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on Urban and Real Estate Economics |
| By: | Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel; Schwartzman, Felipe |
| Abstract: | In the U.S., cognitive non-routine (CNR) occupations associated with higher wages are disproportionately represented in larger cities. To study the allocation of workers across cities, we propose and quantify a spatial equilibrium model with multiple industries that employ CNR and alternative (non-CNR) occupations. Productivity is city-industry-occupation specific and partly determined by externalities across local workers. We estimate that the productivity of CNR workers in a city depends significantly on both its share of CNR workers and total employment. Together with heterogeneous preferences for locations, these externalities imply equilibrium allocations that are not efficient. An optimal policy that benefits workers equally across occupations incentivizes the formation of cognitive hubs, leading to larger fractions of CNR workers in some of today's largest cities. At the same time, these cities become smaller to mitigate congestion effects while cities that are initially small increase in size. Large and small cities end up expanding industries in which they already concentrate, while medium-size cities tend to diversify across industries. The optimal allocation thus features transfers to non-CNR workers who move from large to small cities consistent with the implied change in the industrial composition landscape. Finally, we show that the optimal policy reinforces equilibrium trends observed since 1980. However, these trends were in part driven by low growth in real-estate productivity in CNR-abundant cities that reduced welfare. |
| JEL: | E23 E24 H23 H71 J61 R13 R23 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14000&r=all |
| By: | Smith, Gary (Pomona College); Liang, Wesley (Pomona College) |
| Abstract: | China has seen extraordinary economic growth for the past two decades, coupled with a booming housing market. Following the 2008 financial crisis, however, observers began worrying that the Chinese real estate market had been gripped by a speculative bubble. We use residential rent and price data to assess whether these fears are justified. We conclude that residential real estate markets are bubbly in Beijing and Shanghai, with the Beijing housing market frothier than the Shanghai market. |
| Keywords: | China real estate, housing bubble |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:clm:pomwps:1002&r=all |
| By: | Shadrin Artem (Gaidar Institute for Economic Policy) |
| Abstract: | According to the 2018 year-end data, the regional consolidated budgets and local government off-budget funds’ budgets ran a surplus of RUB 512.9 billion or 0.49 percent of GDP. To compare, the regional consolidated budgets and local government off-budget funds’ budgets ran a deficit of RUB 61.5 billion or 0.07 percent of GDP in 2017. In 2018, the budgets of subjects of the Russian Federation ran a surplus of RUB 491.5 billion, urban districts’ budgets ran a deficit of RUB 0.8 billion, federal-status cities’ inner-city municipalities’ budgets ran a surplus of RUB 0.4 billion, municipal areas’ budgets ran a surplus of RUB 16.0 billion, urban and rural settlements’ budgets ran a surplus of RUB 3.5 billion, local government off-budget funds’ budgets ran a surplus of RUB 2.7 billion. |
| Keywords: | Russian economy, regional and municipal finances, borrowing structure, domestic bonds |
| JEL: | H71 H74 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2019-963&r=all |
| By: | Greg Howard (University of Illinois); Carl Liebersohn (Ohio State University) |
| Abstract: | A simple measure of regional income divergence explains much of the variation in U.S. house prices since 1939. We develop an asset-pricing theory to explain why. House prices reflect the discounted value of expected rents, which reflect expected incomes. Higher expected regional income divergence increases the house price premium in rich areas. This raises average prices because house prices in poor areas are largely determined by construction costs. In addition to explaining average prices, our model explains several facts about the housing market, including regional variation in prices, the relationship between rents and prices, and patterns of net inter-state migration. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1054&r=all |
| By: | Jorge E. Galán (Banco de España); Matías Lamas (Banco de España) |
| Abstract: | Booming house prices have been historically correlated with the loosening of banks’ lending standards. Nonetheless, the evidence in Spain shows that the deterioration of lending policies may not be fully captured by the popular loan-to-value (LTV) ratio. Drawing on two large datasets comprising more than five million mortgage operations that cover the last financial cycle, we show that the LTV indicator may exhibit a misleading picture of actual mortgage credit imbalances and risk. In turn, risk identification improves when other metrics are considered. In particular, we show that loan-to-price (LTP) as well as ratios that consider the income of borrowers are major determinants of mortgage defaults. Moreover, we identify relevant non-linear effects of lending standards on default risk. Finally, we document that the relationship between lending standards and default rates changes over the cycle. Overall, the findings provide useful insights for the design of the macroprudential policy mix and, in particular, for the implementation of borrower-based measures. |
| Keywords: | housing market, lending standards, defaults, macroprudential policy |
| JEL: | C25 E58 G01 G21 R30 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1931&r=all |
| By: | Puhani, Patrick A.; Yang, Philip |
| Abstract: | Because accountability may improve the comparability that is compromised by lenient grading, we compare exit exam outcomes in the same schools before and after a policy change that increased teacher accountability by anchoring grading scales. In particular, using a large administrative dataset of 364,445 exit exam outcomes for 72,889 students, we assess the effect of introducing centralized scoring standards into schools with higher and lower quality peer groups. We find that implementation of these standards increases scoring differences between the two school types by about 25 percent. |
| Keywords: | Subjective performance evaluation,rating standards,policy reform,transparency |
| JEL: | H83 I20 I28 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:412&r=all |
| By: | Charles Nathanson (Northwestern University) |
| Abstract: | This paper provides a quantitative framework for estimating the effects on house prices and household welfare of building different types of housing within a city or metropolitan area. According to our estimates, low-income households without a college degree benefit more from the construction of low-quality rather than high-quality housing, but low-quality construction makes many other households worse off. These conclusions depend on household mobility across cities, the strength of urban spillovers, the indivisibility of housing, and the differential preferences of households with and without a college degree. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:537&r=all |
| By: | Moretti, Enrico |
| Abstract: | The high-tech sector is increasingly concentrated in a small number of expensive cities, with the top ten cities in "Computer Science", "Semiconductors" and "Biology and Chemistry", accounting for 70%, 79% and 59% of inventors, respectively. Why do inventors tend to locate near other inventors in the same field, despite the higher costs? I use longitudinal data on top inventors based on the universe of US patents 1971 - 2007 to quantify the productivity advantages of Silicon-Valley style clusters and their implications for the overall production of patents in the US. I relate the number of patents produced by an inventor in a year to the size of the local cluster, defined as a city * research field * year. I first study the experience of Rochester NY, whose high-tech cluster declined due to the demise of its main employer, Kodak. Due to the growth of digital photography, Kodak employment collapsed after 1996, resulting in a 49.2% decline in the size of the Rochester high-tech cluster. I test whether the change in cluster size affected the productivity of inventors outside Kodak and the photography sector. I find that between 1996 and 2007 the productivity of non-Kodak inventors in Rochester declined by 20.6% relative to inventors in other cities, conditional on inventor fixed effects. In the second part of the paper, I turn to estimates based on all the data in the sample. I find that when an inventor moves to a larger cluster she experiences significant increases in the number of patents produced and the number of citations received. Conditional on inventor, firm, and city * year effects, the elasticity of number of patents produced with respect to cluster size is 0.0662 (0.0138). The productivity increase follows the move and there is no evidence of pre-trends. IV estimates based on the geographical structure of firms with laboratories in multiple cities are statistically similar to OLS estimates. In the final part of the paper, I use the estimated elasticity of productivity with respect to cluster size to quantify the aggregate effects of geographical agglomeration on the overall production of patents in the US. I find macroeconomic benefits of clustering for the US as a whole. In a counterfactual scenario where the quality of U.S. inventors is held constant but their geographical location is changed so that all cities have the same number of inventors in each field, inventor productivity would increase in small clusters and decline in large clusters. On net, the overall number of patents produced in the US in a year would be 11.07% smaller. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13992&r=all |
| By: | Molla, Hemrin (Department of Economics, School of Business, Economics and Law, Göteborg University); Rhawi, Caroline (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Both immigration and a troubling housing deficit have increased rapidly in Sweden over the past 20 years. Today, up to 33 percent of the people living in the largest Swedish cities are immigrants. In this Internet-based field experiment, we investigated whether there exists discrimination in the Swedish private rental housing market based on the names of apartment seekers. We used a correspondent test by randomly sending out equivalent applications from four fictitious, highly educated, and seemingly “well-behaved” male applicants in response to a number of randomly selected private housing ads. Each advertiser received applications from two applicants with names signalling Swedish, Arab/Muslim, Eastern European, or East Asian ethnicity. Our results clearly confirm previous findings that persons with a name traditionally associated with the majority group in the respective community receive more call backs than others. When comparing our results with previous discrimination research focusing on Swedish housing market, we find that a man with an Arab/Muslim-sounding name needs to apply for clearly more rental objects in order to get a call back compared with just 10 years ago. Our results strongly indicate that the name of a person matters a great deal when applying for a rental object. |
| Keywords: | Discrimination; housing market; field experiment; correspondent test |
| JEL: | J71 R21 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0777&r=all |
| By: | Mathias Hoffmann (Department of Economics, University of Zurich); Tetsuji Okazaki (Faculty of Economics, The University of Tokyo); Toshihiro Okubo (Faculty of Economics, Keio University) |
| Abstract: | The banking sector in Japan experienced a substantial organizational change in the early twentieth century, including an expansion of branch networks. In this paper, we explore the implications of branch banking in regional economies, using unique bank branch office-level data for four rural regions: Fukushima, Tottori, Kumamoto, and Miyazaki Prefectures. We find that branch banking had a positive scale effect on lending. However, compared with branch offices of banks headquartered in the same municipality, branch offices of banks headquartered in other municipalities, especially in other prefectures, tended to have a lower propensity to issue loans. In particular, branch offices of banks headquartered in urban areas, such as Osaka and Tokyo, tended to collect deposits rather than to lend money through their branch networks, which restricted regional finance. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2019cf1109&r=all |
| By: | Döttling, Robin; Perotti, Enrico C |
| Abstract: | We study long term effects of the technological shift to intangible capital, whose creation relies on the commitment of skilled human capital in firm production. Humancapital cannot be owned, so firms need less financing. Human capital cannot be credibly committed so firms need to reward it by deferred compensation, diluting future profits. As human capital income is not tradeable, total investable assets fall. The general equilibrium effect is a gradual fall in interest rates and a re-allocation of excess savings into rising valuations of existing assets such as real estate. The concomitant rise in house prices and wage inequality leads to higher household leverage. |
| Keywords: | excess savings; Human Capital; Intangible Capital; knowledge based technological change; mortgage credit; skill premium |
| JEL: | D33 E22 G32 J24 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13984&r=all |
| By: | Monras, Joan |
| Abstract: | An abundance of a certain factor may shape technology adoption. Traditional approaches have used proxies of local technology adoption in combination with immigrant-driven exogenous changes in the factor mix to document this relationship. In this paper, I back-out implied technology adoption from long-run internal migration patterns in Miami relative to a number of controls groups following the Mariel Boatlift. The identifying assumption is that technology adoption explains the part of the wage recovery that cannot be explained by internal migration. Model-based estimates suggest that local technology adoption explains 60 percent of the relative wage recovery in Miami. |
| Keywords: | International and internal migration; Technology adoption |
| JEL: | F22 J20 J30 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13998&r=all |
| By: | Gallier, Carlo; Goeschl, Timo; Kesternich, Martin; Lohse, Johannes; Reif, Christiane; Römer, Daniel |
| Abstract: | We study spatially differentiated competition between charities by partnering with two foodbanks in two neighboring cities to conduct a field experiment with roughly 350 donation appeals. We induce spatial differentiation by varying the observability of charities' location such that each donor faces a socially close 'home' and a distant 'away' charity. We find that spatially differentiated competition is characterized by sorting, crowding-in, and an absence of spillovers: Donors sort themselves by distance; fundraising (through matching) for one charity raises checkbook giving to that charity, irrespective of distance; but checkbook giving to the unmatched charity is not affected. For lead donors, this implies that the social distance between donors and charities is of limited strategic important. For spatially differentiated charities, matching 'home' donations maximizes overall charitable income. Across both charities, however, the additional funds raised fail to cover the cost of the match, despite harnessing social identity for giving. |
| Keywords: | altruism,public goods,charitable giving,social distance,field experiment,competition |
| JEL: | C9 D7 H4 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19039&r=all |
| By: | Sophia Chen (International Monetary Fund); Yu Shi (International Monetary Fund) |
| Abstract: | We develop a model of imperfect competition with variable markups to analyze the role of market competition in the transmission of targeted fiscal stimulus. We find that the more competitive the market is, the more sectoral output responds to fiscal stimulus in the targeted sector. The more competitive the market is, the less sectoral prices, sector-specific factor prices, and markup respond. We offer new empirical evidence consistent with these theoretical predictions in the context of the large fiscal stimulus in China in 2009-2010. Overall, our results support the view that market competition facilitates the transmission of fiscal stimulus. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:708&r=all |
| By: | Malginov Georgiy (Gaidar Institute for Economic Policy); Sternik Sergey (Gaidar Institute for Economic Policy) |
| Abstract: | The preliminary results of the Russian economy’s development in 2018 appear to be rather controversial. On the one hand, the growth rate of GDP gained 2.3 percent; on the other, the consumer inflation index increased significantly, to 4.3 percent, from its record low of the entire period since the onset of market reforms (2.5 percent), achieved in 2017. The movement pattern of personal disposable income, which is a much more significant factor determining the situation in the real estate market, was quite volatile throughout the course of last year, with multiple trend reversals. In spite of the positive results of the first two quarters, probably achieved thanks to the current electoral cycle, in the end the personal disposable income index stayed roughly at the same level as in 2017. The RF Central Bank twice reduced its key rate over the course of H1 2018, to 7.25 percent per annum in early autumn. However, over the next few months it was once again hiked twice, and so returned to its level of late 2017 (7.75 percent). The tricky movement pattern of the key rate pushed down the interest rates on bank loans and notably improved the position of borrowers. |
| Keywords: | Russian economy, residential property prices, housing market, housing construction |
| JEL: | K11 H82 L32 L33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2019-982&r=all |
| By: | Alain Pholo Bala; Michel Tenikue; Baraka Nafari |
| Abstract: | This paper informs the debate on the existence of agglomeration effects in Africa. It uses a structural estimation approach to investigate the impact of agglomeration economies and forward linkages on the localization of French affiliates in Africa. Using a sample of French subsidiaries in Africa, we compate the theoretically derived measure of market potential with the standard form used by geographers and with a measure of local demand. Our results show that maket potential matters for location choice. However, the semi-elasticity estimates suggest that the intensity of demand linkages in Africa is lower than what has been observed in the European Union. Moreover, their effects seem to be insignificant when we consider the spillover variables. These spillover effects have a positive and significant impact on location which suggests that agglomerations effects are at play throughout Africa. |
| Keywords: | Aggloreration Economics, Local of Firms, Market Potential, Africa |
| JEL: | F12 F15 R30 R32 R34 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:774&r=all |
| By: | Margaret Jacobson (Indiana University) |
| Abstract: | This paper investigates the quantitative importance of the interaction of beliefs with credit conditions in explaining the run-up of house prices during the U.S. housing boom. To allow for interacting beliefs and credit conditions while maintaining computational tractability, I will introduce adaptive expectations into a general equilibrium life-cycle model with aggregate risk, incomplete markets, and defaultable debt. I will compare results from the model solved under adaptive expectations derived from ZIP code level house price data to results solved under rational expectations. Although house prices grew by 40 percent relative to their pre-boom level in the data, positive income shocks only generate a 5 percent increase in house prices under rational expectations in the model. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1549&r=all |
| By: | Chandler, Vincent; Heger, Dörte; Wuckel, Christiane |
| Abstract: | Taking advantage of temporal and geographical variations in the timing of school holidays in Germany, this paper finds that school holidays cause an 19 percent (0.03 percentage points) decrease in the probability of youth suicide. This effect is constant across different types of holidays (fall, Christmas, winter, Easter, Pentecost, and summer). Moreover, we find evidence of a spike in suicide propensity in the first two days following the end of school holidays. The results are robust to the inclusion of a series of control variables and to different definitions of youth. Overall, this paper suggests that school holidays have a beneficial impact on the well-being of students and that suicide prevention efforts are particularly important in the days following the end of holidays. |
| Keywords: | school,suicide,teenagers,bullying,stress |
| JEL: | I12 I21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:820&r=all |
| By: | Borowiecki, Karol Jan (Department of Business and Economics) |
| Abstract: | This research illuminates the historical development of creative activity in the United States. Census data is used to identify creative occupations (i.e., artists, musicians, authors, actors) and data on prominent creatives, as listed in a comprehensive biographical compendium. The analysis first sheds light on the socio-economic background of creative people and how it has changed since 1850. The results indicate that the proportion of female creatives is relatively high, time constraints can be a hindrance for taking up a creative occupation, racial inequality is present and tends to change only slowly, and access to financial resources within a family facilitates the uptake of an artistic occupation. Second, the study systematically documents and quantifies the geography of creative clusters in the United States and explains how these have evolved over time and across creative domains. Third, it investigates the importance of outstanding talent in a discipline for the local growth of an artistic cluster. |
| Keywords: | Creativity; artists; geographic clustering; agglomeration economies; urban history |
| JEL: | N33 R10 Z11 |
| Date: | 2019–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2019_011&r=all |
| By: | Matej Bajgar; Giuseppe Berlingieri; Sara Calligaris; Chiara Criscuolo; Jonathan Timmis |
| Abstract: | This report presents new evidence on industry concentration trends in Europe and in North America. It uses two novel data sources: representative firm-level concentration measures from the OECD MultiProd project, and business-group-level concentration measures using matched Orbis-Worldscope-Zephyr data. Based on the MultiProd data, it finds that between 2001 and 2012 the average industry across 10 European economies saw a 2-3-percentage-point increase in the share of the 10% largest companies in industry sales. Using the Orbis-Worldscope-Zephyr data, it documents a clear increase in industry concentration in Europe as well as in North America between 2000 and 2014 of the order of 4-8 percentage points for the average industry. Over the period, about 3 out of 4 (2-digit) industries in each region saw their concentration increase. The increase is observed for both manufacturing and non-financial services and is not driven by digital-intensive sectors. |
| Keywords: | Industry concentration, business dynamics, measurement |
| JEL: | D4 L11 L25 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1654&r=all |
| By: | BARONE, CARLO; Fougère, Denis; PIN, CLEMENT |
| Abstract: | Shared book reading between parents and children is often regarded as a significant mediator of social inequalities in early skill development processes. We argue that socially biased gaps between parents in access to information about the benefits of this activity for school success contribute to inequalities between children in access to this activity and in their language development. We test this hypothesis with a large-scale field experiment assessing the causal impact of an information intervention targeting parents of pre-schoolers on both the frequency of shared book reading and the receptive vocabulary of children. Results indicate that low-educated parents are more reactive to this information intervention, with significant effects on the language development of their children. We conclude that information barriers on the potential of informal learning activities at home contribute to social inequalities in early childhood, and that removing these barriers is a cost-effective way to reduce these inequalities. |
| Keywords: | Early Childhood; field experiment; Language Skills; parental reading |
| JEL: | C93 I21 I24 J13 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14006&r=all |
| By: | Leone Walters; Manoel Bittencourt; Carolyn Chisadza |
| Abstract: | Does ethnic favouritism in administrative governments affect public infrastructure provision? While previous literature has studied the effects of ethnic favouritism on economic growth and development determinants, there has been limited empirical evidence on ethnic favouritism in public infrastructure provision, particularly in South Africa. We study the effects of ethnic favouritism on provision of water and electricity infrastructure. Using municipal-level data for 52 district municipalities from 1996 to 2016, we nd that coethnic municipalities are associated with higher growth in infrastructure relative to non-coethnic municipalities. The results remain robust to time and municipal xed eects, as well as dynamic specications. Additionally, we construct a counterfactual scenario to conrm our results. |
| Keywords: | Ethnic Favouritism, South Africa, Public Infrastructure |
| JEL: | J15 H54 O55 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:787&r=all |
| By: | Muringani, Jonathan; Dahl Fitjar, Rune; Rodríguez-Pose, Andrés |
| Abstract: | The effect of decentralisation on regional economic growth is a hotly debated topic. In theory, decentralisation should entail welfare benefits by bringing government closer to the people. In practice, the benefits of decentralisation have been hard to prove. A problem is that the quality of regional governments is often lacking, or at least varies widely across different regions. Hence, regional governments may not be capable of delivering public goods in an efficient and accountable manner. Previous analyses have, however, neglected how the benefits of decentralisation may depend on the quality of the regional government whose authority is strengthened by such reforms. This paper considers these two dimensions in conjunction, highlighting that the effect of decentralisation on economic performance is highly mediated by the quality of the devolved government. Using panel data for 223 regions in the EU, the results show that the quality of regional government is a better predictor of economic development than decentralisation. Regional government quality also conditions the economic returns to decentralisation, meaning decentralisation works best in regions with a higher quality of government. Accordingly, decentralisation reforms must consider the quality of the regional government to which they would devolve authority. |
| Keywords: | political institutions; regions; quality of government; regional authority; economic growth; Europe |
| JEL: | O1 O4 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:91023&r=all |
| By: | Milenko Fadic; Paula Garda; Mauro Pisu |
| Abstract: | This paper investigates the causal effect of public administration efficiency on firm-level productivity. To this purpose, we combine newly available data from Italy on public administration efficiency of subnational governments with geo-localised firm-level data for the years 2004-2014. Italy provides a relevant setting to examine the relationship between public administration efficiency and firm productivity because of large and persistent spatial disparities in economic performance and local administrative capacity. The identification strategy exploits discontinuities that occur in local public-administration efficiency across provincial borders. The results suggest that local public administration efficiency has a large effect on firms’ productivity growth. Increasing local public administration efficiency from the 25th percentile to the 75th percentile would raise the firm-level labour productivity in Italy by 2.4 percentage points. |
| Keywords: | firm growth, firm performance, interjurisdictional differentials, local government expenditures, local public services, productivity, public administration, public goods, public services |
| JEL: | D24 H41 H72 H73 L25 |
| Date: | 2019–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1573-en&r=all |
| By: | Constant, Amelie F. |
| Abstract: | This chapter provides a state-of-the-art literature review about research that aims to explain the return, repeat, circular and onward migration of the highly-skilled migrants around the world. After it describes the status quo in the knowledge economy and the international race for talent, it presents the relevant theories and concepts of migration in the social sciences and how these theories accommodate the phenomena of return, repeat and onward migration. A special section is devoted to selection. The chapter then summarizes, evaluates, and juxtaposes existing empirical evidence related to theoretical predictions. Observables such as education, income, gender and home country as well as unobservables such as ability, social capital and negotiating skills play a strong role in influencing return, repeat and onward migration decisions. Yet, there is no consensus on the direction of the effect. The chapter discusses shortcomings and limitations along with policy lessons. It concludes by highlighting holes in the literature and the need for better data. |
| Keywords: | Return,circular,onward,international labor migration,knowledge economy,high-skilled,public policy |
| JEL: | F22 J15 J18 J20 J61 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:411&r=all |
| By: | Odran Bonnet (Sciences Po); Guillaume Chapelle (Sciences Po); Alain Trannoy (Aix-Marseille School of Economics (CNRS / AMU / EHESS)); Etienne Wasmer (Département d'économie) |
| Abstract: | The increase in wealth-to-income ratios in the second half of XXth century has recently received much attention. We decompose the trend in physical capital and housing, further decomposed into structures and land. In four out of five major countries analyzed, the positive trend in capital-income ratio arises from housing and specifically from its land component. We therefore revisit the question of wealth inequality and taxation in adopting a Georgist perspective (from Henry George, 1879) subsequently endorsed by prominent economists. We introduce land and housing structures in Judd’s optimal taxation framework. We show that an optimal taxation implies a property tax on land and no tax on capital. When the range of property taxes is politically constrained, taxing the product of housing rents is not optimal, even with additional taxes on "imputed rents". Rent taxes are however less distortive than a capital tax. The distortion depends on the share of housing structures and how they react to the tax on rents. However, a tax on rents complemented by a subsidy on structures investments in rental housing units does almost as well as a land tax. As a side result, we find that Judd’s result of no second best capital taxation extends to a larger range of parameters at the steady-state. |
| Keywords: | Capital; Wealth; Housing; Land; Optimal Tax; First Best; Second Best |
| JEL: | D91 O11 R14 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/1eob9f9aas9q18hfjsiqhggvi2&r=all |
| By: | Kabeya Clement Mulamba; Fiona Tergenna |
| Abstract: | We investigate spatial dependence of per capita property tax income among South African municipalities. One original contribution of our study is the use of per capita property tax income, rather than the property tax rate, as the outcome variable. Per capita property tax income is indicative of tax burden on residents. In addition, whilst most studies focus on advanced countries that have had institutionalised fiscal decentralisation for many decades, this paper focuses on South Africa, which is a developing country and implemented fiscal decentralisation only 18 years ago. Using Bayesian spatial econometric approach, we establish the presence of spatial dependence. |
| Keywords: | Municipalities, per capita property tax income, spatial, Spatial dependence, South Africa |
| JEL: | H70 H77 C31 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:801&r=all |
| By: | Eberle, Jonathan; Böing, Philipp |
| Abstract: | We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivise private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening. |
| Keywords: | China,R&D subsidies,regional economic development,panel VAR,impulse response function |
| JEL: | C33 R11 R58 O38 O47 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19038&r=all |
| By: | Gremm, Cornelia; Bälz, David; Corbo, Chris; Mitusch, Kay |
| Abstract: | The intercity bus market in Germany was deregulated in 2013. As a consequence, there is now a dense network of intercity bus lines. For the first time, the German state-owned railway company Deutsche Bahn AG faces intermodal competition in public intercity passenger land transport on a large number of lines. This paper examines market entry factors for intercity bus companies and price reactions of the incumbent railway company from a theoretical perspective. Our model builds on Salop's circular city model to describe the horizontal product differentiation among the bus companies. At the same time, the railway company occupies the center of the circle and offers a higher product quality than the buses. It dominates the market, while a number of bus companies constitute an oligopolistic competitive fringe. In the subsequent comparative statics analysis, it is shown that the quality differential between the train and bus services have a considerable effect on market entry decisions by buses as well as on price reactions by the incumbent railway company. In particular, on routes where the quality advantage of railway services is rather small, buses are more likely to enter and the railway company will respond with a stronger price reduction than on other routes. |
| Keywords: | intermodal competition,intercity railway and bus services,Salop circle model with center, vertical and horizontal product differentiation,dominant firm with oligopolistic fringe |
| JEL: | R40 L11 L13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:135&r=all |
| By: | Farid Farrokhi (Purdue University) |
| Abstract: | This paper develops a spatial equilibrium model with skill heterogeneity and endogenous agglomeration to study distributional welfare consequences of spatial policies. I show empirically that the relationship between log worker productivity and log city population is nonlinear in city size and in worker's skill. The model predicts these nonlinearities through local idea exchange between workers. I structurally estimate the model to match US Census employment and wage data, and use the estimates for decomposition and counterfactual exercises. A policy, with zero aggregate welfare effect, that favors smaller cities at the expense of larger cities, would notably reduce welfare inequality. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:357&r=all |
| By: | Daniel Gama e Colombo (Instituto Nacional de Estudos e Pesquisas Educacionais Anísio Teixeira (Inep), Brasília, Brazil); Jorge Martinez-Vazquez (International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University, USA) |
| Abstract: | This paper presents a first analysis of the potential link between the level of fiscal decentralization of a country and its public investment in innovation. We present a theoretical model where a ‘benevolent government’ invests in R&D aiming at maximizing net income, and R&D results are subject to interregional knowledge spillovers. The model predicts that decentralization leads to a lower level of public spending on innovation, and to a lower share of basic research in the government R&D budget. These hypotheses are empirically tested using country aggregate data. The results provide empirical support to the mentioned hypotheses, as we find evidence that higher levels of both expenditure and revenue decentralization are associated with a lower intensity of basic research in public R&D and with a lower level of R&D spending. The strength of the evidence, however, is weakened by the small sample size and shortcomings of the indicators used in the analysis. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1918&r=all |
| By: | Alice Evans (Center for International Development at Harvard University) |
| Abstract: | Support for gender equality has risen, globally. Analyses of this trend focus on individual and/or country-level characteristics. But this overlooks sub-national variation. Citydwellers are more likely to support gender equality in education, employment, leadership, and leisure. Why is this? This paper investigates the causes of rural-urban differences through comparative, qualitative research. It centres on Cambodia, where the growth of rural garment factories enables us to test theories that female employment fosters support for gender equality: potentially closing rural-urban differences; or whether other important aspects of city-living accelerate support for gender equality. Drawing on this rural and urban fieldwork, the paper suggests why social change is faster in Cambodian cities. First, cities raise the opportunity costs of gender divisions of labour – given higher living costs and more economic opportunities for women. Second, cities increase exposure to alternatives. People living in more interconnected, heterogeneous, densely populated areas are more exposed to women demonstrating their equal competence in socially valued, masculine domains. Third, they have more avenues to collectively contest established practices. Association and exposure reinforce growing flexibility in gender divisions of labour. By investigating the causes of subnational variation, this paper advances a new theory of growing support for gender equality. |
| Keywords: | Learning and Evaluation |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:356&r=all |
| By: | Bettina Klaus; Jan-Christoph Schlegel; Mehmet Karakaya |
| Abstract: | We study the house allocation with existing tenants model (Abdulkadiroglu and Sonmez, 1999) and consider rules that allocate houses based on priorities. We introduce a new acyclicity requirement and show that for house allocation with existing tenants a top trading cycles (TTC) rule is consistent if and only if its underlying priority structure satisfies our acyclicity condition. Next we give an alternative description of TTC rules based on ownership-adapted acyclic priorities in terms of two specific rules, YRMH-IGYT (you request my house - I get your turn) and efficient priority rules, that are applied in two steps. Moreover, even if no priority structure is a priori given, we show that a rule is a top trading cycles rule based on ownership-adapted acyclic priorities if and only if it satisfies Pareto-optimality, individual-rationality, strategy-proofness, consistency, and either reallocation-proofness or non-bossiness. |
| Keywords: | consistency, house allocation, matching, strategy-proofness, top trading cycles. |
| JEL: | C78 D70 D78 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:19.06&r=all |
| By: | Eduardo Lora (Center for International Development at Harvard University) |
| Abstract: | Can “full and productive employment for all” be achieved by 2030 as envisaged by the United Nations Sustainable Development Goals? This paper assesses the issue for the largest 62 Colombian cities using social security administrative records between 2008 and 2015, which show that the larger the city, the higher its formal occupation rate. This is explained by the fact that formal employment creation is restricted by the availability of the diverse skills needed in complex sectors. Since skill accumulation is a gradual path-dependent process, future formal employment by city can be forecasted using either ordinary least square regression results or machine learning algorithms. The results show that the share of working population in formal employment will increase between 13 and nearly 32 percent points between 2015 and 2030, which is substantial but still insufficient to achieve the goal. Results are broadly consistent across methods for the larger cities, but not the smaller ones. For these, the machine learning method provides nuanced forecasts which may help further explorations into the relation between complexity and formal employment at the city level. |
| Keywords: | Employment creation |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:114a&r=all |
| By: | Milan Straka; Pasquale De Falco; Gabriella Ferruzzi; Daniela Proto; Gijs van der Poel; Shahab Khormali; \v{L}ubo\v{s} Buzna |
| Abstract: | The availability of charging infrastructure is essential for large-scale adoption of electric vehicles (EV). Charging patterns and the utilization of infrastructure have consequences not only for the energy demand, loading local power grids but influence the economic returns, parking policies and further adoption of EVs. We develop a data-driven approach that is exploiting predictors compiled from GIS data describing the urban context and urban activities near charging infrastructure to explore correlations with a comprehensive set of indicators measuring the performance of charging infrastructure. The best fit was identified for the size of the unique group of visitors (popularity) attracted by the charging infrastructure. Consecutively, charging infrastructure is ranked by popularity. The question of whether or not a given charging spot belongs to the top tier is posed as a binary classification problem and predictive performance of logistic regression regularized with an l-1 penalty, random forests and gradient boosted regression trees is evaluated. Obtained results indicate that the collected predictors contain information that can be used to predict the popularity of charging infrastructure. The significance of predictors and how they are linked with the popularity are explored as well. The proposed methodology can be used to inform charging infrastructure deployment strategies. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.02498&r=all |
| By: | Fassio, Claudio (Lund University); Geuna, Aldo (University of Torino); Rossi, Federica (University of London) |
| Abstract: | We investigate the determinants of industry researchers’ interactions with universities in different localities, distinguishing between local and international universities. We analyze the extent to which local and international interactions are enabled by different types of individual personal networks (education, career based), and by their access to different business networks through their employer companies (local vs. domestic or international multinational company networks). We control for selection bias and numerous other individual and firm-level factors identified in the literature as important determinants of interaction with universities. Our findings suggest that industry researchers’ personal networks play a greater role in promoting interactions with local universities (i.e. in the same region, and other regions in the same country) while researcher employment in a multinational is especially important for establishing interaction with universities abroad. |
| Keywords: | University-industry interaction; international knowledge flows; MNEs; social network; education network; career network |
| JEL: | F23 I23 L24 O31 |
| Date: | 2019–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2019_013&r=all |
| By: | Ejermo, Olof (Lund University); Fassio, Claudio (Lund University); Källström, John (Lund University) |
| Abstract: | Using a highly comprehensive new dataset on Swedish researchers, we investigate the effects of interuniversity mobility on researcher productivity. Our study suggests substantial gains from mobility on scientific output. We find that mobility induces a long-lasting increase in a researcher’s publications by 29% and citations by 50%. Moreover, we analyze the factors that are likely to have an impact on the overall effect of mobility: the interaction of mobility and promotion, the importance of the status of the destination university, as well as the role of the specific disciplinary field of mobile researchers. The empirical analysis addresses selection using inverse probability treatment censoring weights. |
| Keywords: | Economics of science; mobility; scientific productivity; university |
| JEL: | I23 J24 O31 |
| Date: | 2019–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2019_014&r=all |
| By: | Joshua Rauh; Ryan J. Shyu |
| Abstract: | Drawing on the universe of California income tax filings and the variation imposed by a 2012 tax increase of up to 3 percentage points for high-income households, we present new findings about the effects of personal income taxation on household location choice and pre-tax income. First, over and above baseline rates of taxpayer departure from California, an additional 0.8% of the California residential tax filing base whose 2012 income would have been in the new top tax bracket moved out from full-year residency of California in 2013, mostly to states with zero income tax. Second, to identify the impact of the California tax policy shift on the pre-tax earnings of high-income California residents, we use as a control group high-earning out-of-state taxpayers who persistently file as California non-residents. Using a differences-in-differences strategy paired with propensity score matching, we estimate an intensive margin elasticity of 2013 income with respect to the marginal net-of-tax rate of 2.5 to 3.3. Among top-bracket California taxpayers, outward migration and behavioral responses by stayers together eroded 45.2% of the windfall tax revenues from the reform. |
| JEL: | H24 H31 H71 H73 J22 J61 R23 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26349&r=all |
| By: | Christian Bayer (Universitaet Bonn); Ralph Luetticke (University College London) |
| Abstract: | The liquidity of the US housing market undergoes large swings that lead the business cycle. After an increase in the time to sell a house, output falls while households increase their liquid asset holdings and simultaneously lower residential investment. A model of incomplete markets and nominal rigidities can rationalize the observed behavior. When houses become less liquid assets, households maintain the capacity for consumption smoothing by demanding a larger portfolio share of liquid (paper) assets instead of houses. This leads to a demand-driven recession. The recessionary effects get stronger if the banking sector produces liquid assets from mortgaging houses. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:256&r=all |
| By: | Jérémie BERTRAND (IESEG); Laurent WEILL (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | We investigate whether discrimination against African Americans occurs in peer-to-peer lending. We consider data from a large peer-to-peer lender that uses algorithms and no face-to-face interview to decide loan approval and conditions. Using data from 3.6 million loan applications and 817,000 granted loans for 2016 and 2017, we perform regressions of loan acceptance and loan conditions on the percentage of African Americans by 3-digit zip area. We observe evidence of discrimination in peer-to-peer lending. African Americans have a greater chance to have their loan applications rejected, pay higher loan rates, and obtain loans with shorter maturity. Discrimination is more pronounced after the election of Trump. |
| Keywords: | discrimination, Fintech, peer-to-peer lending, loans. |
| JEL: | G21 J15 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2019-04&r=all |
| By: | Jamal Bouoiyour (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Amal Miftah (LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique, IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau); Refk Selmi (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour) |
| Abstract: | This policy brief presents some preliminary findings of a recent research regarding the economic impact of legal immigration in terms of growth and unemployment in a large panel of European countries. It sheds some light on a useful and interesting question for policy debate by explicitly distinguishing refugee and economic category immigrants. Our research reveals a non-negative effect of immigration on per capita growth and on employment. The results allow to consider particular implications for the collaboration of EU countries on the immigration issue and seek to inform more specific and actionable public policy interventions . |
| Date: | 2019–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02302125&r=all |
| By: | Hao Wei (Department of International Economics, Beijing Normal University); Ran Yuan (Department of International Economics, Beijing Normal University); Laixun Zhao (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | Using firm-level R&D data with regional international talent data, we find that international talent increases the R&D investment of Chinese manufacturing firms, a result that is further confirmed with patent data and under a number of robustness checks. These findings stem from two mechanisms: international talent boosts human capital accumulation and provides a diversified labor force. Further, the R&D promoting effect is stronger if firms are located in eastern China rather than in other regions, of small and medium-sized rather than large-sized, of domestic ownership rather than foreign ownership. The policy implication is, the introduction of international talent can be a new way to promoting R&D investment, especially for skilled-labor constrained countries. |
| Keywords: | International talent inflow, Manufacturing firms, R&D, Patent application |
| JEL: | F16 F22 O32 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2019-17&r=all |
| By: | Flip Klijn; Joana Pais; Marc Vorsatz |
| Abstract: | In the context of school choice, we experimentally study the student-optimal stable mechanism where subjects take the role of students and schools are passive. Specifically, we study if aschool can be better off when it unambiguously improves in the students’true preferences and its (theoretic) student-optimal stable match remains the same or gets worse. Using first-order stochastic dominance to evaluate the schools’ distributions over their actual matches,we find that schools’ welfare almost always changes in the same direction as the change of the student-optimal stable matching, i.e., incentives to improve school quality are nearly idle. |
| Keywords: | school choice, matching, deferred acceptance, school quality, stability |
| JEL: | C78 C91 C92 D78 I20 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0982019&r=all |
| By: | Crystal, Michael; Gandal, Neil; Shilony, Royee; Shur-Ofry, Michal |
| Abstract: | Scientific understanding of innovation processes and of the patent system increasingly relies on big data analyses of patent citations. Much of that research focuses on highly cited patents. This study, conversely, offers the first systematic exploration of uncited patents-patents that receive no citations. Analyzing data on all US patents issued between 1976 and 2008, we focus on the ratio of uncited patents out of all patents granted each year. We track the changes in the percentage of uncited patents during that period, and across technological fields, controlling for patents' age. We also investigate traits of uncited patents by examining the association between lack of citations and various factors including the number of inventors, number of technological subclasses, number of backward citations, and number of claims in the patent. We find a robust pattern whereby the percentage of uncited patents declined between 1976 and the mid 1990s, but has been significantly increasing since then. These findings are consistent across technological fields and hold after controlling for patent characteristics. We discuss these and additional findings, and propose possible explanations. We suggest that the trend of increase in uncited patents raises, and reinforces, concerns regarding patent quality and "patent explosion". More broadly, our focus on "negative information" embedded in patent data opens up a new avenue for further research that can deepen our understanding of the patent system. |
| Keywords: | Big Data; Innovation; Negative Knowledge; networks; Patent Citations; Uncited Patents |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13982&r=all |
| By: | Michael Woolcock (Center for International Development at Harvard University) |
| Abstract: | Many development agencies and governments now seek to engage directly with local communities, whether as a means to the realization of more familiar goals (infrastructure, healthcare, education) or as an end in itself (promoting greater inclusion, participation, well-being). These same agencies and governments, however, are also under increasing pressure to formally demonstrate that their actions ‘work’ and achieve their goals within relatively short timeframes – expectations which are, for the most part, necessary and desirable. But adequately assessing ‘community-driven’ approaches to development requires the deployment of theory and methods that accommodate their distinctive characteristics: building bridges is a qualitatively different task to building the rule of law and empowering minorities. Moreover, the ‘lessons’ inferred from average treatment effects derived from even the most rigorous assessments of community-driven interventions are likely to translate poorly to different contexts and scales of operation. Some guidance for anticipating and managing these conundrums are provided. |
| Keywords: | Leadership in Development |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:355&r=all |
| By: | Franklin, Simon; Labonne, Julien |
| Abstract: | We test how labour markets adjust to large, but temporary, economic shocks in a context in which such shocks are common. Using an individual-level panel, from 1,140 Philippine municipalities over 26 quarters, we find that workers in areas affected by strong typhoons experience reductions in hours worked and hourly wages, without evidence of layoffs. The results are strongest for formal, wage-paying jobs. We argue that those results are best explained by implicit contracts where workers and firms share risks. We provide extensive qualitative data suggesting that employment contracts in the Philippines allow for such flexibility. |
| JEL: | J1 R14 J01 |
| Date: | 2019–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87937&r=all |
| By: | Luis Abreu (Toulouse School of Economics, 21 Allée de Brienne, 31015 Toulouse Cedex 6, France); Doh-Shin Jeon (Toulouse School of Economics, 21 Allée de Brienne, 31015 Toulouse Cedex 6, France) |
| Abstract: | We study how media bias is affected by the structure of social networks on social media. We consider an ad-financed media firm which chooses the ideological location of its news and targets consumers who can share the news with their followers on an online social media. After studying how a targeted consumer’s incentive to share the news is shaped by the network structure of her followers, we study the firm’s strategy to maximize the breadth of news sharing and find that when the mean (respectively, the variance) of followers’ ideological locations is a convex (respectively, concave) function of a direct consumer’s location, the media firm is likely to produce polarized news. The analysis of the case in which consumers are uniformly distributed reveals that news polarization is more likely to occur as the degree of homophily increases. We also find that media competition makes polarization more likely. |
| Keywords: | media bias; online social networks; homophily; sharing, polarization |
| JEL: | D21 D85 L82 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1905&r=all |
| By: | Carillo, Mario Francesco |
| Abstract: | This paper studies the link between local public spending and popular support and investigates its persistence across institutional transitions and over the long term. I explore the foundation of Mussolini's New Towns (Città di Fondazione) in Fascist Italy, a major infrastructure investment which played a central role in the fascist propaganda. Employing municipality-level data before and after the intervention, together with information on the timing of each New Town construction, I find that the intervention enhanced the electoral support for the Fascist Party, favoring the emergence of the Regime. Furthermore, I document a positive link between the New Towns and the electoral support for the Neo-Fascist Party, which persisted until the present day. Using individual survey data, I document that respondents near the Fascist New Towns built 70 years ago currently display political attitudes in line with the fascist ideology. Results are not driven by the geographic conditions that induced the location of the New Towns, socioeconomic differences, and migration patterns. Furthermore, I find no spurious effect of the New Towns that were planned but not built. The findings suggest that public spending may have long-lasting effects on political and cultural attitudes, which persist across major institutional changes. |
| Keywords: | Political attitudes, infrastructures, democratic transitions |
| JEL: | N0 P0 Z1 |
| Date: | 2018–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96236&r=all |
| By: | Alessandra Venturini; Manuela Stranges; Daniele Vignoli |
| Abstract: | This paper contributes to the growing strand of literature that investigates migrants’ subjective wellbeing by analysing how the social comparison with two reference groups (natives and other migrants) within the host country affects migrants’ life satisfaction. Using data from six rounds of the European Social Survey, we constructed two measures of economic distance that compare each migrant’s situation with the average of the group of natives and the group of migrants with similar characteristics. Our results indicate that when the disadvantage between the migrant and the reference groups becomes smaller, migrant’s life satisfaction increases. The effect of the social comparison with natives appears larger than the social comparison with migrants and, in both cases, it is stronger for individuals with higher levels of education. We also show that social comparison is stronger for second generation migrants than for first generation migrants and, within this latter group, it intensifies as length of stay in the host country increases. Overall, the role of social comparison seems crucial to understanding patterns of integration in an enlarged Europe. |
| Keywords: | subjective well-being, migrants, social comparison |
| JEL: | I31 F22 |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:cel:dpaper:53&r=all |
| By: | Hirsch, Boris; Jahn, Elke (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Manning, Alan; Oberfichtner, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-setting power in denser markets. Local differences in wage-setting power predict 1.8 - 2.1% higher wages from a 100 log points increase in population density. We further document that the observed urban wage premium from such an increase drops by 1.5 - 1.9pp once conditioning on local search frictions. Our results therefore suggest that a substantial part of the urban wage premium roots in differential imperfections across local labour markets." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Marktunvollkommenheit, Stadt, Lohnunterschied, Monopson, friktionelle Arbeitslosigkeit, Bevölkerungsdichte, Einkommenseffekte, regionaler Arbeitsmarkt, Lohnelastizität, Integrierte Erwerbsbiografien, IAB-Betriebs-Historik-Panel, erwerbstätige Männer, Lohnhöhe, Westdeutschland, Bundesrepublik Deutschland |
| JEL: | R23 J42 J31 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201921&r=all |
| By: | Federico Rossi (Warwick) |
| Abstract: | This paper studies how the relative productivity of skilled and unskilled labor varies across countries. I use both micro-data and other sources for countries at different stages of development to document that the skill premium varies little between rich and poor countries, in spite of large differences in the relative skill supply. This pattern is consistent with the view that the relative productivity of skilled workers is higher in rich countries. I propose a methodology based on the comparison of labor market outcomes of immigrants with different levels of educational attainment to discriminate between technology and unobserved human capital as drivers of these patterns. I find that human capital quality plays a minor role in explaining cross-country differences in relative skill efficiency. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:829&r=all |
| By: | Fletcher, R; Saavedra, S |
| Abstract: | The importance of social networks in job search and migration have been well documented. However, spreading information too widely throughout networks when opportunities arise can easily lead to the tragedy of the commons – too many people depleting a limited opportunity can mean no one benefits in the end. Hence, despite the generally positive value of large social networks, we should expect the strategic sharing of information within networks. To better understand this, we study the co-migration decisions of social connections through the movements of gold miners in Colombia. In this setting, we document three facts that are easily interpretable with a model of referrals and scarce resources. First, while working with close social connections is associated with higher production, having too many miners present is ultimately associated with lower production. Second, in line with the first result, we find that more productive miners, for whom depletion of resources is a greater concern, invite fewer social connections. Finally, the connections that miners are willing to invite are heavily selected; miners tend to invite productive over non-productive peers |
| Keywords: | Social networks, Migration, Scarce resources |
| JEL: | O15 L14 |
| Date: | 2019–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:017530&r=all |
| By: | Alexander Zentefis (Yale University) |
| Abstract: | I develop an asset pricing model and show that collateral constraints that are common to the literature—ones that guarantee no loan loss—can generate multiple equilibria in a dynamic rational expectations economy. In the model, expectations of the future value of collateral affect leverage and thus investor demand for assets. High expected collateral value implies high leverage and hence high asset prices, which confirms the initial beliefs. And conversely for low collateral value. As a consequence, asset prices can be self-fulfilling. Price crashes and booms, excess volatility, long price recoveries, price overshooting and misfiring, as well as leverage cycles transpire purely from shifts in investor expectations without corresponding shifts in fundamentals (i.e., from sentiments). |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:747&r=all |
| By: | Pflueger, Dane; Palermo, Tommaso; Martinez, Daniel |
| Abstract: | This chapter explores the ways in which a large-scale accounting system known as Marijuana Enforcement Tracking Reporting and Compliance (METRC) contributes to the construction and organization of a new market for recreational cannabis in the US state of Colorado. Mobilizing the theoretical lenses provided by the literature on market devices on the one hand, and infrastructure on the other, we identify and unpack a changing relationship between accounting and state control through which accounting and markets unfold. We describe this movement in terms of a distinction between knowing devices and thinking infrastructures. In the former, we show, regulators and other authorities perform the market by making it legible for the purpose of intervention, taxation and control. In the latter, thinking infrastructures, an ecology of interacting devices is made and remade by a variety of intermediaries, disclosing the boundaries and possibilities of the market, and constituting both opportunities for innovation and domination through “protocol”. |
| Keywords: | infrastructure; cannabis; markets; market devices; accounting; regulation |
| JEL: | J1 M40 |
| Date: | 2019–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:91412&r=all |
| By: | Lekha Chakraborty |
| Abstract: | There is a growing recognition that fundamental changes are happening in Indian fiscal federalism ex post the abolition of the Planning Commission, the creation of the National Institution for Transforming India (NITI) Aayog, the constitutional amendment to introduce the Goods and Services Tax (GST), the establishment of the GST Council, and the historically high tax devolution to the states based on the 14th Finance Commission's recommendations. Recently, policymakers and experts have raised a few issues, including: whether or not to make Finance Commissions "permanent" or to abolish them by making the tax devolution share constant through a constitutional amendment; the need for an institution to redress spatial inequalities in order to fill the vacuum created by abolishing the Planning Commission; and making the case for Article 282 of the constitution to be circumscribed. The debates are also focused on whether there is a need to establish a link between the GST Council and Finance Commissions, and if India should devise a mechanism of transfer that is predominantly based on sharing of grants for equalization of services rather than tax sharing. Creating a plausible framework for debt-deficit dynamics while keeping the fiscal autonomy of states intact and ensuring output gap reduction and public investment at the subnational level without creating disequilibrium were also other matters of concern. These debates are significant, especially when a group of states came together for the first time ever to question the terms of reference of the 15th Finance Commission amid growing tensions in federal-state relations in India. |
| Keywords: | Fiscal Federalism; Finance Commission; Revenue Sharing; Fiscal Equalization; Goods and Services Tax (GST); Public Debt; Fiscal Rules |
| JEL: | H77 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_937&r=all |
| By: | Saavedra, S; Romero, M |
| Abstract: | Achieving a fair distribution of resources is one of the key goals of fiscal policy. To do this, governments often transfer tax resources from rich to marginalized areas. We study whether lower transfers dampen the incentives of local authorities to curb tax evasion in the context of mining in Colombia. To overcome the challenge of measuring evasion, we use machine learning on satellite images. Using differencein- differences strategies, we find that a reduction in the share of revenue transferred back to mining municipalities led to an increase in illegal mining. This result illustrates the difficulties of redistributing tax revenues. |
| Keywords: | Illegal Minig, Machine Learning |
| JEL: | H26 O13 O17 |
| Date: | 2019–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:017529&r=all |
| By: | das Nair Reena; Landani Namhla |
| Abstract: | Supermarkets are strong catalysts to stimulate the growth and development of producers and suppliers of processed food and manufactured products in Southern Africa.This paper assesses the role of supermarkets and governments in developing supplier capabilities through supplier development programmes. In South Africa, a shift is evident in recent approaches by supermarkets away from mere compliance as part of black economic empowerment or social responsibility objectives, to more mutually beneficial, commercially oriented and long-term investments to develop supplier capabilities.There is still considerable scope to replicate, broaden and deepen these programmes, including extending them to the region. The paper draws lessons from the Namibian Retail Sector Charter of 2016 as the first and only sector-wide intervention in the region that combines a voluntary code of conduct and supplier development commitments.The paper further highlights interventions internationally through codes of conduct as a useful way to reduce possible abuses of supermarket buyer power. |
| Keywords: | Supermarkets,Supplier upgrading,Buyer power,Retail trade,Industrialization |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2019-59&r=all |