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How does rural-urban migration shape urban production in developing countries? We use longitudinal data on Chinese manufacturing firms between 2000 and 2006, and exploit exogenous variation in rural-urban migration induced by agricultural income shocks for identification. We find that, when immigration increases, manufacturing production becomes more labor intensive and productivity declines. We investigate the reorganization of production using patent applications and product information. We show that rural-urban migration induces both labor-oriented technological change and the adoption of labor intensive product varieties. (JEL D24, L23, L60, O33, P25, P31, R23)

Unemployment insurance (UI) programs traditionally take the form of a single insurance contract offered to job seekers. In this work, we show that offering a menu of contracts can be welfare improving in the presence of adverse selection and moral hazard. When insurance contracts are composed of (1) a UI payment and (2) a severance payment paid at the onset of unemployment, offering contracts with different ratios of UI benefits to severance payment is optimal under the equivalent of a single-crossing condition: job seekers in higher need of unemployment insurance should be less prone to moral hazard. In that setting, a menu allows the planner to attract job seekers with a high need for insurance in a contract with generous UI benefits, and to attract job seekers most prone to moral hazard in a separate contract with a large severance payment but little unemployment insurance. We propose a simple sufficient statistics approach to test the single-crossing condition in the data.

Why are the east sides of formerly industrial cities more deprived? To answer this question, we use individual-level census data and create historical pollution patterns derived from the locations of 5,000 industrial chimneys and an atmospheric model. We show that this observation results from path dependent neighborhood sorting that began during the Industrial Revolution as prevailing winds blew pollution eastwards. Past pollution explains up to 20% of the observed neighborhood segregation in 2011, even though coal pollution stopped in the 1970s. We develop a quantitative model to identify the role of neighborhood effects and relocation rigidities in underlying this persistence.

We analyze the anchoring role of mobility rigidities following a news shock on environmental risk. Using an exhaustive registry of housing transactions in England between 2007 and 2014, we identify the impact of changes in perceived environmental risk by comparing property prices near nuclear facilities to those further away before and after the Fukushima nuclear accident. The average price drop amounts to 4.2%. There is significant heterogeneity, reflecting the different mobility rigidities faced by residents and workers. At-risk areas with highly-mobile labor structure undergo a more substantial price decrease after the catastrophe and an increase in deprivation. Such finding is further supported by the long-term patterns of residential flight after the opening of nuclear plants--a marked rise in deprivation is observed in neighborhoods where labor is mobile.

Global flood models have undergone rapid development over the past decade. However, with each new generation of model it is essential to systematically evaluate simulation performance for a range of tests and against multiple sources of data. It is also important to take stock, document lessons learnt and contribute to the formation of better practice and modelling standards in the field. Here we illustrate some of the progress being made in global flood modelling by evaluating the latest 30 m resolution implementation of the LISFLOOD-FP/Fathom global flood model over the Central Highlands of Vietnam, and benchmark it against several previous incarnations of the model.Two independent data sources are used to evaluate the model. The first of these maps recent flood extents using remotely sensed data from the Sentinal-1 missions and compares them to global flood model outputs of commensurate return periods. The second data set identifies land parcels (properties and agricultural fields) that flooded during the same events from a household survey, where uniquely all household land parcels in four villages were sampled. The independence of the date sets also allowed for cross-validation of the observations.Substantial simulation enhancements are associated with the transition from SRTM and MERIT DEM’s at 90 m resolution to FABDEM, a version of Copernicus DEM at 30 m with forests and buildings removed. In addition to improvements derived from the DEM, more accurate river location, river width and discharge estimates combined with the inversion of river bathymetry via gradually varied rather than uniform flow theory also have an impact on performance.

A recent literature has used a historical perspective to better understand fundamental questions of urban economics. However, a wide range of historical documents of exceptional quality remain underutilised: their use has been hampered by their original format or by the massive amount of information to be recovered. In this paper, we describe how and when the flexibility and predictive power of machine learning can help researchers exploit the potential of these historical documents. We first discuss how important questions of urban economics rely on the analysis of historical data sources and the challenges associated with transcription and harmonisation of such data. We then explain how machine learning approaches may address some of these challenges and we discuss possible applications.

Relying on a novel measure of VAT compliance in a panel of 35 countries, we document a robust negative response of tax compliance to changes in tax rates. In order to rationalize this finding, we develop a theoretical framework where heterogeneous firms adjust the share of declared activity. We calibrate the model using firm-level data in Greece, and find large leakages following the recent austerity plans. We then show how differences in financial development and the size of economic activity at the margin of informality are able to explain the heterogeneous response of tax compliance to tax rates across countries.

A substantial fraction of workers are underemployed, i.e., employed in jobs for which they are overqualified, and that fraction—the underemployment rate—is higher in recessions. To explain these facts, we build a search model with an endogenous “ranking” mechanism, in which high-skill applicants are systematically hired over less-skilled competing applicants. Some high-skill workers become underemployed in order to escape the competition for high-skill jobs and find a job more rapidly at the expense of less-skilled workers. Quantitatively, the model can capture the key characteristics of underemployment, notably the fact that both the underemployment rate and the wage loss associated with becoming underemployed increase in recessions. (JEL E24, E32, J24, J64)

We show that, in many countries, tax compliance is volatile and markedly responds to fiscal policy. To explore the consequence of this novel stylized fact, we build a model of sovereign debt with limited commitment and imperfect tax enforcement. Fiscal policy persistently affects the size of the informal economy, which impact future fiscal revenues and thus default risk. This mechanism captures one key empirical regularity of economies with imperfect tax enforcement: the low sensitivity of debt price to fiscal consolidations. The interaction of imperfect tax enforcement and limited commitment strongly constrains the dynamics of optimal fiscal policy. During default crises, high tax distortions force the government towards extreme fiscal policies, notably including costly austerity spells.

This paper analyzes the determinants behind the spatial distribution of the sexindustry in Thailand. We relate the development of the sex industry to an earlytemporary demand shock, i.e., U.S. military presence during the Vietnam War. Comparing the surroundings of Thai military bases used by the U.S. army to districts close to unused Thai bases, we find that there are currently 5 times more commercial sex workers in districts near former U.S. bases. The development of the sex industry is also explained by a high price elasticity of supply due to female migration from regions affected by an agricultural crisis. Finally, we study a consequence induced by the large numbers of sex workers in few red-light districts: the HIV outbreak in the early 1990s.

International audience; This paper provides empirical evidence that, after protests, citizens substantially revise their views on the current leader, but also their trust in the country's institutions. The empirical strategy exploits variation in the timing of an individual level survey and the proximity to social protests in 13 African countries. First, we find that trust in political leaders strongly and abruptly decreases after protests. Second, trust in the country monitoring institutions plunges as well. Both effects are much stronger when protests are repressed by the government. As no signs of distrust are recorded even a couple of days before the social conflicts, protests can be interpreted as sudden signals sent on a leaders' actions from which citizens extract information on their country fundamentals.

This paper analyzes the determinants behind the spatial distribution of the sex industry in Thailand. We relate the development of the sex industry to an early temporary demand shock, i.e., U.S. military presence during the Vietnam War. Comparing the surroundings of Thai military bases used by the U.S. army to districts close to unused Thai bases, we find that there are currently 5 times more commercial sex workers in districts near former U.S. bases. The development of the sex industry is also explained by a high price elasticity of supply due to female migration from regions affected by an agricultural crisis. Finally, we study a consequence induced by the large numbers of sex workers in few red-light districts: the HIV outbreak in the early 1990s.

We analyze how internal labor migration facilitates shock coping in rural economies. Employing high-precision satellite data, we identify objective variations in the inundations generated by a catastrophic typhoon in Vietnam and match them with household panel data before and after the shock. We find that, following a massive drop in income, households cope mainly through labor migration to urban areas. Households with settled migrants ex ante receive more remittances. Nonmigrant households react by sending new members away who then remit similar amounts than established migrants. This mechanism is most effective with long-distance migration, while local networks fail to provide insurance. (JEL J61, O15, P25, P36, Q54, R23)

We study changes in nuclear-risk perception following the Fukushima nuclear accident of March 2011. Using an exhaustive registry of individual housing transactions in England and Wales between 2007 and 2014, we implement a difference-in-difference strategy and compare housing prices in at-risk areas to areas further away from nuclear sites before and after Fukushima incident. We find a persistent price malus of about 3.5% in response to the Fukushima accident for properties close to nuclear plants. We show evidence that this price malus can be interpreted as a change in nuclear-risk perception. In addition, the price decrease is much larger for high-value properties within neighborhoods, and deprived zones in at-risk areas are more responsive to the accident. We discuss various theoretical channels that could explain these results.

The unprecedented tax hikes implemented in Greece in 2010 generated a much lower than expected increase in tax revenues. In this paper, we document a new stylized fact explaining this gap: the strong increase of tax evasion. We then analyze the response of the economy to tax hikes in a stylized model where firms adjust the share of their declared activity. We calibrate the model to firm-level balance sheet data for Greece and quantify the response of tax evasion to the 2010 fiscal adjustment. One third of the tax increase is lost because small and medium size firms expand their share of non-declared activity. In turn, this lowers their borrowing capacity and contributes to non-negligible output losses.

Journals favor rejections of the null hypothesis. This selection upon results may distort the behavior of researchers. Using 50,000 tests published between 2005 and 2011 in the AER, JPE and QJE, we identify a residual in the distribution of tests that cannot be explained by selection. The distribution of p-values exhibits a camel shape with abundant p-values above :25, a valley between :25 and :10 and a bump slightly under :05. Missing tests are those which would have been accepted but close to being rejected (p-values between :25 and :10). We show that this pattern corresponds to a shift in the distribution of p-values: between 10% and 20% of marginally rejected tests are misallocated. Our interpretation is that researchers might be tempted to inflate the value of their tests by choosing the specification that provides the highest statistics. Note that Inflation is larger in articles where stars are used in order to highlight statistical significance and lower in articles with theoretical models., Les journaux académiques ont tendance à préférer les articles rejetant l'hypothèse nulle. Cette sélection peut conduire les chercheurs à modifier leurs comportements. Grâce à un échantillon de 50 000 tests d'hypothèse publiés entre 2005 et 2011 dans l'AER, le JPE et le QJE, nous identifions un résidu dans la distribution de ces tests qui ne peut s'expliquer par la seule sélection. La distribution des valeurs p présente une forme en " bosse de chameaux " avec une surpopulation au dessus de 0,25, un creux entre 0,25 et 0,10 et enfin une nouvelle surabondance en-dessous de 0,10. Les tests absents de cette distribution sont ceux dont l'hypothèse nulle n'a pu être rejetée mais qui étaient proche du seuil de rejet (valeur p entre 0,25 et 0.10). Nous montrons que la forme particulière de cette distribution correspond à un déplacement des valeurs p : environ 10% à 20% des tests d'hypothèse marginalement rejetés sont mal situés. Nous interprétons cela comme la possibilité qu'en choisissant la spécification qui produit les statistiques les plus élevées, les chercheurs peuvent engendrer une inflation de la valeur des tests d'hypothèse. Cette inflation est plus importante dans les articles utilisant des étoiles dans le but de souligner la significativité statistique des résultats. En revanche, elle est moins présente dans les articles proposant un modèle théorique.

Journals favor rejection of the null hypothesis. This selection upon tests may distort the behavior of researchers. Using 50,000 tests published between 2005 and 2011 in the AER, JPE, and QJE, we identify a residual in the distribution of tests that cannot be explained by selection. The distribution of p-values exhibits a camel shape with abundant p-values above 0.25, a valley between 0.25 and 0.10 and a bump slightly below 0.05. The missing tests (with p-values between 0.25 and 0.10) can be retrieved just after the 0.05 threshold and represent 10% to 20% of marginally rejected tests. Our interpretation is that researchers might be tempted to inflate the value of those almost-rejected tests by choosing a "significant" specification. We propose a method to measure inflation and decompose it along articles' and authors' characteristics.