nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2021‒02‒08
fifty-six papers chosen by
Steve Ross
University of Connecticut

  1. Zoning and Segregation in Urban Economic History By Allison Shertzer; Tate Twinam; Randall P. Walsh
  2. Prime locations By Gabriel M. Ahlfeldt; Thilo N. H. Albers; Kristian Behrens
  3. Quality of life in a dynamic spatial model By Gabriel M. Ahlfeldt; Fabian Bald; Duncan Roth; Tobias Seidel
  4. The Resilience and Realignment of House Prices in the Era of Covid-19 By John V. Duca; Martin Hoesli; Joaquim Montezuma
  5. Regional Borders, Commuting and Transport Network Integration By Gabriel Loumeau
  6. Local Job Multipliers in the United States: Variation with Local Characteristics and with High-Tech Shocks By Timothy J. Bartik; Nathan Sotherland
  7. No inventor is an island: social connectedness and the geography of knowledge flows in the US By Andreas Diemer; Tanner Regan
  8. City Minimum Wages and Spatial Equilibrium Effects By Perez Perez, Jorge
  9. Love Thy (Elected) Neighbor? Residential Segregation, Political Representation and Local Public Goods By Oskari Harjunen; Tuukka Saarimaa; Janne Tukiaianen
  10. Should Place-Based Jobs Policies Be Used to Help Distressed Communities? By Timothy J. Bartik
  11. How Should We Measure City Size? Theory and Evidence Within and Across Rich and Poor Countries By Remi Jedwab; Prakash Loungani; Anthony Yezer
  12. Do Rent Increases Reduce the Housing Supply Under Rent Control? Evidence from Evictions in San Francisco By Brian Asquith
  13. Lead Exposure Reduces Academic Performance: Intensity, Duration, and Nutrition Matter By Alex Hollingsworth; Mike Huang; Ivan J. Rudik; Nicholas J. Sanders
  14. Place-based policies and spatial disparities across European cities By Maximilian v. Ehrlich; Henry G. Overman
  15. School indiscipline and crime By Tony Beatton; Michael P. Kidd; Matteo Sandi
  16. Decentralization and Progressive Taxation By Simin Berset; Mark Schelker
  17. How Long-Run Effects of Local Demand Shocks on Employment Rates Vary with Local Labor Market Distress By Timothy J. Bartik
  18. Evaluating the Benefits of a Streamlined Refinance Program By Kristopher S. Gerardi; Lara Loewenstein; Paul S. Willen
  19. School Closures During the 1918 Flu Pandemic By Philipp Ager; Katherine Eriksson; Ezra Karger; Peter Nencka; Melissa A. Thomasson
  20. House Prices, Collateral Effects and Sectoral Output Dynamics in Emerging Market Economies By Berrak Bahadir; Inci Gumus
  21. Urban Specialisation; from Sectoral to Functional By Antoine Gervais; James R. Markusen; Anthony J. Venables
  22. Employment Effects of Immigration to Germany in the Period of Migration Policy Liberalization, 2005–2018 By Isil Erol; Umut Unal
  23. Heterogeneous price and quantity effects of the real estate transfer tax in Germany By Christofzik, Désirée I.; Feld, Lars P.; Yeter, Mustafa
  24. To change or not to change: the impact of the law on mortgage origination By Sá, Ana Isabel
  25. Measuring Local Job Distress By Timothy J. Bartik
  26. Circular economy in cities: An economic theory to decouple economic development from waste By Kurita, Kenichi; Managi, Shunsuke
  27. Urbanisation and the onset of modern economic growth By Liam Brunt; Cecilia García-Peñalosa
  28. Estimating the Price Elasticity of Demand for Subways: Evidence from Mexico By Lucas W. Davis
  29. Trade and geography By Stephen J. Redding
  30. is the Rent Too High? Land Ownership and Monopoly Power By C. Luke Watson; Oren Ziv
  31. Teaching in Times of COVID-19: Determinants of Teachers’ Educational Technology Use By Matthias Dincher; Valentin Wagner
  32. An Aggregate Perspective on the Geo-spatial Distribution of Residential Solar Panels By Abajian, Alexander; Pretnar, Nick
  33. What policies for the hydrogen sector ? Lessons from city buses By Guy Meunier; Jean-Pierre Ponssard
  34. Heterogeneity in criminal behaviour after child birth: the role of ethnicity By Kabir Dasgupta; André Diegmann; Tom Kirchmaier; Alexander Plum
  35. Commercial Real Estate Prices and Covid-19 By Martin Hoesli; Richard Malle
  36. Why is Intermediating Houses so Difficult? Evidence from iBuyers By Greg Buchak; Gregor Matvos; Tomasz Piskorski; Amit Seru
  37. Strategic investment and industry location in a footloose capital model of economic geography By Kenji Fujiwara
  38. The Effect of New Market-Rate Housing Construction on the Low-Income Housing Market By Evan Mast
  39. Migration, Information Gap, and Visible Consumption: Evidence from India By Shihas Abdul Razak; Upasak Das
  40. Railway line capacity utilisation and its impact on renewal costs By Odolinski, Kristofer; Lidén, Tomas
  41. Consequences of a Massive Refugee Influx on Firm Performance and Market Structure By Yusuf Emre Akgunduz; Yusuf Kenan Bagir; Seyit Mumin Cilasun; Murat Gunay Kirdar
  42. Fiscal Decentralization, Regional Income Inequality, and the Provision of Local Public Goods: Evidence from Indonesia By Matondang Elsa Siburian
  43. Students' Heterogeneous Preferences and the Uneven Spatial Distribution of Colleges By Chao Fu; Junjie Guo; Adam J. Smith; Alan T. Sorensen
  44. Competing Social Identities and Intergroup Discrimination: Evidence from a Framed Field Experiment with High School Students in Vietnam By Tam Kiet Vuong; Ho Fai Chan; Benno Torgler
  45. What did we learn from schooling practices during the COVID-19 lockdown? Insights from five EU countries By CARRETERO GOMEZ Stephanie; NAPIERALA Joanna; Bessios Adonis; Magi Eve; Pugacewicz Agnieszka; Maria Ranieri; Triquet Karen; Lombaerts Koen; ROBLEDO BOTTCHER Nicolas; MONTANARI Marco; GONZALEZ VAZQUEZ Ignacio
  46. Ethnic Capital and Class Reproduction: Comparing the Impact of Socio-Economic Status on Children's Educational Attainment across Ethno-Religious Groups in Israel By Miaari, Sami H.; Khattab, Nabil; Kraus, Vered; Yonay, Yuval P.
  47. Market tremors: shale gas exploration, earthquakes, and their impact on house prices By Heblich, Stephan; Gibbons, Stephen
  48. Firearms Law and Fatal Police Shootings: A Panel Data Analysis By Marco Rogna; Diep Bich Nguyen
  49. Firms' Exposures to Geographic Risks By Bernard Dumas; Tymur Gabuniya; Richard C. Marston
  50. Place-Based Redistribution By Cecile Gaubert; Patrick M. Kline; Danny Yagan
  51. Measuring Movement and Social Contact with Smartphone Data: A Real-time Application to COVID-19 By Victor Couture; Jonathan I. Dingel; Allison Green; Jessie Handbury; Kevin Williams
  52. Police Force Size and Civilian Race By Aaron Chalfin; Benjamin Hansen; Emily K. Weisburst; Morgan C. Williams, Jr.
  53. The MEGA Regional General Equilibrium Model By Roberto Roson
  54. Urban density and Covid-19 By Felipe Carozzi; Sandro Provenzano; Sefi Roth
  55. All aboard: the effects of port development By César Ducruet; Réka Juhász; Dávid Krisztián Nagy; Claudia Steinwender
  56. The impact of closing schools on working from home during the COVID-19 pandemic: Evidence using panel data from Japan By Yamamura, Eiji; Tsutsui, Yoshiro

  1. By: Allison Shertzer; Tate Twinam; Randall P. Walsh
    Abstract: Recent work has argued that zoning is responsible for racial segregation, disparities in public goods provision, growing regional inequality, and exploding housing costs in productive areas. However, the slow-moving nature of land regulation’s effects suggests a crucial need for historical perspective to understand how zoning has shaped cities over the long term. This essay places the introduction of zoning in the broader context of urban development in the early twentieth century, with a focus on how the demand for separation of racial groups influenced some of the earliest zoning ordinances in American cities. We also discuss the long-run impact of zoning on the development of cities and highlight the key gaps in our understanding of the role of urban and suburban zoning in fostering segregation within cities and across metropolitan areas. A key lesson from our work in this area is that racial dimensions are important when studying land use regulations, even when the policies in question are ostensibly race neutral.
    JEL: J15 N42 R52
    Date: 2021–01
  2. By: Gabriel M. Ahlfeldt; Thilo N. H. Albers; Kristian Behrens
    Abstract: We harness big data to detect prime locations - large clusters of knowledge-based tradable services - in 125 global cities and track changes in the within-city geography of prime service jobs over a century. Historically smaller cities that did not develop early public transit networks are less concentrated today and have prime locations farther from their historic cores. We rationalize these findings in an agent-based model that features extreme agglomeration, multiple equilibria, and path dependence. Both city size and public transit networks anchor city structure. Exploiting major disasters and using a novel instrument - subway potential - we provide causal evidence for these mechanisms and disentangle size- from transport network effects.
    Keywords: prime services, internal city structure, agent-based model, multiple equilibria and path dependence, transport networks, cities, economic geography
    JEL: R38 R52 R58
    Date: 2020–10
  3. By: Gabriel M. Ahlfeldt; Fabian Bald; Duncan Roth; Tobias Seidel
    Abstract: We develop a dynamic spatial model in which heterogeneous workers are imperfectly mobile and forward-looking and yet all structural fundamentals can be inverted without assuming that the economy is in a stationary spatial equilibrium. Exploiting this novel feature of the model, we show that the canonical spatial equilibrium framework understates spatial quality of-life differentials, the urban quality-of-life premium and the value of local non-marketed goods. Unlike the canonical spatial equilibrium framework, the model quantitatively accounts for local welfare effects that motivate many place-based policies seeking to improve quality of life.
    Keywords: Covid-19, dynamic, housing, migration, rents, pollution, productivity, spatial equilibrium, quality of life, wages, welfare, economic geography, productivity, wages, wellbeing
    JEL: J2 J3 R2 R3 R5
    Date: 2020–12
  4. By: John V. Duca (Oberlin College; Federal Reserve Banks - Federal Reserve Bank of Dallas); Martin Hoesli (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School); Joaquim Montezuma (ISEG Lisbon School of Economics and Management,Universidade de Lisboa)
    Abstract: This article highlights some of the qualitative effects of Covid-19 on housing markets, which could be incorporated in the housing curriculum. We start by discussing why house price indexes may not fully incorporate the effects of the pandemic as of yet. We report variance in the evolution of house prices across countries, with locations depending heavily on tourism showing declining house prices while prices elsewhere have generally continued to increase. We argue that the resilience of house prices largely owes to the low interest rate environment and the smaller relative effect of the pandemic on upper income households, but also to behavioral factors. In some locations, the price of condominiums has fallen relative to the price of detached houses. This could indicate that wealthier households are seeking more space and more socially distanced detached homes in response to the pandemic. Likely reflecting how the pandemic has disproportionately hurt lower income households, there is also evidence of downward pressure on rents, which also has contributed to increased price-to-rent ratios in the U.S. By considering both economic and behavioral factors, this paper provides an overview of the resilience and realignment of housing markets at the onset of the Covid-19 pandemic.
    Keywords: House prices; Covid-19; Housing demand; Tourism; Behavioral effects
    JEL: R21 R31 Z30
    Date: 2020–12
  5. By: Gabriel Loumeau (ETH Zurich, Switzerland)
    Abstract: I study how and why economic activity varies around regional borders. Spatial quasi-experimental variation around French departmental borders reveals discontinuous commuting and residential patterns. To tackle the endogenous border placement problem, I exploit a geometric border design proposed during the French Revolution. I then calibrate a spatial quantifiable general equilibrium framework to structurally match the quasi-experimental estimates. The commuting and residential discontinuities are well explained by a 7km bilateral distance penalty when crossing regional borders, which is the consequence of the decentralized planning and development of local transport networks. Policy simulation shows that integrating local transport networks leads to a 11.7% average growth in real per capita residential income.
    Keywords: Border, Commuting, Discontinuity, Transport network, Decentralization
    JEL: R12 R42 O18
    Date: 2020–12
  6. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research); Nathan Sotherland (W.E. Upjohn Institute for Employment Research)
    Abstract: This paper provides new estimates of local job multipliers, the ratio of total jobs generated to some initial number of jobs created from a demand shock. Multipliers greatly affect benefits versus costs of local job-creation policies. These new estimates rely on improved methodology and data. The methodology better captures dynamic effects of demand shocks, specifies the model so that demand shocks are more comparable, and is more general in the types of demand shocks that are considered. The data has more industry detail than that used in previous studies. The local job multipliers estimated tend to be about one-quarter lower than typically estimated local multipliers, closer to 1.5 than to 2.0. In addition, demand shocks to all industries matter, not just to tradable industries. Multipliers are similar across different types of geographic areas, with county multipliers being only one-quarter below commuting zone multipliers and state multipliers only one-quarter above commuting zone multipliers. Multipliers are not larger for larger commuting zones, but they increase in commuting zones that have lower initial employment to population ratios. Multipliers are higher for high-tech industries, particularly in commuting zones with a larger initial high-tech share. In such high-tech local economies, high-tech multipliers may be close to 3. While our high-tech multipliers are greater than for other industries, our estimated high-tech multipliers are less than in some prior studies.
    Keywords: Multipliers, agglomeration economies, congestion effects, high-technology industries
    JEL: R11 R23
    Date: 2019–03
  7. By: Andreas Diemer; Tanner Regan
    Abstract: Do informal social ties connecting inventors across distant places promote knowledge flows between them? To measure informal ties, we use a new and direct index of social connectedness of regions based on aggregate Facebook friendships. We use a well-established identification strategy that relies on matching inventor citations with citations from examiners. Moreover, we isolate the specific effect of informal connections, above and beyond formal professional ties (co-inventor networks) and geographic proximity. We identify a significant and robust effect of informal ties on patent citation. Further, we find that the effect of geographic proximity on knowledge flows is entirely explained by informal social ties and professional networks. We also show that the effect of informal social ties on knowledge flows: has become increasingly important over the last two decades, is higher for older or `forgotten' patents, is more important for new entrepreneurs or `garage inventors', and is somewhat stronger across distant technology fields.
    Keywords: knowledge flows, diffusion, social connectedness, informal networks
    JEL: O33 R12 Z13
    Date: 2020–11
  8. By: Perez Perez, Jorge
    Abstract: Local minimum wage laws are becoming common across U.S. cities, and their effects may be different from the effects of state or national minimum wage policies. This paper studies the effect of changes in the minimum wage on spatial equilibriums in local labor markets. Using residence and workplace data for the United States, I analyze how commuting, residence, and employment locations change across city and state borders if the minimum wage changes on one side of the border. I find that areas in which the minimum wage increases receive fewer low-wage commuters. A 10 percent increase in the minimum wage reduces the inflow of low-wage commuters by about 2.5 percent. Rises in the minimum wage are also associated with employment relocation across borders toward areas that did not witness an increase in the minimum wage. I formulate a spatial equilibrium gravity model to explain the distribution of workers between low- and high-minimum wage areas. I calculate counterfactual equilibriums with a higher minimum wage for U.S. counties with cities considering an increase, highlighting the role of commuting and migration responses. About two-fifths of the counties considering increases would receive fewer low-wage commuters. Employment relocation away from high-minimum wage areas drives the commuting losses.
    Date: 2020–12–24
  9. By: Oskari Harjunen (VATT Institute for Economic Research, Arkadiankatu 7, Helsinki, FI-00101); Tuukka Saarimaa (Aalto University School of Business and School of Engineering and Helsinki Graduate School of Economics, Ekonominaukio 1, Espoo, FI-02150); Janne Tukiaianen (Department of Economics, Turku School of Economics, Rehtorinpellonkatu 3, FI-20014 University of Turku, Finland; VATT Institute for Economic Research, Arkadiankatu 7, FI-00101, Helsinki, Finland)
    Abstract: We study the link between geographic political representation and geographic distribution of public goods within local jurisdictions using geo-coded data on politicians, the electorate and elementary school closures. We find that poorer neighborhoods are under-represented. Inequality in geographic representation matters as the probability of school closure halves from about 20% to 10% when a candidate close to the school is randomly elected due to ties in personal vote counts. Highincome residents react to school closures by moving away from their neighborhood. Taken together, residential sorting leads to inequality in representation and public goods across neighborhoods, which further reinforces residential segregation.
    Keywords: Geographic representation, random elections, residential segregation, school closure
    JEL: C21 D72 H75 R23
    Date: 2021–01
  10. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Abstract: Should policymakers seek to increase jobs in particular local labor markets? Yes, but only if these policies are well targeted and designed. Encouraging job growth in distressed places can cause persistent gains in employment-to-population ratios. But our current place-based jobs policies, under which state and local governments provide long-term tax incentives to megacorporations, are poorly targeted and designed. Such incentives are as large in nondistressed areas as in distressed areas, and they are excessively costly. What reforms are needed? First, job growth policies should target distressed areas. Second, tax incentives should be focused on high-multiplier businesses, such as high-tech firms. Third, officials can more effectively promote local job creation by relying less on tax incentives and more on public services. These include customized business services, infrastructure, land development policies, local education, and job training. The federal government can use taxes and intergovernmental grants to discourage city or state officials from giving excessive state and local incentives to the largest firms. The federal government can also provide block grants to state and local governments to provide services that promote job growth in distressed places.
    Keywords: distressed places, regional development policies, local labor markets
    JEL: R58 R23 H73 H77
    Date: 2019–08
  11. By: Remi Jedwab; Prakash Loungani; Anthony Yezer
    Abstract: It is obvious that holding city population constant, differences in cities across the world are enormous. Urban giants in poor countries are not large using measures such as land area, interior space or value of output. These differences are easily reconciled mathematically as population is the product of land area, structure space per unit land (i.e., heights), and population per unit interior space (i.e., crowding). The first two are far larger in the cities of developed countries while the latter is larger for the cities of developing countries. In order to study sources of diversity among cities with similar population, we construct a version of the standard urban model (SUM) that yields the prediction that the elasticity of city size with respect to income could be similar within both developing countries and developed countries. However, differences in income and urban technology can explain the physical differences between the cities of developed countries and developing countries. Second, using a variety of newly merged data sets, the predictions of the SUM for similarities and differences of cities in developed and developing countries are tested. The findings suggest that population is a sufficient statistic to characterize city differences among cities within the same country, not across countries.
    Keywords: Population and demographics;Income;Housing;Wages;Housing prices;WP,per capita income,economic development,density function,low income
    Date: 2019–09–20
  12. By: Brian Asquith (W.E. Upjohn Institute for Employment Research)
    Abstract: Rent control balances strong tenant protections with supply-side incentives for landlords. However, cities with rent control are also some of the United States' most unaffordable, prompting questions about how well these incentives are working. I examine how controlled landlords change their housing supply in response to price increases using a well-identified hyperlocal demand shock the privately operated commuter shuttle systems in San Francisco. Controlled landlords increased market withdrawal filings and became less likely to create vacancies via evictions in response to a shuttle stop placement. Policies raising barriers to market withdrawals prompted controlled landlords to respond my increasing their at-fault evictions.
    Keywords: rent control, evictions, private transportation, LASSO
    JEL: R31 R32 R52 K11
    Date: 2019–08
  13. By: Alex Hollingsworth; Mike Huang; Ivan J. Rudik; Nicholas J. Sanders
    Abstract: We leverage a natural experiment, where a large national automotive racing organization switched from leaded to unleaded fuel, to study how ambient lead exposure and nutrition impact learning in elementary school. The average race emitted more than 10 kilograms of lead — a quantity similar to the annual emissions of an airport or a median lead-emitting industrial facility in the United States. Increased levels and duration of exposure to lead negatively affect academic performance, shift the entire academic performance distribution, and negatively impact both younger and older children. We provide quasi-experimental evidence linking measured quantities of lead emissions to decreased test scores, information essential for policies addressing ambient lead and emission sources. Exposure to 10 additional kilograms of lead emissions reduces standardized test scores by 0.07 standard deviations. This corresponds to an average income reduction of $9,000 per treated student in present value terms, an effect of similar magnitude as improving teacher value added by one standard deviation, reducing class size by 10 students, or increasing school spending per pupil by $2,500. The marginal impacts of lead are larger in impoverished, non-white counties, and among students with greater duration of exposure, even after controlling for total exposure. Factors correlated with better nutrition — most notably consumption of calcium-rich foods like milk — help mitigate the link between lead exposure and reduced educational outcomes. These results show that improved child nutrition can help combat the negative effects of lead, addressing several prominent social issues including racial test gaps, human capital formation across income groups, and disparities in regional environmental justice.
    JEL: I14 I21 Q51 Q53
    Date: 2020–12
  14. By: Maximilian v. Ehrlich; Henry G. Overman
    Abstract: Spatial disparities in income levels and worklessness in the European Union are profound, persistent and may be widening. We describe disparities across metropolitan regions and discuss theories and empirical evidence that help us understand what causes these disparities. Increases in the productivity benefits of cities, the clustering of highly educated workers and increases in their wage premium all play a role. Europe has a long-standing tradition of using capital subsidies, enterprise zones, transport investments and other place-based policies to address these disparities. The evidence suggests these policies may have partially offset increasing disparities but are not sufficient to fully offset the economic forces at work.
    Keywords: place based policy, cities, European Union
    JEL: R11 R12 R13
    Date: 2020–10
  15. By: Tony Beatton; Michael P. Kidd; Matteo Sandi
    Abstract: This paper studies the impact of compulsory schooling on violent behaviour and victimization in school using individual-level administrative data matching education and criminal records from Queensland (Australia). Exploiting a legislative increase in the minimum dropout age in 2006, this study defines a series of regression-discontinuity specifications to show that compulsory schooling reduces crime but increases violent behaviour in school. While police records show that property and drugs offences decrease, education records indicate that violence and victimization in school increase. Thus, prior studies that fail to consider in-school behaviour may over-estimate the short-run crime-reducing impact of compulsory education.
    Keywords: youth crime, minimum dropout age, school attendance
    JEL: I2 K42
    Date: 2020–11
  16. By: Simin Berset; Mark Schelker
    Abstract: The traditional normative literature on fiscal federalism argues that redistributive policies should be centralized in order to avoid welfare- or tax-induced migration. However, recent evidence shows that even in a setup where the progressivity of the income tax schedule is centralized to an upper-layer government and local governments are involved in tax competition with only a tax shifter, local mobility induces income sorting. Hence, despite centralized redistributive taxation, the resulting effective tax schedule is less progressive than what is set in the tax code. We argue that upper-layer governments anticipate the impact of local income sorting and strategically adjust their statutory tax schedules. We analyze Swiss panel data and apply causal machine learning methods to identify the effects of decentralization on the statutory tax structure. We provide evidence that more decentralized cantons reduce the tax burden for lower and intermediate income classes and hence implement more redistributive statutory tax schedules. This strategic adjustment is limited by the mobility of the tax base.
    Keywords: fiscal federalism, decentralized taxation, redistribution, progressive income taxes
    JEL: H73 H77 H71
    Date: 2021
  17. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Abstract: This paper estimates that long-run changes in a county’s prime-age employment rate are significantly affected by labor demand shocks to both the county and its overlying commuting zone (CZ). The overall benefits of labor demand shocks are due more to CZ demand shocks than county demand shocks. A lower preexisting county employment rate increases the effects of CZ demand shocks. Simulations suggest that low prior employment rate CZs, versus higher-rate CZs, will have much larger employment rate effects from demand shocks. Targeting jobs at more distressed counties within a CZ has modest effects, much lower than the effects of targeting jobs at more distressed CZs.
    Keywords: Local labor markets, job creation benefits, local labor demand, regional distress
    JEL: R23
    Date: 2021–01
  18. By: Kristopher S. Gerardi; Lara Loewenstein; Paul S. Willen
    Abstract: Mortgage borrowers who have experienced employment disruptions as a result of theCOVID-19 pandemic are unable to refinance their loans to take advantage of historically low market rates. In this article, we analyze the effects of a streamlined refinance (“refi”) program for government-insured loans that would allow borrowers to refinance without needing to document employment or income. In addition, we consider a cash-out component that would allow borrowers to extract some of the substantial amount of housing equity that many have accumulated in recent years.
    Keywords: mortgage; refinance; cash -out; COVID-1
    JEL: G28 G51 R38
    Date: 2020–06–25
  19. By: Philipp Ager; Katherine Eriksson; Ezra Karger; Peter Nencka; Melissa A. Thomasson
    Abstract: The COVID-19 pandemic has reignited interest in responses to the 1918-19 influenza pandemic, the last comparable U.S. public health emergency. During both pandemics, many state and local governments made the controversial decision to close schools. We study the short- and long-run effects of 1918-19 pandemic-related school closures on children. We find precise null effects of school closures in 1918 on school attendance in 1919-20 using newly collected data on the exact timing of school closures for 168 cities in 1918-19. Linking affected children to their adult outcomes in the 1940 census, we also find precise null effects of school closures on adult educational attainment, wage income, non-wage income, and hours worked in 1940. Our results are not inconsistent with an emerging literature that finds negative short-run effects of COVID-19-related school closures on learning. The situation in 1918 was starkly different from today: (1) schools closed in 1918 for many fewer days on average, (2) the 1918 virus was much deadlier to young adults and children, boosting absenteeism even in schools that stayed open, and (3) the lack of effective remote learning platforms in 1918 may have reduced the scope for school closures to increase socioeconomic inequality.
    JEL: I20 N32
    Date: 2020–12
  20. By: Berrak Bahadir (Department of Economics, Florida International University); Inci Gumus (Faculty of Arts and Social Sciences, Sabanci University)
    Abstract: This paper studies the channels through which house prices affect sectoral output in emerging market economies, focusing on the role of collateral and borrowing dynamics. We first show that relative to the tradable sector, nontradable sector output is more strongly correlated with house prices and its response to a house price shock in a Panel VAR is larger for a sample of emerging market economies. Then, we study the model dynamics generated by shocks to housing demand in a two-sector small open economy real business cycle model. The results show that housing demand shocks lead to a sectoral reallocation by inducing an expansion in the nontradable sector and a contraction in the tradable sector. The model successfully generates the comovement between the cycle and house prices, matching the strong positive correlation of house prices and nontradable output. We also study the importance of collateral effects for the model dynamics and show that the collateral channel is key to generating the correlations between house prices and sectoral output observed in the data.
    Keywords: House Prices, Collateral Effects, Housing Demand Shocks, Sectoral Output
    JEL: E32 E44 F34 F41
    Date: 2021–01
  21. By: Antoine Gervais; James R. Markusen; Anthony J. Venables
    Abstract: The comparative advantage of many cities is based on their efficiency in the production of ‘functions’, e.g., business services such as finance, law, engineering, or similar functions that are used by firms in a wide range of sectors. Firms that use these functions may choose to source them locally, or to purchase them from other cities. The former case gives rise to cities developing a pattern of sectoral specialization, and the latter a pattern of functional specialization. A two-city country trades with the larger world, and workers within the country are mobile between the two cities. Productivity in a given function varies across cities, giving rise to urban comparative advantage. This may be due to exogenous technological differences (Ricardian) or to city- and function-specific scale economies. Sectors differ in the intensity with which they use different functions, giving rise to a pattern of sectoral and functional specialisation. We generate a number of economic insights, and examine the model’s predictions empirically over a 20-30-year period for US states. As geographic fragmentation costs fall, both our theory and empirical analysis show that sector concentration and regional specialization fall for sectors and rise for functions (occupations).
    JEL: F12 F23 R11 R12 R13
    Date: 2021–01
  22. By: Isil Erol (Queensland University of Technology); Umut Unal (Philipps University Marburg)
    Abstract: Germany has undergone a significant migration policy shift since the early 2000s. This paper examines the total employment effect of immigration during the liberalization of migration policies from 2005 to 2018 using a spatial approach. A set of methods, along with static and dynamic macro-econometric models, were applied on a balanced panel formed by a unique and manually collected data for 156 statistical regions based on the definition of the German Federal Employment Agency. We find suggestive evidence that there has been a significant adverse impact of new immigrants on the overall employment rate, and this negative effect is substantially larger than those reported in previous studies on the employment effect of immigration in the German labour market. In a further step, we divide our sample into two subsamples to capture the employment effect of the massive humanitarian inflows that began in 2015. Our results indicate that, in addition to the new immigrants' lower rate of integration into the local labour markets, a sudden influx of asylum seekers may possibly lead to a substantial fall in the employment rates, because asylum seekers are not immediately allowed to work in the country.
    Keywords: Immigration, Labour market, Employment, Labour Economics, Asylum seekers
    JEL: J00 J15 J61
    Date: 2021
  23. By: Christofzik, Désirée I.; Feld, Lars P.; Yeter, Mustafa
    Abstract: Using quarterly data for German counties, we study how housing prices and offers respond to higher transaction costs induced by tax increases. Since 2006, states can set their own tax rates on real estate transfers. Several and substantial tax hikes generate variation across time and states which we exploit in our empirical analysis using an event study design. Our results indicate that prices and offers decrease significantly by 3% and 6% already in the quarter in which the tax increase is announced in press but rise subsequently. Furthermore, we find heterogeneous responses when distinguishing between different types of counties. Housing prices decrease persistently in shrinking counties, while this is at most temporarily the case in growing, central and peripheral counties. This implies that the economic incidence of this tax varies across transactions.
    Keywords: Real estate transfer tax,real estate prices,housing market,tax incidence,anticipation effects
    JEL: H20 H22 H71 R32 R38
    Date: 2020
  24. By: Sá, Ana Isabel
    Abstract: Differences in mortgage law have significant effects on loan characteristics at origination. Borrower-friendly laws impose higher costs and risks for lenders and, thus, induce effects on mortgage pricing and leverage. However, not all borrower-friendly laws have the same effects.This finding is established using loan-level data for the U.S. mortgage market between 2001 and 2011. Judicial foreclosure requirements imply higher mortgage interest rates due to higher recovery costs and activate the price channel. Recourse restrictions imply higher loan collateralization to compensate for the fewer recovery opportunities and activate the collateral channel.
    Keywords: mortgage; mortgage law; interest rate; mortgage pricing; judicial foreclosure; nonrecourse; loan-to-value ratio; credit supply
    JEL: E43 G21 G28 K35
    Date: 2020–12
  25. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Abstract: In this paper, estimates are presented on short-run effects of demand shocks on a local labor market’s employment to population ratio (employment rate). Based on the estimates, commuting zones (CZs) better define a local labor market than counties, because both employment and employment rate effects exhibit large spillovers across counties within a CZ. In addition, the estimates suggest that demand shock effects vary, by an amount that is both statistically and substantively significant, with a CZ’s prior overall employment rate.
    Keywords: Local labor markets, distressed regions, job creation benefits, local labor demand
    JEL: R23
    Date: 2021–01
  26. By: Kurita, Kenichi; Managi, Shunsuke
    Abstract: This paper constructs the economic model to consider the circular economy in cities from the waste management perspective. Specifically, we analyze the link between migration, natural capital, human capital, and waste management by extending the new economic geography model. We show the results; the population distribution pattern in the long run varies depending on the congestion effect of natural capital and waste management's technological level. In particular, a full agglomeration equilibrium realizes in the long-run for higher technological levels of waste management (lower congestion effects), an interior asymmetric equilibrium does for intermediate technological levels (intermediate congestion effects), and the symmetric dispersion equilibrium realizes for the lower technological levels (higher congestion effects).
    Keywords: Circular economy; Waste management; Economic geography; Agglomeration; Natural capital
    JEL: F18 Q53 R11 R12
    Date: 2021–01
  27. By: Liam Brunt (Norwegian School of Economics and CEPR); Cecilia García-Peñalosa (Aix-Marseille University, CNRS, EHESS, AMSE and CEPR)
    Abstract: A large literature characterizes urbanisation as the result of productivity growth attracting rural workers to cities. We incorporate economic geography elements into a growth model and suggest that causation runs the other way: when rural workers move to cities, the resulting urbanisation produces technological change and productivity growth. Urban density leads to knowledge exchange and innovation, thus creating a positive feedback loop between city size and productivity that sets off sustained economic growth. The model is consistent with the fact that urbanisation rates in Western Europe, and notably in England, reached unprecedented levels by the mid-18 th century, the eve of the Industrial Revolution.
    Keywords: industrialization, urbanisation, innovation, long-run growth
    JEL: N13 O14 O41
    Date: 2021–01
  28. By: Lucas W. Davis
    Abstract: This paper uses fare changes in Mexico City, Guadalajara, and Monterrey to estimate the price elasticity of demand for urban rail transit. In two of the cases there is a significant fare increase (30%+), and in the third there is a 60-day fare holiday. Ridership responds sharply in the expected direction in all three cities, implying price elasticities which range across cities from -.23 to -.32. In addition, there is suggestive evidence that the temporary fare holiday led to a higher baseline level of ridership. These estimates are directly relevant for policymakers considering alternative pricing structures for urban rail. The paper discusses the relevant economic considerations and then shows how the estimated elasticities can be used to perform policy counterfactuals.
    JEL: H23 Q53 R41 R42
    Date: 2020–12
  29. By: Stephen J. Redding
    Abstract: This paper reviews recent research on geography and trade. One of the key empirical findings over the last decade has been the role of geography in shaping the distributional consequences of trade. One of the major theoretical advances has been the development of quantitative spatial models that incorporate both exogenous first-nature geography (natural endowments) and endogenous second-nature geography (the location choices of economic agents relative to one another) as determinants of the distribution of economic activity across space. These models are sufficiently rich to capture first-order features of the data, such as gravity equations for flows of goods and people. Yet they remain sufficiently tractable as to permit an analytical characterization of the properties of the general equilibrium and facilitate counterfactuals for realistic policy interventions. We distinguish between models of regions or systems of cities (where goods trade and migration take center stage) and models of the internal structure of cities (where commuting becomes relevant). We review some of key empirical predictions of both sets of theories and show that they have been remarkably successful in rationalizing the empirical findings from reduced-form research. Looking ahead, the combination of recent theoretical advances and novel geo-coded data on economic interactions at a fine spatial scale promises many interesting avenues for further research, including discriminating between alternative mechanisms for agglomeration, understanding the implications of new technologies for the organization of work, and assessing the causes, consequences and potential policy implications of spatial sorting.
    Keywords: trade, geography, local labor markets
    JEL: F1 J4 R1 R4
    Date: 2020–09
  30. By: C. Luke Watson; Oren Ziv
    Abstract: We investigate the sources, scope, and implications of landowner market power. We show how zoning regulations generate spillovers through increased markups and derive conditions under which restricting landownership concentration reduces rents. Using newbuilding-level data from New York City, we find that a 10% increase in ownership concentration in a Census tract is correlated with a 1% increase in rent. Market power is substantial: on average, markups account for nearly a third of rents in Manhattan. Furthermore, pecuniary spillovers between zoning constraints and markups at other buildings are appreciable. Up-zoning that results in 417 additional housing units at zoning-constrained buildings reduces markups on policy-unconstrained units and generates between 5 and 19 additional units through increased competition.
    Keywords: monopolistic competition, market power, concentration, rent, housing demand, zoning
    JEL: R31 R38 L13
    Date: 2021
  31. By: Matthias Dincher (Johannes Gutenberg University); Valentin Wagner (Johannes Gutenberg University)
    Abstract: We conduct a large and nationwide survey among German teachers to investigate the determinants of teachers’ adaption to an increased use of educational technology during the COVID-19 school closures. We find that higher levels of technical affinity and higher perceived learning effectiveness of distance teaching are positively associated with using at least one (new) educational technology solution while teachers’ age and the digital infrastructure of the school have no predictive power.
    Keywords: School closures, educational technology, COVID-19, technical affinity
    JEL: I21
    Date: 2021–01–01
  32. By: Abajian, Alexander; Pretnar, Nick
    Abstract: Residential solar panels in the United States (U.S.) are inefficiently distributed in terms of optimizing solar-electrical production. Controlling for local solar electricity generation potential (insolation), the residential solar share of electrical consumption is relatively higher in cloudier locales like the Pacific Northwest and Northeast than it is in sunnier areas like the Western U.S. and Florida. Rebates designed to increase residential solar adoption in places like Florida and Texas with relatively low solar-electrical shares are ineffective and may lead to net decreases in the residential solar share if housing and electrical consumption are complementary. This is because electrical consumption increases faster in response to a decline in effective residential solar prices than actual demand for panels themselves, thus driving down the solar share despite additional installations. Through the lens of a county-level structural model of demand for housing, electricity, and solar panels, we find that this phenomenon is especially prevalent in locales with high demand for cooling services (e.g., air conditioning, refrigeration, etc.) due to high numbers of cooling degree days. Inability to effectively store solar-produced electricity may be to blame. Our results thus suggest that future policies should subsidize nascent battery technologies in place of direct solar-panel installation rebates if the goal is to increase the residential solar share of electrical consumption.
    Keywords: subsidies, environmental subsidy, environmental economics, electricity, energy utilities, renewable energy, solar energy, neighborhood characteristics, diffu- sion, spatial pricing, industrial geography
    JEL: H23 Q42 R23
    Date: 2021–01–22
  33. By: Guy Meunier; Jean-Pierre Ponssard (X - École polytechnique)
    Abstract: Summary: Hydrogen is a possible alternative to the internal combustion engine, alongside battery-powered vehicles, in the context of reducing greenhouse gas emissions associated with transport activities. The costs associated with hydrogen vehicles are currently high, even when considering the greenhouse gas emissions and other pollutants avoided by their use. Efforts to reduce these costs, which will determine the social and environmental desirability of hydrogen vehicles, face two challenges : the high cost of refueling, linked to the crucial problem of coordination between development of the vehicle fleet and refueling infrastructure; and high purchase prices, which may decrease when sufficient quantities generate experience effects. This policy brief argues that each of these two handicaps calls for a specific policy design : at a local level for coordination between actors, and at a European level to generate sufficient volumes. The example of hydrogen-powered urban buses offers a telling illustration of these issues.. Key points: The growing importance of the hydrogen sector has been encouraged by various initiatives in France. These initiatives are based on the idea of a regional ecosystem : around a city, a network of local communities, or even a department or a region. The example of hydrogen buses shows that the abatement costs induced by this technology are still too high. The problem lies both in the price of the vehicles and the supply of fuel. Reducing the costs associated with the supply of fuel requires the resolution of coordination problems linked to network effects, which calls for a response at the local level. Achieving vehicle purchase prices low enough to be competitive requires a European approach, which alone makes it possible to reach significant volumes.
    Date: 2020–07
  34. By: Kabir Dasgupta; André Diegmann; Tom Kirchmaier; Alexander Plum
    Abstract: This paper documents behavioral differences in parental criminality between majority and minority ethnic groups after child birth. The particular effect we exploit is that of the gender of the first-born child on fathers' convictions rates. Based on detailed judicial and demographic data from New Zealand, we first show that the previously documented inverse relationship between having a son and father's criminal behaviour holds across the average of the population. However, when splitting the fathers' sample by ethnicity, the effect appears to be entirely driven by the white part of the population and that there is no effect on the native Maori. The strong ethnic divide is observed along many dimensions and challenges the implicitly made assumption in the economics of crime literature that findings are universally applicable across cultures and race.
    Keywords: crime research, racial bias
    JEL: K42 K49 L38
    Date: 2020–12
  35. By: Martin Hoesli (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School); Richard Malle (Conservatoire National des Arts et Métiers (CNAM))
    Abstract: The article analyzes the effects of the Covid-19 pandemic on commercial real estate prices. We start by highlighting caveats to bear in mind when referring to direct real estate indices. We then analyze the behavior of commercial real estate prices during the pandemic, emphasizing differences across property types. For that purpose, we use data for both direct and listed real estate. We further discuss changes in the main factors affecting commercial real estate pricing. The article then turns to discussing the likely trajectory of commercial real estate prices in the future. We report that retail and hospitality properties and to a lesser extent office buildings have been affected the most by Covid-19. The other sectors, in particular the residential and industrial sectors, have shown more resilience. We maintain that the future trajectory of real estate prices will vary across sectors and that the type and location of assets will become increasingly important in their valuation.
    Keywords: Commercial real estate prices; Covid-19; Pandemic; Office; Retail; Hospitality
    JEL: R33 G12 G23
    Date: 2021–01
  36. By: Greg Buchak; Gregor Matvos; Tomasz Piskorski; Amit Seru
    Abstract: We study the frictions in dealer-intermediation in residential real estate through the lens of “iBuyers,” technology entrants, who purchase and sell residential real estate through online platforms. iBuyers supply liquidity to households by allowing them to avoid a lengthy sale process. They sell houses quickly and earn a 5% spread. Their prices are well explained by a simple hedonic model, consistent with their use of algorithmic pricing. iBuyers choose to intermediate in markets that are liquid and in which automated valuation models have low pricing error. These facts suggest that iBuyers’ speedy offers come at the cost of information loss concerning house attributes that are difficult to capture in an algorithm, resulting in adverse selection. We calibrate a dynamic structural search model with adverse selection to understand the economic forces underlying the tradeoffs of dealer intermediation in this market. The model reveals the central tradeoff to intermediating in residential real estate. To provide valuable liquidity service, transactions must be closed quickly. Yet, the intermediary must also be able to price houses precisely to avoid adverse selection, which is difficult to accomplish quickly. Low underlying liquidity exacerbates adverse selection. Our analysis suggests that iBuyers’ technology provides a middle ground: they can transact quickly limiting information loss. Even with this technology, intermediation is only profitable in the most liquid and easy to value houses. Therefore, iBuyers’ technology allows them to supply liquidity, but only in pockets where it is least valuable. We also find limited scope for dealer intermediation even with improved pricing technology, suggesting that underlying liquidity will be an impediment for intermediation in the future.
    JEL: G0 G2 G5 L0 R20
    Date: 2020–12
  37. By: Kenji Fujiwara (School of Economics, Kwansei Gakuin University)
    Abstract: This paper examines how strategic investment of capitalists affects the industry location in a footloose capital model. We show that the home market effect is robust but is moderated when capitalists strategically invest. That is, the industry location is closer to dispersion when capitalists are strategic than when they are atomic.
    Keywords: Footloose capital model, Strategic investment, Industry location
    JEL: F12 R12
    Date: 2021–02
  38. By: Evan Mast (W.E. Upjohn Institute for Employment Research)
    Abstract: Increasing supply is frequently proposed as a solution to rising housing costs. However, there is little evidence on how new market-rate construction—which is typically expensive—affects the market for lower quality housing in the short run. I begin by using address history data to identify 52,000 residents of new multifamily buildings in large cities, their previous address, the current residents of those addresses, and so on. This sequence quickly adds lower-income neighborhoods, suggesting that strong migratory connections link the low-income market to new construction. Next, I combine the address histories with a simulation model to estimate that building 100 new market-rate units leads 45-70 and 17-39 people to move out of below-median and bottom-quintile income tracts, respectively, with almost all of the effect occurring within five years. This suggests that new construction reduces demand and loosens the housing market in low- and middle-income areas, even in the short run.
    Keywords: housing supply, housing affordability, filtering
    JEL: R31 R21 R23
    Date: 2019–07
  39. By: Shihas Abdul Razak; Upasak Das
    Abstract: Using representative migration survey data from the Indian state of Kerala, this paper assesses the impact of transnational migration on social signaling through the consumption of visible goods. Using the plausibly exogenous variation in migration networks in the neighborhood and religious communities to account for the potential endogeneity, we find significant and positive effects on conspicuous consumption. In terms of the mechanisms, we put forward three possible channels. While we are unable to rule out the associated changes in preferences driving up the spending on status goods, we observe only modest effects of peer group spending due to higher status competition. A key channel that we propose through a theoretical framework is a potential information gap among permanent residents about the income levels of a migrant. This we argue can be leveraged by migrants to increase the visible consumption to gain higher status in the society.
    Date: 2021–01
  40. By: Odolinski, Kristofer (Swedish National Road & Transport Research Institute (VTI)); Lidén, Tomas (Swedish National Road & Transport Research Institute (VTI))
    Abstract: In this paper we estimate the impact of line capacity utilisation on the marginal cost of rail infrastructure renewals. Previous studies are mainly concerned with deterioration costs caused by traffic. This paper contributes to the literature, showing that increased line capacity utilisation can – in addition to higher deterioration costs – generate increased costs for carrying out a renewal project and/or more frequent renewals, where the latter can be motivated by efforts to curb expected delays. A top-down econometric approach is used on a Swedish dataset comprising information on renewal costs for track, electric installations, signalling, telecommunication, and other installations such as barriers, fencing and lubrication equipment. The results are relevant for rail infrastructure managers, especially in Europe where directives by the EU stipulate that track access charges are to be based on direct costs in order to contribute to an efficient use of the infrastructure.
    Keywords: Marginal cost; Capacity utilisation; Renewal; Rail infrastructure; Access charging
    JEL: H54 L92 R48
    Date: 2021–01–26
  41. By: Yusuf Emre Akgunduz; Yusuf Kenan Bagir; Seyit Mumin Cilasun; Murat Gunay Kirdar
    Abstract: This study combines an administrative dataset of the full population of Turkish firms and the setting of the sudden mass migration of Syrian refugees to Turkey to identify the effect of migrants on firm performance and market structure. As a result of the migrant shock, existing firms expand and new firms are established. Quantitatively, a 10 percentage-point rise in migrant-to-native ratio increases average firm sales by 4% and the number of registered firms by 5%. While the number of firms rises, new firms are more likely to be small. The resulting market structure shows less concentration and firms reduce the share of workers formally employed. We further document an increased propensity to export and an increase in the variety of exported products. The impact on exports is driven by a rise in competitiveness of firms in regions hosting Syrians as a decline in export prices is observed. We also uncover evidence for an effect of migrants’ skills and networks on exports, as the export value and variety of products to the Middle East and North Africa (MENA) region increase more than those to the EU region among exporters while the prices of products exported to the two regions show similar changes.
    Keywords: Refugees, Firm performance, Market structure, Sales, Informality, Exports, Migrant business networks
    JEL: J15 J61 F16 L11
    Date: 2021
  42. By: Matondang Elsa Siburian (Graduate School of Economics, Waseda University)
    Abstract: The objective of this paper is to clarify the potential joint determination between fiscal decentralization, regional inequality, and the provision of local public goods in Indonesia. Using provincial-level data over the period 2001-2014, we estimate the simultaneous equation model (SEM) to circumvent the possibility of interdependence between the interest variables. The result reveals that fiscal decentralization is associated with lower regional income disparity but not vice versa. The result confirms that regional income inequality and the provision of public goods are simultaneously determined. The result provides no evidence of interdependence between fiscal decentralization and the provision of local public goods.
    Keywords: fiscal decentralization; regional inequality; local public goods; Indonesia; simultaneous equation model
    JEL: H10 H77 H70
    Date: 2020–05
  43. By: Chao Fu; Junjie Guo; Adam J. Smith; Alan T. Sorensen
    Abstract: We estimate a model of high school students' college choices, allowing for rich heterogeneity in students' preferences for college attributes. We use data on students' enrollment decisions and application decisions—i.e., the sets of colleges to which they applied—to identify the distribution of students' preferences. We use our estimates to quantify differences in a student's expected value upon college application that result from the uneven spatial distribution of colleges. Asfwith other aspects of economic opportunity, we nd that place matters: students with otherwise identical characteristics can have very different expected values depending on where they live. The importance of location reflects differences across states as well as differences across counties within a state. For students with low parental incomes and low SAT scores, over 70% of the variation is within-state across counties, while for students with high parental incomes and high SAT scores, 66% of the variation is across states.
    JEL: I2 I23 I24
    Date: 2021–01
  44. By: Tam Kiet Vuong; Ho Fai Chan; Benno Torgler
    Abstract: We conducted a framed field experiment to explore a situation where individuals have potentially competing social identities to understand how group identification and socialization affect in- group favoritism and out-group discrimination. The Dictator Game and the Trust Game were conducted in Vietnams Ho Chi Minh City on two groups of high school students with different backgrounds, i.e., French bilingual and monolingual (Vietnamese) students. We find strong evidence for the presence of these two phenomena: our micro-analysis of within- and between- school effects show that bilingual students exhibit higher discriminatory behavior toward non- bilinguals within the same school than toward other bilinguals from a different school, implying that group identity is a key factor in the explanation of intergroup cooperation and competition.
    Keywords: socialization; in-group favouritism; out-group discrimination; cooperation; trust; trustworthiness; fairness; altruism; risk preference
    JEL: C93 C70 D74
    Date: 2021–01
  45. By: CARRETERO GOMEZ Stephanie (European Commission – JRC); NAPIERALA Joanna (European Commission – JRC); Bessios Adonis (Praxis Center for Policy Studies); Magi Eve; Pugacewicz Agnieszka (University of Warsaw); Maria Ranieri (University of Florence); Triquet Karen (Vrije Universiteit Brussel); Lombaerts Koen (Vrije Universiteit Brussel); ROBLEDO BOTTCHER Nicolas (European Commission – JRC); MONTANARI Marco (European Commission – JRC); GONZALEZ VAZQUEZ Ignacio (European Commission – JRC)
    Abstract: The unprecedented shift to remote schooling introduced in many countries in the spring of 2020 as one of the preventive measures to stop the spread of COVID-19 gave us the opportunity not only to analyse the strengths and weaknesses of remote schooling, but also to reflect on how education is being provided in general. We interviewed in total around 150 key stakeholders coming from five Member States that represent different degrees of readiness to use digital technologies in education. We aimed to obtain different perspectives about the remote schooling experience collecting insights from various groups, namely students, parents, teachers and school leaders. The topics discussed with study participants related to their experience and perceptions on: unequal access to education, learning tools and content available and put in place through urgent measures, digital and social and emotional competences to face and develop remote schooling, the assessment and certification of students' learning progress, as well as their psychological well-being. The results of our study show that full-time remote education with the current state of infrastructure and accessibility of equipment would aggravate existing inequalities, especially for some groups of children who were prevented from attending classes delivered online. We also saw that parents played a key role in their children’s learning process during remote schooling. This applies in particular to students in primary education or children with special education needs, who required more of their support. Parents played a double role of motivators and facilitators of learning, especially when teachers were not present. Yet, parents’ level of preparedness to play these roles and the level of support received from schools were not always perceived as satisfactory and could contribute to increasing inequalities in access to education.
    Keywords: Education, COVID-19, Remote schooling, Digital technologies, Learning
    Date: 2021–01
  46. By: Miaari, Sami H. (Tel Aviv University); Khattab, Nabil (Doha Institute for Graduate Studies); Kraus, Vered (University of Haifa); Yonay, Yuval P. (University of Haifa)
    Abstract: This article investigates the relationships between ethnicity, class, and prospects of educational success. For this purpose, we compared the effects of family socio-economic characteristics on children's educational attainment in four ethno-religious groups in Israel (Muslim, Christian, and Druze Palestinians; Jews). Information from the 1995 census on the households with at least one child born in the cohort of 1975-1985 is matched with Ministry of Education records on all those who achieved matriculation certificates and academic degrees between 1995 and 2012. The results show that the educational outcomes of Christian and Druze children are less dependent on their family characteristics compared to Muslim and Jewish children. We suggest that the disadvantage of Palestinian schools in a Jewish-dominated state is offset by the tougher competition Jewish children from disadvantaged strata face in schools attended by those from affluent strata. Family background is more important for academic degrees than for the matriculation certificate. Furthermore, the education and occupation of mothers and fathers both have an equally important impact on child outcomes.
    Keywords: ethnic capital, class, inequality, educational attainment, Israel
    JEL: J15 I24 I26 J62
    Date: 2021–01
  47. By: Heblich, Stephan; Gibbons, Stephen
    Abstract: Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks from hydraulic fracturing (‘fracking’). Although commercial development has not yet taken place in the UK, licenses for drilling were issued in 2008, signalling potential future development. This paper examines whether public fears about fracking affect house prices in areas that have been licensed for shale gas exploration. Our estimates suggest differentiated effects. Licensing did not affect house prices but fracking the first well in 2011, which caused two minor earthquakes, did. We find a 3.9–4.7 percent house price decrease in the area where the earthquakes occurred. The earthquakes were too minor to have caused any damage but we find the effect on prices extends to a radius of about 25 km served by local newspapers. This evidence suggests that the earthquakes and newspaper coverage increased awareness of exploration activity and fear of the local consequences
    Keywords: ES/K006460/1; ES/M010341/1; Elsevier
    JEL: R14 J01
    Date: 2021–03–01
  48. By: Marco Rogna; Diep Bich Nguyen
    Abstract: Among industrialized countries, U.S. holds two somehow inglorious records: the highest rate of fatal police shootings and the highest rate of deaths related to firearms. The latter has been associated with strong diffusion of firearms ownership largely due to loose legislation in several member states. The present paper investigates the relation between firearms legislation\diffusion and the number of fatal police shooting episodes using a seven-year panel dataset. While our results confirm the negative impact of stricter firearms regulations found in previous cross-sectional studies, we find that the diffusion of guns ownership has no statistically significant effect. Furthermore, regulations pertaining to the sphere of gun owner accountability seem to be the most effective in reducing fatal police shootings.
    Date: 2021–01
  49. By: Bernard Dumas; Tymur Gabuniya; Richard C. Marston
    Abstract: The distinction between domicile and place of business is becoming more and more relevant as a growing number of firms have activities abroad. In most statistical studies of international stock returns, a firm is included in a country’s index if its headquarters are located in that country. This classification scheme ignores the operations of the firm. We propose, instead, to measure the firms’ exposures to “geographic zones” according to the place where they conduct business. As a representation of “geographic risks”, we synthesize zone factors from all firms in the dataset, be they domestic firms or multinationals. And we show the properties of the exposures to the zone factors.
    JEL: G32
    Date: 2020–12
  50. By: Cecile Gaubert; Patrick M. Kline; Danny Yagan
    Abstract: Governments around the world redistribute to distressed areas by conditioning taxes and transfers on location. We show that when poor households are spatially concentrated, transfers from one location to another can yield equity gains that outweigh their efficiency costs, even when income-based transfers are set optimally. Expressions for the optimal transfer size depend on the mobility of households, the earnings responses of movers, and sorting patterns. Surveys find support for targeting tax credits to poor Americans who live in distressed places. A calibration exercise finds optimal transfers of the same order of magnitude as prominent American zone policies.
    JEL: H20 R10
    Date: 2021–01
  51. By: Victor Couture (University of California, Berkeley); Jonathan I. Dingel (University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)); Allison Green (Princeton University); Jessie Handbury (University of Pennsylvania, The Wharton School); Kevin Williams (Yale School of Management; Yale University - Cowles Foundation)
    Abstract: We argue the revenue potential from increasing tax rates on capital gains may be substantially greater than previously understood. First, many prior studies focus primarily on short-run taxpayer responses, and so miss revenue from gains that are deferred when rates change. Second, the composition of capital gains has shifted in recent years, such that the share of gains that are highly elastic to the tax rate has likely declined. Third, focusing on capital gains tax collection may understate fiscal spillovers from decreasing the preferential tax treatment for capital gains. Fourth, additional base-broadening reforms, like eliminating stepped-up basis and making charitable giving a realization event, will decrease the elasticity of the tax base to rate changes. Overall, we do not think the prevailing assumption of many in the scorekeeping community—that raising rates to top ordinary income levels would raise little revenue—is warranted. A crude calculation illustrates that raising capital gains rates to ordinary income levels could raise $1 trillion more revenue over a decade than other estimates suggest. Given the magnitudes at stake, scorekeeping procedures employed in evaluating capital gains should be made more transparent and be the subject of external professional debate and review.
    JEL: C8 R1 R4
    Date: 2021
  52. By: Aaron Chalfin; Benjamin Hansen; Emily K. Weisburst; Morgan C. Williams, Jr.
    Abstract: We report the first empirical estimate of the race-specific effects of larger police forces in the United States. Each additional police officer abates approximately 0.1 homicides. In per capita terms, effects are twice as large for Black versus white victims. At the same time, larger police forces make more arrests for low-level “quality-of-life” offenses, with effects that imply a disproportionate burden for Black Americans. Notably, cities with large Black populations do not share equally in the benefits of investments in police manpower. Our results provide novel empirical support for the popular narrative that Black communities are simultaneously over and under-policed.
    JEL: H72 J15 J18 K42
    Date: 2020–12
  53. By: Roberto Roson (Department of Economics, University Of Venice Cà Foscari; Loyola Andalusia University)
    Abstract: This paper presents the structure, data sources, assumptions and simulation methods of the Modelo de Equilibrio General para Andalusia_ (MEGA), a regional CGE model that has been designed for the analysis of the Andalusian economic structure, but which could also be applied to other regional economies. The document is intended to be a reference for simulation and assessment exercises based on this model.
    Keywords: Computable General Equilibrium Models, Regional Economics, Numerical Simulations, Computational Economics
    JEL: C51 C68 D58 R13 R15
    Date: 2021
  54. By: Felipe Carozzi; Sandro Provenzano; Sefi Roth
    Abstract: This paper estimates the link between population density and COVID-19 spread and severity in the contiguous United States. To overcome confounding factors, we use two Instrumental Variable (IV) strategies that exploit geological features and historical populations to induce exogenous variation in population density without affecting COVID-19 cases and deaths directly. We find that density has affected the timing of the outbreak, with denser locations more likely to have an early outbreak. However, we find no evidence that population density is positively associated with time-adjusted COVID-19 cases and deaths. Using data from Google, Facebook, the US Census and The County Health Rankings and Roadmaps program, we also investigate several possible mechanisms for our findings. We show that population density can affect the timing of outbreaks through higher connectedness of denser locations. Furthermore, we find that population density is positively associated with proxies for social distancing measures, access to healthcare and income, highlighting the importance of these mediating factors in containing the outbreak.
    Keywords: Covid-19, density
    JEL: I12 R12
    Date: 2020–08
  55. By: César Ducruet; Réka Juhász; Dávid Krisztián Nagy; Claudia Steinwender
    Abstract: This paper examines the effects of port development on the economy. By using scarce local land intensively, ports put pressure on local land prices and crowd out other forms of economic activity. We use the introduction of containerized shipping -- a technology that substantially increased land requirements at the port -- to estimate the effects of port development. We find an important role for the crowding-out effect both at the local and at the aggregate level. First, we show that the causal effect of the shipping boom caused by containerization on local population is zero -- port development increases city population by making a location more attractive for firms and consumers, but this well-known market access effect is fully offset by the crowding-out mechanism. Second, to measure the aggregate implications, we add endogenous port development to a standard quantitative model of cross-city trade. Through the lens of this model, we estimate that containerization increased aggregate world welfare by 3.95%. However, relative to the positive welfare effects of a trade-cost reduction in standard models, our model implies a sizeable welfare cost associated with the increased land-usage of ports, partly offset by welfare gains from endogenous specialization based on comparative advantage across port- and non-port activities. In terms of the distributional effects, we find that initially poorer countries gained more from containerization as they had a comparative advantage in port development.
    Keywords: port development, containerization, quantitative economic geography
    JEL: R40 O33 F6
    Date: 2020–12
  56. By: Yamamura, Eiji; Tsutsui, Yoshiro
    Abstract: COVID-19 has led to the closure of various schools in Japan to cope with the pandemic. This study explores how school closure influences parents’ work style based on short panel data for the period of school closure from mid-March to mid-April 2020. Specifically, we analyze how the presence of their children influences parents’ work at home and examine how the effect differs by the parent’s gender. After controlling for various factors, we find that in cases where parents are full-time employees and the children are: (1) in primary school, mothers are more likely to work remotely, while fathers are less likely to do so and (2) in junior high school, the parents’ work styles are hardly affected. This shows that mothers shoulder the burden of working remotely and caring for small children at home, while fathers tend to work in the office and spend less time with their childcare at home. Inevitably, COVID-19 has increased the inequality in the burden of child care.
    Keywords: COVID-19; gender difference; school closure; primary school; remote work
    JEL: I28 J12 J13 J16
    Date: 2020–07–14

This nep-ure issue is ©2021 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.