nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2020‒06‒29
fifty-six papers chosen by
Steve Ross
University of Connecticut

  1. Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment By Peter Bergman; Eric W. Chan; Adam Kapor
  2. Spatial spillovers in the pricing of flood risk: Insights from the housing market By Pommeranz, Carolin; Steininger, Bertram
  3. Is smaller housing size a consequence of land price policies and building permit regulations? By Engerstam, Sviatlana; Warsame, Abukar; Wilhelmsson, Mats
  4. The Anatomy of the Transmission of Macroprudential Policies By Viral V. Acharya; Katharina Bergant; Matteo Crosignani; Tim Eisert; Fergal J. McCann
  5. The benefits of remoteness: Digital mobility data, regional road infrastructure, and COVID-19 infections By Krenz, Astrid; Strulik, Holger
  6. Do segregated housing markets have a spillover effect on housing prices in nearby residential areas? By Ismail, Mohammad; Warsame, Abukar; Wilhelmsson, Mats
  7. Spatial Misallocation in Chinese Housing and Land Markets By Yongheng Deng; Yang Tang; Ping Wang; Jing Wu
  8. Hipsters vs. Geeks? Creative workers, STEM and innovation in US cities By Lee, Neil; Rodríguez-Pose, Andrés
  9. Heterogeneous Treatment Effects of Place-based Policies: Which Cities Should be Targeted? By FUJISHIMA Shota; HOSHINO Tadao; SUGAWARA Shinya
  10. The Long-Run Effects of School Racial Diversity on Political Identity By Stephen B. Billings; Eric Chyn; Kareem Haggag
  11. The eï¬?ect of self-ï¬ nanced property buyers on local house prices By Fischer, Andreas M; Zachmann, Lucca
  12. Fractal Urbanism: City Size and Residential Segregation in India By Bharathi, Naveen; Malghan, Deepak; Mishra, Sumit; Rahman, Andaleeb
  13. Building the city: from slums to a modern metropolis By Henderson, J. Vernon; Regan, Tanner; Venables, Anthony J.
  14. Black Lives Matter Protests, Social Distancing, and COVID-19 By Dave, Dhaval M.; Friedson, Andrew I.; Matsuzawa, Kyutaro; Sabia, Joseph J.; Safford, Samuel
  15. O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries By Adam Altmejd; Andrés Barrios-Fernández; Marin Drlje; Joshua S. Goodman; Michael Hurwitz; Dejan Kovac; Christine Mulhern; Christopher Neilson; Jonathan Smith
  16. Labor Market Polarization and The Great Divergence: Theory and Evidence By Davis, Donald R.; Mengus, Eric; Michalski, Tomasz
  17. Internal Borders and Population Geography in the Unification of Italy By A'Hearn, Brian; Rueda, Valeria
  18. Impacts of shopping malls on apartment prices: The case of Stockholm By Long, Runfeng; Wilhelmsson, Mats
  19. Transportation Technology, Individual Mobility and Social Mobilisation By Eric Melander
  20. It Takes a Village: The Economics of Parenting with Neighborhood and Peer Effects By Agostinelli, Francesco; Doepke, Matthias; Sorrenti, Giuseppe; Zilibotti, Fabrizio
  21. Macroprudential policy, mortgage cycles and distributional effects: Evidence from the UK By José-Luis Peydró; Francesc R. Tous; Jagdish Tripathy; Arzu Uluc
  22. Entrepreneurship and the fight against poverty in US Cities By Lee, Neil; Rodríguez-Pose, Andrés
  23. A World Divided: Refugee Centers, House Prices, and Household Preferences By Koster, Hans R.A.
  24. Optimal Lockdown in a Commuting Network By Pablo D. Fajgelbaum; Amit Khandelwal; Wookun Kim; Cristiano Mantovani; Edouard Schaal
  25. Entrepreneurship and Regional Windfall Gains: Evidence from the Spanish Christmas Lottery By Bermejo, Vicente; Ferreira, Miguel; Wolfenzon, Daniel; Zambrana, Rafael
  26. Commuting Variability by Wage Groups in Baton Rouge 1990-2010 By Yujie Hu; Fahui Wang; Chester Wilmot
  27. COVID-19 and urban vulnerability in the megacities of the global south By Mishra, Swasti Vardhan; Gayen, Amiya; Haque, Sk. Mafizul
  28. Teaching ‘out of field’ in STEM subjects in Australia: Evidence from PISA 2015 By Shah, Chandra; Richardson, Paul; Watt, Helen
  29. Urbanization in the Developing World: Too Early or Too Slow? By J. Vernon Henderson; Matthew A. Turner
  30. Peers, Gender, and Long-Term Depression By Giulietti, Corrado; Vlassopoulos, Michael; Zenou, Yves
  31. Macroprudential Policy and Household Debt: What is Wrong with Swedish Macroprudential Policy? By Svensson, Lars E.O.
  32. Were Urban Cowboys Enough to Control COVID-19? Local Shelter-in-Place Orders and Coronavirus Case Growth By Dhaval M. Dave; Andrew I. Friedson; Kyutaro Matsuzawa; Joseph J. Sabia; Samuel Safford
  33. Air Pollution Exposure and COVID-19 By Cole, Matthew A.; Ozgen, Ceren; Strobl, Eric
  34. Innovating in Krugman’s Footsteps – Where and How Innovation Differs in Europe: Static Innovation Indicators for Identifying Regional Policy Leverages By Rhoden, Imke
  35. Employer Policies and the Immigrant-Native Earnings Gap By Benoit Dostie; Jiang Li; David Card; Daniel Parent
  36. Divided We Stay Home: Social Distancing and Ethnic Diversity By Georgy Egorov; Ruben Enikolopov; Alexey Makarin; Maria Petrova
  37. Party On: The Labor Market Returns to Social Networks and Socializing By Adriana Lleras-Muney; Matthew Miller; Shuyang Sheng; Veronica T. Sovero
  38. The Environmental Benefits from Transportation Electrification: Urban Buses By Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
  39. COVID-19 Lockdowns and Decline in Traffic Related Deaths and Injuries By Oguzoglu, Umut
  40. Policing the Police: The Impact of "Pattern-or-Practice" Investigations on Crime By Tanaya Devi; Roland G. Fryer Jr
  41. Stimulating Peer Effects? Evidence from a Research Cluster Policy By Carayol, Nicolas; Henry, Emeric; Lanoe, Marianne
  42. Government policies for start-ups in Korea and its regions: Motives, mechanisms and major obstacles By Schüler, Diana; Suhalitca, Mihaela; Pascha, Werner; Oh, Keun-yeob
  43. Migration-prone and migration-averse places. Path dependence in long-term migration to the US By Rodríguez-Pose, Andrés; von Berlepsch, Viola
  44. Sibling Correlation in Educational Attainment: A Test of Genetic Nurture By John Cawley; Euna Han; Jiyoon Kim; Edward C. Norton
  45. COVID-19 Doesn't Need Lockdowns to Destroy Jobs: The Effect of Local Outbreaks in Korea By Sangmin Aum; Sang Yoon (Tim) Lee; Yongseok Shin
  46. Costs and Benefits of Rural-Urban Migration : Evidence from India By Imbert, Clément; Papp, John
  47. Concentration and Agglomeration of IT Innovation and Entrepreneurship: Evidence from Patenting By Chris Forman; Avi Goldfarb
  48. Immigrant Inventors and Diversity in the Age of Mass Migration By Francesco Campo; Mariapia Mendola; Andrea Morrison; Gianmarco Ottaviano
  49. Prussia Disaggregated: The Demography of its Universe of Localities in 1871 By Becker, Sascha O.; Cinnirella, Francesco
  50. Plants in Space By Ezra Oberfield; Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Nicholas Trachter
  51. Resistance to Racial Equity in U.S. Federalism and its Impact on Fragmented Regions By Grigsby, Sheila; Hernàndez, Alicia; John, Sarah; Désirée Jones-Smith,; Kaufmann, Katie; Patrick, Cordaryl; Prener, Chris; Tranel, Mark; Udani, Adriano
  52. Telework and Time Use in the United States By Pabilonia, Sabrina Wulff; Vernon, Victoria
  53. The Gravity Model of Forced Displacement Using Mobile Phone Data By Michel Beine; Luisito Bertinelli; Rana Cömertpay; Anastasia Litina; Jean-François Maystadt
  54. Testing Random Assignment to Peer Groups By Jochmans, K.
  55. The Seeds of Ideology: Historical Immigration and Political Preferences in the United States By Paola Giuliano; Marco Tabellini
  56. Immigrant franchise and immigration policy: Evidence from the Progressive Era By Biavaschi, Costanza; Facchini, Giovanni

  1. By: Peter Bergman; Eric W. Chan; Adam Kapor
    Abstract: We randomized school quality information onto the listings of a nationwide housing website for low-income families. We use this variation and data on families' search and location choices to estimate a model of housing search and neighborhood choice that incorporates imperfect information and potentially biased beliefs. We find that imperfect information and biased beliefs cause families to live in neighborhoods with lower-performing, more segregated schools. Families underestimate school quality conditional on neighborhood characteristics. If we had ignored this information problem, we would have estimated that families value school quality relative to their commute downtown by half that of the truth.
    JEL: I0 I21 I24 I3 R0 R21 R31
    Date: 2020–05
  2. By: Pommeranz, Carolin (RWTH Aachen University); Steininger, Bertram (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: In this study, we analyse how, and to what extent, direct and indirect effects (spatial spillovers) matter when estimating price effects for a property located in a flood zone. Unlike the previous literature, we show the importance of indirect effects resulting from a neighbourhood being situated in a flood zone. Additionally, the types of indirect effects (global vs. local) need to be determined theoretically or empirically using an appropriate spatial model comparison approach. Using the Bayesian model comparison for data related to the flood-prone city of Dresden, Germany, we find strong evidence for a spatial Durbin error model which controls for local spillover effects. These indirect price effects amount to -6.5% for houses and -4.8% for condominiums. However, direct effects diminish when controlling for spatial spillovers. Our results are generally robust across different model specifications, urban areas, and risk-adjusted prices that include future insurance costs, thus providing evidence of the importance of addressing indirect effects in the form of local spillovers in the analysis of flood zone effects. Ignoring indirect flood effects when formulating policy can lead to flood management that is inefficient and not cost-effective, as the economic consequences of flood are underestimated.
    Keywords: spatial econometrics; spatial spillovers; indirect effects; flood hazards; housing market
    JEL: G22 Q51 Q54
    Date: 2020–06–11
  3. By: Engerstam, Sviatlana (Department of Real Estate and Construction Management, Royal Institute of Technology); Warsame, Abukar (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: We can observe a trend of smaller housing units in new residential construction in many countries with rapid urban growth. It is of interest to recognize the driving forces that are behind this trend because if it sustains in the long run, as both positive and negative consequences for sustainable development of the housing market can be expected. Therefore, the purpose of this paper is to examine the main underlying factors affecting the average size of apartments in new construction in metropolitan areas in Sweden. Panel data methodology applied in the analysis. The model uses the average size of an apartment in new housing construction as a function of the changes in the population, apartment prices, mortgage interest rates, rents, land prices, building permits per capita. We estimate the interrelationship between apartment size and these variables through simultaneous equation models. The data covers both the rental and the cooperative housing sectors over 24-28 years depending on availability of variables. The analysis demonstrates that the land values and building policies, along with market fundamentals, are the underlying factors that affect the average size of an apartment in new residential construction. Opposite to previous studies that focus on explaining the number of new housing, we analyze the average size of new housing units and factors that affect it on an aggregated level.
    Keywords: Apartment size; Housing market; New construction; Land and Building policies
    JEL: R14 R31 R52
    Date: 2020–06–16
  4. By: Viral V. Acharya; Katharina Bergant; Matteo Crosignani; Tim Eisert; Fergal J. McCann
    Abstract: We analyze how regulatory constraints on household leverage—in the form of loan-to-income and loan-to-value limits—affect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is reallocated from low-to high-income borrowers and from urban to rural counties. This reallocation weakens the feedback loop between credit and house prices and slows down house price growth in “hot” housing markets. Consistent with constrained lenders adjusting their portfolio choice, more-affected banks drive this reallocation and substitute their risk-taking into holdings of securities and corporate credit.
    JEL: E21 E44 E58 G21 R21
    Date: 2020–05
  5. By: Krenz, Astrid; Strulik, Holger
    Abstract: We investigate the regional distribution of the COVID-19 outbreak in Germany. We use a novel digital mobility dataset, that traces the undertaken trips on Easter Sunday 2020 and instrument them with regional accessibility as measured by the regional road infrastructure of Germany's 401 NUTS III regions. We identify a robust negative association between the number of infected cases per capita and accessibility by road infrastructure, measured by the average travel time to the next major urban center. What has been a hinderance for economic performance in good economic times, appears to be a benevolent factor in the COVID-19 pandemic: bad road infrastructure. Using road infrastructure as an instrument for mobility reductions we assess the causal effect of mobility reduction on infections. The study shows that keeping mobility of people low is a main factor to reduce infections. Aggregating over all regions, our results suggest that there would have been about 63,000 infections less on May 5th, 2020, if mobility at the onset of the disease were 10 percent lower.
    Keywords: Digital technology,Mobility data,Regional road infrastructure,Germany,COVID-19
    JEL: R11 R12 I18
    Date: 2020
  6. By: Ismail, Mohammad (Department of Real Estate and Construction Management, Royal Institute of Technology); Warsame, Abukar (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: From an international perspective, housing segregation in Sweden is considered relatively low. However, in recent years the issue has been raised and problematized. For example, some studies show that ethnic housing segregation increased in 199 of Sweden's 285 municipalities during the years 2005- 2015. The purpose of this project is to analyze the trends regarding housing segregation over the past 10-20 years, and whether housing segregation has a spillover effect on neighboring housing areas. Namely, does proximity to a specific type of segregated housing market has a negative impact, while another type of segregation has a positive impact, on nearby housing markets. The results indicate that segregation measured as income sorting has increased over time in some of the housing markets. Its effects on housing values in neighboring housing areas are significant and statistically significant.
    Keywords: segregation; spillover effect; housing values
    JEL: R20 R23 R30
    Date: 2020–06–05
  7. By: Yongheng Deng; Yang Tang; Ping Wang; Jing Wu
    Abstract: Housing and land prices in China have experienced dramatic hikes over the past decade or two. Moreover, housing and land prices have also become more dispersed across Chinese cities. This paper intends to explore how housing and land market frictions may affect not only the aggregate but also the spatial distribution of housing and land prices and hence the extent of spatial misallocation. We first document the spatial variations of housing and land market frictions. In particular, larger tier-1 cities receive less housing and land subsidies, compared to tier-2 and tier-3 cities, whereas land frictions have been mitigated over time. We then embed both types of market frictions into a dynamic competitive spatial equilibrium framework featured with endogenous rural-urban migration. The calibrated model can reasonably mimic the price hikes in the data. Our counterfactual analysis reveals that, in a frictionless economy, the levels of housing and land prices would both be higher; while the housing price hike would slow down, the land price would grow more rapidly. Moreover, the housing price would not be slow down unless housing frictions can be largely mitigated.
    JEL: E20 R20
    Date: 2020–05
  8. By: Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Innovation in cities is increasingly regarded as an outcome of two potential inputs: scientific activity and creativity. Recent research using firm level data has suggested that actually it might be the combination of these two inputs, rather than the mere presence of workers representing each group, which matters. Yet there is little evidence on whether this relationship holds using city level data in the case of the United States (US). This paper investigates this gap in our knowledge by examining how the combination of STEM (geeks) and creative workers (hipsters) in a panel of 290 US Metropolitan Statistical Areas during the period between 2005 and 2015 relates to city level innovation. The results indicate that, although the presence of STEM workers is a more important driver of innovation than that of creative ones, the most innovative cities are characterised by a combination of the two. Hence, current policies which tend to focus mainly on either STEM or creativity may be better targeted at ensuring interactions between the two.
    Keywords: cities; Creative Class; Creativity; Innovation; STEM; United States
    JEL: O18 O32 O33 R12
    Date: 2020–04
  9. By: FUJISHIMA Shota; HOSHINO Tadao; SUGAWARA Shinya
    Abstract: In this paper, we empirically assess the treatment effects of a Japanese place-based policy known as the urban revitalization zone (URZ) program. on regional economies. We propose socially desirable assignment rules for the URZ program. The mixed results of previous empirical studies on place-based policies suggest that the treatment effects are regionally heterogeneous. In order to account for such heterogeneity across regions, this study estimates the conditional average treatment effect (CATE) for each region using a marginal treatment effects framework. We then use the estimated CATE parameters to construct empirically welfare-maximizing treatment rules based on the following three types of regional characteristic variables: demographic variables, suburbanization variables, and local production-network variables. Our results indicate that the treatment choice rule based on the suburbanization variables is the most successful. In particular, we find that cities with high numbers of cars per household and low percentages of large-scale stores should be targeted for URZ.
    Date: 2020–04
  10. By: Stephen B. Billings; Eric Chyn; Kareem Haggag
    Abstract: How do early-life experiences shape political identity? In this paper, we study how a shock to the social lives of youth affected their party affiliation in adulthood. Specifically, we examine the end of race-based busing in Charlotte-Mecklenburg schools (CMS), an event that led to large changes in school racial composition. Using linked administrative data, we compare party affiliation for students who had lived on opposite sides of newly drawn school boundaries. We find that a 10-percentage point increase in the share of minorities in a student's assigned school decreased their likelihood of registering as a Republican by 8.8 percent. Consistent with the contact hypothesis, this impact is entirely driven by white students (a 12 percent decrease). This effect size is roughly 16 percent of the correlation between parents and their children's party affiliations. Finally, consistent with this change reflecting underlying partisan identity, we find no significant effect on voter registration likelihood. Together these results suggest that schools in childhood play an important role in shaping partisanship.
    JEL: D72 I20 J15
    Date: 2020–06
  11. By: Fischer, Andreas M; Zachmann, Lucca
    Abstract: This paper tests the hypothesis whether self-ï¬ nanced property buyers, such as insurance and pension funds, have a larger eï¬?ect on local house prices than bank-ï¬ nanced property buyers, such as homeowners. Self-ï¬ nanced property buyers of new residential housing are not dependent on mortgage credit and operate independently of the macro-prudential environment. This is not so for bank-ï¬ nanced property buyers. We examine the response of Swiss house prices to new housing investments by self- and bank-ï¬ nanced property buyers at the municipality level between 2008 and 2015: a period when interest rates were at the zero lower bound and macro-prudential regulation became more restrictive. Despite being a small investor class for new residential housing, self-ï¬ nanced property buyers have a disproportionate eï¬?ect on local house prices.
    Keywords: macro-prudential regulation; self-ï¬ nanced investors; zero lower bound
    JEL: E59 G20 G21 G28
    Date: 2020–04
  12. By: Bharathi, Naveen; Malghan, Deepak; Mishra, Sumit; Rahman, Andaleeb
    Abstract: We present the first ever large-scale snapshot of urban residential segregation in India at the neighborhood-scale. Our analysis from 147 largest cities in contemporary India shows how caste-based residential segregation is independent of city size (our sample includes all cities in India with at least 0.3 million residents in 2011). The extent of segregation in the largest metropolitan centers with over ten million residents closely tracks cities that are nearly two orders-of-magnitude smaller. We also show how residential segregation across a large swathe of urban India mirrors the spatial geometry of rural India. Our findings call into question one of the central normative promises of modernization in India and elsewhere --- the gradual withering of traditional ascriptive identities such as caste. Our paper also contributes to the emerging debates in urban segregation by developing an interdisciplinary framework for analytical and empirical operationalization of a neighborhood unit.
    Date: 2020–05–31
  13. By: Henderson, J. Vernon; Regan, Tanner; Venables, Anthony J.
    Abstract: We model the building of a city, estimate parameters of the model, and calculate welfare losses from institutional frictions encountered in changing land-use. We distinguish formal and slum construction technologies; in contrast to slums, formal structures can be built tall, are durable, and nonmalleable. As the city grows areas are initially developed informally, then formally, and then redeveloped periodically. Slums are modelled as a technology choice; however, institutional frictions in land markets may hinder their conversion to formal usage that requires secure property rights. Using unique data on Nairobi for 2003 and 2015, we develop a novel set of facts that support assumptions of the model, estimate all parameters of the model, and calculate welfare losses of conversion frictions. We track the dynamic evolution of the city and compare it with model predictions. In the core city formal sector, about a third of buildings were torn down over 12 years and replaced by buildings on average three times higher. For slums in older areas near the centre, even after buying out slumlords, overcoming institutional frictions would yield gains amounting to about $18,000 per slum household, 30 times typical annual slum rent payments.
    Keywords: city; urban growth; slums; urban structure; urban form; housing investment; capital durability
    JEL: O14 O18
    Date: 2020–06
  14. By: Dave, Dhaval M. (Bentley University); Friedson, Andrew I. (University of Colorado Denver); Matsuzawa, Kyutaro (San Diego State University); Sabia, Joseph J. (San Diego State University); Safford, Samuel (San Diego State University)
    Abstract: Sparked by the killing of George Floyd in police custody, the 2020 Black Lives Matter protests have brought a new wave of attention to the issue of inequality within criminal justice. However, many public health officials have warned that mass protests could lead to a reduction in social distancing behavior, spurring a resurgence of COVID-19. This study uses newly collected data on protests in 315 of the largest U.S. cities to estimate the impacts of mass protests on social distancing and COVID-19 case growth. Event-study analyses provide strong evidence that net stay-at-home behavior increased following protest onset, consistent with the hypothesis that non-protesters' behavior was substantially affected by urban protests. This effect was not fully explained by the imposition of city curfews. Estimated effects were generally larger for persistent protests and those accompanied by media reports of violence. Furthermore, we find no evidence that urban protests reignited COVID-19 case growth during the more than two and a half weeks following protest onset. We conclude that predictions of broad negative public health consequences of Black Lives Matter protests were far too narrowly conceived.
    Keywords: urban protests, social distancing, coronavirus, COVID-19
    JEL: H75 I18
    Date: 2020–06
  15. By: Adam Altmejd; Andrés Barrios-Fernández; Marin Drlje; Joshua S. Goodman; Michael Hurwitz; Dejan Kovac; Christine Mulhern; Christopher Neilson; Jonathan Smith
    Abstract: Family and social networks are widely believed to influence important life decisions but identifying their causal effects is notoriously difficult. Using admissions thresholds that directly affect older but not younger siblings’ college options, we present evidence from the United States, Chile, Sweden and Croatia that older siblings’ college and major choices can significantly in-fluence their younger siblings’ college and major choices. On the extensive margin, an older sibling’s enrollment in a better college increases a younger sibling’s probability of enrolling in college at all, especially for families with low predicted probabilities of enrollment. On the intensive margin, an older sibling’s choice of college or major increases the probability that a younger sibling applies to and enrolls in that same college or major. Spillovers in major choice are stronger when older siblings enroll and succeed in more selective and higher-earning majors. The observed spillovers are not well-explained by price, income, proximity or legacy effects, but are most consistent with older siblings transmitting otherwise unavailable information about the college experience and its potential returns. The importance of such personally salient in-formation may partly explain persistent differences in college-going rates by geography, income, and other determinants of social networks.
    Keywords: sibling effects, college and major choice, peer and social network effects
    JEL: I21 I24
    Date: 2020
  16. By: Davis, Donald R.; Mengus, Eric; Michalski, Tomasz
    Abstract: In recent decades, middle-paid jobs have declined, replaced by a mix of high and low-paid jobs. This is labor market polarization. At the same time, initially skilled and typically larger cities have become even more skilled relative to initially less skilled and typically smaller cities. This is the great divergence. We develop a theory that links these two phenomena. We draw on existing models of polarization and heterogeneous labor in spatial equilibrium, adding to these a sharper interaction of individual- and city-level comparative advantage. We then confront the predictions of the theory with detailed data on occupational growth for a sample of 117 French cities. We find, consistent with our theory, that middle-paid jobs decline most sharply in larger cities; that these lost jobs are replaced two-to-one by high-paid jobs in the largest cities and two-to-one by low-paid jobs in the smallest cities; and that the lost middle-paid jobs are concentrated in an upper tier in the large cities and a lower tier in the smaller cities.
    Keywords: Great Divergence; inequality; Labor Market Polarization; System Of Cities
    JEL: J21 R12 R13
    Date: 2020–04
  17. By: A'Hearn, Brian; Rueda, Valeria
    Abstract: We examine the economic impact of Italian unification from a micro-geographical perspective, asking whether the abolition of internal borders caused a redistribution of economic activity towards the former border zones, which now enjoyed improved market access. We construct a new geocoded dataset of municipal (comune) populations from the pre-unification period through to 1871. Using a difference-in-differences approach and controlling for a variety of geographic correlates including elevation and distances to ports, railway lines, and large cities, we find robust evidence of a relative acceleration in population growth â?? our proxy for economic activity â?? in comuni near the former internal borders, consistent with our market access hypothesis.
    Keywords: 19th century; Border effects; economic history; economic integration; Italy; Political Unification; spatial inequality
    JEL: J6 N33 N93 R12 R23
    Date: 2020–04
  18. By: Long, Runfeng (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Shopping malls, as an important type of commercial facilities, are growing dramatically. They have gradually become one of the most dominant factors that can influence people's daily life as well as a city's economic development. People's willingness to pay for dwellings is also primarily associated with the surrounding commercial layout. Hence, it is of interest to find out more from a quantitative perspective on the relationship between shopping malls and housing prices. This study aims to analyze how the prices of condominiums will be affected by the proximity of shopping malls. Two aspects are considered and examined in the empirical study, namely a proximity to the shopping mall, and the number of shopping malls within 3 kilometers radius. We try to examine if there is any price premium for those apartments near the shopping mall or with more shopping malls in the neighborhood. In this empirical study, 36 shopping malls in different locations in the county of Stockholm, Sweden, is utilized. The sample of transactions consists of 336,914 apartments. By using regression analysis, based on the traditional hedonic model, the results show that there is an inverse relationship between the apartment prices and its distance from the shopping mall while the number of shopping malls is positively correlated with apartment prices. However, the impact has declined over time.
    Keywords: hedonic; spillover effect; shopping mall
    JEL: R21 R23 R31
    Date: 2020–06–05
  19. By: Eric Melander (University of Namur and CAGE)
    Abstract: How do reductions in interaction costs shape the diffusion of social movements? In this paper, I use a natural experiment from Swedish history to answer this question. During the thirty-year period 1881-1910, Swedish society underwent two transformative developments: the large-scale roll-out of a national railway network and the nascence of grassroots social movements which came to dominate economic, social and political spheres well into the twentieth century. Using exogenous variation in railway access arising from initial plans for the network, I show that well-connected municipalities were more likely to host a local movement and subsequently saw more rapid membership growth and a greater number of distinct organisations. The mobility of individuals is key: results are driven by passenger arrivals into connected municipalities, not freight arrivals. I implement a market access framework to show that, by reducing least-cost distances between municipalities, railways intensified the influence exerted by neighbouring concentrations of membership, thereby enabling social movement spread.
    Keywords: social movements, railways, collective action, interaction costs, market access JEL Classification: D71, D83, N33, N73, O18, R40, Z13
    Date: 2020
  20. By: Agostinelli, Francesco; Doepke, Matthias; Sorrenti, Giuseppe; Zilibotti, Fabrizio
    Abstract: As children reach adolescence, peer interactions become increasingly central to their development, whereas the direct influence of parents wanes. Nevertheless, parents may continue to exert leverage by shaping their children's peer groups. We study interactions of parenting style and peer effects in a model where children's skill accumulation depends on both parental inputs and peers, and where parents can affect the peer group by restricting who their children can interact with. We estimate the model and show that it can capture empirical patterns regarding the interaction of peer characteristics, parental behavior, and skill accumulation among US high school students. We use the estimated model for policy simulations. We find that interventions (e.g., busing) that move children to a more favorable neighborhood have large effects but lose impact when they are scaled up because parents' equilibrium responses push against successful integration with the new peer group.
    Keywords: neighborhood effects; Parenting; parenting style; peer effects; skill acquisition
    JEL: I24 J13 J24 R20
    Date: 2020–04
  21. By: José-Luis Peydró; Francesc R. Tous; Jagdish Tripathy; Arzu Uluc
    Abstract: Macroprudential regulators worldwide have introduced regulations to limit household leverage in light of existing evidence which suggests that high leverage is associated with household distress during crisis. We analyse the distributional effects of such a macroprudential policy on mortgage and house price cycles. For identification, we exploit the universe of UK mortgages and a 15%-limit imposed in 2014 on lenders—not households—for high loan-to-income ratio (LTI) mortgages. Despite some regulatory arbitrage (e.g. increases in LTV and average loan size), more-constrained lenders issue fewer high-LTI mortgages. Partial substitution by less-constrained lenders leads to overall credit contraction to low-income borrowers in local-areas more exposed to constrained-lenders, lowering house price growth. Following the Brexit referendum (which led to house-price correction), the 2014-policy strongly implies—via lower pre-correction debt—better house prices and mortgage defaults during an episode of house price correction.
    Keywords: macroprudential policy; mortgages; credit cycles; inequality; house prices.
    JEL: E5 G01 G21 G28
    Date: 2020–06
  22. By: Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Entrepreneurship is sometimes portrayed as a cure-all solution for poverty reduction. Proponents argue it leads to job creation, higher incomes, and lower poverty rates in the cities in which it occurs. Others, by contrast, posit that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesise that the impact of entrepreneurship depends on whether it occurs in tradeable sectors â?? and, therefore, is more likely to have positive local multiplier effects â?? or non-tradable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs. The result is confirmed using an instrumental variable approach, employing the inheritance of entrepreneurial traits as an instrument. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty.
    Keywords: cities; economic development; entrepreneurship; poverty; USA
    JEL: J21 J31 M13 O18 R11
    Date: 2020–04
  23. By: Koster, Hans R.A.
    Abstract: Using detailed housing transactions data from the Netherlands over the period 1990-2015, we examine the disamenity effect associated with the opening of refugee centers (RCs). This effect captures a negative externality but also reflects the attitudes of incumbent households towards immigration. Using a differencein-differences methodology, we show that the opening of an RC decreases house prices within 2km by 3-6%. This effect has become stronger over the past decade and is correlated with the local share of nationalist, anti-immigration, votes. Using micro-data on home buyers' characteristics and employing a non-parametric hedonic pricing method, we identify households' individual preferences. The willingness to pay is more negative for larger RCs, suggesting stronger negative externalities. However, we also show that the willingness to pay of foreign-born households is more positive. This is indicative of a more positive attitude towards immigration. Overall, these results imply that when opening RCs, it is advisable to keep them relatively small and locate them in more ethnically diverse areas.
    Keywords: House Prices; household preferences; Immigration; refugee centers
    JEL: E02 O18 R31
    Date: 2020–04
  24. By: Pablo D. Fajgelbaum; Amit Khandelwal; Wookun Kim; Cristiano Mantovani; Edouard Schaal
    Abstract: We study optimal dynamic lockdowns against Covid-19 within a commuting network. Our framework combines canonical spatial epidemiology and trade models, and is applied to cities with varying initial viral spread: Seoul, Daegu and NYC-Metro. Spatial lockdowns achieve substantially smaller income losses than uniform lockdowns, and are not easily approximated by simple centrality-based rules. In NYM and Daegu -with large initial shocks- the optimal lockdown restricts inflows to central districts before gradual relaxation, while in Seoul it imposes low temporal but large spatial variation. Actual commuting responses were too weak in central locations in Daegu and NYM, and too strong across Seoul.
    Keywords: COVID-19, commuting, network, optimal policy
    JEL: R38 R4 C6
    Date: 2020–06
  25. By: Bermejo, Vicente; Ferreira, Miguel; Wolfenzon, Daniel; Zambrana, Rafael
    Abstract: The Spanish Christmas Lottery is the largest lottery worldwide. We exploit local windfall gains arising from lottery prizes to estimate the effect of income on entrepreneurship. We find higher firm creation and greater self-employment in winning provinces. Our estimates imply that 46 firms are created for every â?¬1,000 increase in disposable income per capita. The effect occurs in both non-tradable and tradable industries, and is more pronounced in regions with poorer access to finance. Firms created in winning provinces are larger, create more value-added, and are more likely to survive. These results suggest that local income and financial development are important drivers of entrepreneurship.
    Keywords: Aggregate income; entrepreneurship; Financial Development; firm creation; Local demand; public policy; Self-employment
    JEL: D14 L26
    Date: 2020–04
  26. By: Yujie Hu; Fahui Wang; Chester Wilmot
    Abstract: Residential segregation recently has shifted to more class or income-based in the United States, and neighborhoods are undergoing significant changes such as commuting patterns over time. To better understand the commuting inequality across neighborhoods of different income levels, this research analyzes commuting variability (in both distance and time) across wage groups as well as stability over time using the CTPP data 1990-2010 in Baton Rouge. In comparison to previous work, commuting distance is estimated more accurately by Monte Carlo simulation of individual trips to mitigate aggregation error and scale effect. The results based on neighborhoods mean wage rate indicate that commuting behaviors vary across areas of different wage rates and such variability is captured by a convex shape. Affluent neighborhoods tended to commute more but highest-wage neighborhoods retreated for less commuting. This trend remains relatively stable over time despite an overall transportation improvement in general. A complementary analysis based on the distribution of wage groups is conducted to gain more detailed insights and uncovers the lasting poor mobility (e.g., fewer location and transport options) of the lowest-wage workers in 1990-2010.
    Date: 2020–05
  27. By: Mishra, Swasti Vardhan; Gayen, Amiya; Haque, Sk. Mafizul
    Abstract: The global pandemic has an inherently urban character. The UN-Habitat’s awareness of it has led to the publication of a Response Plan for mollification of the disease-induced externalities in the cities of the world. This article takes the UN-Habitat report as the premise to carry out an empirical investigation in the four metro cities of India. The report’s concern with the urban character of the pandemic has underlined the role of cities in disease transmission. In that wake, the study demarcates factors at the sub-city level that tend to jeopardize the two mandatory precautionary measures during COVID-19 – Social Distancing and Lockdown. It investigates those factors that bring deprived locales parallel to COVID-19 induced vulnerability. Secondly, UN-Habitat’s one of the major action areas is evidence-based knowledge creation through mapping and its analysis. In our study, we do it at a more granular scale than the city so a more nuanced understanding can be arrived at. Thus, in tune with the UN-habitat’s we have embarked on a detailed study of the four metro cities in India that are simultaneously the densest in the global south.
    Date: 2020–06–02
  28. By: Shah, Chandra; Richardson, Paul; Watt, Helen
    Abstract: Science, technology, engineering and mathematics (STEM) education is a critical part of a modern education system. Motivating students to learn STEM subjects is however a challenge. Teachers have a critical role in motivating students but to do this effectively they need to have appropriate subject matter knowledge. Data from PISA 2015 show a substantial proportion of teachers in Australian schools are teaching STEM subjects ‘out-of-field’, which is that they do not have the qualifications to teach these subjects. This paper examines the effects of individual teacher characteristics and school context on of out-of-field teaching in STEM subjects. In particular, it examines the role of school autonomy and staff shortage in this. The results show these two variables have a strong association with out-of-field teaching, however, other factors either mediate or confound their effects. A full understanding of the results requires knowing the role of school funding and school budgets in out-of-field teaching. While we do not have direct measures of these in the data, we can infer their likely roles through the effects of other factors, such as school sector and education level of parents of students in the school, in the model.
    Keywords: out-of-field teaching,teacher supply and demand,multi-level logit model
    JEL: C25 I22 I24 J23 J24
    Date: 2020
  29. By: J. Vernon Henderson; Matthew A. Turner
    Abstract: We describe patterns of urbanization in the developing world and the extent to which they differ from the developed world. We consider the extent to which urbanization in the developing world can be explained by conventional models of spatial equilibrium. Despite their relative poverty, developing world cities are relatively highly productive, and often provide good access to safe water, improved sanitation, schooling and inoculations. In some parts of the world, they are home to a surprisingly small number of factory workers and a surprisingly large number of farmers. Developing world cities seem to do less well at protecting their residents from lifestyle diseases and crime, their female residents from domestic violence and their children from illness. In thinking about these facts, we note that one strand of the literature focused on structural transformation has suggested that urbanization in the developing is occurring `too early’, while another strand argues that urbanization is occurring `too slow’ to be consistent with conventional models of spatial equilibrium. Despite many differences between developing and developed world cities, our new results combined with those in the literature suggest that models of spatial equilibrium can be adapted to be a useful guide to understanding the process of urbanization in the developing world.
    JEL: O18 R0 R11
    Date: 2020–05
  30. By: Giulietti, Corrado; Vlassopoulos, Michael; Zenou, Yves
    Abstract: We provide first evidence that peer depression in adolescence affects own depression in adulthood. We use data from Add Health and an identification strategy that relies on within-school and across-cohort idiosyncratic variation in the share of own-gender peers who are depressed. We find a significant peer effect for females but not for males. An increase of one standard deviation of the share of own-gender peers (schoolmates) who are depressed increases the probability of depression in adulthood by 2.6 percentage points for females (or 11.5% of mean depression). We also find that the peer effect is already present in the short term when girls are still in school and provide evidence for why it persists over time. Further analysis reveals that individuals from families with a lower socioeconomic background are more susceptible to peer influence, thereby suggesting that family can function as a buffer. Our findings underscore the importance of peer relationships in adolescence with regard to the development of long-lasting depression in women.
    Keywords: adolescence; Causal peer effects; Depression; Gender
    JEL: I12 Z13
    Date: 2020–04
  31. By: Svensson, Lars E.O.
    Abstract: Much is right with Swedish macroprudential policy. But regarding risks associated with household debt, the policy does not pass a cost-benefit test. The substantial credit tightening that Finansinspektionen (the FI, the Swedish Financial Supervisory Authority) has achieved â?? through amortization requirements and more indirect ways â?? has no demonstrable benefits but substantial costs. The FI - and the international organizations that have commented on risks associated with Swedish household debt - use a flawed theoretical framework for assessing macroeconomic risks from household debt. The tightening was undertaken for mistaken reasons. Several reforms are required for a better-functioning mortgage market. A reform of the governance of macroprudential policy â?? including a decision-making committee and improved accountability â?? may reduce risks of policy mistakes.
    Keywords: Household Debt; Housing; Macroeconomic Risk; macroprudential policy; Mortgages
    JEL: E21 G1 G21 G23 G28 R21
    Date: 2020–04
  32. By: Dhaval M. Dave; Andrew I. Friedson; Kyutaro Matsuzawa; Joseph J. Sabia; Samuel Safford
    Abstract: One of the most common policy prescriptions to reduce the spread of COVID-19 has been to legally enforce social distancing through state or local shelter-in-place orders (SIPOs). This paper is the first to explore the comparative effectiveness of early county-level SIPOs versus later statewide mandates in curbing COVID-19 growth. We exploit the unique laboratory of Texas, a state in which the early adoption of local SIPOs by densely populated counties covered almost two-thirds of the state’s population prior to Texas’s adoption of a statewide SIPO on April 2, 2020. Using an event study framework, we document that countywide SIPO adoption is associated with a 14 percent increase in the percent of residents who remain at home full-time, a social distancing effect that is largest in urbanized and densely populated counties. Then, we find that in early adopting counties, COVID-19 case growth fell by 19 to 26 percentage points two-and-a-half weeks following adoption of a SIPO, a result robust to controls for county-level heterogeneity in outbreak timing, coronavirus testing, and border SIPO policies. This effect is driven nearly entirely by highly urbanized and densely populated counties. We find that approximately 90 percent of the curbed growth in COVID-19 cases in Texas came from the early adoption of SIPOs by urbanized counties, suggesting that the later statewide shelter-in-place mandate yielded relatively few health benefits.
    JEL: H75 I18 R0
    Date: 2020–05
  33. By: Cole, Matthew A. (University of Birmingham); Ozgen, Ceren (University of Birmingham); Strobl, Eric (University of Bern)
    Abstract: In light of the existing preliminary evidence of a link between Covid-19 and poor air quality, which is largely based upon correlations, we estimate the relationship between long term air pollution exposure and Covid-19 in 355 municipalities in the Netherlands. Using detailed secondary and administrative data we find compelling evidence of a positive relationship between air pollution, and particularly PM2.5 concentrations, and Covid-19 cases, hospital admissions and deaths. This relationship persists after controlling for a wide range of explanatory variables. Our results indicate that a 1 μ/m3 increase in PM2.5 concentrations is associated with 9.4 more Covid-19 cases, 3.0 more hospital admissions, and 2.3 more deaths. The relationship between Covid-19 and air pollution withstands a number of sensitivity and robustness exercises including instrumenting pollution to mitigate potential endogeneity and modelling spatial spillovers using spatial econometric techniques.
    Keywords: COVID-19, air pollution, Netherlands, spatial spillovers
    JEL: I21 I23 Q53
    Date: 2020–06
  34. By: Rhoden, Imke
    Abstract: This paper introduces two indicators for innovation, showing the allocation of innovation and its inherent diversity. Both indicators can give insights for regional innovation policy conception. The first indicator measures the share of patents in research and development expenditure, proposing a locational innovation output indicator. It can show that innovation in Europe differs strongly among NUTS2-level regions, which points to regionally specific, place-based policies as a result of a strong dispersion in European innovation activity. The second measure, the innovation diversity indicator, shows the diversification of innovation in a region and is built upon Krugman’s locational Gini coefficients. Here, the share of patents belonging to a particular IPC class is related to the dispersion of all patents in a region. Possible implications for policy are the construction of place-based, technology-specific programs, on either national or subnational (NUTS2-) level, where each country or region has to be considered carefully. Analyses underline that innovation in Europe is a highly regionally and technically diversified concept.
    Keywords: Innovation Indicator,Innovation Gini,Regional Dispersion,Research and Development Allocation,Patent Data
    JEL: R12 O33 O38
    Date: 2020
  35. By: Benoit Dostie; Jiang Li; David Card; Daniel Parent
    Abstract: We use longitudinal data from the income tax system to study the impacts of firms’ employment and wage-setting policies on the level and change in immigrant-native wage differences in Canada. We focus on immigrants who arrived in the early 2000s, distinguishing between those with and without a college degree from two broad groups of countries – the U.S., the U.K. and Northern Europe, and the rest of the world. Consistent with a growing literature based on the two-way fixed effects model of Abowd, Kramarz, and Margolis (1999), we find that firm-specific wage premiums explain a significant share of earnings inequality in Canada and contribute to the average earnings gap between immigrants and natives. In the decade after receiving permanent status, earnings of immigrants rise relative to those of natives. Compositional effects due to selective outmigration and changing participation play no role in this gain. About one-sixth is attributable to movements up the job ladder to employers that offer higher pay premiums for all groups, with particularly large gains for immigrants from the “rest of the world” countries.
    Keywords: Wage Differentials,Immigrants,Linked Employer-Employee Data,Firm Effects,
    Date: 2020–06–11
  36. By: Georgy Egorov; Ruben Enikolopov; Alexey Makarin; Maria Petrova
    Abstract: Voluntary social distancing plays a vital role in containing the spread of the disease during a pandemic. As a public good, it should be more commonplace in more homogeneous and altruistic societies. However, for healthy people, observing social distancing has private benefits, too. If sick individuals are more likely to stay home, healthy ones have fewer incentives to do so, especially if the asymptomatic transmission is perceived to be unlikely. Theoretically, we show that this interplay may lead to a stricter observance of social distancing in more diverse and less altruistic societies. Empirically, we find that, consistent with the model, the reduction in mobility following the first local case of COVID-19 was stronger in Russian cities with higher ethnic fractionalization and cities with higher levels of xenophobia. For identification, we predict the timing of the first case using pre-existing patterns of internal migration to Moscow. Using SafeGraph data on mobility patterns, we confirm that mobility reduction in the United States was also higher in counties with higher ethnic fractionalization. Our findings highlight the importance of strategic incentives of different population groups for the effectiveness of public policy.
    JEL: D64 D74 I12
    Date: 2020–05
  37. By: Adriana Lleras-Muney; Matthew Miller; Shuyang Sheng; Veronica T. Sovero
    Abstract: A person’s schooling years are a formative time for cognitive development, and also a period of intense social interaction and friendship formation. In this paper, we estimate the production of social capital during adolescence and its effect on wages. We develop a model where homophily and coordination play crucial roles in the decision to socialize and study, which in turn determine educational attainment, network formation, and labor market outcomes. We document that individuals make investments to accumulate friends and other forms of social capital. Sometimes these investments compete with schooling investments (particularly when they involve alcohol consumption), but not always. These social investments have payoffs in the labor market and cannot be thought of as pure leisure. We estimate that receiving five to six friend nominations in adolescence has an impact on wage earnings of approximately 10%, comparable to a broad set of estimates of the return to an additional year of schooling. Therefore, policies that alter the schooling environment should be evaluated by their impacts on social capital as well as their impact on education.
    JEL: I20 J31
    Date: 2020–06
  38. By: Stephen P. Holland; Erin T. Mansur; Nicholas Z. Muller; Andrew J. Yates
    Abstract: We determine the environmental benefit of using electric buses rather than diesel or CNG for urban transit. For diesel and CNG we calculate air pollution damages by combining emission rates with damage valuations from the AP3 integrated assessment model and the social cost of carbon. For electric buses we calculate air pollution damages by combining the damage valuations with estimates of the marginal increase in emissions from electricity usage. The environmental benefit is positive on average across all counties in the contiguous U.S. when comparing electric to either diesel or CNG. The environmental benefit of operating an electric bus fleet (rather than diesel) is about $65 million per year in Los Angeles and above $10 million per year in six other MSAs. Including the environmental benefit, we calculate the net present value (NPV) of bus investment. Relative to diesel, the NPV benefit of an electric bus is positive in about two thirds of urban counties. Relative to CNG, the NPV benefit is negative in all counties.
    JEL: D62 H23 Q53 R40
    Date: 2020–05
  39. By: Oguzoglu, Umut (University of Manitoba)
    Abstract: This paper investigates the decline in traffic accidents, fatalities and injuries during the months that COVID-19 stay-at-home orders implemented in Turkey. Taking into account the decline in accidents in March and April together, these rates roughly translate to 200 traffic related deaths and 17,600 injuries avoided during the months that stay-at-home orders were in place. The Difference in Difference estimates that exploit variation in quarantine orders among small cities, I also show that stricter rules in April are responsible for the decline of accidents with death or injury by 35 percent, death by 72 percent and injuries by 19 percent.
    Keywords: COVID-19, safer-at-home, lockdowns, traffic accidents, fatality, injury, Turkey
    JEL: P48 Q53 Q58
    Date: 2020–05
  40. By: Tanaya Devi; Roland G. Fryer Jr
    Abstract: This paper provides the first empirical examination of the impact of federal and state "Pattern-or-Practice" investigations on crime and policing. For investigations that were not preceded by "viral" incidents of deadly force, investigations, on average, led to a statistically significant reduction in homicides and total crime. In stark contrast, all investigations that were preceded by "viral" incidents of deadly force have led to a large and statistically significant increase in homicides and total crime. We estimate that these investigations caused almost 900 excess homicides and almost 34,000 excess felonies. The leading hypothesis for why these investigations increase homicides and total crime is an abrupt change in the quantity of policing activity. In Chicago, the number of police-civilian interactions decreased by almost 90% in the month after the investigation was announced. In Riverside CA, interactions decreased 54%. In St. Louis, self-initiated police activities declined by 46%. Other theories we test such as changes in community trust or the aggressiveness of consent decrees associated with investigations -- all contradict the data in important ways.
    JEL: J0 J15 K10
    Date: 2020–06
  41. By: Carayol, Nicolas; Henry, Emeric; Lanoe, Marianne
    Abstract: Production of knowledge relies on peer effects and interactions between researchers. However, little is known on how much policies may stimulate these peer effects. In this paper we shed light on this question, and show how a public "research cluster" policy, which funds local networks of researchers working on a common theme, affects the organization of research within these clusters and the productivity of its members. Using data from a large scale financing program in France, and relying on an identification strategy based on grades awarded by reviewers, we show that members of financed clusters increase by up to 30% the research collaborations they have with other members of the cluster, compared to researchers of non selected proposals. This very large reorganization of the research network translates into a more modest positive effect on research productivity. Paradoxically, those who benefit the most from the financing, are those who were not at the core of the research topic, i.e. were not cited in the bibliography of the research proposal, who significantly increase their links with core members and their total publication counts. Consistently, the policy reduces inequality in publication outcomes within the cluster. It stimulates peer effects to the benefit of periphery members.
    Keywords: cluster policy; economics of science; peer effects; Research funding
    Date: 2020–04
  42. By: Schüler, Diana; Suhalitca, Mihaela; Pascha, Werner; Oh, Keun-yeob
    Abstract: The paper discusses the role of government policies and related support services in the formation of start-up businesses in South Korea. Start-ups can infuse an economy with renewed vigor, but it is questionable how Korea, an economy that has been dependent on a few large conglomerates in the past, can successfully encourage such start-up dynamism. The paper traces the economic history of start-ups and venture businesses in Korea and highlights its current situation. The analysis then focusses on explaining the start-up support policies, both on the level of central government and of the regions, paying attention to the intertwined role of the venture capital industry. A number of major obstacles are identified, in particular the ambiguous effects of social networks, the widespread risk aversion among potential entrepreneurs, the shortage of exit opportunities and the pronounced regional imbalances. The authors conclude that financial support measures should be streamlined, that the state should focus on creating appropriate framework conditions and that the regions should be given more independence from central government to choose their own path of development.
    Keywords: South Korea,start-ups,start-up government policy,regional economic policy,venture capital industry
    JEL: M13 L26 L53 O38 R11
    Date: 2020
  43. By: Rodríguez-Pose, Andrés; von Berlepsch, Viola
    Abstract: Does past migration beget future migration? Do migrants from different backgrounds, origins and ethnicities, and separated by several generations always settle - in a path dependent way - in the same places? Is there a permanent separation between migration-prone and migration-averse areas? This paper examines whether that is the case by looking at the settlement patterns of two very different migration waves to the United States (US), that of Europeans at the end of the 19th and early 20th centuries and that of Latin Americans between the 1960s and the early 21st century. Using Census data aggregated at county level, we track the settlement pattern of migrants and assess the extent to which the first mass migration wave has determined the later settlement pattern of Latin American migrants. The analysis, conducted using ordinary least squares, instrumental variable and panel data estimation techniques, shows that past US migration patterns create a path dependence that has conditioned the geography of future migration waves. Recent Latin American migrants have flocked, once other factors are controlled for, to the same migration prone US counties where their European predecessors settled, in spite of the very different nature of both migration waves and a time gap of three to five generations.
    Keywords: Counties; Europe; Latin America; long-term; migration; migration waves; US
    JEL: F22 J15 O15 R23
    Date: 2020–04
  44. By: John Cawley; Euna Han; Jiyoon Kim; Edward C. Norton
    Abstract: The educational attainment of siblings is highly correlated. We test for a specific type of peer effect between siblings in educational attainment: genetic nurture. Specifically, we test whether a person’s educational attainment is correlated with their sibling’s polygenic score (PGS) for educational attainment, controlling for their own PGS for educational attainment. Models estimated using genetic data in the National Longitudinal Survey of Adolescent to Adult Health (Add Health) yield strong evidence of such genetic nurture between siblings, and this result is robust to alternative measures of educational attainment and different measures of polygenic score.
    JEL: D1 D13 I2 I21 I23 I24 J13
    Date: 2020–06
  45. By: Sangmin Aum; Sang Yoon (Tim) Lee; Yongseok Shin
    Abstract: Unlike most countries, Korea did not implement a lockdown in its battle against COVID-19, instead successfully relying on testing and contact tracing. Only one region, Daegu-Gyeongbuk (DG), had a significant number of infections, traced to a religious sect. This allows us to estimate the causal effect of the outbreak on the labor market using difference-in-differences. We find that a one per thousand increase in infections causes a 2 to 3 percent drop in local employment. Non-causal estimates of this coefficient from the US and UK, which implemented large-scale lockdowns, range from 5 to 6 percent, suggesting that at most half of the job losses in the US and UK can be attributed to lockdowns. We also find that employment losses caused by local outbreaks in the absence of lockdowns are (i) mainly due to reduced hiring by small establishments, (ii) concentrated in the accommodation/food, education, real estate, and transportation industries, and (iii) worst for the economically vulnerable workers who are less educated, young, in low-wage occupations, and on temporary contracts, even controlling for industry effects. All these patterns are similar to what we observe in the US and UK: The unequal effects of COVID-19 are the same with or without lockdowns. Our finding suggests that the lifting of lockdowns in the US and UK may lead to only modest recoveries in employment unless COVID-19 infection rates fall.
    JEL: I14 I18 J21
    Date: 2020–05
  46. By: Imbert, Clément (University of Warwick); Papp, John (R.I.C.E)
    Abstract: This paper provides new evidence on rural-urban migration decisions in developing countries. Using original survey data from rural India, we show that seasonal migrants prefer to earn 35 percent less on local public works rather than incur the cost of migrating. Structural estimates suggest that the fixed cost of migration is small, and can be entirely explained by travel costs and income risk. In contrast, the flow cost of migration is very high. We argue that higher living costs in the city explain only a small part of the flow cost of migration, and that most of it is non-monetary.
    Keywords: Internal Migration ; Workfare Programs ; India ; Urban ; Rural JEL Classification: H53 ; J22 ; J61 ; O15 ; R23
    Date: 2020
  47. By: Chris Forman; Avi Goldfarb
    Abstract: Information technology (IT) matters to prosperity. The top patenters are increasingly IT companies. We use data on US patents to document four trends in IT patenting. First, firm-level concentration in IT patenting is increasing over time. Second, geographic concentration in IT patenting is increasing over time. Third, most technology classes experienced a decline in new patenters from 1980 to 2000. This was not true of new IT patents. Since 2000, the trend in new IT patenters looks like other classes and is declining over time. Fourth, there is increased geographic concentration of new IT patenters. We do not identify the reasons behind these trends nor whether they are related to overall changes in industry concentration, agglomeration, or prosperity.
    JEL: L22 L26 M13 M15 O31 O32 O33 O34 R12
    Date: 2020–06
  48. By: Francesco Campo (University of Milano Bicocca); Mariapia Mendola (University of Milano Bicocca, IZA, LdA and CefES); Andrea Morrison (ICRIOS-Bocconi University and Utrecht University); Gianmarco Ottaviano (Bocconi University, BAFFI-CAREFIN, IGIER, CEP, CEPR and IZA)
    Abstract: A possible unintended but damaging consequence of anti-immigrant rhetoric, and the policies it inspires, is that they may put high-skilled immigrants off more than low-skilled ones at times when countries and businesses intensify their competition for global talent. We investigate this argument following the location choices of thousands of immigrant inventors across US counties during the Age of Mass Migration. To do so we combine a unique USPTO historical patent dataset with Census data and exploit exogenous variation in both immigration flows and diversity induced by former settlements, WWI and the 1920s Immigration Acts. We find that coethnic networks play an important role in attracting immigrant inventors. However, we also find that immigrant diversity acts as an additional significant pull factor. This is mainly due to externalities that foster immigrant inventors’ innovativeness. These findings are relevant for today’s advanced economies that have become major receivers of migrant flows and,in a long-term perspective,have started thinking about immigration in terms of not only level but also composition.
  49. By: Becker, Sascha O.; Cinnirella, Francesco
    Abstract: We provide, for the first time, a detailed and comprehensive overview of the demography of more than 50,000 towns, villages, and manors in 1871 Prussia. We study religion, literacy, fertility, and group segregation by location type (town, village, and manor). We find that Jews live predominantly in towns. Villages and manors are substantially segregated by denomination, whereas towns are less segregated. Yet, we find relatively lower levels of segregation by literacy. Regression analyses with county-fixed effects show that a larger share of Protestants is associated with higher literacy rates across all location types. A larger share of Jews relative to Catholics is not significantly associated with higher literacy in towns, but it is in villages and manors. Finally, a larger share of Jews is associated with lower fertility in towns, which is not explained by differences in literacy.
    Keywords: Fertility; Literacy; Prussia; religion; Segregation
    JEL: I21 J13 J15 N33 Z12
    Date: 2020–04
  50. By: Ezra Oberfield; Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Nicholas Trachter
    Abstract: We study the number, size, and location of a firm's plants. The firm's decision balances the benefit of delivering goods and services to customers using multiple plants with the cost of setting up and managing these plants, and the potential for cannibalization that arises as their number increases. Modeling the decisions of heterogeneous firms in an economy with a vast number of widely distinct locations is complex because it involves a large combinatorial problem. Using insights from discrete geometry, we study a tractable limit case of this problem in which these forces operate at a local level. Our analysis delivers clear predictions on sorting across space. Productive firms place more plants in dense locations that exhibit high rents compared with less productive firms, and place fewer plants in markets with low density and low rents. Controlling for the number of plants, productive firms also operate larger plants than those operated by less productive firms in locations where both are present. We present evidence consistent with these and several other predictions using U.S. establishment-level panel data.
    JEL: D24 L25 R3
    Date: 2020–06
  51. By: Grigsby, Sheila; Hernàndez, Alicia; John, Sarah; Désirée Jones-Smith,; Kaufmann, Katie; Patrick, Cordaryl; Prener, Chris; Tranel, Mark; Udani, Adriano
    Abstract: In this commentary, we provide our ground-level observations of how the novel COVID-19 pandemic has exposed weaknesses in our federal system to respond to local communities, particularly African Americans and Latina/os who live and work in the St. Louis region. It is based on a virtual town hall hosted by the Community Innovation and Action Center (CIAC) at the University of Missouri, St. Louis on April 18, 2020. Based on these initial public discussions, we use St. Louis as a lens for arguing that that government’s attenuated impact is not due to a natural disaster itself, but the inevitable result of race-based policies that had worked against African Americans over generations. The real failure involves our federalist system’s lack of a commitment to racial equity - when race no longer is used to predict life outcomes, and outcomes for all groups are improved - when designing the federal plan to respond to COVID-19 in local communities.
    Date: 2020–06–02
  52. By: Pabilonia, Sabrina Wulff (U.S. Bureau of Labor Statistics); Vernon, Victoria (Empire State College)
    Abstract: Remote work is rapidly increasing in the United States. Using data on full-time wage and salary workers from the 2017–2018 American Time Use Survey Leave and Job Flexibilities Module, this paper examines the characteristics of teleworkers, the effects of teleworking on wages, and differences in time-use patterns between office and work-at-home workdays. We find that some teleworkers earn a wage premium, but it varies by occupation, gender, parental status, and teleworking intensity. Teleworkers also spend less time on commuting and grooming activities but more time on leisure and household production activities and more time with family on work-at-home days.
    Keywords: working from home, telework, telecommuting, commuting, home-based work, alternative work arrangements, work-life balance, time use, wages
    JEL: J22 J31 D13
    Date: 2020–05
  53. By: Michel Beine (Department of Economics and Management, Université du Luxembourg); Luisito Bertinelli (Department of Economics and Management, Université du Luxembourg); Rana Cömertpay (Department of Economics and Management, Université du Luxembourg); Anastasia Litina (University of Ionannina, Greece); Jean-François Maystadt (University of Antwerp, Belgium, Lancaster University Management School, UK)
    Abstract: Based on geolocalized mobile phone calls data, we study the mobility of refugees in Turkey. We employ a gravity model to estimate the determinants of refugee movements across 26 regions in 2017. To benchmark our findings, we estimate the same model for the mobility of individuals with a non-refugee status. Beyond the standard determinants such as the levels of income at origin, at destination and distances across regions, we find that networks, provision of humanitarian aid and asylum grants are important determinants of refugee mobility. Our paper deepens our understanding on how forcibly displaced people may respond to economic, social and political factors in their location decision.
    Keywords: Refugee Mobility, Gravity Model of Migration, Forced Displacement, Mobile Phone Data, News Media, Poisson Pseudo-Maximum Likelihood
    JEL: J6
    Date: 2020
  54. By: Jochmans, K.
    Abstract: Identification of peer effects is complicated by the fact that the individuals under study may self-select their peers. Random assignment to peer groups has proven useful to sidestep such a concern. In the absence of a formal randomization mechanism it needs to be argued that assignment is `as good as' random. This paper introduces a simple yet powerful test to do so. We provide theoretical results for this test and explain why it dominates existing alternatives. Asymptotic power calculations and an analysis of the assignment mechanism of players to playing partners in tournaments of the Professional Golfer's Association is used to illustrate these claims. Our approach can equally be used to test for the presence of peer effects. To illustrate this we test for the presence of peer effects in the classroom using kindergarten data collected within Project STAR. We find no evidence of peer effects once we control for classroom fixed effects and a set of student characteristics.
    Keywords: asymptotic power, bias, peer effects, random assignment
    JEL: C12 C21
    Date: 2020–04–06
  55. By: Paola Giuliano; Marco Tabellini
    Abstract: We test the relationship between historical immigration to the United States and political ideology today. We hypothesize that European immigrants brought with them their preferences for the welfare state, and that this had a long-lasting effect on the political ideology of US born individuals. Our analysis proceeds in three steps. First, we document that the historical presence of European immigrants is associated with a more liberal political ideology and with stronger preferences for redistribution among US born individuals today. Next, we show that this correlation is not driven by the characteristics of the counties where immigrants settled or other specific, socioeconomic immigrants’ traits. Finally, we conjecture and provide evidence that immigrants brought with them their preferences for the welfare state from their countries of origin. Consistent with the hypothesis that immigration left its footprint on American ideology via cultural transmission from immigrants to natives, we show that our results are stronger when inter-group contact between natives and immigrants, measured with either intermarriage or residential integration, was higher. Our findings also indicate that immigrants influenced American political ideology during one of the largest episodes of redistribution in US history — the New Deal – and that such effects persisted after the initial shock.
    JEL: D64 D72 H2 J15 N32 Z1
    Date: 2020–05
  56. By: Biavaschi, Costanza; Facchini, Giovanni
    Abstract: What is the role played by immigrant groups in shaping migration policy in the destination country? We address this question exploiting cross-state variation in U.S. citizens' access to the franchise, due to the presence of residency requirements. First we document that naturalized immigrants were more geographically mobile than natives. Second, congressmen representing districts with large numbers of naturalized U.S. citizens were more likely to support an open migration policy, but this effect is reversed once we account for residency requirements. Our results indicate that electoral accountability of U.S. congressmen to naturalized immigrants was a key factor in explaining this outcome.
    Keywords: immigration policy; political economy
    JEL: F22 J61
    Date: 2020–04

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