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A large literature characterises urbanisation as resulting from productivity growth attracting rural workers to cities. Incorporating economic geography elements into a growth model, we suggest that causation runs the other way: when rural workers move to cities, the resulting urbanisation produces technological change and productivity growth. Urban density leads to knowledge exchange and innovation, thus creating a positive feedback loop between city size and productivity that initiates sustained economic growth. This model is consistent with the fact that urbanisation rates in western Europe, most notably England, reached unprecedented levels by the mid-eighteenth century, the eve of the Industrial Revolution.
The 20th EEAG report, entitled “Beyond the Coronavirus Crisis: Investing for a Viable Future” has been released. Economists from Europe and the US are calling for changes to the Next Generation EU (NGEU) package to repair the damage caused by the coronavirus crisis.
The Great Recession has strongly influenced employment patterns across skill and gender groups in EU countries. We analyse how these changes in workforce composition might distort comparisons of conventional measures of gender wage gaps via non-random selection of workers into EU labour markets. We document that male selection (traditionally disregarded) has become positive during the recession, particularly in Southern Europe. As for female selection (traditionally positive), our findings are twofold. Following an increase in the labour-force participation of less-skilled women, due to an added-worker effect, these biases declined in some countries where new female entrants were able to find jobs, whereas they went up in other countries which suffered large female employment losses. Finally, we document that most of these changes in selection patterns were reversed during the subsequent recovery phase, confirming their cyclical nature.
The promotion system for French academic economists provides an interesting environment to examine the promotion gap between men and women. Promotions occur through national competitions for which we have information both on candidates and on those eligible to be candidates. Thus, we can examine the two stages of the process: application and success. Women are less likely to seek promotion, and this accounts for up to 76 percent of the promotion gap. Being a woman also reduces the probability of promotion conditional on applying, although the gender difference is not statistically significant. Our results highlight the importance of the decision to apply.
This articles focuses on the recent research efforts to incorporate income, wage and wealth inequality in macroeconomic models. I start by reviewing recent models on the impact of inequality on, on the one hand, long-run growth and, on the other, and macroeconomic fluctuations. The articles then reviews the literature concerned with the macroeconomic determinants of wage and wealth inequality. It concludes by discussing a number of possible avenues of research that seem to me particularly important, such as the impact of macroeconomic policy on distribution or the effect that firm size can have on both growth and wage inequality.
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A sizable literature has established the positive impact of social infrastructure on economic development, but the determinants of social infrastructure itself have yet to be fully explored. Competing theories suggest a variety of political institutions as driving forces of social infrastructure, but the empirical literature has been hampered by the small set of available proxies, many of which are broadly defined. We leverage a new, comprehensive dataset that codes political institutions directly from countries’ constitutions. By employing a statistical methodology that is designed to juxtapose candidate regressors associated with many competing theories, we test each individual political institution's effect on social infrastructure. Our results show that constitutional rules pertaining to executive constraints as well as to the structure of electoral systems are crucial for the development of high-quality social infrastructure. We also find that the determinants of social infrastructure are much more fundamental than previously thought: not only the general structure of electoral systems matter, but also highly detailed aspects such as limits on campaign contributions and the freedom to form parties. Moreover, the granularity of our data allows us to highlight the profound effect of basic human rights on social infrastructure, a dimension which has not been explored in the literature to date.
The long-term costs of protectionism are difficult to evaluate as very few countries have switched back to this economic policy after a long period of free trade. One country that did make the move was France in 1892, when the Chamber of Deputies, encouraged by the president of the customs commission, Jules Méline, decided to sharply raise cereal import duties. This decision slowed the upwards trend in education levels as it made farming jobs more attractive than manufacturing jobs, thereby reducing the relative return on an education. These findings are consistent with the theory of unified growth which associates demand for education with technological improvement. They also suggest that educational progress is reversible.
Cet article s’intéresse aux inégalités de répartition des salaires et du patrimoine comme programme de recherche macroéconomique. Après un bref aperçu des modèles récents liant inégalités et croissance à long terme d’une part, et inégalités et fluctuations macroéconomiques d’autre part, nous passons en revue la littérature sur les facteurs macroéconomiques à l’origine des inégalités de répartition des salaires et du patrimoine. En guise de conclusion, nous proposons quelques pistes de recherches futures qui nous semblent importantes à mener telles que le rôle des politiques macroéconomiques sur la répartition ou encore celui de la taille des entreprises sur la croissance et leur contribution aux inégalités.