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We study optimal and equilibrium sizes of cities in a city system model with pollution. Pollution is a function of population size. If pollution is local or per-capita pollution increases with population, equilibrium cities are too large under symmetry; with asymmetric cities, the largest cities are too large and the smallest too small. When pollution is global and per-capita pollution declines with city size, cities may be too small under symmetry; with asymmetric cities, the largest cities are too small and the smallest too large if the marginal damage of pollution is large enough. We calibrate the model to US cities and find that the largest cities may be undersized by 3-4%.
This paper studies the effectiveness of building height limits as a policy to limit greenhouse gas (GHG) emissions. It shows that building height limits lead to urban sprawl and higher emissions from commuting. On the other hand, aggregate housing consumption may decrease, which reduces emissions from residential energy use. A numerical model is used to evaluate whether total GHG emissions may be lower under building height restrictions. Welfare is not concave in the strictness of building height limits, so either no limit or a very strict one (depending on the strength of the externality) might maximize welfare. The paper discusses several extensions, such as congestion, endogenous transport mode choice, migration, and urban heat island effect. (C) 2016 Elsevier B.V. All rights reserved
This article studies the effect of child care provision on family structure. We present a model of a marriage market with positive assortative matching, where in equilibrium, the poorest women stay single. Couples have to decide on the number of children and spousal specialization in home production of public goods and child care. We then study how child care provision affects the equilibrium. Due to specialization in home production, the incentive to use child care is smaller for married mothers than for single mothers. We show that this increases the number of single mothers and the divorce rate. Using survey data from Germany, we present suggestive empirical evidence consistent with this finding. (JEL codes: J12 and J13).
We use panel data from Germany to analyze the effect of population density on urban air pollution (nitrogen oxides, particulate matter and ozone). To address unobserved heterogeneity and omitted variables, we present long difference/fixed effects estimates and instrumental variables estimates, using historical population and soil quality as instruments. Our preferred estimates imply that a one-standard deviation increase in population density increases air pollution by 3-12%.
We study voting over higher-education finance in an economy with two regions and two separated labor markets. Households differ in their financial endowment and their children's ability. Nonstudents are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher-education costs or to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is sufficiently small. When that probability is large, both regions opt for full tuition finance.
Through an intertemporal budget constraint, jurisdictions may gain advantages in tax and spending competition by 'competing' on debt. While the existing spatial econometric literature focuses on tax and spending competition, very little is known about spatial interaction via public debt. If jurisdictions compete for mobile capital to finance public spending, they may compete in debt levels as well as taxes. We use a theoretical model to derive the reaction of jurisdictions' debt levels to their neighbors' debts. We then estimate the spatial interdependence of public debt among German municipalities using a panel on municipalities in the two largest German states from 1999 to 2006. We find significant and robust interaction effects between debt levels of neighboring municipalities, which we compare to spatial tax and spending interactions. The results indicate that a municipality increases its per capita debt by 16-33 Euro as a reaction to an increase of 100 Euro in neighboring municipalities. (C) 2015 Elsevier B.V. All rights reserved.
Adieu Rabenmutter-culture, fertility, female labour supply, the gender wage gap and childcare
(2014)
This paper studies the effect of cultural attitudes on childcare provision, fertility, female labour supply and the gender wage gap. Cross-country data show that fertility, female labour force participation and childcare provision are positively correlated with each other, while the gender wage gap seems to be negatively correlated with these variables. The paper presents a model with endogenous fertility, female labour supply and childcare choices driven by cultural attitudes which fits these facts. There may exist multiple equilibria: one with zero childcare provision, low fertility and female labour supply and high wage gap and one with high childcare provision, high fertility and female labour supply and low wage gap.