nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2021‒05‒10
sixty-one papers chosen by
Steve Ross
University of Connecticut

  1. High-speed Rail and the Spatial Distribution of Economic Activity: Evidence from Japan's Shinkansen By Hayakawa, Kazunobu; Koster, Hans R.A.; Tabuchi, Takatoshi; Thisse, Jacques-François
  2. Social Exclusion and Ethnic Segregation in Schools: The Role of Teacher's Ethnic Prejudice By Alan, Sule; Duysak, Enes; Kubilay, Elif; Mumcu, Ipek
  3. Urban Growth Shadows By Cuberes, David; Desmet, Klaus; Rappaport, Jordan
  4. Consumption Access and Agglomeration: Evidence from Smartphone Data By Miyauchi, Yuhei; Nakajima, Kentaro; Redding, Stephen J.
  5. Does the built environment shape commuting? The case of Lyon (France) By Charles Raux; Ayana Lamatkhanova; Lény Grassot
  6. Transit Infrastructure and Informal Housing: Assessing an Expansion of the Medellin’s Metrocable System By Posada, H. M.; Garcia-Suaza, A. F.
  7. Motorways, urban growth, and suburbanisation:evidence from three decades of motorway construction in Portugal By Bruno T. Rocha; Patrícia C. Melo; Nuno Afonso; João de Abreu e Silva
  8. Diversity in Schools: Immigrants and the Educational Performance of U.S. Born Students By Figlio, David; Giuliano, Paola; Marchingiglio, Riccardo; Ozek, Umut; Sapienza, Paola
  9. To be connected or not to be connected? The role of long-haul economies By Koster, Hans R.A.; Tabuchi, Takatoshi; Thisse, Jacques-François
  10. Inequality is rising where social network segregation interacts with urban topology By Gergõ Tóth; Johannes Wachs; Riccardo Di Clemente; Ákos Jakobi; Bence Ságvári; János Kertész; Balázs Lengyel
  11. Loan sales and the tyranny of tistance in U.S. residential mortgage lending By van der Plaat, Mark
  12. Welfare Effects of Property Taxation By Löffler, Max; Siegloch, Sebastian
  13. Urban specialisation; from sectoral to functional By Gervais, Antoine; Markusen, James R.; Venables, Anthony
  14. Equal Time for Equal Crime? Racial Bias in School Discipline By Shi, Ying; Zhu, Maria
  15. Repeated collaboration of inventors across European regions By Gergõ Tóth; Zoltán Elekes; Sándor Juhász; Balázs Lengyel
  16. Household Mortgage Refinancing Decisions Are Neighbor Influenced By W. Ben McCartney; Avni Shah
  17. Search and Predictability of Prices in the Housing Market By Møller, Stig; Pedersen, Thomas; Schütte, Erik Christian Montes; Timmermann, Allan
  18. When distance drives destination, towns can stimulate development By Christiaensen, Luc; De Weerdt, Joachim; Kanbur, Ravi
  19. Modeling inter-regional patient mobility: Does distance go far enough? By Michael Irlacher; Dieter Pennerstorfer; Anna-Theresa Renner; Florian Unger
  20. Institutions and the Productivity Challenge for European Regions By Ganau, Roberto; Rodríguez-Pose, Andrés
  21. Biased Teachers and Gender Gap in Learning Outcomes: Evidence from India By Rakshit, Sonali; Sahoo, Soham
  22. Economic Complexity and Industrial Upgrading in the Product Space Network - Opportunities for the City of Laval, Canada By Yihan Wang; Ekaterina Turkina
  23. Active peer effects in residential photovoltaic adoption: evidence on impact drivers among potential and current adopters in Germany By Fabian Scheller; S\"oren Graupner; James Edwards; Jann Weinand; Thomas Bruckner
  24. Who Bears the Burden of Local Taxes? By Brülhart, Marius; Danton, Jayson; Parchet, Raphaël; Schläpfer, Jörg
  25. Reducing Parent-School Information Gaps and Improving Education Outcomes: Evidence from High-Frequency Text Messages By Berlinski, Samuel; Busso, Matias; Dinkelman, Taryn; Martinez A., Claudia
  26. Faith and Assimilation: Italian Immigrants in the US By Gagliarducci, Stefano; Tabellini, Marco
  27. Apart but Connected: Online Tutoring and Student Outcomes during the COVID-19 Pandemic By Carlana, Michela; La Ferrara, Eliana
  28. Economic effects of a debt-to-income constraint in Finland: Evidence from Aino 3.0 model By Kärkkäinen, Samu; Nyholm, Juho
  29. Why Working from Home Will Stick By Jose Maria Barrero; Nicholas Bloom; Steven J. Davis
  30. Unequal Jury Representation and Its Consequences By Anwar, Shamena; Bayer, Patrick; Hjalmarsson, Randi
  31. Leveraged property cycles By Jaccard, Ivan
  32. Zoomshock: The geography and local labour market consequences of working from home. By De Fraja, Gianni; Matheson, Jesse; Rockey, James
  33. Whistle the Racist Dogs: Political Campaigns and Police Stops By Grosjean, Pauline; Masera, Federico; Yousaf, Hasin
  34. Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches By de Haas, Ralph; Ongena, Steven; Qi, Shusen; Straetmans, Stefan
  35. Persecution and Escape: Professional Networks and High-Skilled Emigration from Nazi Germany By Becker, Sascha O.; Lindenthal, Volker; Mukand, Sharun; Waldinger, Fabian
  36. Trade and the spatial distribution of transport infrastructure By Felbermayr, Gabriel; Tarasov, Alexander
  37. Inequality in Public School Spending across Space and Time By Biolsi, Christopher; Craig, Steven G.; Dhar, Amrita; Sørensen, Bent E
  38. Trauma at School: The Impacts of Shootings on Students' Human Capital and Economic Outcomes By Cabral, Marika; Kim, Bokyung; Rossin-Slater, Maya; Schnell, Molly; Schwandt, Hannes
  39. Social capital and economic growth in the regions of Europe By Fitjar, Rune Dahl; Muringani, Jonathan; Rodríguez-Pose, Andrés
  40. Small area variation in crime effects of COVID-19 policies in England and Wales By Langton, Samuel; Dixon, Anthony; Farrell, Graham
  41. Converting variables between non-hierarchical regions: The case of Austrian municipalities and ZIP-code areas By Dieter Pennerstorfer„
  42. Industry interconnectedness and regional economic growth in Germany By Shutters, Shade T.; Seibert, Holger; Alm, Bastian; Waters, Keith
  43. Is College Remediation a Barrier or a Boost? Evidence from the Tennessee SAILS Program By Thomas J. Kane; Angela Boatman; Whitney Kozakowski; Christopher Bennett; Rachel Hitch; Dana Weisenfeld
  44. Attitudes Towards Migrants during Crisis Times By Chatruc, Marisol Rodríguez; Rozo, Sandra V.
  45. Driver Positioning and Incentive Budgeting with an Escrow Mechanism for Ridesharing Platforms By Hao Yi Ong; Daniel Freund; Davide Crapis
  46. Land is back, it should be taxed, it can be taxed By Bonnet, Odran; Chapelle, Guillaume; Trannoy, Alain; Wasmer, Etienne
  47. Racial Diversity, Electoral Preferences, and the Supply of Policy: The Great Migration and Civil Rights By Calderon, Alvaro; Fouka, Vasiliki; Tabellini, Marco
  48. Methods for small area population forecasts: state-of-the-art and research needs By Wilson, Thomas; Grossman, Irina; Alexander, Monica; Rees, Philip; Temple, Jeromey
  49. Travel distance and travel time using Stata: New features and major improvements in georoute By Sylvain Weber; Martin Péclat; August Warren
  50. The Role of Macroprudential Policy in Times of Trouble By Jagjit S. Chadha; Germana Corrado; Luisa Corrado; Ivan De Lorenzo Buratta
  51. Changing Ingroup Boundaries: The Effect of Immigration on Race Relations in the US By Fouka, Vasiliki; Tabellini, Marco
  52. Employer concentration and wages for specialized workers By Thoresson, Anna
  53. Material resources and well-being — Evidence from an Ethiopian housing lottery By Andersen, Asbjørn G.; Kotsadam, Andreas; Somville, Vincent
  54. Fire Sale Risk and Credit By Bongaerts, Dion; Mazzola, Francesco; Wagner, Wolf
  55. The Electoral Impact of Wealth Redistribution: Evidence from the Italian Land Reform By Caprettini, Bruno; Casaburi, Lorenzo; Venturini, Miriam
  56. Mass Incarceration Retards Racial Integration By Peter Temin
  57. Complex Causal Structures of Neighbourhood Change: Evidence From a Functionalist Model and Yelp Data By Silver, Daniel; Silva, Thiago H
  58. Migration and Redistribution: Federal Governance of an Economic Union Matters By Razin, Assaf; Sadka, Efraim
  59. Individual risk attitudes and local unemployment: evidence from Italy in the Great Recession By Andrea Filippetti; Neil Lee
  60. Direct, spillover and welfare effects of regional firm subsidies By Siegloch, Sebastian; Wehrhöfer, Nils; Etzel, Tobias
  61. Evaluating fiscal equalisation: Finding the right balance By Sean Dougherty; Kass Forman

  1. By: Hayakawa, Kazunobu; Koster, Hans R.A.; Tabuchi, Takatoshi; Thisse, Jacques-François
    Abstract: We investigate the effects of high-speed rail (HSR) on the location of economic activity. We set up a spatial quantitative general equilibrium model that incorporates spatial linkages between firms (including manufacturing and services), agglomeration economies, as well as commuting and migration. The model is estimated for Japan in order to investigate the impacts of the Shinkansen, i.e., the first HSR ever built. We show that traveling by train strengthens firms' linkages, but is less important for commuting interactions. The Shinkansen increases welfare by about 5%. We show that extensions of the Shinkansen network may have large effects (up to a 30% increase in employment) on connected municipalities, although the effects are smaller for places with higher fixed costs. Our counterfactuals show that, without the Shinkansen, Tokyo and Osaka would be 6.3% and 4.4% larger, respectively.
    Keywords: agglomeration; commuting; employment; high-speed rail; Population
    JEL: D04 H43 R42
    Date: 2021–02
  2. By: Alan, Sule; Duysak, Enes; Kubilay, Elif; Mumcu, Ipek
    Abstract: Using detailed data on primary school children and their teachers, we show that teachers who hold prejudicial attitudes towards an ethnic group create socially and spatially segregated classrooms. We identify this relationship by leveraging a natural experiment where newly arrived refugee children are randomly assigned to teachers within schools. We elicit children's social networks to construct multiple measures of social exclusion and ethnic segregation in classrooms. We find that teachers' ethnic prejudice significantly lowers the prevalence of inter-ethnic social links, increases homophilic ties among host children, and puts refugee children at a higher risk of peer violence. Biased teachers' exclusionary classroom practices emerge as a likely mechanism that explains our results. We find that biased teachers tend to spatially segregate refugees, seat them at the back corners of classrooms, away from attention. Our results highlight the role of teachers in achieving integrated schools in a world of increasing ethnic diversity.
    Keywords: ethnic prejudice; ethnic segregation; social exclusion; Teacher effects
    JEL: I24 J15
    Date: 2021–02
  3. By: Cuberes, David; Desmet, Klaus; Rappaport, Jordan
    Abstract: Does a location's growth benefit or suffer from being geographically close to large economic centers? Spatial proximity may lead to competition and hurt growth, but it may also improve market access and enhance growth. Using data on U.S. counties and metro areas for the period 1840-2017, we document this tradeoff between urban shadows and urban access. Proximity to large urban centers was negatively associated with growth between 1840 and 1920, and positively associated with growth after 1920. Using a two-city spatial model, we show that the secular evolution of inter-city and intra-city commuting costs can account for this. Alternatively, the long-run decline in inter-city shipping costs relative to intra-city commuting costs is also consistent with these observed patterns.
    Keywords: 1840-2017; City Growth; commuting; spatial economics; United States; urban access; urban shadows; Urban systems
    JEL: N91 N92 R11 R12
    Date: 2021–02
  4. By: Miyauchi, Yuhei; Nakajima, Kentaro; Redding, Stephen J.
    Abstract: We provide new theory and evidence on the role of consumption access in understanding the agglomeration of economic activity. We combine smartphone data that records user location every 5 minutes of the day with economic census data on the location of service-sector establishments to measure commuting and non-commuting trips within the Greater Tokyo metropolitan area. We show that non-commuting trips are frequent, more localized than commuting trips, strongly related to the availability of nontraded services, and occur along trip chains. Guided by these empirical findings, we develop a quantitative urban model that incorporates travel to work and travel to consume non-traded services. Using the structure of the model, we estimate theoretically-consistent measures of travel access, and show that consumption access makes a sizable contribution relative to workplace access in explaining the observed variation in residents and land prices across locations. Undertaking counterfactuals for changes in travel costs, we show that abstracting from consumption trips leads to a substantial underestimate of the welfare gains from a transport improvement (because of the undercounting of trips) and leads to a distorted picture of changes in travel patterns within the city (because of the different geography of commuting and non-commuting trips).
    Keywords: agglomeration; Transportation; Urbanization
    JEL: R2 R3 R41
    Date: 2021–02
  5. By: Charles Raux (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Ayana Lamatkhanova (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique); Lény Grassot (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Is built environment the most influential factor on travel behavior when compared to individual socioeconomic characteristics? This paper extends the empirical knowledge by providing and comparing quantitative estimates of these various effects on both commuting distance and mode choice in a European city spatial context, while using up-to-date and novel methodology. Eight indicators of built and social environment are identified in order to characterize clusters of residential locations, giving a rich view of spatial and social diversity of locations. To disentangle the causal effects of residential self selection and built environment, both sample selection and specific matching preprocessing ("coarsened exact matching", a novel approach in the field) are implemented. Regarding commuting distance, the true effect of built and social environment appears modest with an increase in the range of 10-20%. It comes behind individual socioeconomic characteristics such as car availability and qualification. Regarding commuting mode choice, again the true effect of built and social environment is modest, with a nearly 20%pt increase of car share and around 10%pt decrease or public transport share for the most prominent effects, and it comes behind car availability. These results suggest the primary importance of influencing directly car use, if not car ownership, in the European context, while trying to modify the built environment would provide only limited results.
    Keywords: Built environment,Commuting,Mode choice,Distance travelled,Lyon,France,Working Papers du LAET
    Date: 2021
  6. By: Posada, H. M.; Garcia-Suaza, A. F.
    Abstract: Transportation policies have an important incidence on the allocation of resources within cities. Therefore, investigating the impacts of transit investment is relevant especially in developing countries where informal housing is highly prevalent and spatial disparities are remarkable. We study the impact of a transit expansion of the Metrocable system in Medellín (Colombia) as a natural scenario to understand the causal links between lowering access cost and informal housing. Using a difference-in-difference identification strategy, we estimate that the expasion of Line H of Metrocable reduces informal housing up to 15 percentage points. We also show that the magnitude of the effect depends on the distance to the intervention. When exploring potential mechanisms mediating the analyzed causal relation we find that the labor market plays a crucial role.
    Keywords: Informal housing, Transportation cost, Land value, Informal labor market, Colombia
    JEL: R41 R42 R31 J46
    Date: 2021–04–22
  7. By: Bruno T. Rocha; Patrícia C. Melo; Nuno Afonso; João de Abreu e Silva
    Abstract: Portugal moved from having less than 200 km of motorways before joining the European Union in 1986 to having the fifth highest motorway density relative to population in the Union in 2017. This paper studies the relationship between the expansion of the Portuguese motorway network between 1981 and 2011 and the growth of population and employment in the 275 mainland municipalities of the country. We address the endogeneity of the geography of motorways using instrumental variables based on historical transport networks from 1800 and 1945. Our findings suggest that, on average, new motorways caused large increases in both population and employment. In line with existing evidence for other countries, we find that motorways contributed to suburbanisation, as the impact of motorways on population growth (but not on employment growth) is particularly strong in suburban municipalities. In addition, motorways also appear to have influenced urban agglomeration dynamics, as their effect on population growth depends positively on the municipality’s population size in 1970.
    Keywords: transport infrastructure, motorways, population redistribution, employment, suburbanisation, instrumental variables.
    JEL: O18 R11 R49 R58
    Date: 2021–05
  8. By: Figlio, David; Giuliano, Paola; Marchingiglio, Riccardo; Ozek, Umut; Sapienza, Paola
    Abstract: We study the effect of exposure to immigrants on the educational outcomes of US-born students, using a unique dataset combining population-level birth and school records from Florida. This research question is complicated by substantial school selection of US-born students, especially among White and comparatively affluent students, in response to the presence of immigrant students in the school. We propose a new identification strategy to partial out the unobserved non-random selection into schools, and find that the presence of immigrant students has a positive effect on the academic achievement of US-born students, especially for students from disadvantaged backgrounds. Moreover, the presence of immigrants does not affect negatively the performance of affluent US-born students, who typically show a higher academic achievement compared to immigrant students. We provide suggestive evidence on potential channels.
    Keywords: Educational Attainment; Immigrant students
    JEL: I21 I24 J15
    Date: 2021–03
  9. By: Koster, Hans R.A.; Tabuchi, Takatoshi; Thisse, Jacques-François
    Abstract: We investigate what regions are the winners and losers from large transportation infrastructure improvements. We argue that long-haul economies - implying that the marginal transportation cost decreases with distance - play a pivotal role in understanding the location choices of firms. Using data from Japan and the Netherlands, we first establish that long-haul economies are an important feature of modern transportation networks. Then, we develop a simple model to show that improvements in transportation infrastructure have non-trivial impacts on the location choices of firms. While these investments are often beneficial to large regions, they may be detrimental to small intermediate regions, implying job losses. Using data on Japan's Shinkansen, we confirm that 'in-between' municipalities that are connected to the HSR witness a sizable decrease in employment.
    Keywords: accessibility; long-haul economies; Regional Development; Transport Infrastructure
    JEL: H40 O18 R30 R42
    Date: 2021–03
  10. By: Gergõ Tóth (Agglomeration and Social Networks Lendület Research Group, Centre for Economic-and Regional Studies, Budapest, Hungaryand Spatial Dynamics Lab, University College Dublin, Dublin, Ireland); Johannes Wachs (Institute for Data, Process and Knowledge Management, Vienna University of Economics and Business, Vienna, Austria and Complexity Science Hub Vienna, Vienna, Austria); Riccardo Di Clemente (Department of Computer Science, University of Exeter, Exeter, UK and Centre for Advanced Spatial Analysis, University College London, London, UK); Ákos Jakobi (Department of Regional Science, Eötvös Loránd University, Budapest, Hungary and Institute of Advanced Studies, Kõszeg, Hungary); Bence Ságvári (CSS-Recens, Centre for Social Sciences, Budapest, Hungary and International Business School Budapest, Budapest, Hungary); János Kertész (Department of Network and Data Science, Central European University, Budapest, Hungary); Balázs Lengyel (Agglomeration and Social Networks Lendület Research Group, Centre for Economic-and Regional Studies, Budapest, Hungary; International Business School Budapest, Budapest, Hungary and NETI Lab, Corvinus Institute for Advanced Studies, Budapest Corvinus University, Budapest, Hungary)
    Abstract: Social networks amplify inequalities by fundamental mechanisms of social tie formation such as homophily and triadic closure. These forces sharpen social segregation, which is reflected in fragmented social network structure. Geographical impediments such as distance and physical or administrative boundaries also reinforce social segregation. Yet, less is known about the joint relationships between social network structure, urban geography, and inequality. In this paper we analyze an online social network and find that the fragmentation of social networks is significantly higher in towns in which residential neighborhoods are divided by physical barriers such as rivers and railroads. Towns in which neighborhoods are relatively distant from the center of town and amenities are spatially concentrated are also more socially segregated. Using a two-stage model, we show that these urban geography features have significant relationships with income inequality via social network fragmentation. In other words, the geographic features of a place can compound economic inequalities via social networks.
    Keywords: social networks, income inequality, social segregation, network fragmentation, geographicalcal boundaries, urban topology
    JEL: C36 D85 I32 N34 R23 Z13
    Date: 2021–03
  11. By: van der Plaat, Mark
    Abstract: The distance between lenders and borrowers in the U.S. has increased considerably since the 1970s. This paper analyzes whether the use of loan sales by lenders has caused this increase. Using data on U.S. residential mortgage lending, we find that loan sales on average increase the lending distance with approximately 47%, which corresponds to 206.9 km (128.6 miles). Loan sales are able to increase lending distances because they allow lenders to reduce their loan rates, which allows them to compete for loans in remote markets. We find that loan sales almost completely offset higher loan rates of remote lenders.
    Keywords: Lending Distance; Remote Lending; Loan Sales; Securitization; Residential Mortgage Lending; Loan Rate Spreads; Great Recession; Multidimensional Panel Data
    JEL: C33 C55 G21 G23 R31
    Date: 2020–09–28
  12. By: Löffler, Max; Siegloch, Sebastian
    Abstract: We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German institutional setting with 5,200 municipal tax reforms for identification. We find that higher taxes are fully passed on to rental prices after three years. The pass-through is lower when housing supply is inelastic. Combining reduced form estimates with our theoretical framework, we simulate the welfare effects of property taxes and show that they are regressive.
    Keywords: Local Labor Markets; property taxation; rental housing; Tax Incidence; welfare
    JEL: H22 H41 H71 R13 R31 R38
    Date: 2021–03
  13. By: Gervais, Antoine; Markusen, James R.; Venables, Anthony
    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. This paper develops a model to investigate circumstances under which either of these outcomes is more likely, and finds that predictions of the model are consistent with changes in the pattern of specialization in the US over recent decades. The model combines elements of the literatures on economic geography, multinational firms, urban economics, and trade theory. 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, including that, as costs of remote sourcing fall, cities' functional specialization tends to increase and their sectoral specialization falls. We examine the model's predictions empirically over a 20-30-year period for US states. In line with the predictions of the model, we find that functional concentration rises and sectoral concentration falls over this time span. Similarly, we find that regional specialization in functions rises and regional specialization in sectors falls over the period.
    Keywords: agglomeration economies; firm organization; fragmentation; Geographic concentration; multiple equilibria; Regional specialization
    JEL: F12 F23 R11 R12 R13
    Date: 2021–01
  14. By: Shi, Ying (Syracuse University); Zhu, Maria (Syracuse University)
    Abstract: Well-documented racial disparities in rates of exclusionary discipline may arise from differences in hard-to-observe student behavior or bias, in which treatment for the same behavior varies by student race or ethnicity. We provide evidence for the presence of bias using statewide administrative data that contain rich details on individual disciplinary infractions. Two complementary empirical strategies identify bias in suspension outcomes. The first uses within-incident variation in disciplinary outcomes across White and under-represented minority students. The second employs individual fixed effects to examine how consequences vary for students across incidents based on the race of the other student involved in the incident. Both approaches find that Black students are suspended for longer than Hispanic or White students, while there is no evidence of Hispanic-White disparities. The similarity of findings across approaches and the ability of individual fixed effect models to account for unobserved characteristics common across disciplinary incidents provide support that remaining racial disparities are likely not driven by behavior.
    Keywords: racial bias, exclusionary discipline
    JEL: I24 J15
    Date: 2021–04
  15. By: Gergõ Tóth (Agglomeration and Social Networks Lendület Research Group, Centre for Economic-and Regional Studies, Budapest, Hungary and Spatial Dynamics Lab, University College Dublin, Dublin, Ireland); Zoltán Elekes (Agglomeration and Social Networks Research Group, Centre for Economic and Regional Studiesand Centre for Regional Science at Umea University (CERUM), Umea University, 90187 Umea, Sweden); Sándor Juhász (NETI Lab, Corvinus Institute for Advanced Studies, Budapest Corvinus University, Budapest, Hungary); Balázs Lengyel (Agglomeration and Social Networks Lendület Research Group, Centre for Economic-and Regional Studies, Budapest, Hungary;International Business School Budapest, Budapest, Hungaryand NETI Lab, Corvinus Institute for Advanced Studies, Budapest Corvinus University, Budapest, Hungary)
    Abstract: This paper explores the spatial patterns and underlying determinants of repeated inventor collaboration across European NUTS 3 regions. It is found that only a small fraction of co-inventor linkages across regions are repeated, while community detection reveals that these collaborations are clustered in geographical space more intensively compared with collaboration in general. Additional results from gravity modelling indicate that links in the inter-regional co-patenting network emerge mainly through the triadic collaboration of regions, while geographical proximity becomes the most influential factor for repeating co-inventor ties. In addition to that, the combination of technological similarity and shared third partner regions offer a premium for the likelihood of repeating collaboration, but only when geographical proximity is present as an enabler.
    Keywords: collaborative knowledge production; inter-regional collaboration; co-inventor network; repeated collaboration; European Research Area; gravity model
    JEL: D85 O31 O43 O52 R11 R58
    Date: 2021–03
  16. By: W. Ben McCartney; Avni Shah
    Abstract: Can social influence effects help explain regional heterogeneity in refinancing activity? Neighborhood social influence effects have been shown to affect publicly observable decisions, but their role in private decisions, like refinancing, remains unclear. Using precisely geolocated data and a nearest-neighbor research design, we find that households are 7% more likely to refinance if a neighbor within 50 meters has recently refinanced. Consistent with a word-of-mouth mechanism, social influence effects are weaker when neighbors are farther away and non existent for non-occupants. Our results illustrate the importance of the proximate community for household wealth accumulation and the transmission of monetary policy.
    Keywords: Household Finance; Refinancing; Peer Effects; Neighborhoods
    JEL: D12 D14 D71 H31 R23
    Date: 2021–04–30
  17. By: Møller, Stig; Pedersen, Thomas; Schütte, Erik Christian Montes; Timmermann, Allan
    Abstract: We develop a new housing seach index (HSI) extracted from online search activity on a limited set of keywords related to the house buying process. We show that HSI has strong predictive power for subsequent changes in house prices, both in-sample and out-of-sample, and after controlling for the effect of commonly used predictors. Compared to the stock market, online search has much stronger predictive power over house prices and its effect also lasts longer. Variation in housing search is a particularly strong predictor of subsequent price changes in markets with inelastic housing supply and high speculation.
    Keywords: Forecasting; Housing Demand; housing markets; inelastic housing supply; Internet search
    JEL: C10 E17 G10 R3
    Date: 2021–03
  18. By: Christiaensen, Luc; De Weerdt, Joachim; Kanbur, Ravi
    Abstract: While city migrants see their welfare increase much more than those moving to towns, many more rural-urban migrants end up in towns. This phenomenon, documented in detail in Kagera, Tanzania, begs the question why migrants move to seemingly suboptimal destinations. Using an 18-year panel of individuals from this region and information on the possible destinations from the census, this study documents, through dyadic regressions and controlling for individual heterogeneity, how the deterrence of further distance to cities (compared to towns) largely trumps the attraction from their promise of greater wealth, making towns more appealing destinations. Education mitigates these effects (lesser deterrence from distance; greater attraction from wealth), while poverty reduces the attraction of wealth, consistent with the notion of urban sorting. With about two thirds of the rural population in low-income countries living within two hours from a town, these findings underscore the importance of vibrant towns for inclusive development.
    Keywords: Africa; internal migration; Secondary Towns; Urbanization
    JEL: J61 O15 O55
    Date: 2021–03
  19. By: Michael Irlacher; Dieter Pennerstorfer; Anna-Theresa Renner; Florian Unger
    Abstract: This paper estimates a theory-guided gravity equation of regional patient flows. In our model, a patient’s choice to consult a physician in a particular region depends on a measure of spatial accessibility that accounts for the exact locations of both patients and physicians. Introducing this concept in a spatial economics model, we derive an augmented gravity-type equation and show that our measure of accessibility performs better in explaining patient flows than bilateral distance. We conduct a rich set of counterfactual simulations, illustrating that the effects of physicians’ market exits on patient mobility crucially depend on their exact locations.
    Keywords: gravity model, patient mobility, spatial accessibility, two-step floating catchment areas (2SFCA)
    JEL: R10 R12 R23 I11 I18
    Date: 2021–04
  20. By: Ganau, Roberto; Rodríguez-Pose, Andrés
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity 'puzzle'. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions' labour productivity growth both directly -as improvements in institutional quality drive productivity growth- and indirectly -as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.
    Keywords: Europe; Human Capital; Innovation; institutional quality; labour productivity; Physical Capital; regions
    JEL: E24 J24 O47 R11
    Date: 2021–03
  21. By: Rakshit, Sonali (Arizona State University); Sahoo, Soham (Indian Institute of Management Bangalore)
    Abstract: We investigate the effect of stereotypical beliefs of teachers on the learning outcomes of secondary school students in India. We measure teacher’s bias through an index capturing teacher’s subjective beliefs about the role of gender and other characteristics in academic performance. We tackle the potential endogeneity of teacher’s subjective beliefs by controlling for teacher fixed effects in a value-added model that includes lagged test scores of students. We find that a standard deviation increase in the biased attitude of the math teacher increases the female disadvantage in math performance by 0.07 standard deviation over an academic year. The effect is stronger among medium-performing students and in classes where the majority of students are boys. The negative effect of biased teachers is statistically insignificant for female teachers who also reduce gender gap among medium-performing students. Mediation analysis shows that biased teachers negatively affect girls’ attitude towards math as compared to boys.
    Keywords: learning outcomes, value-added model, gender, teachers, stereotypes, India
    JEL: I24 J16 J24
    Date: 2021–04
  22. By: Yihan Wang (HEC Montréal - HEC Montréal, Métis Lab EM Normandie - EM Normandie - École de Management de Normandie); Ekaterina Turkina (HEC Montréal - HEC Montréal)
    Abstract: This paper studies a city-region's multi-level competitiveness based on the configurations of local product space network and agglomeration of Revealed Competitive Advantage (RCA) sectors. We undertake a mandate studying the economic complexity of the City of Laval and explore the opportunities of industrial upgrading in its product space network. Addressing the importance of subnational analysis of economic complexity, we find the divergence of a city-region's RCA sectors at regional, national and global levels. We also imply the contribution of the structural holes of a cityregion's product space network across RCA sectors as potential fields to attract FDI inflow and enhance economic growth. Then, we discover the correlated spatial agglomeration of RCA and structural hole sectors within a city-region's hierarchical ecosystem. Finally, we conclude the practical implications for policy makers and discusses future research directions.
    Date: 2020–11–24
  23. By: Fabian Scheller; S\"oren Graupner; James Edwards; Jann Weinand; Thomas Bruckner
    Abstract: While the importance of peer influences has been demonstrated in several studies, little is known about the underlying mechanisms of active peer effects in residential photovoltaic (PV) diffusion. Empirical evidence indicates that the impacts of inter-subjective exchanges are dependent on the subjective mutual evaluation of the interlocutors. This paper aims to quantify, how subjective evaluations of peers affect peer effects across different stages of PV adoption decision-making. The findings of a survey among potential and current adopters in Germany(N=1,165)confirm two hypotheses. First, peer effects play a role in residential PV adoption: the number of peer adopters in the decision-maker's social circle has a positive effect on the decision-maker's belief that their social network supports PV adoption; their ascription of credibility on PV-related topics to their peers; and their interest in actively seeking information from their peers in all decision-making stages. Second, there is a correlation between the perceived positive attributes of a given peer and the reported influence of said peer within the decision-making process, suggesting that decision-makers' subjective evaluations of peers play an important role in active peer effects. Decision-makers are significantly more likely to engage in and be influenced by interactions with peers who they perceive as competent, trustworthy, and likeable. In contrast, attributes such as physical closeness and availability have a less significant effect. From a policymaking perspective, this study suggests that the density and quality of peer connections empower potential adopters. Accordingly, peer consultation and community-led outreach initiatives should be promoted to accelerate residential PV adoption.
    Date: 2021–05
  24. By: Brülhart, Marius; Danton, Jayson; Parchet, Raphaël; Schläpfer, Jörg
    Abstract: We study the incidence of local taxes on the welfare of heterogeneous residents. A structural model of imperfectly mobile households who differ in terms of income and family status allows us to back out preferences for local public goods and mobility parameters that vary by family status. We calibrate the model with plausibly causal tax-base and housing-price elasticity estimates. Based on municipality-level data for Switzerland, we find that households with children have stronger preferences for locally provided public services and are less mobile than households without children. This in turn implies that the burden of local taxes is mainly borne - linearity of taxes and capitalization into lower housing notwithstanding - by above-median income households without children.
    Keywords: heterogeneous households; household mobility; housing prices; Local taxation; public-good preferences; Tax Incidence
    JEL: H24 H71 R21 R31
    Date: 2021–02
  25. By: Berlinski, Samuel; Busso, Matias; Dinkelman, Taryn; Martinez A., Claudia
    Abstract: Grade retention and early dropout are two of the biggest challenges facing education systems in middle-income countries today, representing waste in school resources. We investigate whether reducing parent-school information gaps can improve outcomes that are early-warning signals for grade retention and dropout. We conducted an experiment in low-income schools in Chile to test the effects and behavioral changes triggered by a program that sends attendance, grade, and classroom behavior information to parents via weekly and monthly text messages. Our 18-month intervention raised average math GPA by 0.09 of a standard deviation and increased the share of students satisfying attendance requirements for grade promotion by 4.5 percentage points. Treatment effects were larger for students at higher risk of later grade retention and dropout. We find some evidence of positive classroom spillovers. Leveraging existing school inputs to implement a light-touch, cost-effective information intervention can improve education outcomes in lower-income settings.
    Keywords: Chile; Education; information experiment; parent-school communication
    JEL: D8 I25 N36
    Date: 2021–03
  26. By: Gagliarducci, Stefano; Tabellini, Marco
    Abstract: We study the effects of religious organizations on immigrants' assimilation. We focus on the arrival of Italian Catholic churches in the US between 1900 and 1920, when four million Italians had moved to America, and anti-Catholic sentiments were widespread. We combine newly collected Catholic directories on the presence of Italian churches across years and counties with the full count US Census of Population. We find that Italian churches reduced the social assimilation of Italian immigrants, lowering intermarriage rates and increasing ethnic residential segregation. We find no evidence that this was the result of either lower effort exerted by immigrants to ``fit in'' the American society or increased desire to vertically transmit national culture. Instead, we provide evidence for other two, non-mutually exclusive, mechanisms. First, Italian churches raised the frequency of interactions among fellow Italians, likely generating peer effects and reducing contact with other groups. Second, they increased the salience of the immigrant community among natives, thereby triggering backlash and discrimination.
    Keywords: Assimilation; Immigration; religious organizations
    JEL: J15 N31 Z12
    Date: 2021–02
  27. By: Carlana, Michela; La Ferrara, Eliana
    Abstract: In response to the COVID-19 outbreak, the governments of most countries ordered the closure of schools, potentially exacerbating existing learning gaps. This paper evaluates the effectiveness of an intervention implemented in Italian middle schools that provides free individual tutoring online to disadvantaged students during lock-down. Tutors are university students who volunteer for 3 to 6 hours per week. They were randomly assigned to middle school students, from a list of potential beneficiaries compiled by school principals. Using original survey data collected from students, parents, teachers and tutors, we find that the program substantially increased students' academic performance (by 0.26 SD on average) and that it significantly improved their socio-emotional skills, aspirations, and psychological well-being. Effects are stronger for children from lower socioeconomic status and, in the case of psychological well-being, for immigrant children.
    JEL: I21 I24
    Date: 2021–02
  28. By: Kärkkäinen, Samu; Nyholm, Juho
    Abstract: We analyze the economic effects of a debt-to-income constraint for the Finnish economy. Our benchmark is a DSGE model which is designed to capture the most prominent features of the Finnish economy and is calibrated using Finnish macroeconomic data. The baseline model incorporates a loan-to-value type of constraint for new mortgage loans. We study the effects of replacing this with a neutral DTI constraint, neutral meaning that the level of the constraint is set so that it would not alter the mortgage loans-to-GDP ratio in the long run. We find that the replacement would have only small long run effects on the economy, and it would poten-tially reduce the volatility of several variables associated with the housing markets.
    Keywords: Suomen Pankki,Aino 3.0,DSGE,mallit,Suomi
    Date: 2021
  29. By: Jose Maria Barrero; Nicholas Bloom; Steven J. Davis
    Abstract: COVID-19 drove a mass social experiment in working from home (WFH). We survey more than 30,000 Americans over multiple waves to investigate whether WFH will stick, and why. Our data say that 20 percent of full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before. We develop evidence on five reasons for this large shift: better-than-expected WFH experiences, new investments in physical and human capital that enable WFH, greatly diminished stigma associated with WFH, lingering concerns about crowds and contagion risks, and a pandemic-driven surge in technological innovations that support WFH. We also use our survey data to project three consequences: First, employees will enjoy large benefits from greater remote work, especially those with higher earnings. Second, the shift to WFH will directly reduce spending in major city centers by at least 5-10 percent relative to the pre-pandemic situation. Third, our data on employer plans and the relative productivity of WFH imply a 5 percent productivity boost in the post-pandemic economy due to re-optimized working arrangements. Only one-fifth of this productivity gain will show up in conventional productivity measures, because they do not capture the time savings from less commuting.
    JEL: D13 D23 E24 G18 J22 M54 R3
    Date: 2021–04
  30. By: Anwar, Shamena; Bayer, Patrick; Hjalmarsson, Randi
    Abstract: We analyze the extent and consequences of unequal representation on juries in Harris County, Texas. We first document that residents from predominantly white and high-income neighborhoods are substantially over-represented on juries. Using quasi-random variation in those called for jury duty each day, we next establish that Black defendants are more likely to be convicted and receive longer sentences from juries with more residents from these over-represented neighborhoods. We estimate that equal representation would reduce Black defendants' median sentence length by 50 percent and the probability of receiving a life sentence by 67 percent. Straightforward remedies could mitigate this severe bias.
    Keywords: crime; inequality; jury; race; Representation; sentences
    Date: 2021–03
  31. By: Jaccard, Ivan
    Abstract: This paper studies the effects of imperfect risk-sharing between lenders and borrowers on commercial property prices and leverage. The key friction is that agents use different discount rates to evaluate future flows. Eliminating this pecuniary externality generates large reductions in the volatility of real estate prices and credit. Therefore, policies that enhance risk-sharing between lenders and borrowers reduce the magnitude of boom-bust cycles in real estate prices. We also introduce health shocks to study the effect of the COVID-19 crisis on the commercial property market. JEL Classification: E32, E44, G10, E23
    Keywords: asset pricing, incomplete markets, leverage cycle, pecuniary externalities
    Date: 2021–04
  32. By: De Fraja, Gianni; Matheson, Jesse; Rockey, James
    Abstract: The Covid-19 health crisis has led to a substantial increase in work done from home, which shifts economic activity across geographic space. We refer to this shift as a Zoomshock. The Zoomshock has implications for locally consumed services; much of the clientèle of restaurants, coffee bars, pubs, hair stylists, health clubs, and the like located near workplaces is transferred to establishments located near where people live. In this paper we measure the Zoomshock at a very granular level for UK neighbourhoods. We establish three important empirical facts. First, the Zoomshock is large; many workers can work-from-home and live in a different neighbourhood than they work. Second, the Zoomshock is very heterogeneous; economic activity is decreasing in productive city centres and increasing residential suburbs. Third, the Zoomshock moves workers away from neighbourhoods with a large supply of locally consumed services to neighbourhoods where the supply of these services is relatively scarce. We discuss the implications for aggregate employment and local economic recovery following the Covid-19 health crisis.
    Keywords: COVID-19; Local Labour Markets; lockdown; teleworking; work-from-home
    JEL: H12 J01 R12
    Date: 2021–01
  33. By: Grosjean, Pauline; Masera, Federico; Yousaf, Hasin
    Abstract: Did Trump radicalize xenophobes? Using data from nearly 12 million traffic stops, we show that the probability that a police officer stops a Black driver increases by 4.2% after a Trump rally during his 2015-2016 campaign. The effect is immediate, specific to Black drivers, lasts for up to 50 days after the rally, and is due to discretionary stops only. The effects are significantly larger in areas with more racist attitudes today, those that experienced more racial violence during the Jim Crow era, or those that relied more heavily on slavery. Results from a 2016 online experiment reveal how Trump's campaign speech specifically aggravated respondents' prejudice that Blacks are violent. We take this as evidence that although not explicitly anti-Black, Trump's campaign radicalized racial prejudice against Blacks -- a phenomenon known as dog-whistling-- and the expression of such prejudice in a critical and potentially violent dimension: police behavior.
    Keywords: Police stops; political campaign; racial prejudice
    JEL: D72 J15 K42
    Date: 2021–01
  34. By: de Haas, Ralph; Ongena, Steven; Qi, Shusen; Straetmans, Stefan
    Abstract: We study how information sharing between banks influences the geographical clustering of branches. A spatial oligopoly model first explains why branches cluster and how information sharing impacts price competition and equilibrium clustering. With data on 56,555 branches of 614 banks in 19 countries between 1995 and 2012, we test key model hypotheses. We find that information sharing increases branch clustering as banks open branches in localities that are new to them but that are already served by other banks. This branch clustering is associated with less spatial credit rationing as information sharing allows firms to borrow from more distant banks.
    Keywords: Branch clustering; information sharing; spatial oligopoly model
    JEL: D43 G21 G28 L13 R51
    Date: 2021–02
  35. By: Becker, Sascha O.; Lindenthal, Volker; Mukand, Sharun; Waldinger, Fabian
    Abstract: We study the role of professional networks in facilitating the escape of persecuted academics from Nazi Germany. From 1933, the Nazi regime started to dismiss academics of Jewish origin from their positions. The timing of dismissals created individual-level exogenous variation in the timing of emigration from Nazi Germany, allowing us to estimate the causal effect of networks for emigration decisions. Academics with ties to more colleagues who had emigrated in 1933 or 1934 (early émigrés) were more likely to emigrate. The early émigrés functioned as "bridging nodes" that helped other academics cross over to their destination. Furthermore, we provide some of the first empirical evidence of decay in social ties over time. The strength of ties also decays across space, even within cities. Finally, for high-skilled migrants, professional networks are more important than community networks.
    Keywords: High-Skilled Emigration; Jewish Academics; Nazi Germany; Professional Networks; Universities
    JEL: I20 I23 I28 J15 J24 N30 N34 N40 N44
    Date: 2021–02
  36. By: Felbermayr, Gabriel; Tarasov, Alexander
    Abstract: The distribution of transport infrastructure across space is the outcome of deliberate government planning that reflects a desire to unlock the welfare gains from regional economic integration. Yet, despite being one of the oldest government activities, the economic forces shaping the endogenous emergence of infrastructure have not been rigorously studied. This paper provides a stylized analytical framework of open economies in which planners decide non-cooperatively on transport infrastructure investments across continuous space. Allowing for intra- and international trade, the resulting equilibrium investment schedule features underinvestment that turns out particularly severe in border regions and that is amplified by the presence of discrete border costs. In European data, the mechanism explains about 16% of the border effect identified in a conventionally specified gravity regression.
    Keywords: international trade,infrastructure investment,economic geography,border effect
    JEL: F11 R42 R13
    Date: 2021
  37. By: Biolsi, Christopher; Craig, Steven G.; Dhar, Amrita; Sørensen, Bent E
    Abstract: This paper takes a novel time series perspective on K-12 school spending. About half of school spending is financed by state government aid to local districts. Because state aid is generally income conditioned, with low-income districts receiving more aid, state aid acts as a mechanism for risk sharing between school districts. We show that temporal inequality, due to state and local business cycles, is prevalent across the income distribution. We estimate a model of local revenue and state aid, and its allocation across districts, and use the parameters to simulate impulse response functions. We find that state aid provides risk sharing for local shocks, although slow speed of adjustment results in temporal inequality. There is little risk sharing for statewide income shocks, and the risk from such shocks to school spending is more severe in low income districts because of their greater reliance on state aid.
    JEL: H72 H77 I22
    Date: 2021–01
  38. By: Cabral, Marika; Kim, Bokyung; Rossin-Slater, Maya; Schnell, Molly; Schwandt, Hannes
    Abstract: A growing number of American children are exposed to gun violence at their schools, but little is known about the impacts of this exposure on their human capital attainment and economic well-being. This paper studies the causal effects of exposure to shootings at schools on children's educational and economic outcomes, using individual-level longitudinal administrative data from Texas. We analyze the universe of shootings at Texas public schools that occurred between 1995 and 2016 and match schools that experienced shootings with observationally similar control schools in other districts. We use difference-in-difference models that leverage within-individual and across-cohort variation in shooting exposure within matched school groups to estimate the short- and long-run impacts of shootings on students attending these schools at the time of the shooting. We find that shooting-exposed students have an increased absence rate and are more likely to be chronically absent and repeat a grade in the two years following the event. We also find adverse long-term impacts on the likelihood of high school graduation, college enrollment and graduation, as well as employment and earnings at ages 24--26. Heterogeneity analyses by student and school characteristics indicate that the detrimental impacts of shootings are universal, with most sub-groups being affected.
    Keywords: childhood trauma; human capital development; school shootings
    JEL: I24 I31 J13
    Date: 2021–01
  39. By: Fitjar, Rune Dahl; Muringani, Jonathan; Rodríguez-Pose, Andrés
    Abstract: Social capital is an important factor explaining differences in economic growth among regions. However, the key distinction between bonding social capital, which can lead to lock-in and myopia, and bridging social capital, which promotes knowledge flows across diverse groups, has been overlooked in growth research. In this paper, we address this shortcoming by examining how bonding and bridging social capital affect regional economic growth, using data for 190 regions in 21 EU countries, covering eight waves of the European Social Survey between 2002 and 2016. The findings confirm that bridging social capital is linked to higher levels of regional economic growth. Bonding social capital is highly correlated with bridging social capital and associated with lower growth when this is controlled for. We do not find significantly different effects of bonding social capital in regions with more or less bridging social capital, or vice versa. We examine the interaction between social and human capital, finding that bridging social capital is fundamental for stimulating economic growth, especially in low-skilled regions. Human capital also moderates the relationship between bonding social capital and growth, reducing the negative externalities imposed by excessive bonding.
    Keywords: bonding; bridging; economic growth; EU; regions; social capital
    JEL: O17 O43 R11
    Date: 2021–03
  40. By: Langton, Samuel; Dixon, Anthony; Farrell, Graham (University of Leeds)
    Abstract: It is well established that COVID-19 policies to restrict movement induced widespread falls in many crime types internationally. Much less is known about variation between areas in how these changes occurred. This study uses k-means clustering to examine local area variation in police notifiable offences across England and Wales. It finds that crime in most areas remained stable, a small proportion of areas accounting for disproportionate change. These were typically city centers with plentiful pre-pandemic crime opportunities, dominated by theft and shoplifting offences. We explore potential implications for policy, theory and further research.
    Date: 2021–04–25
  41. By: Dieter Pennerstorfer„
    Abstract: This report provides a method to convert variables between two non-hierarchical regional levels of aggregation. This approach is applied to municipalities and ZIP-code areas in Austria for the period between 2012 and 2020. Based on detailed information on the spatial distribution of the population at the 250 m grid-cell level and on the spatial extent of both municipalities and ZIP-code areas, I calculate weights to convert variables from one regional entity to the other. This report also provides the data necessary for this data conversion.
    Date: 2021–04
  42. By: Shutters, Shade T.; Seibert, Holger (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Alm, Bastian; Waters, Keith
    Abstract: "Urban systems, and regions more generally, are the epicenters of many of today's social issues. Yet they are also the global drivers of technological innovation and thus it is critical that we understand their vulnerabilities and what makes them resilient to different types of shocks. We take regions to be systems composed of internal networks of interdependent components. As the connectedness of those networks increases, it allows information and resources to move more rapidly within a region. Yet, it also increases the speed and efficiency at which the effects of shocks cascade through the system. Here we analyze regional networks of interdependent industries and how their structures relate to a region's vulnerability to shocks. Methodologically, we utilize a metric of economic connectedness, known as tightness, which attempts to quantify the ambiguous notion of a region's internal connectedness relative to other regions. Using industry employment, we calculate the economic tightness of German regions during the Great Recession, comparing it to each region's economic performance during the shock (2007-2009) and during recovery (2009-2011). We find that tightness is negatively correlated with changes in economic performance during the shock but positively correlated with performance during recovery. This suggests that regional economic planners face a tradeoff between being more productive or being more vulnerable to the next economic shock. Finally, we speculate on how these findings from the Great Recession may highlight potential implications of the ongoing COVID-19 pandemic and suggest future research that would compare outcomes of these two global shocks." (Author's abstract, IAB-Doku) ((en))
    JEL: J40 R00 R11 R12 R58
    Date: 2021–04–27
  43. By: Thomas J. Kane; Angela Boatman; Whitney Kozakowski; Christopher Bennett; Rachel Hitch; Dana Weisenfeld
    Abstract: Many states are redesigning their college remediation policies to increase postsecondary degree completion. In 2012, Tennessee began waiving college math remediation for high school students who completed a computer†based remedial math course (SAILS) during their senior year.
    Keywords: postsecondary education, college remediation, Tennessee, SAILS
  44. By: Chatruc, Marisol Rodríguez (Inter-American Development Bank); Rozo, Sandra V. (USC Marshall School of Business)
    Abstract: How are natives' attitudes towards migrants shaped by economic crises? Natives could show more empathy towards migrants as everyone faces a common threat. Alternatively, natives' prejudice could rise as competition for scarce economic opportunities increases. We conduct an online survey to 3,400 Colombian citizens and randomly prime half of them to think about the economic consequences of COVID-19, before eliciting their altruism and attitudes towards Venezuelan forced migrants. We find that natives' attitudes towards migrants are substantially more negative in the treatment relative to the control group. Individuals ages 18 to 25 years, however, respond by showing more altruism.
    Keywords: migration, COVID-19, attitudes, priming, altruism
    JEL: D72 F2 O15 R23
    Date: 2021–04
  45. By: Hao Yi Ong; Daniel Freund; Davide Crapis
    Abstract: Drivers on the Lyft rideshare platform do not always know where the areas of supply shortage are in real time. This lack of information hurts both riders trying to find a ride and drivers trying to determine how to maximize their earnings opportunity. Lyft's Personal Power Zone (PPZ) product helps the company to maintain high levels of service on the platform by influencing the spatial distribution of drivers in real time via monetary incentives that encourage them to reposition their vehicles. The underlying system that powers the product has two main components: (1) a novel 'escrow mechanism' that tracks available incentive budgets tied to locations within a city in real time, and (2) an algorithm that solves the stochastic driver positioning problem to maximize short-run revenue from riders' fares. The optimization problem is a multiagent dynamic program that is too complicated to solve optimally for our large-scale application. Our approach is to decompose it into two subproblems. The first determines the set of drivers to incentivize and where to incentivize them to position themselves. The second determines how to fund each incentive using the escrow budget. By formulating it as two convex programs, we are able to use commercial solvers that find the optimal solution in a matter of seconds. Rolled out to all 320 cities in which Lyft's operates in a little over a year, the system now generates millions of bonuses that incentivize hundreds of thousands of active drivers to optimally position themselves in anticipation of ride requests every week. Together, the PPZ product and its underlying algorithms represent a paradigm shift in how Lyft drivers drive and generate earnings on the platform. Its direct business impact has been a 0.5% increase in incremental bookings, amounting to tens of millions of dollars per year.
    Date: 2021–04
  46. By: Bonnet, Odran; Chapelle, Guillaume; Trannoy, Alain; Wasmer, Etienne
    Abstract: Land is back. The increase in wealth in the second half of 20th century arose from housing and land. It should be taxed. We introduce land and housing structures in Judd's standard setup: first best optimal taxation is achieved with a property tax on land and requires no tax on capital. With positive taxes on housing rents, a first best is still possible but with subsidies to rental housing investments, and either with differential land tax rates or with a tax on imputed rents. It can be taxed. Even absent land taxes, one can tax it indirectly and reach a Ramsey-second best still with no tax on capital and positive housing rent taxes in the steady-state. This result extends to the dynamics under restrictions on parameters.
    Keywords: Capital; First best; housing; land; Optimal tax; Second best; wealth
    JEL: D63 R14
    Date: 2021–02
  47. By: Calderon, Alvaro (Stanford University); Fouka, Vasiliki (Stanford University); Tabellini, Marco (Harvard Business School)
    Abstract: Between 1940 and 1970 more than 4 million African Americans moved from the South to the North of the United States, during the Second Great Migration. This same period witnessed the struggle and eventual success of the civil rights movement in ending institutionalized racial discrimination. This paper shows that the Great Migration and support for civil rights are causally linked. Predicting Black inflows with a version of the shift-share instrument, we find that the Great Migration increased support for the Democratic Party and encouraged pro-civil rights activism in northern and western counties. These effects were driven by both Black and white voters, and were stronger in counties with a lower history of discrimination and with a larger working class and unionized white population. Mirroring the changes in the electorate, non-southern Congress members became more likely to promote civil rights legislation. Yet, these average effects mask heterogeneity in the behavior of legislators, who grew increasingly polarized along party lines on racial issues. Overall, our findings indicate that the Great Migration promoted Black political empowerment outside the South. They also suggest that, under certain conditions, cross-race coalitions can be major drivers of social and political change.
    Keywords: diversity, civil rights, great migration, race
    JEL: D72 J15 N92
    Date: 2021–04
  48. By: Wilson, Thomas (The University of Melbourne); Grossman, Irina; Alexander, Monica; Rees, Philip; Temple, Jeromey
    Abstract: Small area population forecasts are widely used by government and business for a variety of planning, research and policy purposes, and often influence major investment decisions. Yet the toolbox of small area population forecasting methods and techniques is modest relative to that for national and large subnational regional forecasting. In this paper we assess the current state of small area population forecasting, and suggest areas for further research. The paper provides a review of the literature on small area population forecasting methods published over the period 2001-2020. The key themes covered by the review are: extrapolative and comparative methods, simplified cohort-component methods, model averaging and combining, incorporating socio-economic variables and spatial relationships, ‘downscaling’ and disaggregation approaches, linking population with housing, estimating and projecting small area component input data, microsimulation, machine learning, and forecast uncertainty. Several avenues for further research are then suggested, including more work on model averaging and combining, developing new forecasting methods for situations which current models cannot handle, quantifying uncertainty, exploring methodologies such as machine learning and spatial statistics, creating user-friendly tools for practitioners, and understanding more about how forecasts are used.
    Date: 2021–04–28
  49. By: Sylvain Weber; Martin Péclat; August Warren
    Abstract: The user-written command georoute is designed to calculate travel distance and travel time between two addresses or two geographical points identified by their coordinates. Since its conception and description by Weber and Péclat (2017), the command has been gradually maintained and enriched. The new version of georoute presented in this article encompasses major improvements, such as the possibility to specify transport mode and departure time. The new features open the way to a multitude of more sophisticated research applications.
    Keywords: Stata, geocoding, travel distance, travel time.
    JEL: C87 R41
    Date: 2021–04
  50. By: Jagjit S. Chadha; Germana Corrado; Luisa Corrado; Ivan De Lorenzo Buratta
    Abstract: We develop a DSGE model with heterogeneous agents, where savers own firms and riskpricing banks while borrowers require loans to establish their consumption plans. The bank lends at an external finance premium (EFP) over the policy rate as a function of the asset price, housing collateral, the demand for loans and their perceived riskiness. We suggest that the close relationship between aggregate consumption and house prices is related to collateral effects. We also outline the role of the EFP in determining consumption spillovers between borrowers and lenders. We solve the model with occasionally-binding constraints to examine the redistributive role of macro-prudential policies in terms of welfare. Countercyclical deployment of the loan-to-value constraint placed on borrowers can limit the scale of the downturn from a negative house price shock. Furthermore, when the zero lower bound acts to constrain monetary policy, looser macroprudential policies can act as an effective substitute for lower policy rates. Finally, we show that co-ordinated macroprudential and fiscal policies can also attenuate the welfare losses that arise from uncertainty banks may face about default probabilities.
    JEL: E32 E44 E58
    Date: 2021
  51. By: Fouka, Vasiliki (Stanford University); Tabellini, Marco (Harvard Business School)
    Abstract: How do social group boundaries evolve? Does the appearance of a new outgroup change the ingroup's perceptions of other outgroups? We introduce a conceptual framework of context-dependent categorization, in which exposure to one minority leads to recategorization of other minorities as in- or outgroups depending on perceived distances across groups. We test this framework by studying how Mexican immigration to the US affected White Americans' attitudes and behaviors towards Black Americans. We combine survey and crime data with a difference-in-differences design and an instrumental variables strategy. Consistent with the theory, Mexican immigration improves Whites' racial attitudes, increases support for pro-Black government policies and lowers anti-Black hate crimes, while simultaneously increasing prejudice against Hispanics. Results generalize beyond Hispanics and Blacks and a survey experiment provides direct evidence for recategorization. Our findings imply that changes in the size of one group can affect the entire web of inter-group relations in diverse societies.
    Keywords: ingroup–outgroup relations, race, immigration
    JEL: J11 J15
    Date: 2021–04
  52. By: Thoresson, Anna (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: This paper studies how wages respond to a sudden change in employer concentration. It exploits a reform that deregulated the Swedish pharmacy market, which until 2009 was a monopoly. The reform involved a substantial increase in the number of employers on the pharmacy labor market. However, the change in employer concentration was not geographically uniform: certain areas experienced large changes while others were largely unaffected. Exploiting this geographical variation, elasticities of wages with respect to labor market concentration are estimated to be between -0.02 and -0.05. The empirical approach relies only on the variation in concentration controlled by the policymaker to remedy the concern that actual labor market concentration is endogenous. The positive wage effects from reduced labor market concentration are found to be most prevalent for stayers, rather than new hires, as well as those with more industry experience and longer tenure. Overall, the paper adds to a growing literature that finds that market concentration matters for workers' wages, in a context where labor is highly industry-specific.
    Keywords: Wages; Competition; Market concentration
    JEL: J31 J42 J45
    Date: 2021–05–04
  53. By: Andersen, Asbjørn G. (Ragnar Frisch Centre for Economic Research); Kotsadam, Andreas (Ragnar Frisch Centre for Economic Research); Somville, Vincent (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Do better material conditions improve well-being and mental health? Or does any positive relationship merely reflect that psychological well-being promotes economic success? We supply new responses to these questions by comparing winners and losers from a large Ethiopian housing lottery in a preregistered analysis. Winners gain access to better housing, experience a substantial increase in wealth, and report higher levels of overall life satisfaction and lower levels of financial distress. However, we find no effects of winning on psychological distress, suggesting that depression and anxiety involve other causal determinants and are less sensitive to economic conditions than life satisfaction is.
    Keywords: Housing lottery; Mental health
    JEL: I00
    Date: 2021–04–26
  54. By: Bongaerts, Dion; Mazzola, Francesco; Wagner, Wolf
    Abstract: This paper examines whether the risk of a future collateral fire sale affects lending decisions. We study US mortgage applications and exploit exogenous variation in foreclosure frictions for identification. We find lenders to be less likely to approve mortgages when anticipated losses due to uncoordinated collateral liquidations are high, and when there iselevated risk of joint collateral liquidation. These results suggest that fire-sale risk has implications for credit allocation, and that lenders' collective origination decisions mitigate fire sale risk ex-post. However, we also find the effects to be significantly weaker outside periods in which fire sales are salient.
    Keywords: Collateral; credit supply; creditor concentration; fire sales; foreclosure laws; joint liquidation risk
    Date: 2021–02
  55. By: Caprettini, Bruno; Casaburi, Lorenzo; Venturini, Miriam
    Abstract: Governments often implement large-scale redistribution policies to gain enduring political support. However, little is known on whether such policies generate sizable gains, whether these gains are persistent, and why. We study the political consequences of a major land reform in Italy. A panel spatial regression discontinuity design shows that the reform generated large electoral gains for the incumbent Christian Democratic party, and similarly large losses for the Communist party. The electoral effects persist over four decades. Farmers' grassroots organizations and continued political investment in reform areas (i.e. fiscal transfers and public sector employment) are plausible mechanisms for this persistence. We find less support for other potential explanations, including migration, voters' beliefs, and patterns of economic development.
    Keywords: Italy; Land reform; redistribution; voting
    JEL: D72 N54 P16 Q15
    Date: 2021–01
  56. By: Peter Temin (Center for Economic and Policy Research)
    Abstract: President Nixon replaced President Johnson's War on Poverty with his War on Drugs in 1971. This new drug war was expanded by President Reagan and others to create mass incarceration. The United States currently has a higher percentage of its citizens incarcerated than any other industrial country. Although Blacks are only 13 percent of the population, they are 40 percent of the incarcerated. The literatures on the causes and effects of mass incarceration are largely distinct, and I combine them to show the effects of mass incarceration on racial integration. Racial prejudice produced mass incarceration, and mass incarceration now retards racial integration.
    Keywords: mass incarceration, War on Drugs, racism, neighborhood effects, Head Start
    JEL: J15 H72 K14 N11
    Date: 2021–04–08
  57. By: Silver, Daniel; Silva, Thiago H (University of Toronto)
    Abstract: Why some neighbourhoods change over time but others retain their identity remains an open question. Several attempts have been made to answer this question, with a family of models emerging as a result. However, empirically evaluating neighbourhood evolution models is a challenging task, because most require information that is difficult to obtain in traditional sources. For this reason, researchers have turned to new datasets, such as census microdata, Twitter, and Yelp. In this study, we articulate a functional model of neighbourhood change and continuity, adapted from a classical functionalist model proposed by Stinchcombe in 1968. We argue this model provides a relatively simple way to capture key aspects of the complex causal structure of neighbourhood change that are implicit in much neighbourhood change research but rarely formulated explicitly. We demonstrate how to assess the proposed model empirically using large-scale data from Our results indicate that our approach can potentially help to understand the nature of neighbourhood change and be useful in different applications.
    Date: 2021–04–27
  58. By: Razin, Assaf; Sadka, Efraim
    Abstract: Both the U.S. and the EU are an economic union: There is a single market for goods, capital, finance, and labor. That is, there is free mobility of goods and services, physical and financial capital, and labor among the member countries of the union. Nevertheless, there is much higher degree of economic policy coordination among the member states of the U.S than of the EU. For instance, the U.S. has a common (federal) income tax system which constitutes the major source of revenues in the union. Similarly, the social security system is more or less uniform across the U.S. There is also a single migration policy set up and enforced by the federal government. In contrast, there is very little coordination on these issues among the member countries of the EU. We argue by using a migration-based, fiscal-externality, model that the degree of coordination among the member states potentially contribute a great deal to our understanding of observed policy differences between the EU and the US as economic unions: the generosity of the welfare state and the skill composition of migration.
    Date: 2021–03
  59. By: Andrea Filippetti (Italian National Research Council, Italy; Center for Innovation Management, Birkbeck University of London, UK); Neil Lee (Department of Geography & Environment, London School of Economics & Political Science, UK)
    Date: 2021–04
  60. By: Siegloch, Sebastian; Wehrhöfer, Nils; Etzel, Tobias
    Abstract: We analyze the effects of a large place-based policy, subsidizing up to 50% of investment costs of manufacturing firms in East Germany after reunification. We show that a 1-percentage-point decrease in the subsidy rate leads to a 1% decrease in manufacturing employment. We document important spillovers for untreated sectors in treated counties, untreated counties connected via trade and local taxes, whereas we do not find spillovers on counties in the same local labor market. We show that the policy is at least as efficient as cash transfers to the unemployed, but is more effective in curbing regional inequality.
    Keywords: place-based policies,employment,spillovers,administrative microdata
    JEL: H24 J21 J23
    Date: 2021
  61. By: Sean Dougherty; Kass Forman
    Abstract: Fiscal equalisation refers to the transfer of financial resources to and between subnational governments with the aim of mitigating regional differences in fiscal capacity and expenditure needs. However, the determination of fiscal capacity and expenditure needs is not a straightforward task. OECD countries use widely varying mechanism design approaches in their equalisation systems. This paper compares national approaches, covering the three modes of fiscal equalisation: pure revenue equalisation, revenue/cost equalisation and gap-filling equalisation, describing the distinct impacts of each approach on subnational revenue disparities. A clear inverse relationship emerges between the size of the cost-equalising component within a system and the percentage change in subnational per capita revenue disparities after equalising transfers are applied, although no significant relationship emerges between equalisation and regional convergence.
    Keywords: , fiscal equalisation systems, fiscal federalism, inter-governmental transfers, public economics, regional inequality
    JEL: H76 O38 R31
    Date: 2021–04–06

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