This is the end of the IELM seminar. The seminar of the IELM research group has merged with the seminar of the DD group of the CES. Please visit our new web-pages:
- Internal seminar: IELM-DD Internal Seminar
- External seminar: tba soon !
Michel Serafinelli
Monday, June 5th, 2023 — 12:00-01:00pm
Room 116, MSE
The World’s Rust Belts: The Heterogeneous Effects of
Deindustrialization on 1,993 Cities in Six Countries
Michel Serafinelli
(University of Essex)
co-authored with Luisa Gagliardi (Bocconi University) & Enrico Moretti (University of California, Berkley)
We use a newly-assembled dataset to investigate the employment consequences of deindustrialization for 1,993 cities in France, Germany, Great Britain, Italy, Japan and the United States. In all six countries we find a strong negative relationship between a city’s share of manufacturing employment in the year of its country’s manufacturing peak and the subsequent change in the city’s total employment, reflecting the fact that cities where manufacturing was initially more important experienced larger negative labor demand shocks. But this average effect masks vast heterogeneity across cities. In a significant number of former manufacturing hubs, total employment fully recovered or even exceeded initial levels, despite the loss of manufacturing jobs. Overall, 34% of former manufacturing hubs in our sample experienced employment growth faster than their country’s mean, suggesting that a surprisingly large fraction of cities was able to adapt to the negative employment shock caused by deindustrialization. We then seek to understand the causes of such differences in labor market performance across cities. We find that deindustrialization had profoundly different effects on local employment depending on the initial level of schooling of the local labor force. In particular, using an instrumental variable based on the driving distance to historical colleges and universities, we find that cities that had a high share of college graduates in the labor force in the year of their country’s manufacturing peak experienced faster subsequent total employment growth than cities with a low share of college graduates in the labor force. Our estimates imply that total employment in a city at the 75th percentile of its country’s college share distribution grew 7 percentage points faster per decade than total employment in a city at the 25th percentile. Most of this difference is due to faster employment growth in human capital-intensive services, which more than offsets the loss of manufacturing jobs.
Maria Bas
Monday, May 15, 2023 — 01:00-02:00pm
Room 116, MSE
Productivity in the aftermath of a natural disaster: Evidence from the El Niño floods in Ecuador
Maria Bas
(Paris 1, CES)
co-authored with Caroline Paunov (OECD)
This paper investigates the effects of the 1997-98 El Niño floods on Ecuadorian firms’ production efficiency, measured by quantity-based total factor productivity (TFP-Q). The floods, which led to firm exit and shrunk production, reduced the TFP-Q of highly productive, capital-intensive and small firms. Moreover, the floods increased firms’ marginal costs as domestic intermediary input prices increased. Cheaper inputs from abroad counteracted additional cost increases. Firms’ markups decreased because firms could not pass through higher marginal costs to consumers by increasing output prices. Weak investments to repair damages from the shock resulted. Small firms’ product scope did not recover after the crisis with lower economies of scope likely contributing to persistent negative productivity effects. At the aggregate industry-province level, productivity decreased due to the shock in the year after the floods. More productive firms had more difficulties in recovering than less productive firms resulting in resource reallocation towards less productive firms.
Michael Koch
Monday, April 17, 2023 — 12:00-01:00pm
Room 116, MSE
Globalization, Migration, and the Spatial Organization of Production
Michael Koch
(Aarhus University)
co-authored with Jackie M.L. Chan (Aarhus University) and Lin Ma (Singapore Management University)
In this paper, we investigate how international trade affects the spatial organization of production across sectors within a country and the internal migration of individuals. To do so, we develop a rich quantitative framework and estimate it using unique detailed data on individuals and firms in Denmark. In our multi-region multi-sector general equilibrium model, individuals have heterogeneous preferences for locations and sectors, and face migration frictions for moving between regions. They also choose to be either workers or entrepreneurs based on their entrepreneurial ability. The firms that entrepreneurs operate face a trade-off between the positive externalities of agglomeration that generate higher productivity and higher wages à la Gaubert (2018). The model is structurally estimated using Danish register-based data from 1999 to 2007. We do so by matching key moments of the firm-size distribution and value added across locations, as well as individual moments related to the dispersion of wages. We exploit the rise in import competition from China and Central and Eastern European Countries faced by Danish manufacturers, and study its impact on internal migration, the city size distribution, and sectoral output in manufacturing and services. We demonstrate that this has important implications for aggregate productivity, inequality, and welfare. Thus, we quantify the role of international trade for shaping economic activity and inequality within Denmark, during a period where the country experienced a transformation with notable growth rates in imports and exports and a remarkable change in internal migration flows.
Alexandra Avdeenko
Monday, April 3, 2023 — 12:00-01:00pm
Room 116, MSE
Does early adaptation to climate change pay?: Evidence from an RCT and extreme flooding in Pakistan
Alexandra Avdeenko
(Heidelberg University)
With rising global temperatures and more frequent weather extremes, climate change adaptation is a necessary policy response to increase resilience. We study the impact of climate adaptation interventions that aim at increasing welfare as well as preparedness and resilience to future natural disasters using a clustered randomized control trial in disaster-prone areas of Pakistan. Relying on evidence from a three-year household panel, we first show that the preparedness strategies were adopted by the villagers, i.a., shelters were strengthened, hygiene practices and the subjective feeling of preparedness improved. In the course of our investigation, part our study areas were affected by extreme monsoon flooding. We measure substantial improvement for food security and health outcomes for households that had previously been assigned to the climate adaptation measures. A detailed cost-benefit analysis displays that early investments can be largely self-sustaining. We present estimates on the damage of climate change by explicitly considering adaptation costs.
Florian Oswald – CANCELLED
Monday, March 20, 2023 — 12:00-01:00pm
Room 115, MSE
TALK CANCELLED
Fertility, Housing Costs, and City Growth
Florian Oswald
(Assistant Professor of Economics, SciencesPo Paris)
Developed economies moved from a baby boom to a baby bust, with very low fertility in large urban centers. We develop a spatial theory of demographic change and urban growth, whereby the housing market acts as an endogenous automatic stabilizer of fertility: high housing costs deter fertility while lower demographic growth mitigates future housing price increase. Our theory predicts rich dynamics of fertility and housing costs across space and time. The aging of baby boomers and their sorting across space triggers a later baby bust, more pronounced in larger cities, together with a long-lasting fertility and house price cycle that varies across locations. The predictions of the theoretical model with endogenous demographics and city growth are confronted to the data for French urban areas over the last decades.
Margarita López Forero
Monday, Februray 13, 2023 — 12:00-01:00pm
Room 115, MSE
Aggregate Labor Share and Tax Havens: things are not always what they seem
Margarita López Forero
(Post-doc, Université Paris Saclay – Evry)
We use French firm-level data to study the role of multinational enterprises’ (MNEs) presence in tax havens in determining the dynamics of the aggregate labor share and therefore, income inequalities between workers and capitalists. Given these firms’ weight in the economy, we find that tax haven presence of MNEs accounts for a 7.3% of the observed increase in the aggregate share of labor in France between 1997-2014. Implementing a difference-in-differences we analyze the effect of firm entry in tax havens on firms’ labor share of value added and each of its components. We find that average firm labor share in France experiences an increase by 2.3% over the immediate years following the establishment in a tax haven. We argue that the labor share of MNEs with presence in tax havens is overestimated given that tax optimization partly consists in artificially shifting profits to low tax jurisdictions, thus underestimating domestic value added, which experiences an average drop by 10.2%. Indeed, the labor share increases even if its numerator, total wage bill, decreases on average by 8.2% when MNEs enter a tax haven. Additionally, the total wage bill drop is explained by a strong decline in employment (-7.7%) rather than a decline on average firm wages, on which there is no statistically significant effect. Finally, we implement a panel event study design to show that our estimates capture the tax haven entry effect and not differential trends between treated and control units.
Els Bekaert
Monday, January 30, 2023 — 12:00-01:00pm
Room 115, MSE
The role of health(care) as a driver for migration aspirations and realizations in Africa: An empirical analysis
Els Bekaert
(Post-doc, Ghent University & UNU-CRIS)
This study empirically examines how African migration aspirations can be explained on the basis of poor health and dissatisfaction with local healthcare. Deploying unique individual-level data, I track the drivers to internal and international migration aspirations, and their materialisation across 47 African countries between 2008-2015 (210,551 respondents). Dissatisfaction with local healthcare forms a strong and highly robust determinant of migration aspirations in Africa; however, there is no systematic additional impact on subsequent migration behaviour. Migration aspirations and their materialisation vary with individuals’ health status. Health problems drive people’s aspirations to move in the short run, but reduce aspirations to migrate permanently abroad. Yet, among those aspiring to go abroad, respondents with poor health are more likely to start preparing for their move (i.e. purchased a ticket, applied for a visa). No consistent relationship between poor health and migration aspirations, however, is uncovered across Africa, and varies with individual (gender, education, living area) and country characteristics.
Frauke Steglich
Monday, January 16, 2023 — 12:00-01:00pm
Room 115, MSE
Corporate Social Responsibility along the Global Value Chain
Frauke Steglich
(Post-doc, Kiel Institute for the World Economy)
with Philipp Herkenhoff, Sebastian Krautheim, Finn Ole Semrau
Locating substantial parts of the production process in developing and emerging economies, many firms face an increasing demand by stakeholders for Corporate Social Responsibility (CSR) along their value chains. Contractual incompleteness between firms and their suppliers at different stages of production can exacerbate the ability to meet these demands. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. Progressing down the value chain, our model predicts an increasing CSR profile from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data – computing a firm’s value chain position by combining its product-level sales information with the World Input-Output Database. We find that more downstream firms report higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.
Rezart Hoxhaj
Monday, November 28, 2022 — 12:00-01:00pm
Room S18, MSE
The impact of the COVID-19 pandemic on work from home of ethnic groups: Evidence from U.S time-use data.
Rezart Hoxhaj
(Ghent University)
co-authored with Florian Miti (University of Vlorë Isamil Qemali)
Using time-use data for the U.S., we analyze impact of the COVID-19 pandemic on participation and time allocated to work from home by ethnic/racial groups. Difference-in-Difference estimates show that the pandemic increased work from home of Asians of both genders. For men this increase is explained mainly by a higher participation in paid work from home, while for women the increase is explained by both a higher participation and by more time spent in paid work from home. Possible explanations could be: (i) the higher ability of Asians to perform remote work, that is related to their skills and competencies; and (ii) the rise of discrimination against Asians that affected their willingness to work from home. This paper contributes to the understanding of the heterogeneous impact of COVID-19 on well-being, health risks and work-life balance, and more generally on inequalities among ethnic/racial groups in the US.
IELM seminars - CES & Paris 1 University 
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