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How do trade shocks affect welfare and inequality when human capital is endogenous? Using an external information technology demand shock and detailed internal migration data from India, this paper first documents that both information technology employment and engineering enrollment responded to the rise in information technology exports. Information technology employment responded more when nearby regions had a higher share of college-age population. The paper then develops a quantitative spatial equilibrium model featuring two new channels: higher education choice and differential costs of migrating for college and work. The framework is used to quantify the aggregate and distributional effects of the information technology boom and perform counterfactuals. Without endogenous education, the estimated aggregate welfare gain from the export shock would have been about a third as large and regional inequality twice as large. Reducing barriers to mobility for education, such as reducing in-state quotas for students at higher education institutes, would substantially reduce inequality in the gains from the information technology boom across districts.
Access To Education --- Digital Economy --- Education --- Education and Digital Divide --- Education For the Knowledge Economy --- Human Capital --- Inequality --- Information and Communication Technologies --- Information Technology --- Labor Markets --- Labor Mobility --- Labor Skills --- Migration --- Skills Development and Labor Force Training --- Social Protections and Labor --- Trade
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Using a policy change in the Netherlands in 2012 that made it easier and less costly for firms to employ high-skilled short-stay non-European Union workers and a matched employer-employee data, this paper shows that firms in high-skill industries respond by both employing a higher share of non-European Union immigrants and increasing the total amount of offshoring to non-European Union countries. With reduced costs of hiring short-stay non-European Union workers, small firms hire and fire more non-European Union workers in a given year. Many of these workers return to their home countries, establishing direct connections that boost offshoring to firms in the Netherlands. By contrast, large firms absorb some of the workers leaving the small firms. These workers also establish connections between their host and origin countries, boosting offshoring.
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This study examines the effects of communal violence on women's marital outcomes. Using individual-level survey data from India and a difference-in-differences approach, the study shows that women's age of marriage decreased, and the probability of getting married before the age of 18 increased after the Hindu-Muslim riots in Gujarat in 2002. Event study and synthetic control methods suggest that these effects are prominent two years after the riots and have increased over time. Women married after the riots also had fewer years of education and poorer social and economic status, such as a lower probability of employment and lower autonomy in household decision-making.
Married people. --- Women --- Violence against.
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What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2-3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.
Export Competitiveness --- Infrastructure Economics --- Infrastructure Economics and Finance --- International Economics and Trade --- Private Sector Development --- Private Sector Economics --- Road Infrastructure --- Roads and Highways --- Trade --- Trade and Regional Integration --- Trade Logistics --- Transport Infrastructure
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What is the impact on intra-national trade and regional economic outcomes when the quality and lane-capacity of an existing paved road network is expanded significantly? We investigate this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, we estimate a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2-3 percent in the long-run. Reductions in travel times increased local employment-to-population ratio but had no effect on local population. We extend the model by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.
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