nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2019‒06‒10
fifty-six papers chosen by
Steve Ross
University of Connecticut

  1. Roads, railroads and decentralization of Chinese cities By Baum-Snow, Nathaniel; Brandt, Loren; Henderson, J. Vernon; Turner, Matthew A.; Zhang, Qinghua
  2. Regional inequality in urban China, allowing for spatial cost of living differences: Evidence from a hedonic analysis of apartment prices By Chao Li, John Gibson and Geua Boe-Gibson
  3. Understanding Migration Aversion using Elicited Counterfactual Choice Probabilities By Gizem Kosar; Tyler Ransom; Wilbert van der Klaauw
  4. Are rising house prices really good for your brain? House value and cognitive functioning among older Europeans By Bénédicte Apouey; Isabelle Chort
  5. The impact of place-based policies on perceived regional living conditions across German labor market regions. Examining the impacts on migration flows. By Sven Wardenburg; Thomas Brenner
  6. Inter-City Spillover and Intra-City Agglomeration Effects among Local Labour Markets in China By Gong, Xiaodong; Gao, Jiti; Liang, Xuan
  7. Racial Residential Segregation and Black Low Birth Weight, 1970-2010 By Niemesh, Gregory; Shester, Katharine
  8. Property Rights, Place-Based Policies, and Economic Development By Laurel Wheeler
  9. Empty homes, longer commutes: the unintended consequences of more restrictive local planning By Cheshire, Paul; Hilber, Christian A.L.; Koster, Hans R.A.
  10. The Role of the Federal Housing Administration in the Reverse-Mortgage Market By Congressional Budget Office
  11. Does greater social diversity in schools have an impact on equity in learning outcomes? By Pauline Givord
  12. Real-estate concentration in the Irish banking system By Lyons, Paul; Nevin, Ciarán; Shaw, Frances
  13. Monitoring General Education: Sociological Aspects By Avraamova, Elena (Авраамова, Елена); Klyachko, Tatiana (Клячко, Татьяна); Loginov, Dmitriy (Логинов, Дмитрий); Semionova, Elena (Семионова, Елена); Tokareva, Galina (Токарева, Галина)
  14. Uneven economic development and its implications for policy: lessons from the UK By Overman, Henry G.
  15. The Role of Trust in Regional Development By Grillitsch, Markus; Nilsson, Magnus
  16. Taxing vehicles, fuels, and road use: Opportunities for improving transport tax practice By Kurt van Dender
  17. Industrial Land Policy and Economic Complexity of Chinese Cities By Zhaoyingzi Dong; Yingcheng Li; Pierre-Alexandre Balland; Siqi Zheng
  18. Who cares? Future sea-level-rise and house prices By Filippova, Olga; Nguyen, Cuong; Noy, Ilan; Rehm, Michael
  19. Information, Mobile Communication, and Referral Effects By Panle Jia Barwick; Yanyan Liu; Eleonora Patacchini; Qi Wu
  20. OK Computer: The Creation and Integration of AI in Europe By Bernardo S. Buarque; Ronald B. Davies; Dieter F. Kogler; Ryan M. Hynes
  21. Regional inequalities in African political economy: theory, conceptualization and measurement, and political effects By Boone, Catherine; Simson, Rebecca
  22. It's the Phone, Stupid: Mobiles and Murder By Lena Edlund; Cecilia Machado
  23. Income redistribution and self-selection of immigrants By Corneo, Giacomo G.; Neidhöfer, Guido
  24. Math Scores in High Stakes Grades By Brunello, Giorgio; Kiss, David
  25. Does Low Skilled Immigration Increase Profits? Evidence from Italian Local Labour Markets By Giorgio Brunello; Elisabetta Lodigiani; Lorenzo Rocco
  26. The Community Origins of Private Enterprise in China By Ruochen Dai; Dilip Mookherjee; Kaivan Munshi; Xiaobo Zhang
  27. Determinants of School Dropout in Lao PDR: A Survival Analysis By Kikeo Boualaphet; Hideaki Goto
  28. Firm soundness and knowledge externalities: a comparative regional analysis By Giuseppe Arcuri; Nadine Levratto; Aziza Garsaa; Lara Abdel Fattah
  29. Resilience, Skill Endowment and Diversity: Evidence from US Metropolitan Areas By Fabrizio Fusillo; Davide Consoli; Francesco Quatraro
  31. Determinants of Peer Selection By Lukas Kiessling; Jonas Radbruch; Sebastian Schaube
  32. The innovative performance of firms in heterogeneous environments : the interplay between external knowledge and internal absorptive capacities By Crescenzi, Riccardo; Gagliardi, Luisa
  33. The impact of cumulative tonnes on track failures: An empirical approach By Odolinski, Kristofer
  34. Resource Transfers to Local Governments: Political Manipulation and Household Responses in West Bengal By Pranab Bardhan; Sandip Mitra; Dilip Mookherjee; Anusha Nath
  35. Classifying small (TL3) regions based on metropolitan population, low density and remoteness By Milenko Fadic; José Enrique Garcilazo; Ana Moreno Monroy; Paolo Veneri
  36. Industrial clusters in the long run: Evidence from Million-Rouble plants in China By Stephan Heblich; Marlon Seror; Hao Xu; Stephan Yanos Zylberberg
  37. Owner Occupied Housing in the CPI and Its Impact On Monetary Policy During Housing Booms and Busts By Robert J. Hill; Miriam Steurer; Sofie R. Waltl
  38. The Beveridge curve in the housing market By Gaetano Lisi
  39. Experience of Communal Conflicts and Inter-group Lending By Raymond Fisman; Arkodipta Sarkar; Janis Skrastins; Vikrant Vig
  40. Do firms exchange knowledge through complementary or substitutive routes of diffusion? By Amir Maghssudipour; Luciana Lazzeretti; Francesco Capone
  41. Intergenerational and Intragenerational Externalities of the Perry Preschool Project By James J. Heckman; Ganesh Karapakula
  42. Competition between offline and online retailers with heterogeneous customers By Stefano Colombo; Noriaki Matsushima
  43. The regional significance of university locations in Lower Saxony By Stöver, Britta
  44. Regional fiscal equalization. A simultaneous equation approach to assess the economic effects of fiscal policy By Jonathan Eberle
  45. Migrants and Firms: Evidence from China By Clement Imbert; Marlon Seror; Yifan Zhang; Stephan Yanos Zylberberg
  46. Housing Market Returns and the Consumption-(Dis)Aggregate Wealth Ratio: Evidence from U.S. State-Level Data By Mehmet Balcilar; Rangan Gupta; Ricardo M. Sousa; Mark E. Wohar
  47. Tales of the City: What Do Agglomeration Cases Tell Us About Agglomeration in General? By Faggio, G.; Silva, O.; Strange, W.C.
  48. The Effect of Initial Placement Restrictions on Refugees' Language Acquisition in Germany By Felicitas Schikora
  49. Asset Price Bubbles and Systemic Risk By Markus Brunnermeier; Simon Rother; Isabel Schnabel
  50. Social Ties and the Selection of China’s Political Elite By Raymond Fisman; Jing Shi; Yongxiang Wang; Weixing Wu
  51. Repercussions of negatively selective migration for the behavior of non-migrants when preferences are social By Stark, Oded; Budzinski, Wiktor
  52. The efficiency of the distribution of tax sources between levels of government in Russia By Arlashkin, Igor (Арлашкин, Игорь); Barbashova, Natalia (Барбашова, Наталья); Deryugin, Alexander (Дерюгин, Александр); Komarnitskaya, Anna (Комарницкая, Анна)
  53. Enduring Gendered Mobility Patterns in Contemporary Senegal By Isabelle Chort; Philippe de Vreyer; Thomas Zuber
  54. Do Physicians Influence Each Other’s Performance? Evidence from the Emergency Department By Saghafian, Soroush; Imanirad, Raha; Traub, Stephen J.
  55. Social Connections and the Sorting of Workers to Firms By Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordström Skans, Oskar
  56. Birthplace diversity and team performance By Brox, Enzo; Krieger, Tommy

  1. By: Baum-Snow, Nathaniel; Brandt, Loren; Henderson, J. Vernon; Turner, Matthew A.; Zhang, Qinghua
    Abstract: We investigate how configurations of urban railroads and highways influenced urban form in Chinese cities since 1990. Each radial highway displaces about 4 percent of central city population to surrounding regions and ring roads displace about an additional 20 percent, with stronger effects in the richer coastal and central regions. Each radial railroad reduces central city industrial GDP by about 20 percent, with ring roads displacing an additional 50 percent. Similar estimates for the locations of manufacturing jobs and residential location of manufacturing workers is evidence that radial highways decentralize service sector activity, radial railroads decentralize industrial activity and ring roads decentralize both. Historical transportation infrastructure provides identifying variation in more recent measures of infrastructure.
    Keywords: China; roads; railroads; infrastructure
    JEL: O2 R4
    Date: 2017–07–17
  2. By: Chao Li, John Gibson and Geua Boe-Gibson
    Abstract: Studies of inequality in China typically ignore cost of living differences between areas. Under the Balassa–Samuelson effect, nontradeables cost more in richer areas, so nominal inequality exceeds real inequality. This especially matters in China, where spatial cost of living differences should grow with recent development of urban housing markets. We use new data on apartment prices in 104 cities in China to develop housing†related spatial deflators. The level of spatial inequality in urban China is overstated by 27% if cost of living differences are ignored. Our hedonic analysis of 41,000 individual apartment sales shows that most price variation is between areas, rather than from features of individual apartments. The dominant trend in the reform era is for regional inequality in China to decline, contrary to the common perceptions. In nominal terms, the Theil index for interprovincial inequality in 2016 is just 46% of its 1978 level. The current results imply that the fall in inequality in real terms would be even greater.
    Keywords: China, housing, inequality, regional policy, spatial deflators
    Date: 2019–06–03
  3. By: Gizem Kosar (Federal Reserve Bank of New York); Tyler Ransom (Oklahoma University); Wilbert van der Klaauw (Federal Reserve Bank of New York)
    Abstract: Residential mobility rates in the U.S. have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained. In this paper we investigate the relative importance of alternative drivers of residential mobility, including job opportunities, neighborhood and housing amenities, social networks and housing and moving costs, using data from two waves of the NY Fed’s Survey of Consumer Expectations. Our hypothetical choice methodology elicits choice probabilities from which we recover the distribution of preferences for location and mobility attributes without concerns about omitted variables and selection biases that hamper analyses based on observed mobility choices alone. We estimate substantial heterogeneity in the willingness-to-pay (WTP) for location and housing amenities across different demographic groups, with income considerations, proximity to friends and family, neighbors’ shared norms and social values, and monetary and psychological costs of moving being key drivers of migration and residential location choices. The estimates point to potentially important amplifying roles played by family, friends, and shared norms and values in the decline of residential mobility rates.
    Keywords: migration, geographic labor mobility, neighborhood characteristics
    JEL: J61 R23 D84
    Date: 2019–06
  4. By: Bénédicte Apouey (PSE - Paris School of Economics); Isabelle Chort (UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: This study examines how house prices in uence cognitive functioning for individuals aged 50+ in Europe. Using data from the Survey of Health, Ageing and Retirement, we compute the median house price for each region-year, employing individual self-reported house values. We allow housing market fluctuations to have different effects during episodes of price increases and decreases, and we study owners with a mortgage, owners without a mortgage, and tenants separately. House price booms do not systematically improve cognitive outcomes: for outright owners, rising prices have a negative impact on cognitive health. For richer households, this negative effect is driven by respondents with no second home, suggesting that high prices make second home ownership less affordable and reduces household residential mobility. Finally, house price decreases are associated with better cognitive health for mortgaged owners, but this beneficial effect is largely due to the burst of the house price bubble in Spain.
    Keywords: House prices,Wealth,Cognitive functioning,Health,Older Europeans,Europe,SHARE
    Date: 2018–06
  5. By: Sven Wardenburg (Department of Geography, Philipps University Marburg); Thomas Brenner (Department of Geography, Philipps University Marburg)
    Abstract: The paper analyzes the impact of the two major German regional development and redistribution policies, the municipal fiscal equalization scheme and the economic funds GRW, on perceived regional living conditions, measured through interregional migration between German labor market regions. Using a spatial vector-autoregressive panel model (SpVar), we find evidence that equalization transfers have a significant positive impact on perceived living conditions and contribute to the aim of regional equity. These effects are especially found for regions with low endogenous fiscal capacities. GRW funding reveals no significant effects on net migration rates in total, but short-term effects in rural regions.
    Keywords: amenities, fiscal equalization, impulse-response functions, living conditions, migration, policy, SpVar
    JEL: C33 R23 R58 O38
    Date: 2019–05
  6. By: Gong, Xiaodong (NATSEM, University of Canberra); Gao, Jiti (Monash University); Liang, Xuan (Australian National University)
    Abstract: We examine how city size affect wage levels of cities (agglomeration externality) and how it influence surrounding cities (spill-over effect) in China for the period between 1995 and 2009. Using spatial fixed-effect panel data models and allowing for endogenous and exogenous spatial dependence, we find strong positive city size effect on real wage levels, which confirms the existence of agglomeration economy within cities. We also find significant differences in both the direct and indirect effect of factors such as FDI between more and less population dense areas.
    Keywords: agglomeration economy, spill-over, spatial econometrics, fixed-effects
    JEL: C23 R12 R23
    Date: 2019–05
  7. By: Niemesh, Gregory; Shester, Katharine
    Abstract: The black-white gap in low birth weight in the United States remains large and mostly unexplained. A large literature links segregation to adverse black birth outcomes but, to the best of our knowledge, no studies explore how this relationship has changed over time. We explore the relationship between racial residential segregation on black and white birth weights for the period 1970-2010. We find a negative effect of segregation on black birth outcomes that only emerges after 1980. We explore the potential pathways through which segregation influenced black birth outcomes and how these mechanisms may have changed over time. Measures for maternal socioeconomic status and behaviors accounts for 35 to 40 percent of the full segregation effect between 1990 and 2010. Single-motherhood and mother's education, and unobservable factors that load onto these variables, play important and increasing roles. After controlling for MSA and parent characteristics, segregation explains 21-25 percent of the raw black-white gap in low birth weight between 1990 and 2010.
    Keywords: Racial segregation, residential segregation, low birth weight, infant health
    JEL: I14 J13 J15 R23
    Date: 2019–05–16
  8. By: Laurel Wheeler
    Abstract: This paper examines the effect of property rights on economic development within local labor markets, including how property rights change the equilibrium response to place-based policies. It does so in the context of federally recognized American Indian reservations, where a fraction of the land is held in trust by the US federal government and associated with restrictions on transactions. I find that incomplete property rights on reservations are responsible for lower wages and higher levels of unemployment. The direction of these findings is robust to an instrumental variables approach to dealing with the endogeneity of property rights. Next I shed light on the extent to which place-based policies can improve economic outcomes on reservations. I use a spatial equilibrium framework to study the incidence of casino adoption, a place-based policy unique to reservations. The key insight from the model is that incomplete property rights impose frictions in the housing market that lower the migration response to casino adoption, improving the likelihood that the local population benefits. Consistent with the model's predictions, I find that casino adoption raises average wages and that the wage effect is greater on reservations with more land in trust. My estimates suggest that wage increases correspond to welfare improvements. This paper provides insights into how place-based policies and property rights jointly shape economic outcomes through changes in the labor market, the housing market, and the mobility of workers.
    Date: 2019–06
  9. By: Cheshire, Paul; Hilber, Christian A.L.; Koster, Hans R.A.
    Abstract: We investigate the impact of land use regulation on housing vacancy rates. Using a 30-year panel dataset on land use regulation for 350 English Local Authorities (LAs) and addressing potential reverse causation and other endogeneity concerns, we find that tighter local planning constraints increase local housing vacancy rates: a one standard deviation increase in restrictiveness causes the local vacancy rate to increase by 0.9 percentage points (23%). The same increase in local restrictiveness also causes a 6.1% rise in commuting distances. The results underline the interdependence of local housing and labour markets and the unintended adverse impact of more restrictive planning policies
    Keywords: (ES/J021342/1
    JEL: R13 R38
    Date: 2018–02–01
  10. By: Congressional Budget Office
    Abstract: The Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program guarantees repayment on qualifying reverse mortgages made by private lenders. Reverse mortgages let older homeowners borrow money by using the equity in their home as collateral. The borrowed funds can be used to repay an existing mortgage or to fund other expenses. In this report, CBO examines how the HECM program works, how it affects the federal budget, and how various policy changes might reduce costs and risks to the government or to borrowers.
    JEL: G10 G21 G28 R31 R38 R51
    Date: 2019–05–23
  11. By: Pauline Givord
    Abstract: A student’s performance in school is influenced by personal characteristics, but also, amongst other influences, by those of his or her schoolmates. Schoolmates can motivate and help each other overcome learning difficulties; but they can also disrupt instruction, require disproportionate attention from teachers, and be a source of anxiety. The way students are allocated to schools, and whether that results in greater socio-economic or academic differences across schools, may thus have an impact on education outcomes at the country level.In which PISA-participating countries and economies are students concentrated in certain schools, depending largely on their ability or socio-economic status? How is socio-economic segregation across schools related to the achievement gaps between students of different socio-economic status?
    Date: 2019–06–11
  12. By: Lyons, Paul (Central Bank of Ireland); Nevin, Ciarán (Central Bank o Ireland); Shaw, Frances (Central Bank o Ireland)
    Abstract: Globally, there is evidence that vulnerabilities in real-estate markets have been the trigger for many financial crises. In this Note, we assess the concentration in real-estate exposures of the Irish banking system in a historic and European context. Despite a substantial reduction in overall lending balances since the Irish financial crisis, we find that the overall level of concentration in real-estate lending has remained relatively stable.We also find that the Irish banking system is more concentrated in real-estate lending than its European peers. We show that the composition of concentration has changed, with the share of residential mortgages increasing and the share of commercial real estate decreasing. This high degree of concentration of the Irish banking system in real-estate exposures underlines the importance of prudent underwriting by the banking system. The Central Bank’s mortgage market measures help in this regard, by protecting banks and borrowers against a marked loosening of such underwriting. In doing this, the measures serve to strengthen the resilience of a concentrated system.
    Date: 2019–05
  13. By: Avraamova, Elena (Авраамова, Елена) (The Russian Presidential Academy of National Economy and Public Administration); Klyachko, Tatiana (Клячко, Татьяна) (The Russian Presidential Academy of National Economy and Public Administration); Loginov, Dmitriy (Логинов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration); Semionova, Elena (Семионова, Елена) (The Russian Presidential Academy of National Economy and Public Administration); Tokareva, Galina (Токарева, Галина) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper presents the results of a monitoring study of the effectiveness of general education conducted by the Center for Continuing Education Economics of the IPEI RANEPA in 2013–2018. The participants of a sociological survey of the sixth monitoring wave in 2018 were 40 school principals, 2,295 representatives of households, 2,077 teachers of educational institutions located in urban settlements and rural areas of the Chelyabinsk Region, Altai and Stavropol region, as well as in St. Petersburg. The paper considers the positions of teachers on a wide range of issues related to general education: the personnel situation in schools, the quality of teaching, the requirements of families for the organization of the educational process, the satisfaction of teachers with their professional activities.
    Date: 2019–04
  14. By: Overman, Henry G.
    Abstract: This paper examines the UK’s large and, by some measures, growing variation in economic performance across cities and regions and assesses how policymakers can and should respond. The traditional policy mix – including central government investments in local growth projects, transport and other infrastructure, and funding for business support and access to finance – has not been effective. Greater local control is needed to improve policy effectiveness and recent devolution deals and directly elected mayors are a step in this direction. Nonetheless, when devolving powers, it is important that policies that have wide scale impacts (such as transport and housing) are coordinated across local areas. London’s strong economic performance plays a large part in explaining widening disparities within the UK. Providing an effective counter-balance to London may require policy aimed at ‘rebalancing’ to be more spatially focused. Ultimately, policymakers should care about the effect of policies on people more than on places and thus efforts to rebalance an economy should be judged on the extent to which they improve opportunities for all, rather than whether they narrow the gap between particular places.
    Keywords: economic development; United Kingdom
    JEL: R12 O15
    Date: 2018
  15. By: Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University)
    Abstract: Regional development is a dynamic process where relatively stable periods are interrupted by phases of more rapid transformation and disruption. Such dynamics are heavily influenced by the scope and nature of knowledge networks. Trust is a key mechanism influencing the mobilization of networks for learning and innovation and thereby an important factor for understanding regional development. This paper sets out to unpack the role of trust in regional development by advancing a differentiated view that sheds light on why, when, and how trust affects regional development dynamics in a positive or negative way. Avenues for future research are identified.
    Keywords: Regional dynamics; trust; networks; path-dependency; path emergence; lock-in
    JEL: L14 L16 R11
    Date: 2019–05–24
  16. By: Kurt van Dender
    Abstract: This paper discusses the main external costs related to road transport and the design of taxes to manage them. It provides an overview of evolving tax practice in the European Union and the United States and identifies opportunities for better alignment of transport taxes with external costs. There is considerable scope for improving transport tax practice, notably by increasing the use of taxes based on road use. Distance charges offer great promise in delivering more efficient road transport. In heavily congested areas, targeted charges are a cost-effective way of reducing congestion. Fiscal objectives provide an impetus for change as improving vehicle fuel efficiency and fleet penetration of alternative fuel vehicles erode traditional tax bases, particularly those relating to fossil fuel use. A gradual shift from an energy-based approach towards distance-based transport taxes has the potential to establish a stable tax base in the road transport sector in the long run.
    Keywords: congestion, congestion charging, distance-charges, external costs, fuel taxes, pollution, road transport
    JEL: H23 Q58 R4 R41 R48
    Date: 2019–06–05
  17. By: Zhaoyingzi Dong; Yingcheng Li; Pierre-Alexandre Balland; Siqi Zheng
    Abstract: Economies producing more complex products tend to be wealthier and grow more quickly. Therefore, a key issue for cities around the world is to develop new specializations into more complex industries. In China, local governments tend to use industrial land subsidy as a policy tool to attract new firms in desired industries and promote industrial growth. However, relatively little is known about the impact of this policy tool on the economic complexity of Chinese cities. Drawing upon the recent literature on the principle of relatedness and economic complexity, this paper investigates the impact of this industrial land policy (ILP) on the diversification of Chinese cities into more complex industries. The empirical results support our hypothesis that those cities providing higher intensity of land subsidy are more likely to enter new industries, in particular the most complex ones.
    Keywords: : Economic Complexity, Industry Complexity, Industrial Land Policy, Industrial Diversification
    JEL: O25 O38 R11
    Date: 2019–05
  18. By: Filippova, Olga; Nguyen, Cuong; Noy, Ilan; Rehm, Michael
    Abstract: Globally, the single-most observable, predictable, and certain impact of climate change is sea level rise. Using a case study from the Kapiti Coast District in New Zealand, we pose a simple question: Do people factor in the warnings provided by scientists and governments about the risk of sea-level rise when making their investment decisions? We examine the single most important financial decision that most people make – purchasing a home, to see whether prices of coastal property change when more/less information becomes available about property-specific consequences of future sea level rise. The Kapiti Coast District Council published detailed projected erosion risk maps for the district’s coastline in 2012 and was forced to remove them by the courts in 2014. About 1,800 properties were affected. We estimate the impact of this information on home prices using data from all real estate transactions in the district with a difference-in-differences framework embedded in a hedonic pricing model. We find that the posting of this information had a very small and statistically insignificant impact on house prices, suggesting people do not care much about the long-term risks of sea-level rise as they do not incorporate these risks in their investment decisions.
    Keywords: House price, Sea level rise, Climate change, Erosion, New Zealand, Investment risk,
    Date: 2019
  19. By: Panle Jia Barwick; Yanyan Liu; Eleonora Patacchini; Qi Wu
    Abstract: Information is a crucial ingredient in economic decision making. Yet measuring the extent of information exchange among individuals and its effect on economic outcomes is a difficult task. We use the universe of de-identified cellphone usage records from more than one million users in a Chinese city over twelve months to quantify information exchange among individuals and examine the role of referrals – human carriers of information – in urban labor markets. We present the first evidence that information flow (measured by call volume) correlates strongly with worker flows, a pattern that persists at different levels of geographic aggregation. Condition on information flow, socioeconomic diversity in information sources (social contacts), especially that associated with the working population, is crucial and helps to predict worker flows. We supplement our phone records with auxiliary data sets on residential housing prices, job postings, and firm attributes from administrative data. Information passed on through referrals is valuable: referred jobs are associated with higher monetary gains, a higher likelihood to transition from part-time to full-time, reduced commuting time, and a higher probability of entering desirable jobs. Referral information is more valuable for young workers, people switching jobs from suburbs to the inner city, and those changing their industrial sector. Firms receiving referrals are more likely to have successful recruits and experience faster growth.
    JEL: J60 R23
    Date: 2019–05
  20. By: Bernardo S. Buarque; Ronald B. Davies; Dieter F. Kogler; Ryan M. Hynes
    Abstract: This paper investigates the creation and integration of Artificial Intelligence (AI) patents in Europe. We create a panel of AI patents over time, mapping them into regions at the NUTS2 level. We then proceed by examining how AI is integrated into the knowledge space of each region. In particular, we find that those regions where AI is most embedded into the innovation landscape are also those where the number of AI patents is largest. This suggests that to increase AI innovation it may be necessary to integrate it with industrial development, a feature central to many recent AI-promoting policies.
    Keywords: Artificial Intelligence; Geography of Innovation; Knowledge Space; Technological Change; Regional Studies
    JEL: O33 O31 R11
    Date: 2019–05
  21. By: Boone, Catherine; Simson, Rebecca
    Abstract: There is growing recognition in the economics literature that African countries are characterized by very large economic disparities across subnational regions. Yet the lack of systematic and reliable empirical data at subnational levels of aggregation has made it difficult to explore possible links between these spatial inequalities and political dynamics. This paper reviews some of the empirical literature that attempts to measure and compare spatial inequality within and acorss African countries, and asks whether and how it might be used to bring studies of Africa into dialogue with comparative political economy work on regional inequality in other parts of the world.
    Keywords: Africa; inequality; regionalism; political geography; urban-rural; political economy
    JEL: N0 Q15
    Date: 2019–03–11
  22. By: Lena Edlund; Cecilia Machado
    Abstract: US homicide rates fell sharply in the early 1990s, a decade that also saw the mainstreaming of cell phones – a concurrence that may be more than a coincidence, we propose. Cell phones may have undercut turf-based street dealing, thus undermining drug-dealing profits of street gangs, entities known to engage in violent crime. Studying county-level data for the years 1970-2009 we find that the expansion of cellular phone service (as proxied by antenna-structure density) lowered homicide rates in the 1990s. Furthermore, effects were concentrated in urban counties; among Black or Hispanic males; and more gang/drug-associated homicides.
    JEL: I0 I18 R0
    Date: 2019–05
  23. By: Corneo, Giacomo G.; Neidhöfer, Guido
    Abstract: We analyze the effects of governmental redistribution of income on migration patterns,using an Italian administrative dataset that includes information on almost every Italian citizen living abroad. Since Italy takes a middle ground in terms of redistribution, both the welfare-magnet effect from more redistributive countries and the propensity of the high-skilled to settle in countries with lower taxes can be empirically studied. Our findings confirm the hypothesis that destination countries with more redistribution receive a negative selection of Italian migrants. This holds true after accounting for many individual and country level covariates, migration costs, and when testing for stochastic dominance of the skill distributions of migrants and stayers. Policy simulations are run in order to gauge the magnitude of these migration effects. Based on estimated elasticities, we find that sizable increases in the amount of redistribution in Italy have small effects on the skill composition of the resident population.
    Keywords: Roy-Model,Self-selection,Migration,Redistribution
    JEL: D31 F22 H23 J61 O15
    Date: 2019
  24. By: Brunello, Giorgio (University of Padova); Kiss, David (Leibniz University of Hannover)
    Abstract: We investigate whether tests taken during a high stakes grade by German primary and secondary students produce higher math scores than in lower stakes grades. We identify a high stakes grade with the final grade of primary or secondary school, because good performance in that grade can affect future opportunities. Our difference-in-differences estimates show that high stakes increase math scores on average by 0.17 to 0.23 standard deviations, a sizeable effect.
    Keywords: high stakes testing, student motivation, achievement, (perceived) returns to education
    JEL: J24 D91
    Date: 2019–05
  25. By: Giorgio Brunello (University of Padova, IZA, Cesifo and ROA); Elisabetta Lodigiani (University of Padova and LdA); Lorenzo Rocco (University of Padova and IZA)
    Abstract: We study the effects of low skilled immigration on firm profits, average wages, capital and total factor productivity (TFP) by combining firm-level and local labour market data from Italy. We find that low skilled immigration increases profits. This effect is small on average, larger for small firms and considerably larger for firms operating in local labour markets with a higher than median share of (before sample) low skilled employment. In these areas, substitution effects reduce average wages much more than elsewhere. Low skilled immigration has increased profits by lowering average wages and by increasing the capital stock, with no effect on TFP.
    Date: 2019–05–28
  26. By: Ruochen Dai (Peking University); Dilip Mookherjee (Boston University); Kaivan Munshi (University of Cambridge); Xiaobo Zhang (Peking University)
    Abstract: This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. The starting point for the analysis is the observation that population density is positively associated with local social interactions, social homogeneity, and enforceable trust in counties (but not cities). This motivates a model of network-based spillovers that predicts how the dynamics of firm entry, concentration, and firm size vary with birth county population density. The predictions of the model are validated over the 1990-2009 period with administrative data covering the universe of registered firms. Competing non-network-based explanations can explain some, but not all of the results. We subsequently estimate the structural parameters of the model and conduct counter-factual simulations, which indicate that entry and capital stock over the 1995-2004 period would have been 40% lower without community networks. Additional counter-factual simulations shed light on misallocation and industrial policy.
    Keywords: Community Networks. Enforceable Trust. Entrepreneurship. Misallocation. Informal Institutions. Growth and Development.
    JEL: J12 J16 D31 I3
    Date: 2019–02
  27. By: Kikeo Boualaphet (Bank of Lao PDR); Hideaki Goto (International University of Japan)
    Abstract: Using the most recent round of a nationally representative survey series, this study examines determinants of dropout from primary to higher levels of education in Lao PDR. The existing studies show that, unlike in other developing countries, the effects of household income and gender are limited. Our analysis confirms the former, that is, net household income has a negligible effect but not the latter-gender inequality remains an issue to be resolved at relatively higher levels of education. Further, despite the government's significant emphasis on early childhood education, the earlier studies report only insignificant effects. In contrast, we find that preschool attendance helps reduce dropout rates, implying that the government policy has been gaining effectiveness in recent years. As in other countries, mothers' schooling and school construction have positive effects on school enrollment in Lao PDR as well.
    Keywords: School dropout, education, preschool, gender inequality, survival analysis, Laos
    Date: 2019–05
  28. By: Giuseppe Arcuri; Nadine Levratto; Aziza Garsaa; Lara Abdel Fattah
    Abstract: This paper investigates the role of regional context with regard to human capital and knowledge spillover effects in SMEs’ financial soundness. Our empirical setting is based on the multilevel analysis for panel data, which better allows for the treatment of hierarchical data. It is applied to firms belonging to the industrial sector and operating in four European countries over the 2010–2015 period. We find that a combination of individual- and regional-level characteristics explain firm soundness more accurately than individual features alone. Furthermore, we find that a higher local educational level and knowledge spillover improve the firm soundness.
    Keywords: Entreprise et territoire, capital humain, robustesse financière de l'entreprise, modèle multiniveau
    JEL: I25 L26 R11 C33
    Date: 2019
  29. By: Fabrizio Fusillo; Davide Consoli; Francesco Quatraro
    Abstract: By adopting the evolutionary approach to resilience, this paper discusses and empirically investigate the determinants of the ability of region to resist, absorb, and react to recessionary shocks. The recent 2008 Great Recession has extremely affected most of the advanced economies all over the World, leading scholars to study in details how different regions responded to the crisis. The aim of the paper is to contribute this literature analyzing the impact of technological, industrial and human capital composition on the short-term resilience. The empirical analysis is conducted on 295 U.S. Metropolitan Statistical Areas over the period 2008-2014. The main finding is that the most resilient regions are those characterized by a very diversified industrial structure. An excess of technological diversity, on the other hand, seems to thwart the ability to absorb external shocks. Lastly, our results suggest that the local occupational structure matters: a high endowment of high-level abstract skills has a positive correlation with regional resilience, though the moderating effect of technological diversity appears to be negative.
    Keywords: regional resilience; human capital; technological diversity; industrial diversity.
    Date: 2019–05–30
  30. By: Christophe Providence (CREGED - Centre de Recherche en Gestion et Economie du Développement - Université Quisqueya, MEMIAD - Management, économie, modélisation, informatique et aide à la décision - UA - Université des Antilles)
    Abstract: For decade Haiti's development was thought to be the prerogative of the central authorities who conceived, in national logic, strategies for this purpose without necessarily considering the subnational specificities. This vision of the development of the territories emerged from a unique context and history that would therefore imply a unique development logic. By taking the case of studies the budgetary allocations to the Haitian communes for the fiscal years2017-2018, we want to demonstrate that the logic of allocating the financing of local authorities is neither neutral nor strategic. The purpose of this article is twofold. First, it is to model spatial disparities and structural instability in the national territory. Secondly, it is to study the differences in space and to explain the inclusiveness and complementary nature of the territorial development process. Limited analysis of the communal allocations of budgetary appropriations reveals two major anomalies in the financing logic of these territories. The first anomaly considers the legitimization of territorial and socioeconomic disparities that comes from an unenlightened choice of leaders to design Haitian territory and the proximity relations between the localized actors. The second anomaly is found in the lack of vision or global consideration in the national strategy for territorial development. The Haitian State cannot therefore make a planned and strategic management of the territory because it is too dependent on the economic events.
    Keywords: Territorial Development,Spatial Disparities,Proximities,Local Financing,Territorial Nesting
    Date: 2019–05–20
  31. By: Lukas Kiessling; Jonas Radbruch; Sebastian Schaube
    Abstract: Peers influence behavior in many domains. We study whom individuals choose as peers and explore individual determinants of peer selection. Using data from a framed field experiment at secondary schools, we analyze how peer choices depend on relative performance, personality differences, and the presence of friendship ties. Our results document systematic patterns of peer choice: friendship is the most important determinant, albeit not the only one. Individuals exhibit homophily in personality, and prefer on average similar but slightly stronger performing peers. Our results help to rationalize models of differential and non-linear peer effects and to understand reference group formation.
    Keywords: Peer Effects, Peer Selection, Social Comparison, Reference Points
    JEL: C93 D01 D03 J24 L23
    Date: 2019–05
  32. By: Crescenzi, Riccardo; Gagliardi, Luisa
    Abstract: This paper investigates the link between firm-level innovative performance and innovation prone external environments where knowledgeable individuals tend to cluster. Organizational ambidexterity and absorptive capacities (potential and realized) make it possible for firms to leverage the availability of external knowledge and boost their innovation performance. The empirical analysis focuses on England and is based on a novel combination of Community Innovation Survey (CIS) firm-level data and patent data. The results show that only firms complementing potential and realized absorptive capacities are able to take advantage of favorable external environments by actively combining internal and external sources of knowledge.
    Keywords: Innovation; Geography of innovation; Absorptive capacities; Exploration and exploitation
    JEL: J1
    Date: 2018–05–01
  33. By: Odolinski, Kristofer (Research Programme in Transport Economics)
    Abstract: Cost-benefit analysis is often used in appraisal of rail infrastructure investments. A corresponding decision support is, however, not available for rail infrastructure maintenance and renewal. To for example decide whether to renew or continue to maintain an infrastructure asset, a relationship between cumulative traffic and infrastructure failures is required. This relationship is established in this paper, using an empirical (top-down) approach on Swedish data for years 2003 to 2016. It is shown that the average elasticity for track failures with respect to cumulative tonnes is 0.32, and that the elasticity varies for different levels of traffic and for different infrastructure characteristics. The results in this paper can for example be used to calculate the impact cumulative tonnes have on train delay costs, which together with a relationship between cumulative traffic and infrastructure maintenance costs are essential in an economic optimization of maintenance and renewal activities.
    Keywords: Rail infrastructure; Track failures; Cumulative traffic; Infrastructure management
    JEL: H54 L92 R49
    Date: 2019–05–28
  34. By: Pranab Bardhan (University of California, Berkeley); Sandip Mitra (Indian Statistical Institute); Dilip Mookherjee (Boston University); Anusha Nath (Federal Reserve Bank of Minneapolis)
    Abstract: We study how political support of household heads respond to receipt of different private and public good benefits delivered by local governments, and whether upper level governments respond strategically by manipulating program budgets to lower level government in West Bengal, India. We exploit redistricting of electoral boundaries by a non-partisan Election Commission, a plausibly exogenous shock to political competition. Consistent with a model of politically motivated allocation, private recurring benefit programs contracted (resp. expanded) in villages redistricted to more competitive constituencies when bottom and upper tier governments were controlled by opposing (resp. same) parties. The resulting changes in household benefit flows help predict household political support, which in turn rationalize the inter-village targeting patterns. The results illustrate the tendency for political parties to manipulate transfers across constituencies in the absence of formula-based grants to local governments, and more generally for political incentives to focus on delivery of short-term private benefits rather than one-time benefits or public goods consistent with theories of political clientelism.
    JEL: H40 H75 H76 O10 P48
    Date: 2018–12
  35. By: Milenko Fadic; José Enrique Garcilazo; Ana Moreno Monroy; Paolo Veneri
    Abstract: This paper provides a method to classify TL3regions across OECD countries based on their level of access to metropolitan areas. TL3 regions are classified as ‘metropolitan’ if more than half of their population lives in one or more functional urban area (FUA) of at least 250 thousand inhabitants and as ‘non-metropolitan’ otherwise. The method sub-classifies metropolitan regions into ‘large metro’ or ‘metro’ regions based on the population size of the FUAs located within those regions. Non-metropolitan TL3 regions are sub-classified into: with accessto a metro, with access to a small/medium city, or remote based on their level of access to a FUA with population above a predetermined threshold. The method relies on publicly available grid-level population data and localised information on driving conditions.
    Keywords: culture, Indigenous peoples, place, regional and rural development, sustainable development goals, well-being
    JEL: C80 R41 R52 R58
    Date: 2019–06–06
  36. By: Stephan Heblich; Marlon Seror; Hao Xu; Stephan Yanos Zylberberg
    Abstract: This paper exploits a short-lived cooperation program between the U.S.S.R. and China, which led to the construction of 156 "Million-Rouble plants" in the 1950s. We isolate exogenous variation in location decisions due to the relative position of allied and enemy airbases and study the long-run impact of these factories on local economic activity. While the "156" program accelerated industrialization in treated counties until the end of the command-economy era, this significant productivity advantage fully eroded in the subsequent period. We explore the nature of local spillovers responsible for this pattern, and provide evidence that treated counties are overspecialized and far less innovative. There is a large concentration of establishments along the production chain of the Million-Rouble plants, which limits technological spillovers across industries.
    Keywords: USSR, China, million-rouble plants.
    Date: 2019–05–21
  37. By: Robert J. Hill (University of Graz, Austria); Miriam Steurer (University of Graz, Austria); Sofie R. Waltl (Luxembourg Institute of Socio-Economic Research, Luxembourg)
    Abstract: The treatment of owner-occupied housing (OOH) is probably the most important unresolved issue in inflation measurement. How - and whether - it is included in the Consumer Price Index (CPI) affects inflation expectations, the measured level of real interest rates, and the behavior of governments, central banks and market participants. We show that none of the existing treatments of OOH are fit for purpose. Hence, we propose a new simplified user cost method with better properties. Using a micro-level dataset, we then compare the empirical behavior of eight different treatments of OOH. Our preferred user cost approach pushes up the CPI during housing booms (by 2 percentage points or more). Our findings relate to the following important debates in macroeconomics: the behavior of the Phillips curve in the US during the global financial crisis, and the response of monetary policy to housing booms, secular stagnation, and globalization.
    Keywords: Measurement of inflation; Owner occupied housing; User cost; Rental equivalence; Quantile regression; Hedonic imputation; Housing booms and busts; Inflation targeting; Leaning against the wind; Phillips curve; Disinflation puzzle; Secular stagnation
    JEL: C31 C43 E01 E31 E52 R31
    Date: 2019–05
  38. By: Gaetano Lisi (University of Cassino and Lazio Meridionale)
    Abstract: As opposed to a recent criticism (according to which a model à la Pissarides inherently generates a downward sloping Beveridge curve), this preliminary theoretical paper shows that a baseline search-and-matching model is able to take into account the main distinctive features of the housing market, thus generating an upward sloping Beveridge curve.
    JEL: J63 J64 R21 R31 R32
    Date: 2019–05
  39. By: Raymond Fisman (Boston University and NBER); Arkodipta Sarkar (London Business School); Janis Skrastins (Washington University in St. Louis); Vikrant Vig (London Business School)
    Abstract: We provide microeconomic evidence on the link between ethnic frictions and market efficiency, using dyadic data on managers and borrowers from a large Indian bank. Our analysis builds on the idea that exposure to religion-based communal violence may intensify branch managers’ same-group preferences, and thus result in lending decisions that are more sensitive to a borrower’s religion. We find that, in our sample of Hindu loan officers, those with substantial riot exposure prior to joining the bank lend relatively less to Muslim borrowers. Riot-exposed officers’ loans to Muslims are also less likely to default, suggesting that the lower lending rate for Muslims is driven by taste-based discrimination. This bias is persistent across a bank officer’s tenure, suggesting that the economic costs of ethnic conflict are long-lasting, potentially spanning across generations.
    Date: 2018–12
  40. By: Amir Maghssudipour (Dipartimento di Scienze per l'Economia e l'Impresa); Luciana Lazzeretti (Dipartimento di Scienze per l'Economia e l'Impresa); Francesco Capone (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: The aim of the present research is to investigate the rise and the evolution of research on the ‘creative economy’, which focuses on the convergence of four research pillars: contributions on the creative class, creative industries, creative city and cultural industries. Publications on Creative Economy Research have been collected from the ISI Web of Science database, which includes all the academic works starting from the contribution of DCMS in 1998 till 2013. Through the analysis of nearly 1.000 publications produced in 16 years, the birth and evolution of creative economy research is investigated. Besides, the second part of the paper focuses on a relational analysis developed through the use of Social Network Analysis, investigating co-citations of disseminators and founders of creative economy research. Results underline that the Creative economy may be considered a successful multidisciplinary paradigm born and developed in English speaking, North American and European countries, which has contributed to the rise of a new economic sector: the cultural and creative industries.
    Keywords: multiple networks; knowledge diffusion; ERGM; industrial cluster; wine industry.
    JEL: D85 L14 L84
    Date: 2019
  41. By: James J. Heckman (The University of Chicago); Ganesh Karapakula (Center for the Economics of Human Development, University of Chicago)
    Abstract: This paper examines the impact of the iconic Perry Preschool Project on the children and siblings of the original participants. The children of treated participants have fewer school suspensions, higher levels of education and employment, and lower levels of participation in crime, compared with the children of untreated participants. Impacts are especially pronounced for the children of male participants. These treatment effects are associated with improved childhood home environments. The intergenerational effects arise despite the fact that families of treated subjects live in similar or worse neighborhoods than the control families. We also find substantial positive effects of the Perry program on the siblings of participants who did not directly participate in the program, especially for male siblings. The appendix to this paper may be found here.
    Keywords: externalities, early childhood intervention, Spillover effects, intergenerational effects
    JEL: C40 I21
    Date: 2019–05
  42. By: Stefano Colombo; Noriaki Matsushima
    Abstract: We consider the spatial competition between two traditional physical (or offline) retailers and an Internet (or online) retailer where the efficiency of the latter differs from that of the former. We assume consumers are heterogeneous across two dimensions: (i) the costs of traveling to either of the offline retailers and (ii) the costs of purchasing from the online retailer. Both dimensions depend on the spatial location of consumers and are independent of each other. We show that the online retailer maximizes its profit at an intermediate level of the consumer disutility of online purchase when its efficiency is low.
    Date: 2019–05
  43. By: Stöver, Britta
    Abstract: Universities are important economic actors in having a considerable impact on the demand and supply side of their local economy. The aim of this paper is to quantify, compare and classify the different economic demand- and supply-side contributions of the university locations within Lower-Saxony using a combination of multiplier analysis and spatial econometrics on a NUTS-3 level. In comparison to numerous other studies this paper does not focus on the economic impact of single cases or a selected university location but gives a complete picture of the importance and significance of all university locations within Lower-Saxony. The income induced direct and indirect demand effects are estimated with a rich data set from higher education statistics in combination with an income and employment multiplier derived from a regional input-output table while the supply-side effects, i.e. the impact of the education and research outcomes, are calculated by estimating with spatial panel regressions a model derived from human capital theory and knowledge spillover theory. The estimation results give a complete and reproducible impression of the importance and significance of the different university locations offering the opportunity for comparisons and classifications.
    Keywords: Demand and supply-side effects; multiplier analysis; spatial panel model; university location
    JEL: I23 R11 R12 R15
    Date: 2019–06
  44. By: Jonathan Eberle (Department of Geography, Philipps University Marburg)
    Abstract: Regional fiscal equalization in Germany aims to reduce fiscal disparities by allocating financial resources to less promising regions in order to support the supply of public goods. This paper aims to analyse secondary economic effects of regional fiscal equalization on several economic in- and output variables. Additionally, the paper examines the potential regional characteristics to influence the transformation of fiscal inputs into economic outcomes. Lastly, I compare the effects of fiscal equalization to these of the major German structural funding program GRW. My findings reveal a significant positive effect of fiscal equalization on the regional employment rate. Moreover, the findings suggest different transmission channels of fiscal equalization in East and West Germany. Particularly, I find higher effects in right-wing CDU/CSU preferring regions on the employment, human capital and private-sector investment rate. Finally, while structural funding affects more economic variables significantly, the magnitude of the estimated economic responses of fiscal equalization compared to these of German structural funding are not statistically different.
    Keywords: fiscal equalization, regional economic growth, production function, political ideology, SpPVAR, impulse response function
    JEL: C33 E62 R11 R58 O38 O47
    Date: 2019–01
  45. By: Clement Imbert; Marlon Seror; Yifan Zhang; Stephan Yanos Zylberberg
    Abstract: This paper estimates the causal effect of rural-urban migration on urban production in China. We use longitudinal data on manufacturing firms between 2001 and 2006 and exploit exogenous variation in rural-urban migration due to agricultural price shocks. Following a migrant inflow, labor costs decline and employment expands. Labor productivity decreases sharply and remains low in the medium run. A quantitative framework suggests that destinations become too labor-abundant and migration mostly benefits low-productivity firms within locations. As migrants select into high-productivity destinations, migration however strongly contributes to the equalization of factor productivity across locations.
    Keywords: China, productivity.
    Date: 2018–12–01
  46. By: Mehmet Balcilar (Eastern Mediterranian University, Montpellier Business School and University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Ricardo M. Sousa (University of Minho, NIPE and LSE Alumni Association); Mark E. Wohar (University of Nebraska-Omaha and Loughborough University)
    Abstract: Using state-level data for the U.S. housing market over the period of 1975:Q1-2012:Q2, we show that the consumption-wealth ratios derived from aggregate wealth (cay) and disaggregate (i.e. financial and housing) wealth (cday) are strong predictors of real housing returns (and their volatility). Additionally, we find that, barring the extreme ends of their respective conditional distributions, such effect is stronger for housing return volatility than housing returns. All in all, our findings show that state-level regressions can recover a large degree of heterogeneity that country-level exercises typically ignore. Such heterogeneity is prominent not only in terms of consumption smoothing behaviour, but also with regard to housing return predictability.
    Keywords: consumption-wealth ratio, housing returns, volatility, forecasting, nonparametric causality-in-quantiles test.
    JEL: C22 R31
    Date: 2019–05
  47. By: Faggio, G.; Silva, O.; Strange, W.C.
    Abstract: This paper considers the heterogeneous microfoundations of agglomeration economies. It studies the co-location of industries to look for evidence of labor pooling, input sharing, and knowledge spillovers. The novel contribution of the paper is that it estimates single-industry models using a common empirical framework that exploits the cross-sectional variation in how one industry co-locates with the other industries in the economy. This unified approach yields evidence on the relative importance of the Marshallian microfoundations at the single-industry level, allowing for like-for-like cross-industry comparisons on the determinants of agglomeration. Using UK data, we estimate such microfoundations models for 97 manufacturing sectors, including the classic agglomeration cases of automobiles, computers, cutlery, and textiles. These four cases – as with all of the individual industry models we estimate – clearly show the importance of the Marshallian forces. However, they also highlight how the importance of these forces varies across industries – implying that extrapolation from cases should be viewed with caution. The paper concludes with an investigation of the pattern of heterogeneity. The degree of an industry’s clustering (localization), dynamism, incumbent firm size, and worker education are shown to contribute to the pattern of heterogeneous microfoundations.
    Keywords: Agglomeration; microfoundations; heterogeneity; industrial clusters
    Date: 2019
  48. By: Felicitas Schikora
    Abstract: This paper analyzes the effect of a recently introduced policy reform on participation in integration courses and on certified language proficiency levels among refugees in Germany. The residence rule restricts initial residence for refugees with a permanent residence permit. Given that treatment intensity varies distinctly across states, I utilize this quasi-experiment and apply a difference-in-differences approach. Using an innovative data-set, the IAB-BAMF-SOEP Survey of Refugees, I find that stricter statutory provisions have a positive effect on the probability to complete a language course and on the level of certified language proficiency. The results indicate that this effect is driven partly by spatial mismatch.
    Keywords: Migration, Refugees, Language Acquisition, Placement Restriction, Quasi-Experiment
    JEL: J15 J60
    Date: 2019
  49. By: Markus Brunnermeier; Simon Rother; Isabel Schnabel
    Abstract: We analyze the relationship between asset price bubbles and systemic risk, using bank-level data covering almost thirty years. Systemic risk of banks rises already during a bubble’s build-up phase, and even more so during its bust. The increase differs strongly across banks and bubble episodes. It depends on bank characteristics (especially bank size) and bubble characteristics, and it can become very large: In a median real estate bust, systemic risk increases by almost 70 percent of the median for banks with unfavorable characteristics. These results emphasize the importance of bank-level factors for the build-up of financial fragility during bubble episodes.
    Keywords: Asset price bubbles, systemic risk, financial crises, credit booms, CoVaR, MES
    JEL: E32 G01 G12 G20 G32
    Date: 2019–05
  50. By: Raymond Fisman (Boston University and NBER); Jing Shi (RMIT); Yongxiang Wang (University of Southern California); Weixing Wu (University of International Business and Economics)
    Abstract: We study how sharing a hometown or college connection with an incumbent member of China’s Politburo affects a candidate’s likelihood of selection as a new member. In specifications that include fixed effects to absorb quality differences across cities and colleges, we find that hometown and college connections are each associated with 5-9 percentage point reductions in selection probability. This “connections penalty†is equally strong for retiring Politburo members, arguing against quota-based explanations, and it is much stronger for junior Politburo members, consistent with a role for intra-factional competition. We show that our findings differ sharply from earlier work both because of our more rigorous empirical specification as well as our emphasis on shared hometown and college – rather than shared workplace – connections.
    Keywords: Social Ties, Political Connections, Political Elite, Politburo, China
    JEL: D72 P26
    Date: 2019–04
  51. By: Stark, Oded; Budzinski, Wiktor
    Abstract: We study how the work effort and output of non-migrants in a village economy are affected when a member of the village population migrates. Given that individuals dislike low relative income, and that migration modifies the social space of the non-migrants, we show why and how the non-migrants adjust their work effort and output in response to the migration-generated change in their social space. When migration is negatively selective such that the least productive individual departs, the output of the non-migrants increases. While as a consequence of this migration statically calculated average productivity rises, we identify a dynamic repercussion that compounds the static one.
    Keywords: Social preferences,Distaste for low relative income,Work effort,Per capita output,Migration
    JEL: D01 D31 J24 O15
    Date: 2019
  52. By: Arlashkin, Igor (Арлашкин, Игорь) (The Russian Presidential Academy of National Economy and Public Administration); Barbashova, Natalia (Барбашова, Наталья) (The Russian Presidential Academy of National Economy and Public Administration); Deryugin, Alexander (Дерюгин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Komarnitskaya, Anna (Комарницкая, Анна) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper contains the results of efficiency evaluation of taxes’ distribution between levels of public authority in Russian Federation, as well as the analysis of a relationship between assigning certain taxes to local budgets and regional economic growth. Based on the results of the analysis, recommendations are made in transferring additional revenue sources to the local level of government, and conclusions are provided concerning the impact of tax decentralization on the regional economic growth.
    Date: 2019–05
  53. By: Isabelle Chort (UPPA - Université de Pau et des Pays de l'Adour, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Philippe de Vreyer (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Thomas Zuber (Colombia University - Mailman school of public health)
    Abstract: This study explores internal migration patterns of men and women using individual panel data from a nationally representative survey collected in two waves, in 2006-2007 and 2010-2012, in Senegal. The data used are unique in that they contain the GPS coordinates of individuals' location in both waves. We are thus able to precisely calculate distances and map individual moves, avoiding limitations and constraints of migration definitions based on administrative units. Our results reveal major differences across gender. Women are found to be more likely to migrate than men. However, they move less far and are more likely to migrate to rural areas, especially when originating from rural areas. Education is found to increase the likelihood of migration to urban destinations, especially for women. An analysis of the motives for migrating confirms the existence of gendered migration patterns, as female mobility is mostly linked to marriage while labor mobility is frequently observed for men.
    Keywords: Internal Migration,Gender Inequalities,Rural-Urban Migration,Senegal
    Date: 2018–10
  54. By: Saghafian, Soroush (Harvard Kennedy School); Imanirad, Raha (Harvard Business School); Traub, Stephen J. (Mayo Clinic Arizona)
    Abstract: Understanding potential ways through which physicians impact each other's performance can yield new insights into better management of hospitals' operations. We use evidence from Emergency Medicine to study whether and how physicians who work alongside each other during same shifts affect each other's performance. We find strong empirical evidence that physicians affect each other's speed and quality, and scheduling diverse peers during the same shift could have a positive net impact on the operations of a hospital Emergency Department (ED). Specifically, our results show that a faster (slower) peer decreases (increases) the average speed of a focal physician compared to a same-speed peer. Similarly, a higher- (lower-) quality peer decreases (increases) a focal physician's average quality. Furthermore, the presence of a less-experienced peer improves a focal physician's average speed. However, in contrast to the conventional wisdom, we do not find any evidence that more-experienced physicians can affect the performance of their less-experienced peers. We investigate various mechanisms that might be the driving force behind our findings, including psychological channels such as learning, social influence, and homophily as well as resource spillover. We identify resource spillover as the main driver of the effects we observe and show that, under high ED volumes (i.e., when the shared resources are most constrained), the magnitude of the observed effects increases. While some of these observed effects tend to be long-lived, we find that their magnitudes are fairly heterogeneous among physicians. In particular, our results show that newly-hired and/or high-performing physicians are typically more influenced than others by their peers. Finally, we draw conclusions from our results and discuss how they can be utilized by hospital administrators to improve the overall performance of physicians via better scheduling patterns and/or training programs that require physicians to work during same shifts.
    Date: 2019–05
  55. By: Eliason, Marcus (IFAU); Hensvik, Lena (IFAU); Kramarz, Francis (CREST (ENSAE)); Nordström Skans, Oskar (Uppsala University)
    Abstract: The literature on social networks often presumes that job search through (strong) social ties leads to increased inequality by providing privileged individuals with access to more attractive labor market opportunities. We assess this presumption in the context of sorting between AKM-style person and establishment fixed effects. Our rich Swedish register data allow us to measure connections between agents – workers to workers and workers to firms – through parents, children, siblings, spouses, former co-workers and classmates from high school/college, and current neighbors. In clear contrast with the above presumption, there is less sorting inequality among the workers hired through social networks. This outcome results from opposing factors. On the one hand, reinforcing positive sorting, high-wage job seekers are shown to have social connections to high-wage workers, and therefore to high-wage firms (because of sorting of workers over firms). Furthermore, connections have a causal impact on the allocation of workers across workplaces – employers are much more likely to hire displaced workers to whom they are connected through their employees, in particular if their social ties are strong. On the other hand, attenuating positive sorting, the (causal) impact is much stronger for low-wage firms than it is for high-wage firms, irrespective of the type of worker involved, even conditional on worker fixed effects. The lower degree of sorting among connected hires thus arises because low-wage firms use their (relatively few) connections to high-wage workers to hire workers of a type that they are unable to attract through market channels.
    Keywords: networks, job search, job displacement, hiring
    JEL: J60 J30 J23
    Date: 2019–04
  56. By: Brox, Enzo; Krieger, Tommy
    Abstract: We present a simple model to illustrate how birthplace diversity may affect team performance. The model assumes that birthplace diversity increases the stock of available knowledge due to skill complementarities and decreases effciency due to communication barriers. The consequence of these two opposing effects is a humpshaped relationship between birthplace diversity and team performance. To verify this prediction, we exploit self-collected data on the first division of German male soccer. Our data set covers 7,028 matches and includes information about 3,266 players coming from 98 countries. We propose two different instrumental variable approaches to identify the effect of birthplace diversity on team performance. Our findings suggest that an intermediate level of birthplace diversity maximizes team performance.
    Keywords: birthplace diversity,firm performance,globalization,high-skilled migration,international migration,productivity,soccer,team composition,team performance
    JEL: F23 J01 J24 M14 M54
    Date: 2019

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