energy efficiency and the cost of ghg abatement a comparison of bottom up and hybrid models for the us a highly influential report by the mckinsey consulting firm suggests that a large potential for profitable energy efficiency exists in the us and that substantial greenhouse gas emissions reductions can therefore be achieved at a low cost this result is consistent with other studies conducted using a bottom up methodology that dates back to the work of lovins beginning in the 1970s research over the past two decades however has identified shortcomings with the conventional bottom up approach and this has led to the development of new analytical frameworks that are referred to as hybrid energy economy models using the cims hybrid model we conducted simulations for comparison with the mckinsey results these exercises suggest a more modest potential to reduce greenhouse gas emissions at a given marginal cost as well as a smaller contribution from energy efficiency relative to other abatement opportunities such as fuel switching and carbon capture and storage hybrid models incorporate parameters reflecting risk and quality into their estimates of technology costs and our analysis suggests that these play a significant role in explaining differences in the results

marshall s scale economies using panel data this paper estimates plant level production functions for machinery and high tech industries that allow for scale externalities from other plants in the same industry locally and from the scale or diversity of local economic activity outside the own industry the paper finds that the count of other own industry plants representing a count of local information spillover sources has strong productivity effects in high tech but not machinery industries single plant firms both benefit more from and generate greater external benefits than corporate plants given their greater reliance on external environments on dynamic externalities high tech single plant firms benefit also from the scale of past own industry activity i find little evidence of economies from the diversity or scale of local economic activity outside the own industry

commutes neighborhood effects and earnings an analysis of racial discrimination and compensating differentials abstract recent tester studies indicate that minority workers face restricted residential and employment opportunities because of racial discrimination in housing and labor markets these restrictions may create a spatial mismatch between where urban minorities reside and where metropolitan area jobs are located resulting in reduced proximity of minority workers to jobs prior studies of racial discrimination and urban spatial mismatch however have paid little attention to the possibility that differences in employment commutes may be partially offset by compensating variations in neighborhood amenities quality adjusted house prices and earnings such effects could help to mitigate the impact of discrimination on minority workers using a unique subset of the 1985 and 1989 american housing surveys we estimate a fixed effects commute time model that controls for quality adjusted house prices neighborhood amenities and earnings results indicate that although blacks have longer commutes than comparably skilled white and asian workers roughly one third of the estimated difference is offset by neighborhood amenity and housing price differentials however even after controlling for neighborhood fixed effects and earnings educated black workers have significantly longer commutes than comparably skilled asian and white workers additional findings indicate that regardless of race household mobility is an important mechanism through which the market attains a spatial equilibrium providing further support for arguments that restricted proximity to residential opportunities and jobs reduces the economic welfare of minority households

fdi and taxation a meta study despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses it still remains open whether or when tax competition is harmful moreover the influence of tax differentials on multinationals decisions is still insufficiently analyzed thus economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of fdi with respect to company taxation as a result the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence in this paper we extend former meta analyses on fdi and taxation in three ways first we add the most recent publications unconsidered in meta analyses up to date second we apply a different methodology by using a broad set of meta regression estimators and explicitly discuss which one is most suitable for application to our meta data third we address some important issues in research on fdi and taxation to the clarification of which meta analysis can make valuable contributions these issues are mainly the influence of variables which might moderate effects of tax differentials e g public spending the implications of using aggregate fdi data as opposed to firm level information on measured tax effects the implications of bilateral effective tax rates and the possible presence of publication bias in primary research

valuing english primary schools this paper provides the first empirical evidence for the uk on the effect of primary school performance on property prices we find that on average a one percentage point increase in the neighbourhood proportion of children reaching the government specified target grade pushes up neighbourhood property prices by 0 67 at 2000 property prices we calculate the social valuation of a sustained 1 improvement in primary school performance to be up to 90 per child per year our instrumental variable and semi parametric approach avoids the problems of school quality endogeneity and omitted neighbourhood variables that occur in typical property value models

positive feedback in skill aggregation across chinese cities this paper examines whether human capital levels diverged across chinese cities between 1990 and 2010 by employing a series of instruments for the initial human capital share consistent positive

race specific urban wage premia and the black white wage gap abstract we establish a novel empirical fact about the black white wage gap looking both across and within metropolitan areas increasing city size or employment density is associated with a larger black white wage gap the estimated effects represent between 9 and 18 of recent estimates of the black white wage gap using a variety of techniques we demonstrate that our within city relationship is unlikely to be driven by racial differences in unobserved ability finally we present evidence suggestive of a role for race specific networks in explaining these differences in the black white wage gap

ethnicity neighborhoods and human capital externalities the socioeconomic performance of today s workers depends not only on parental skills but also on the average skills of the ethnic group in the parents generation or ethnic capital this paper investigates the link between the ethnic externality and ethnic neighborhoods the evidence indicates that residential segregation and the external effect of ethnicity are linked partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised ethnicity has an external effect even among persons who grow up in the same neighborhood when children are exposed frequently to persons who share the same ethnic background copyright 1995 by american economic association

are ghettos good or bad spatial separation of racial and ethnic groups may theoretically have positive or negative effects on the economic performance of those groups we examine the effects of segregation on outcomes for blacks in schooling employment and single parenthood we find that blacks in more segregated areas have significantly worse outcomes than blacks in less segregated areas we control for the endogeneity of location choice using instruments based on political factors topographical features and residence before adulthood a one standard deviation decrease in segregation would eliminate one third of the black white differences in most of our outcomes

evaluating sub national building energy efficiency policy options under uncertainty efficient sensitivity testing of alternative climate technological and socioeconomic futures in a regional integrated assessment model abstract improving the energy efficiency of building stock commercial equipment and household appliances can have a major positive impact on energy use carbon emissions and building services sub national regions such as the u s states wish to increase energy efficiency reduce carbon emissions or adapt to climate change evaluating sub national policies to reduce energy use and emissions is difficult because of the large uncertainties in socioeconomic factors technology performance and cost and energy and climate policies climate change itself may undercut such policies however assessing all of the uncertainties of large scale energy and climate models by performing thousands of model runs can be a significant modeling effort with its accompanying computational burden by applying fractional factorial methods to the gcam usa 50 state integrated assessment model in the context of a particular policy question this paper demonstrates how a decision focused sensitivity analysis strategy can greatly reduce computational burden in the presence of uncertainty and reveal the important drivers for decisions and more detailed uncertainty analysis

the optimal taxation of risky return to foreign investment the paper analyses state contingent taxation of the return to foreign investment in a country it is assumed that the investment will be undertaken only if the investor obtains a given expected utility from the project the optimal tax schedule across income levels in different states is characterized in cases wlhere private domestic income is exogenous and in the case of endogenous domestic taxation in the latter case the striking results are obtained that the total tax revenue should always increase wheni total income increases and it makes no difference for the rate of increase whetlher it is domestic or foreign income that increases

racial disparities in job finding and offered wages abstractthe extent to which discrimination can explain racial wage gaps is one of the most divisive issues in the social sciences using a newly available data set this paper develops a simple empirical test that under plausible but not innocuous conditions provides a lower bound on the extent of discrimination in the labor market taken at face value our estimates imply that differential treatment accounts for at least one third of the black white wage gap we argue that the patterns in our data are most naturally rationalized through a search matching model in which employers statistically discriminate on the basis of race when hiring unemployed workers but learn about their marginal product over time

black residential centralization and the spatial mismatch hypothesis abstract black residential centralization is found to be an important determinant of black employment status when estimated across metropolitan areas mas to avoid neighborhood selection the effects are greatest in large mas for the young and elderly and for individuals with less than a college education instrumental variable iv estimates support ordinary least squares ols results black residential centralization can account for 48 62 of the black white employment differential among 18 30 year olds living in large mas when estimated together black residential centralization job centralization and segregation all have large effects but the effects of black centralization and job centralization are considerably larger

geography industrial organization and agglomeration this paper makes two contributions to the empirical literature on agglomeration economies first the paper uses a unique and rich database in conjunction with mapping software to measure the geographic extent of agglomerative externalities previous papers have been forced to assume that agglomeration economies are club goods that operate at a metropolitan scale second the paper tests for the existence of organizational agglomeration economies of the kind studied qualitatively by saxenian 1994 this is a potentially important source of increasing returns that previous empirical work has not considered results indicate that localization economies attenuate rapidly and that industrial organization affects the benefits of agglomeration

ethnic unemployment rates and frictional markets the unemployment rate in france is roughly 6 percentage points higher for african immigrants than for natives in the us the unemployment rate is approximately 9 percentage points higher for blacks than for whites commute time data indicates that minorities face longer commute times to work potentially reflecting more difficult access to jobs in this paper we investigate the impact of spatial mismatch on the unemployment rate of ethnic groups using the matching model proposed by rupert and wasmer 2012 we find that spatial factors explain 1 1 5 percentage points of the unemployment rate gap in both france and the us amounting to 17 25 of the relative gap in france and about 10 17 5 in the us among these factors differences in commuting distance play the most important role in france though longer commuting distances may be mitigated by higher mobility in the housing market for african workers overall we still conclude that labor market factors remain the main explanation for the higher unemployment rate of africans

the effect of female education on fertility and infant health evidence from school entry policies using exact date of birth this paper uses age at school entry policies to identify the effect of female education on fertility and infant health we focus on sharp contrasts in schooling fertility and infant health between women born just before and after the school entry date school entry policies affect female education and the quality of a woman s mate and have generally small but possibly heterogeneous effects on fertility and infant health we argue that school entry policies manipulate primarily the education of young women at risk of dropping out of school

residential segregation and the economic status of black workers new evidence for an old debate abstract scholars have long debated whether ghetto residence lowers the earnings of blacks most empirical studies on this question have been flawed because they have not considered the simultaneous effects of choices of work and residence locations and the effects of intrametropolitan variation in rents and wages this paper estimates a revealed preference model of intraurban location with data from the 1980 public use microdata sample for cleveland detroit and philadelphia to test whether black male household heads who are employed full time year round are less likely than whites to live and work at their best locations we measure the wages rents and commuting costs associated with each possible job residence location combination in these cities for each person given their job qualifications and their housing needs a revealed preference approach is used to evaluate the economic welfare of individuals at each possible location and then compare the actual distribution of work and residence locations by race with the welfare maximizing distribution the divergence in these distributions by race measures the economic effects for employed black male household heads of residential segregation in ghettos we find that the economic status of blacks can be improved significantly by changing their intrametropolitan job locations surprisingly this conclusion holds regardless of whether or not blacks keep their current residential locations while changes in residential locations can improve the economic status of blacks relative to whites by decreasing commuting and or the cost of housing such residential changes do not significantly alter the physical accessibility of better paying jobs

communication externalities in cities to identify communication externalities in french cities we exploit a unique survey recording workplace communication of individual workers our hypothesis is that in larger and or more educated cities workers should communicate more in turn more communication should have a positive effect on wages by estimating both an earnings and a communication equation we find evidence of communication externalities in larger and more educated cities workers communicate more and in turn this has a positive effect on their wages depending on the estimates we find that 13 to 22 of the effects of a more educated and larger city on wages percolate through this channel

start up complexity and the thickness of regional input markets start ups in different industry groups are classified according to their average complexity we find that thick regional input markets are conducive to start up activity in general and complex start ups in particular but that some inputs are more important than others

competition over high income workers job growth and access to labour in atlanta access to a large labour pool labour pooling leads to local economic concentrations through agglomeration economies however these concentrations may be self limiting by reducing labour availability through competition over high skill workers this paper examines whether labour pooling and labour availability of workers with different incomes account for local job growth in the atlanta metropolitan area between 2000 and 2006 workers income is employed to account for the human capital of workers including education and skills it is found that the availability of high income workers is the only positive significant factor for job growth and the spatial size of the effect is larger than the traffic analysis zone neighbourhood scale in contrast no labour pooling indicators show a positive association with job growth the finding casts doubt on labour pooling effects at the intraregional level and suggests avenues for further research on local area agglomeration economies

imperfect mobility of labor across sectors a reappraisal of the balassa samuelson effect this paper investigates the relative price and relative wage effects of a higher productivity in the traded sector compared with the non traded sector in a two sector open economy model with imperfect substitutability in hours worked across sectors the balassa samuelson 1964 model predicts that a rise in the sectoral productivity ratio by 1 raises the relative price of non tradables by 1 while leaving the non traded wage traded wage ratio unchanged applying cointegration methods to a panel of fourteen oecd countries over the period 1970 2007 our estimates show that the relative price rises by only 0 78 and the relative wage falls by 0 27 while our first set of empirical findings cast doubt on the quantitative predictions of the balassa samuelson model our second set of evidence highlights the role of imperfect labor mobility the relative price responds more to a productivity differential between tradables and non tradables while the reaction of the relative wage is more muted in countries with higher intersectoral reallocation of labor we show that the ability of the two sector model to account for our evidence quantitatively relies upon two ingredients i imperfect mobility of labor across sectors and ii physical capital accumulation finally our numerical results reveal that the model predicts the relative price response fairly well and to a lesser extent the relative wage response

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

wage premia in employment clusters how important is worker heterogeneity this article tests whether the correlation between wages and concentration of employment can be explained by unobserved worker productivity residential location is used as a proxy for unobserved productivity and average commute time to workplace is used to test whether location based productivity differences are compensated away by longer commutes analyses using confidential data from the 2000 decennial census find that estimates of agglomeration wage premia within metropolitan areas are robust to comparisons within residential location and that estimates do not persist after controlling for commuting costs suggesting that the productivity differences across locations are due to location not individual unobservables

job search and unemployment duration implications for the spatial mismatch hypothesis abstract this paper analyzes the relationship between unemployment duration and the spatial distribution of employment it builds on the spatial mismatch literature by analyzing the role of access in a job search framework a unique measure of access is created using municipal level employment growth and a matrix of commuting times for the pittsburgh metropolitan area individuals with more access to employment are found to have shorter unemployment spells the effect of access on unemployment duration is found to be sensitive to the specification of access

do esg controversies matter for firm value evidence from international data the aim of this paper is to investigate the relationship between environmental social and governance esg controversies and firm market value we use a unique dataset of more than 4000 firms from 58 countries during 2002 2011 primary analysis surprisingly shows that esg controversies are associated with greater firm value however when interacted with the corporate social performance csp score esg controversies are found to have no direct effect on firm value while the interaction appears to be highly and significantly positive building on this evidence we attempt to explore the channels through which csp may enhance market value conducting sample split analysis indicates that higher csp score has an impact on market value only for high attention firms those firms which are larger perform better located in countries with greater press freedom more searched on the internet more followed by analysts and have an improved corporate social reputation thus our findings provide new insights on the role of firm visibility through which firms can profit from their csp

neighborhood crime and young males job opportunity abstract a puzzling aspect of america s crime problem is the concentration of crime in poor inner city neighborhoods the economic model of crime suggests that this concentration may be caused by a dearth of legitimate earnings opportunities for young males living in these neighborhoods while studies on spatial mismatch in the low skilled labor market have documented the relatively poor job opportunity possessed by youth in these neighborhoods there exists no evidence on the role job opportunity plays in explaining the dramatic spatial variation in crime within urban areas using a unique panel of neighborhood crime and employment data for atlanta i estimate models that control for time and fixed effects as well as the possible endogeneity of job opportunity the results suggest that young males job opportunity plays a key role in resolving the enigma surrounding the high variation in crime across urban neighborhoods

customer discrimination and employment outcomes for minority workers this paper investigates the effects of customer discrimination on the employment and earnings of minorities particularly blacks data are used from a new survey of employers in four large metropolitan areas in the united states our results show that the racial composition of an establishment s customers has sizable effects on the race of who gets hired particularly in jobs that involve direct contact with customers and in sales or service occupations race of customers also affects wages with employees in establishments that have mostly black customers earning less than those in establishments with mostly white customers

personal bankruptcy and credit market competition we document a link between u s credit supply and rising personal bankruptcy rates we exploit the exogenous variation in market contestability brought on by banking deregulation the relaxation of entry restrictions in the 1980s and 1990s at the state level we find deregulation explains at least 10 of the rise in bankruptcy rates we also find that deregulation leads to increased lending lower loss rates on loans and higher lending productivity our findings indicate that increased competition prompted banks to adopt sophisticated credit rating technology allowing for new credit extension to existing and previously excluded households the last quarter century saw a dramatic increase in the share of u s con sumers filing for personal bankruptcy thereby seeking a discharge of their unsecured debt in 2005 this increase led to the most comprehensive change to u s bankruptcy law since 1978 while several causes for the rise in bankruptcies have been advanced and it is the subject of ongoing research two potentially significant changes occurred during this period banking deregulation the relaxation of bank entry restrictions in the 1980s and 1990s and technological change in consumer lending banking deregulation by removing barriers to entry increases credit market competition and there fore affects the supply of credit new screening technologies change the way loans are made allowing for interest rates to better reflect underlying risk and thus facilitating lending to riskier borrowers in this paper we examine whether banking deregulation and technological change played a role in the increase in consumer bankruptcy the empirical literature has mostly focused on cross sectional differences in personal bankruptcy in particular it has revolved around legal institutions as a way to answer whether consumers file due to adverse events as part of a rational financial calculation or as a consequence of unfair or deceptive lending practices usually researchers have exploited the different asset exemptions across u s states i e the amount of personal assets protected from creditors

urban wages and labor market agglomeration abstract using the 5 public use micro sample of the 1990 u s census we find that observationally equivalent workers in the manufacturing sector earn higher wages when they are in urban labor markets that have a larger share of national or metropolitan employment in their same occupation and industry groups quantitatively the effect is large with an elasticity measured at the means of between 1 2 and 3 6 for these effects we interpret the willingness of firms to pay more for equivalent workers in dense markets as evidence of an agglomeration economy in urban labor

can black workers escape spatial mismatch employment shifts population shifts and black unemployment in american cities abstract this paper uses a spatial mismatch index that measures the extent to which residential and employment locations differ across a metropolitan area to determine whether the spatial separation of black residential locations and employment locations impacted black labor market outcomes from 1980 to 1990 it is found that between 1980 and 1990 unemployment rates for black workers were negatively affected by a growing divergence between black residential locations and metropolitan employment locations metropolitan employment shifts increased black unemployment rates by 0 63 to 4 32 percentage points while black population shifts did not fully offset the impact of employment shifts

peers at work we study peer effects in the workplace specifically we investigate whether how and why the productivity of a worker depends on the productivity of coworkers in the same team using high frequency data on worker productivity from a large supermarket chain we find strong evidence of positive productiv ity spillovers from the introduction of highly productive personnel into a shift worker effort is positively related to the productivity of workers who see him but not workers who do not see him additionally workers respond more to the presence of coworkers with whom they frequently interact we conclude that social pressure can partially internalize free riding externalities that are built into many workplaces jel j24 l81 m54

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

commutes quits and moves abstract this paper analyzes the effects of commuting distance on quit and move propensities in metropolitan areas with conventional wage and housing price gradients most workers ordinarily move in order to lengthen commutes and quit in order to shorten them however quits and moves by workers whose residential choices are constrained by segregation should be relatively insensitive to commutes descriptive statistics and simultaneous probit estimates of move and quit propensities for white and black employees of a single firm confirm these predictions they demonstrate that long commutes encourage white quits and discourage white moves commute increases of one standard deviation would increase white quit propensities and reduce white move propensities by approximately 10 in contrast commutes by black employees have no significant effects on their quit and move propensities

effort wages and the international division of labor this paper embeds variable effort into a traditional two sector heckscher ohlin model of international competition effort enters a production function as total factor productivity and on the assumption that effort does not affect capital depreciation the capital cost savings from high effort operations are passed on to workers the labor market thus offers a set of contracts with higher wages compensating for higher effort this has implications for growth openness minimum wages collective bargaining public support of education efficiency of state enterprises the distribution of wealth childbearing and much more

spatial mismatch in the labor market and racial differences in neighborhood crime abstract results from estimating fixed effects models of neighborhood crime show that an important cause of higher crime in black neighborhoods is the poor job accessibility of black youth a key result is that access explains 21 of the difference in property crime between black and white neighborhoods

the impact of school racial compositions on neighborhood racial compositions evidence from school redistricting i use data surrounding public school redistricting to study how school racial compositions affect neighborhood racial compositions this redistricting followed from the end of court ordered busing for racial desegregation significantly changing the racial composition of the assigned school for many neighborhoods over a 5 year period the impact of an increase in the percent black of the assigned elementary school on the percent black of the neighborhood was positive the effects increased over time consistent with a simple model of short run neighborhood racial dynamics these results have implications for potential effects of school racial desegregation policy changes on neighborhood racial compositions jel h75 i28 r23

job information networks neighborhood effects and inequality this paper explores the theoretical and empirical literature to examine the use by different social groups of informal sources of information provided by friends relatives and acquaintances during job search and its consequences for the job market it also addresses the role of network structure and size the resource endowments of contacts and nature of the links between contacts to explain differences in the effects of job information networks in doing so the paper also turns to the sociology literature on job information networks and provides an economic perspective on such sociological concepts as strong versus weak ties inbreeding distance from structural holes etc the paper distinguishes between models of exogenous job information networks that is where individuals obtain job related information through a given social structure and endogenous job information networks which are social networks that result from individuals uncoordinated actions the paper pays special attention to such issues as physical and social proximity and sharing of information and discusses them in the context of the recent social interactions and neighborhood effects literature finally the paper outlines a model that integrates job information networks where interactions occur in business cycle frequencies with the dynamics of human capital formation which include the joint effects of parental community and neighborhood human capital and are set in life cycle frequencies for the purpose of organizing suggestions for future research and examining earned income inequality

concentration of human capital externalities and the wage gap in us metro areas the effects of the concentration of human capital on wages and productivity have been widely studied but despite their heterogeneity little attention has been paid to its effects on the wage gap

learning by working in big cities individual earnings are higher in bigger cities we consider three reasons spatial sorting of initially more productive workers static advantages from workers current location and learning by working in bigger cities using rich administrative data for spain we find that workers in bigger cities do not have higher initial ability as reflected in fixed effects instead they obtain an immediate static premium and accumulate more valuable experience the additional value of experi ence in bigger cities persists after leaving and is stronger for those with higher initial ability this explains both the higher mean and greater dispersion of earnings in bigger cities

uncertainty in integrated assessment models modeling with minicam 1 0 abstract human initiated climate change remains one of the major science based public policy issues facing the nations of the world one feature of the issue that inhibits effective decisions is the ubiquity of uncertainty many if not most of the parameters of mathematical relationships that forecast emissions atmospheric processes impacts and effectiveness of countermeasures are uncertain we have added a stochastic simulation capability to the commonly used integrated assessment model minicam 1 0 to analyze the sources of uncertainty and their relative importance and to help devise strategies for depicting and coping with uncertainty the analysis shows that 1 the projected range of uncertainty in global temperature increase during the next century is greater than previously supposed but the central tendency is not dramatically higher 2 many of the major sources of uncertainty previously discussed in the literature remain significant but not all 3 an adaptive policy of act then learn then act appears to offer better prospects for balancing uncertain costs and benefits of controlling greenhouse gas emissions than do rigid precautionary measures and 4 current targets for atmospheric stabilization appear excessively ambitious

moody s and s p ratings are they equivalent conservative ratings and split rated bond yields we examine the relative impact of moody s and s p ratings on bond yields and find that at issuance yields on split rated bonds with superior moody s ratings are about 8 basis points lower than yields on split rated bonds with superior s p ratings this suggests that investors differentiate between the two ratings and assign more weight to the ratings from moody s the more conservative rating agency moody s becomes more conservative after 1998 and the impact of a superior moody s rating becomes stronger furthermore the differential impact of the two ratings is more pronounced for the more opaque rule 144a issues

race segregation and postal employment new evidence on spatial mismatch abstract the spatial mismatch hypothesis posits that employment decentralization isolated urban blacks from work opportunities this paper focuses on one large employer that has remained in the central city over the twentieth century the u s postal service we find that blacks substitute towards postal work as other employment opportunities leave the city circa 1960 the response is particularly strong in segregated areas where black neighborhoods are clustered near the central business district furthermore this pattern only holds for non mail carriers many of whom work in central processing facilities more recently the relationship between black postal employment and segregation has declined suggesting that spatial mismatch has become less important over time

do neighborhoods affect hours worked evidence from longitudinal data using a confidential version of the nlsy79 we estimate large effects of neighborhood social characteristics and job proximity on labor market activity a variety of neighborhood social characteristics are associated with less market work social characteristics have nonlinear effects with the greatest impact in the worst neighborhoods social characteristics are also more important for less educated workers exploiting the panel aspects of our data we find that estimates that do not account for neighborhood selection on the basis of time invariant and time varying unobserved individual characteristics substantially overstate the social effects of neighborhoods but understate the effects of job access

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

spatial wage disparities sorting matters spatial wage disparities can result from spatial differences in the skill composition of the workforce in non human endowments and in local interactions to distinguish between these explanations we estimate a model of wage determination across local labour markets using a very large panel of french workers we control for worker characteristics worker fixed effects industry fixed effects and the characteristics of the local labour market our findings suggest that individual skills account for a large fraction of existing spatial wage disparities with strong evidence of spatial sorting by skills interaction effects are mostly driven by the local density of employment not controlling for worker heterogeneity leads to very biased estimates of interaction effects endowments only appear to play a small role

why do minority men earn less a study of wage differentials among the highly educated en in several minority groups in the united states have wages that are substantially lower than those of the benchmark majority group non hispanic white men several generations of labor economists have sought to understand the forces that drive these disparities this research program is potentially important for the purpose of determining whether minority wage gaps are likely to be narrowed more effectively by increasing enforcement of antidiscrimination laws or by implementing policies that reduce inequity in educational opportunity existing work shows large racial and ethnic differences in premarket factors especially formal schooling and suggests that these differences play a key role in shaping wage differences one example is trejo 1997 who finds that third and higher generation mexican american men earn 21 less than non hispanic white men approximately three quarters of the earnings gap is found to be attributable to the mexican americans relative youth and to differences in english language proficiency and years of schooling a second example is neal and johnson 1996 who find that black men earn 24 less than do non hispanic white men differences in schooling account for only about one fifth of this gap when the authors condition on performance on a basic verbal and math skills test the armed forces qualification test afqt though the differential between wages of blacks and whites declines to approximately onethird of its unadjusted level 1 trejo s 1997 study is a nice example of the traditional approach to studying race ethnicity wage gaps traditional in the sense that the explanatory variables in the study are conventional objective measures of human capital such as years of schooling and language ability neal and john

the attenuation of human capital spillovers abstract this paper uses 2000 census data to estimate the relationship of agglomeration and proximity to human capital to wages the paper takes a geographic approach and focuses on the attenuation of agglomeration and human capital effects differencing and instrumental variable methods are employed to address endogeneity in the wage agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables three key results are obtained first the spatial concentration of employment within five miles is positively related to wage second the benefits of spatial concentration are driven by proximity to college educated workers an instance of human capital spillovers third these effects attenuate sharply with distance

social housing neighborhood quality and student performance children who grow up in deprived neighborhoods underperform at school and later in life but whether there is a causal link remains contested this study estimates the short term effect of very deprived neighborhoods characterized by a high density of social housing on the educational attainment of fourteen years old students in england to identify the causal impact this study exploits the timing of moving into these neighborhoods i argue that the timing can be taken as exogenous because of long waiting lists for social housing in high demand areas using this approach i find no evidence for negative short term effects on teenage test scores

local human capital and productivity an analysis for the spanish regions sanroma e and ramos r 2007 local human capital and productivity an analysis for the spanish regions regional studies 41 349 359 this paper examines the relationship between the stock of human capital and productivity in the spanish regions nuts iii and assesses whether the transmission channel involves external economies the empirical evidence points to a positive relationship between the two variables although it cannot be explained in terms of the impact of exogenous local human capital external economies but rather in terms of other demand factors sanroma e et ramos r 2007 le capital humain et la productivite locales une analyse des regions d espagne regional studies 41 349 359 cet article cherche a examiner le rapport entre le stock de capital humain et la productivite dans les regions d espagne nuts iii et a evaluer si oui ou non la chaine de transmission implique des economies externes les preuves empiriques indiquent un rapport etroit entre les deux variables bien que l

crowd out effects of place based subsidized rental housing new evidence from the lihtc program abstract since its inception in 1987 the low income housing tax credit lihtc program has ballooned into the largest ever source of subsidized construction of low income housing in the united states accounting for one third of all recent multi family rental construction this paper examines the crowd out effects of this increasingly important source of low moderate income housing to do so we analyze the impact of lihtc construction at three different levels of geography msa county and 10 mile radius circles this allows us to employ increasingly extensive geographic fixed effects that help to difference away unobserved factors political variables are also used as instruments to further facilitate identification in all of our models iv estimates yield substantially greater crowd out than ols confirming the endogenous attraction of lihtc development to areas ripe for new construction our most robust iv estimates indicate that nearly 100 of lihtc development is offset by a reduction in the number of newly built unsubsidized rental units although the confidence band around this point estimate allows for less dramatic assessments additional estimates suggest that lihtc development has a much more moderate impact on construction of owner occupied housing but these estimates are imprecise overall while lihtc development may well affect the location of low moderate income rental housing opportunities our estimates suggest that the impact of the program on the number of newly developed rental housing units appears to be small

the effect of professional sports on the earnings of individuals evidence from microeconomic data this article examines the impact of professional sports franchises in labour markets using data from the march supplement to the current population survey cps for workers employed in specific occupational groups in all large us cities from 1983 to 2002 results from a standard wage model suggest that professional football franchises increase average hourly and weekly earnings of males employed in these occupations but professional baseball franchises reduce them these results support growing evidence that professional sports affect labour markets however the mixed nature of the association between sport and earnings provides little economic justification for government subsidies for professional sport

is it enough evidence from a natural experiment in india s agriculture markets access to information and communication technologies icts such as mobile phone networks is widely known to improve market efficiency in this paper we examine whether access to timely and accurate information provided through ict applications has any additional impact using a detailed data set from reuters market light rml a text message service in india that provides daily price information to market participants we find that this information reduces the geographic price dispersion of crops in rural communities by an average of 12 over and above access to mobile phone technology and other means of communication to identify the effect of information on price dispersion we exploit a natural experiment where bulk text messages were banned unexpectedly across india for 12 days in 2010 we find that besides reducing geographic price dispersion rml also increases the rate at which prices converge across india over time we discuss the implications of this for development organizations and informat

conjoint analysis of industry location preferences evidence from the softwood lumber industry in the us conjoint analysis ca was used to study location preferences among members of the softwood lumber industry in the southern and western regions of the us this industry was selected as an example of a resource based industry to test several hypotheses derived from location theory decision makers owners and managers identified price of logs and distance to sources for logs as the most important location factors a secondary category included wages and energy costs other variables such as cost of land quality of access roads and distance to markets are less important there were statistically significant differences in the part worth estimates of raw materials and wage costs among decision makers but not between regions in an ordered model for site preference marginal analysis of the price of logs stressed its importance as the major location factor in the softwood lumber industry

spatial mismatch transport mode and search decisions in england abstract we develop a theoretical model in which whites mainly use private vehicles to commute whereas nonwhites use public transportation we show that for both whites and nonwhites higher time distance to jobs leads to lower search effort because of different transport modes we also show that at exactly the same time distance to jobs white unemployed workers search more intensively than nonwhites because it is less costly for them to gather information about jobs we then test this model using english sub regional data we find that for each race indeed living in areas where distance to jobs is higher yields the unemployed to search less than in areas with better job access we also find that having access to a car increases search intensity for both whites and nonwhites finally closing the racial gap in car access and distance to jobs would considerably narrow the difference in search intensities between whites and nonwhites

two tales on human capital and knowledge spillovers the case of the us and brazil this article uses a quasi mincerian approach to verify whether the concentration of college educated individuals employed in the business support services sector and in the own sector contributes to increased productivity in other sectors of the economy we estimate the returns to education using data from the 2008 us current population survey march supplement and from the 2008 brazilian household survey this article finds evidence of a positive and significant human capital sectorial spillover effect which is consistent with acemoglu s 1996 conjecture the sectorial concentration of highly educated workers contributes to increase wages for all workers this study also finds evidence of increasing returns to education in brazil and diminishing returns to education in the united states this finding may be explained by differences in supply of skilled workers in both economies in addition the short supply of highly skilled workers in brazil likely explains the importance of the spillover effect fro

choice under uncertainty evidence from ethiopia india and uganda we review experimental evidence collected from risky choice experiments using poor subjects in ethiopia india and uganda using these data we estimate that just over 50 of our sample behaves in accordance with expected utility theory and that the rest subjectively weight probability according to prospect theory our results show that inferences about risk aversion are robust to whichever model we adopt when we estimate each model separately however when we allow both models to explain portions of the data simultaneously we infer risk aversion for subjects behaving according to expected utility theory and risk seeking behaviour for subjects behaving according to prospect theory

taxation uncertainty and the choice of a consumption tax base abstract several observers have concluded that the equivalence between the cash flow and wage tax approaches to direct consumption taxation breaks down in the presence of uncertainty as individuals with extraordinarily large gains are treated too generously under the latter approach in particular ahsan journal of public economics 1989 40 99 134 canadian journal of economics 1990 23 408 433 contends that equivalence obtains only if returns in excess of a safe rate of return are included in the wage tax base this paper constructs an alternative and arguably more plausible model under which full equivalence between the two approaches obtains even in the presence of uncertainty it also derives ahsan s result in a more general context and demonstrates that the divergence between the two analyses is attributable to different assumptions regarding the cost to the government of an uncertain revenue stream

cross listed bonds information asymmetry and conservatism in credit ratings we propose information asymmetry as an additional explanation for rating conservatism because information asymmetry is likely higher for cross listed bonds than for u s bonds we expect and find that cross listed bonds are rated more conservatively than u s domestic bonds at issuance further cross listed bonds receive less frequent upgrades and take longer to be upgraded after issuance because lower ratings might also reflect higher default risk based on agencies private information we conduct additional tests to discriminate between the rating conservatism and private information explanations the results are consistent with ratings conservatism and inconsistent with the private information explanation

the spatial mismatch hypothesis what has the evidence shown this paper reviews 20 years worth of empirical evidence on the spatial mismatch hypothesis after briefly surveying the relevant models from urban and labour economics and recent trends in employment and population suburbanisation the empirical evidence on spatial effects is examined this literature includes evidence on the effects of residential segregation residential suburbanisation and employment suburbanisation and direct measures of access such as travel times the most recent evidence suggests that spatial mismatch is relevant for explaining black white employment differences though the magnitudes of these effects remain unclear

intra metropolitan shifts in labor demand and the adjustment of local markets abstract i offer new evidence on the adjustment of local labor markets to geographic shifts in labor demand within us metropolitan areas using a unique data set in which metropolitan subregions are geographically matched across the 1970 1980 and 1980 1990 decades the evidence uncovered paints the following picture workers especially those with less education make incomplete adjustments within metropolitan areas in response to intra metropolitan demand shifts although blacks may not make especially limited adjustments they have disproportionately suffered deleterious effects from job movements because the demand shifts have tended to be away from their places of residence

offering versus choice in 401 k plans equity exposure and number of funds records of over half a million participants in more than 600 401 k plans indicate that participants tend to allocate their contributions evenly across the funds they use with the tendency weakening with the number of funds used the number of funds used typically between three and four is not sensitive to the number of funds offered by the plans which ranges from 4 to 59 a participant s propensity to allocate contributions to equity funds is not very sensitive to the fraction of equity funds among offered funds the paper also comments on limitations on inferences from experiments and aggregate level data analysis how much and how to save for retirement is one of the most important financial decisions made by most people defined contribution dc pension plans such as the popular 401 k plans are important instruments of such savings by 2001 year end about 45 million american employees held 401 k plan accounts with a total of 1 75 trillion in assets holden and vanderhei 2001 an important characteristic of these plans is that the participant has responsibility over his savings among a plan s various funds how responsibly do the participants behave in particular how sensitive are participants choices to possible framing effects associated with the menu of choices they are offered to explore these questions this paper analyzes a data set recently provided by the vanguard group consisting of records of more than half a million participants in about 640 dc plans these plans offer between 4 and 59 funds in which participants can invest all plans offer at least one stock fund 635 plans

housing mobility programs and economic self sufficiency evidence from a randomized experiment this paper examines the effects of a randomized housing voucher program on individual economic outcomes public housing residents who are offered relocation counseling together with housing vouchers that can only be redeemed in low poverty areas experience a reduction in welfare receipt of between 11 and 16 compared to controls these effects are not accompanied by changes in earnings or employment rates as measured by unemployment insurance records offering families unrestricted housing vouchers without additional counseling appears to have little effect on economic outcomes

smart cafe cities testing human capital externalities in the boston metropolitan area abstract existing studies have explored only one or in some cases two mechanisms by which human capital externalities percolate at the macrogeographic levels this study however uses the 1990 massachusetts census data to test four mechanisms at the microgeographic levels in the boston metropolitan area labor market we propose that individual workers can learn from their occupational and industrial peers in the same local labor market through four channels depth of human capital stock marshallian labor market externalities jacobs labor market externalities and thickness of the local labor market we find that all types of human capital externalities are significant across census blocks different types of externalities attenuate at different speeds over distances for example the effect of human capital depth decays rapidly beyond three miles away from block centroids we conclude that knowledge spillovers are very localized within a microgeographic scope in cities that we call smart cafe cities

cluster sample methods in applied econometrics inference methods that recognize the clustering of individual observations have been available for more than 25 years brent moulton 1990 caught the attention of economists when he demonstrated the serious biases that can result in estimating the effects of aggregate explanatory variables on individual specific response variables the source of the downward bias in the usual ordinary least squares ols standard errors is the presence of an unobserved state level effect in the error term more recently john pepper 2002 showed how accounting for multi level clustering can have dramatic effects on t statistics while adjusting for clustering is much more common than it was 10 years ago inference methods robust to cluster correlation are not used routinely across all relevant settings in this paper i provide an overview of applications of cluster sample methods both to cluster samples and to panel data sets

the mechanisms of spatial mismatch the spatial mismatch hypothesis smh argues that low skilled minorities residing in us inner cities experience poor labour market outcomes because they are disconnected from suburban job opportunities this assumption gave rise to an abundant empirical literature which is rather supportive of the smh surprisingly it is only recently that theoretical models have emerged which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested this article presents relevant facts reviews the theoretical models of spatial mismatch confronts their predictions with available empirical results and indicates which mechanisms deserve further empirical tests

intra urban wage variation employment location and commuting times abstract theory predicts that within a metropolitan area employers located where there is difficult commuting will have to compensate their workers with appropriately higher wages this should hold whether one is comparing central city work locations with those at the fringe or simply differences between suburban edge cities in the longer run if employers are concerned primarily with labor costs firm mobility should equalize wages or else agglomeration economies must exist to sustain the differences using microdata from the 1990 census for 2 large metropolitan areas in the u s wage equations are estimated for urban workers allowing for different wage levels depending on zone of employment the results show that observationally equivalent workers have wages that vary substantially across employment zones within a metro area and that this variation is strongly and significantly correlated with the average commute time of the workers employed in that zone these results hold across several different econometric specifications wages and average travel times also are found to be highly correlated with the aggregate number of workers in each zone but are not affected by zone employment specialization thus there is inconclusive evidence as to whether wage commuting cost differences result from equilibrium agglomeration effects or from a disequilibrium distribution of employment

space and unemployment the labor market effects of spatial mismatch the aim of this article is to analyze the effects of housing discrimination on the wages and unemployment rates of black workers the unemployment effect is first analyzed using a simple minimum wage model an efficiency wage model is then adopted in order to endogenize both unemployment and wages under both models suburban housing discrimination leads to a higher unemployment rate for blacks in the central city than in the suburbs under the efficiency wage model black wages are also lower in the center the analysis thus generates a link between unemployment and a seemingly unrelated phenomenon racial discrimination in the housing market

investment preferences for wood based energy initiatives in the us abstract the forest sector is poised to become a major supplier of wood based energy in the us prospects for growth in energy demand and higher prices can create opportunities for private investments in renewable energy industries a conjoint analysis examined individuals willingness to invest in wood based energies following a random utility model the study design included three investment attributes annual returns on investment type of investment and location of investment three ordinal models that also included demographic and attitudinal characteristics indicate that wood based energy is less preferred among potential investors compared to the stock market and solar wind renewable energy investments expected returns and location of energy investments within the us are also major drivers of investment preferences favorable attitudes towards forestry and wood based energy could enhance prospects for a greater number of potential investors

choice of tax base under uncertainty consumption or income abstract this paper compares the efficiency of alternative tax bases in the context of a two period life cycle model should the objective of tax policy be to encourage social risk taking savings or to maximize welfare the consumption tax is a clear front runner this tax also leads to greater expected revenue than an equal expected utility income tax further equal utility or revenue rates of consumption tax are practically independent of the degree of risk aversion and revenue fluctuations between alternative states of nature turn out to be small

racial differences in residential and job mobility evidence concerning the spatial mismatch hypothesis abstract the spatial mismatch hypothesis asserts that job decentralization adversely impacts the labor market outcomes of african americans this paper tests whether race and job access have an independent effect on the probability of a joint residential move and job change no evidence is found to indicate that race directly influences the joint probability the paper finds however that poor job access has an independent negative effect on the probability of a joint residential move and job change because african american residences are heavily concentrated in american central cities these results suggest that african american workers may not be able to fully adjust as new jobs are created in the suburbs

city structure job search and labour discrimination theory and policy implications we consider a search matching model in which black workers are discriminated against and the job arrival rates of all workers depend on social networks as well as distance to jobs location choices are driven by the racial preferences of households both blacks and whites consciously choosing to trade off proximity to neighbors of similar racial backgrounds for proximity to jobs because of coordination failures in the location choices multiple urban equilibria emerge there is a spatial mismatch equilibrium in which blacks reside far away from jobs and experience high unemployment rates and a spatial match equilibrium in which blacks are closer to jobs and experience lower unemployment rates under some reasonable condition we demonstrate that all workers are better off in the spatial match equilibrium we then consider two policies affirmative action and employment subsidies to the firms which hire black workers we show that the optimal policy requires imposing larger quotas or subsidies in cities in which black workers reside far away from jobs than in cities in which they live closer to jobs

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

can the land tax help curb urban sprawl evidence from growth patterns in pennsylvania abstract urban sprawl has become a policy concern of national prominence one tool that has been suggested for combating sprawl is the land or split rate tax in theory such taxes can raise the ratio of housing capital to land this in turn can raise the density of housing units where it is applied if the average size of housing units does not increase enough to offset an effect on the number of housing units this research explores these issues looking at a panel of land uses and demographics in pennsylvania we confirm the theoretical prediction that the split rate tax raises the capital land ratio we also find that the primary effect is in more housing units rather than bigger units suggesting the split rate tax is potentially a powerful anti sprawl tool we find adoption of the split rate tax increases the number of housing units and that these units follow a more dense pattern of development

congestion tolling with agglomeration externalities abstract consider an urban economy with two types of externalities negative traffic congestion externalities and positive agglomeration externalities deriving from non market interaction suppose that urban travel can be tolled that non market interaction cannot be subsidized and that non market interaction is stimulated by a reduction in travel costs then the optimal toll is below the congestion externality cost this paper explores this line of reasoning

education and labor market discrimination using a model of statistical discrimination and educational sorting we explain why blacks get more education than whites of similar cognitive ability and we explore how the armed forces qualification test afqt wages and education are related the model suggests that one should control for both afqt and education when compar ing the earnings of blacks and whites in which case a substantial black white wage differential emerges we reject the hypothesis that differences in school quality between blacks and whites explain the wage and education differentials our findings support the view that some of the black white wage differential reflects the operation of the