different distances from each of these camps. Finally, on the basis of focus group discussions conducted among locals, we provide further insights into the ways in which locals perceive the effects of the refugee camp’s presence on their children’s access to schooling and educational outcomes. Our results highlight that living nearby a refugee camp does not have a negative influence on the education of local children. On the contrary, children residing closer to the camps have better schooling outcomes, and locals residing closer to the camps have a wide array of mostly positive views regarding the effects of refugees on local education. These results contribute to the body of literature on the effects of refugees on host communities and inform policies on how refugees need not be a ‘burden’ if long-term investments are made and the voice of the locals are heard to address their needs.
    Date: 2018
  42. By: David Jaume (Department of Economics, Cornell University); Alexander Willén (Department of Policy Analysis and Management, Cornell University)
    Abstract: This is the first paper to estimate the effect of teacher strikes on student long-run educational attainment and labor market outcomes. We exploit cross-cohort variation in the prevalence of teacher strikes within and across provinces in Argentina in a difference-in-difference framework to examine how exposure to teacher strikes during primary school affects long-run outcomes. We find robust evidence that teacher strikes worsen the labor market outcomes of these individuals when they are between the ages of 30 and 40: being exposed to the average incidence of teacher strikes during primary school (88 days) reduces annual labor market earnings by 2.99 percent. A back-of-the-envelope calculation suggests that this amounts to an aggregate earnings loss of $712 million in Argentina annually. This is equivalent to the cost of raising the average annual employment income of all primary school teachers in Argentina by 19 percent. We also find evidence of a decline in hourly wage, an increase in unemployment, an increase in the probability of not working or studying and a decline in the skill levels of the occupations into which students sort. Examining short- and long-run educational outcomes suggests that the labor market effects are driven, at least in part, by a reduction in educational attainment. Our analysis further identifies significant intergenerational treatment effects. Children of adults who were exposed to teacher strikes during primary school also experience adverse educational attainment effects.
    JEL: I20 J24 J45 J52
    Date: 2017–10
  43. By: Ignacio Lago; André Blais
    Abstract: We explore how the uniformity of electoral swings in the district vote within countries is affected by the level of economic and political decentralization. We rely on district-level data from OECD countries in two consecutive elections before and after the Great Recession to show that as regional governments exert more influence over the central government, districts deviate less from the overall pattern of change in support of the national incumbent party. The causal mechanism accounting for the effect of decentralization on dynamic nationalization is examined with individual panel data from national elections in Canada and Spain.
    Keywords: Decentralization, dynamic nationalization, electoral swing, Great Recession.
    JEL: D72 H77
    Date: 2018–02
  44. By: Pablo Beramendi; Melissa Rogers
    Abstract: We argue that fiscal decentralisation is one important explanation for variation in distributive outcomes following the Great Recession. Using a difference in differences approach, we examine how fiscal decentralisation mediated the link between spatial distribution, redistributive effort, and interpersonal inequality in 21 OECD cases in the years following the Great Recession. We find that fiscally decentralised nations saw increased interpersonal inequality and lower redistribution, but lower inter-regional inequality. We attribute these results to the weaker redistributive mechanisms in fiscally decentralized nations, which increased interpersonal inequality while preserving market-driven productivity declines in high productivity areas that temporary increased regional convergence.
    Keywords: Fiscal decentralisation, Inter-regional inequality, Interpersonal inequality, Redistribution.
    JEL: H71 H72 H77 I38
    Date: 2018–02
  45. By: Mario Chacon (Division of Social Science)
    Abstract: Policies aimed at increasing the resources and administrative responsibilities of subnational governments are often proposed as a conict resolution strategy. This paper explores a particular threat to the e¤ectiveness of decentralizing reforms in war-torn countries, namely the capture of local governments by non-state armed actors. These groups are reliant on rents and may increase their violence against local authorities in an attempt to capture local governments in a decentralized system. This relationship between decentralization and conict is explored using subnational-level data from Colombia during the 1990s, when local scal capacity greatly expanded. I exploit a key reform to identify the effect of automatic transfers from the center on conict casualties. The evidence shows that scal transfers are associated with higher murder rates of local authorities and politicians. Moreover, this effect is conditional on the state capacity of localities. These results are robust and consistent with the rent-seeking strategy of paramilitaries and guerrillas during the period.
    Date: 2017–10
  46. By: Laura Alfaro (Harvard Business School And Nber); Manuel García-Santana (Upf, Barcelona Gse, and Cepr); Enrique Moral-Benito (Banco de España)
    Abstract: We consider the real effects of bank lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all fi rms in Spain with a matched bank-fi rm-loan dataset incorporating information on the universe of corporate loans for 2003-2013. Using methods from the matched employer-employee literature for handling large data sets, we identify bank-specifi c shocks for each year in our sample. Combining the Spanish Input-Output structure and fi rm-specifi c measures of upstream and downstream exposure, we construct fi rm-specifi c exogenous credit supply shocks and estimate their direct and indirect effects on real activity. Credit supply shocks have sizable direct and downstream propagation effects on investment and output throughout the period but no signifi cant impact on employment during the expansion period. Downstream propagation effects are comparable or even larger in magnitude than direct effects. The results corroborate the importance of network effects in quantifying the real effects of credit shocks and show that real effects vary during booms and busts.
    Keywords: bank-lending channel, employment, investment, output, matched employeremployee, input-output linkages
    JEL: E44 G21 L25
    Date: 2018–03
  47. By: Eva-Maria Egger; Julie Litchfield
    Abstract: The decision to migrate is often influenced by the experience of earlier migrants from one’s household. Earlier migrants provide information on likely opportunities and potential risks and can offer support at destination to later migrants. We explore patterns of migration within rural households and the impact that these later migrants have on household welfare outcomes. Specifically, we use a household panel survey collected in 2013 and 2015 in rural areas of Ghana. We exploit the panel nature of the data and a weighting method to overcome sources of bias. Welfare is measured with an asset index of housing quality. We find that more recent or ‘new’ migrants are more likely to be from a younger generation, they face lower migration costs, and few of them remit. We find no effect of sending a new migrant on the asset index. We conclude that the different nature of migration of new migrants implies neither an economic gain for the household nor a loss. The reason for the former is that the more recent migrants remit less or not at all compared to earlier waves of migrants and the reason for the latter is that migration becomes less costly with prior experience.
    Date: 2018
  48. By: Leah Gillion (Princeton University)
    Abstract: In recent studies, scholars have come to view grit as an essential component for success. This field has gained attention because it crosses the social economic spectrum and it is considered to be a learned characteristic. In this paper, I investigate the link between birth endowments and grit and the role parental investment plays in the development of non-cognitive skills. Using data from the Fragile Families Study, I find mixed results. Birth weight is associated with grit, when measured by teachers, but there is little association when measured by parents and the child. Furthermore, parental investment is associated with grit when measured by parents and the child, but there is no association when measured by teachers. This paper suggests that grit is a behavior that can be learned through parental investment, but the returns to parental investment in elementary school are not realized in the academic environment.
    JEL: I12 J13
    Date: 2017
  49. By: Wapler, Rüdiger (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolff, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "While many studies estimated the effects of active labour market programmes (ALMPs) on the participants' labour market outcomes, much fewer studies are concerned with effects of these policies on the regional matching-process between job seekers and vacancies. An essential part of many reforms of the unemployment benefit system such as in Germany intended to activate unemployed job-seekers through an intense use of ALMPs. Therefore, it is crucial to understand whether such policies can improve the matching efficiency. We analyse quarterly panel data of German job centres in the period 2006 to 2011 and estimate the effects of the most important ALMPs on the regional exit rate from job-seeking into regular employment in a matching-function framework by applying the system generalized methods of moments estimator. Our results point to positive effects on the matching efficiency of a number of ALMPs, but the effects partly differ between high and low unemployment regions. Only for a few programmes does our evidence point to no or negative effects on the matching efficiency and this may be related to the implementation of these programmes on a very large scale." (Author's abstract, IAB-Doku) ((en))
    JEL: C23 H43 J64 J68
    Date: 2018–03–01
  50. By: Kenneth Gillingham; Anders Munk-Nielsen
    Abstract: Pricing greenhouse gases is widely understood as the most efficient approach for mitigating climate change, yet distributional effects hamper political acceptance. These distributional effects are especially important in transport, the fastest growing sector for greenhouse gas emissions. Using rich data covering the entire population of vehicles and households in Denmark, this study uncovers an important feature of driving demand: two groups of much more responsive households in the lower and upper tails of the work distance distribution. We further estimate the causal effect of public transport–a critical determinant of the upper tail–and show how public transport access can both reconcile differences in fuel price elasticities between the United States and Europe, and considerably influence the distributional effects of fuel pricing.
    Keywords: transportation, distributional effects, urban form, environmental taxes
    JEL: L90 R40 Q40 N70
    Date: 2017
  51. By: Brandon Wagner (Texas Tech University); Louis Donnelly (Princeton University); Sara McLanahan (Princeton University); Irwin Garfinkel (Columbia School of Social Work); Jeanne Brooks-Gunn (Teachers College and the College of Physicians and Surgeons at Columbia University)
    Abstract: Exposure to airborne toxins is associated with a variety of health risks. A growing body of research suggests exposure to air pollution negatively impacts neurological function, although the extent to which cumulative exposure throughout childhood matters for children’s cognitive development is unclear. To address this question, we join Census tract-level data on air pollution estimated in the National Air Toxics Assessment by the Environmental Protection Agency to individual-level data from the Fragile Families and Child Wellbeing Study, a birth cohort study following children born in large US cities between 1998 and 2000. We find that children who grow up in neighborhoods with higher levels of neurologically hazardous air pollution score lower on multiple measures of intellectual and academic ability at age 9, even after accounting for parental intelligence and the socio-economic characteristics of families and neighborhoods. We also show that cumulative exposure to air pollution during childhood is associated with declines in relative vocabulary test scores between ages 3 and 9, net of air pollution exposure at birth. Overall, our findings provide strong evidence for the deleterious effect of childhood air pollution on children’s cognitive development.
    JEL: Q53 I24 J13
    Date: 2017
  52. By: Dupor, William D. (Federal Reserve Bank of St. Louis); Karabarbounis, Marios (Federal Reserve Bank of Richmond); Kudlyak, Marianna (Federal Reserve Bank of San Francisco); Mehkari, M. Saif (University of Richmond)
    Abstract: We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data come from household-level retail purchases in Nielsen and auto purchases from Equifax credit balances. We estimate that a $1 increase in county-level government spending increases consumer spending by $0.18. We translate the regional consumption responses to an aggregate fiscal multiplier using a multi-region, New Keynesian model with heterogeneous agents and incomplete markets. Our model successfully generates the estimated positive local multiplier, a result that distinguishes our incomplete markets model from models with complete markets. The aggregate consumption multiplier is 0.4, which implies an output multiplier higher than one. The aggregate consumption multiplier is almost twice the local estimate because trade linkages propagate government spending across regions.
    Keywords: Consumer Spending; Fiscal Multiplier; Regional Variation; Heterogeneous Agents.
    JEL: E21 E62 H31 H71
    Date: 2018–02–20
  53. By: Konstantins Benkovskis (Bank of Latvia); Olegs Tkacevs (Bank of Latvia); Naomitsu Yashiro (OECD)
    Abstract: This paper investigates the effects of EU regional support on firms' productivity, the number of employees and other firm performance indicators. For this purpose, a rich firmlevel dataset for Latvia, a country where investment activities are affected by the availability of EU funding, is used. The paper finds that participation in activities cofunded by the ERDF raises firms' input and output soon after they embark on them, while the effect on labour productivity and TFP appears only with a time lag of three years. However, this positive productivity premium is not homogenous across firms and is more likely to materialise in the case of initially less productive and medium-sized/large firms. Furthermore, statistical significance of positive productivity gains is not particularly robust across different estimation procedures. The study also shows that after controlling for investment expenditures, EU sponsored projects are as efficient as the privately financed ones, irrespective of where private financing comes from.
    Keywords: EU funds, productivity, firm-level data, propensity score matching
    JEL: C14 D22 R11
    Date: 2018–02–23

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