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O18 - Urban, Rural, Regional, and Transportation Analysis • Housing • Infrastructure

Urban, Rural, Regional, and Transportation Analysis • Housing • Infrastructure

JEL Code: 
O18

Anonymity or Distance? Experimental Evidence on the Obstacles That Young People Face in the Labour Market

Do search frictions constrain the labour market prospects of young workers? We conduct a randomised evaluation of two programmes designed to lower spatial and informational barriers to job search among 4,000 young Ethiopians. One group of subjects receives a transport subsidy. Another group participates in a workshop where their skills are certified and they receive training on how to make effective job applications. We find that both treatments significantly improve the quality of the jobs young workers obtain, and the effects are strongest for the most disadvantaged job-seekers.

International Isolation and Regional Inequality: Evidence from Sanctions on North Korea

This paper examines how regional inequality evolves when a country becomes increasingly isolated from economic sanctions. I hypothesize three channels: regional favoritism by the ruling elites, reallocation of commerce that reflects the change in relative trade costs, and import substitution. Using nighttime lights from North Korea, I find that the capital city, trade hubs near China, and manufacturing cities become relatively brighter when sanctions increase. However, production shifts away from capital-intensive goods, deterring industrial development.

Paving the Road to Development: Costly Migration and Labor Market Integration

How integrated are labor markets within a country? Labor mobility is key to the integration of local labor markets and therefore to understanding the efficacy of policies to reduce regional inequality. We present a comprehensive framework for understanding migration decisions, focusing on the costs of migrating. We construct and then estimate a spatial equilibrium model where mobility is determined not only by idiosyncratic tastes, but also by moving costs that are origin-destination dependent.

Entrepreneurship, Small Businesses, and Economic Growth in Cities: An Empirical Analysis

Does entrepreneurship cause urban economic growth and if so how large is the impact? Empirical analysis of such question is hampered by endogeneity. This paper uses two different sets of variables – the homestead exemption levels in state bankruptcy laws from 1975 and the share of MSA overlaying aquifers - to instrument for entrepreneurship and examine urban growth between 1993 and 2002. Despite using different sets of instrumental variables, the ranges of 2SLS estimates are similar, further supporting the significant impact of entrepreneurship on urban growth.

Do Government Guaranteed Small Business Loans Promote Economic Growth and Entrepreneurship?

This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrumental variable regressions show no growth impact from government guaranteed loans. In contrast, market entrepreneurship significantly and positively contributes to local economic growth.

Unfinished Business: Historic Complementarities, Political Competition and Ethnic Violence in Gujarat

I examine how the historical legacies of inter-ethnic complementarity and competition interact with contemporary electoral competition in shaping patterns of ethnic violence. Using local comparisons within Gujarat, a single Indian state known for both its non-violent local traditions and for widespread ethnic pogroms in 2002, I provide evidence that where political competition was focused upon towns where ethnic groups have historically competed, there was a rise in the propensity for ethnic rioting and increased electoral support for the incumbent party complicit in the violence.

Countering Sanctions: The Unequal Geographic Impact of Economic Sanctions in North Korea

This paper examines how an autocratic regime domestically counters the impact of economic sanctions. A stylized model predicts that, as long as non-compliance is not too costly, the autocrat redistributes resources to the more valuable urban area when sanctions increase. Empirically, I examine the case of North Korea. I use the satellite night lights data to create average luminosity for each one minute by one minute cell between 1992 and 2010. I construct a sanctions index that varies based on the international response to North Korea’s nuclear pursuit.

Developments and Prospects for Rural Finance in China

A central theme of China’s 11th Five Year Plan (2006-2010) is the building of a “new socialist countryside.” Over recent years, reforming rural finance and improving access to credit by small businesses and farmers has figured increasingly prominently in the leadership’s proclamations of support to rural economic development. While hundreds of pilot innovations in small-scale finance have been pursued by local and international donors, very few have proven financially self-sustaining and none have proven scalable.

Schooling, Cognitive Skills, and the Latin American Growth Puzzle

Economic development in Latin America has trailed most other world regions over the past four decades despite its relatively high initial development and school attainment levels. This puzzle can be resolved by considering the actual learning as expressed in tests of cognitive skills, on which Latin American countries consistently perform at the bottom. In growth models estimated across world regions, these low levels of cognitive skills can account for the poor growth performance of Latin America.

The Spatial Development of India

This paper studies the recent spatial development of India. Services, and to a lesser extent manufacturing, are increasingly concentrating in high-density clusters. This stands in contrast with the United States, where in the last decades services have tended to grow fastest in mediumdensity locations, such as Silicon Valley. India's experience is not common to all fast-growing developing economies. The spatial growth pattern of China looks more similar to that in the U.S. than to that of India.

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