May 11 (Thr) Shinnosuke Kikuchi (MIT) 15:15–16:45, Place: IER Conference room
Title: Granular Origins of Labor Market Pooling
Abstract: Small cities only have a few potential employers. Therefore, if one business is doing poorly, its employees do not have many other places to find work. We find three stylized facts showing how labor markets differ systematically by size. Larger labor markets have (i) lower variance of log total payment to workers, (ii) lower variance of log effective wages, and (iii) higher variance in establishment-level log employment. We then present an economic geography model where granular firms are subject to idiosyncratic shocks. The model rationalizes the stylized facts and also generates productivity gains in larger markets. Industries sort into larger locations if they have high idiosyncratic risk or use specialized labor. Industrial policies that subsidize entry, especially in small markets, improve welfare.
June 1 (Thr) Kenzo Asahi (Pontificia Universidad Catolica de Chile) 15:15–16:45, Place: IER Conference room
Title: The Role of Social, Spatial, and Economic Frictions in School Socioeconomic Segregation
Abstract: We quantify how social, spatial, and economic frictions affect school socioeconomic segregation. We use administrative data from Chile’s centralized school admission process, including the applicants’ individual rank-ordered preferences and residential addresses. Removing social or spatial frictions significantly decreases school socioeconomic segregation (16–19 percent). By contrast, eliminating economic frictions leads to a modest to null reduction in school segregation (4 percent). These results suggest that busing, transport policies, school constructions, or making public schools more attractive to affluent families may significantly reduce school socioeconomic segregation.
June 8 (Thr) Heejin Kim (Michigan State University) 15:15–16:45, Place: IER Conference room
Title: The Effects of a Local Improvement on Housing Markets and the Neighborhoods: Evidence from Chicago
Abstract: I study heterogeneous impacts of a public park conversion on neighborhood change and housing prices. I examine the case of The 606, a multi-use bike trail park that was transformed from an abandoned railroad bed. I use synthetic control methods to construct a comparison area as the project site consisting of neighborhoods that had experienced similar changes before 2008, the year after funding first began to flow in. I estimate that housing prices near The 606 have changed with varying degrees between -10% to 40% across locations. The prices have increased to a greater extent in low-income neighborhoods, especially when they are located closer to higher-income neighborhoods. I find the larger effects on housing prices occur in the same places experiencing larger effects on household incomes and shares of college graduates. The result suggests that high-income households have greater values of the amenity and that housing price impacts could be increased through endogenous gentrification due to the preference for high-income neighborhoods.
September 14 (Thr) Masahiro Yoshida (Waseda University) 15:15–16:45, Place: IER Conference room
Title: Climate Change and Labor Market Dropouts of Adult Males: Evidence from the Half Century
Abstract: Labor force participation of prime-aged males in developed economies has ubiquitously declined for a half century since 1970s. I test a hypothesis that the concurrent climate change aligned with the spread of residential air conditioner induced labor market exits of less-educated males, a disproportionate fraction of whom are working outdoors. Combining granular variations of daily/hourly weather and annual participation rates across U.S. Commuting Zones during 1970-2019, I find that exposure to hot days with higher mean work-hour temperature (i.e.; 75F and above) accounts for 10% of increased dropouts of prime-aged males. The effect is salient in salaried employment and unemployed workers, and very subtle in females. The finding suggests that a heat protection law would bolster the labor market attachment of outdoor essential workers in the forecast of accelerated global warming.
October 12 (Thr) Kiyoyasu Tanaka (IDE-JETRO) 15:15–16:45, Place: IER Conference room
Title: Origin of Goods and the Distributional Effects of Trade Liberalization
Abstract: This paper introduces origin of goods in household welfare to estimate consumer gains from trade liberalization. We use a unique dataset of household expenditure on goods by origin in Cambodia and show that rich households are more likely than poor households to consume import goods. We estimate tariff pass-through rates across origins and find that trade liberalization reduces a price for import goods more than for domestically produced goods, with little influence on home-produced goods. The first-order impacts of tariff reduction between 2004 and 2019 show a larger welfare gain for richer households; households at the 80-90 income percentile gain more than those at the 0-10 percentile by 40%. We calculate alternative welfare measures with varying assumptions on origins and demonstrate that disaggregating origins can significantly magnify a gap in the welfare impacts between rich and poor.