PRODUCTION OR CONSUMPTION? DISENTANGLING THE SKILL-AGGLOMERATION CONNECTION

To explain the concentration of human capital in cities, urban theory conjectures that the metropolitan scale provides two sources of returns for the more educated: production benefits, both in terms of wages and non-monetary gains, and consumption benefits. By exploiting a unique survey on Italian workers that records information for the two sources of returns, this paper quantifies their respective roles. The findings show that skilled workers enjoy higher consumption amenities in larger cities. They benefit from the local public goods, such as transportation, health and schooling services, the shopping possibilities, and the cultural consumption potentials made possible by the urban location of cinemas, theaters, and museums. On the other hand, the more educated do not receive benefits on the production side. Their wages do not reflect a premium, and the returns to education and experience are not higher than elsewhere. Moreover, urban skilled workers do not change jobs more readily than elsewhere and do not appear to be more satisfied of their jobs. The estimates imply that in the largest metropolitan areas the value of the consumption amenities can be as high as 50% of the rents or 16-17% of the wages.

Does the Internet Kill the Distance? Evidence From Navigation, E-Commerce, and E-Banking.

By diminishing the cost of performing isolated economic activities in isolated areas, information technology might serve as a substitute for urban agglomeration. This paper assesses this hypothesis by using Italian household level data on internet navigation, e-commerce, and e-banking. Empirically, I find no support for the argument that the internet reduces the role of distance. My results suggest that: (1) Internet navigation is more frequent for urban consumers than their non-urban counterparts. (2) The use of e-commerce is basically not affected by the size of the city where the household lives. Remote consumers are discouraged by the fact that they cannot see the goods before buying them. Leisure activities and cultural items are the only goods and services for which e-commerce is used more intensively in isolated areas. (3) E-banking bears no relationship with city size. In choosing a bank, non-urban customers evaluate personal acquaintances as an important factor more intensively than urban clients. This also depends on the fact that banking account holders in remote areas are more frequently supplied with a loan by their bank.

Production or consumption? Disentangling the skill-agglomeration connection

To explain the concentration of human capital in cities, urban theory conjectures that the metropolitan scale provides two sources of returns for the more educated; production benefits, both in terms of wages and non-monetary gains, and consumption benefits. By exploiting a unique survey on Italian workers that records information for the two sources of returns, this paper quantifies their respective roles. The findings show that skilled workers enjoy higher consumption amenities in larger cities. They benefit from the local public goods, such as transportation, health and schooling services, the shopping possibilities, and the cultural consumption potentials made possible by the urban location of cinemas, theaters, and museums. On the other hand, the more educated do not receive benefits on the production side. Their wages do not reflect a premium, and the returns to education and experience are not higher than elsewhere. Moreover, urban skilled workers do not change jobs more readily than elsewhere and do not appear to be more satisfied of their jobs. The estimates imply that in the largest metropolitan areas the value of the consumption amenities can be as high as 50% of the rents or 16-17% of the wages.cities, human capital

Electoral rules and voter turnout

The paper investigates the effect of electoral rules on voter turnout. It focuses on Italian municipalities, where voting schemes are differentiated by the size of the city: a single ballot system applies to municipalities with less than 15,000 inhabitants, while a dual ballot system is in place above that threshold. By exploiting this discontinuity, the paper finds that the dual ballot increases participation at the local polls, with an estimated effect of about 1 percentage point. The increase in voter turnout is associated with wider political representation, politicians of higher quality, greater fiscal discipline, and more robust local development. Finally, we document that the higher political participation triggered by local electoral rules extends to nationwide voting contexts.voter turnout, electoral systems, regression discontinuity design

Where Do Human Capital Externalities End Up To?

Recent literature has aimed at evaluating human capital externalities by estimating the effect of human capital on wages at urban level. We argue that this methodology might not identify properly human capital spillovers. We consider a general equilibrium model based on Roback (1982) where both wages and rents are simultaneously determined at the local level. We show that human capital externalities cannot be identified unless the joint effect of local human capital on both wages and rents is considered. Empirically, we study the effects of local human capital on household-level rents and individual-level wages for a sample of Italian local labor markets. Our results show a positive and robust effect of local human capital on rents. This unambiguously demonstrates that the concentration of human capital at the local level generates positive externalities. As for the relative importance of consumption and production externalities, our results suggest that the two effects have a similar impact on wages.

The Legacy of History for Economic Development: The Case of Putnam's Social Capital

Putnam (1993) argues that (i) center-northern Italy has developed faster than southern Italy because the former was better endowed with social capital; and (ii) that the endowments of social capital across Italian territories have been highly persistent over centuries. This paper provides an empirical investigation of PutnamÂ’s case. To evaluate the relevance of social capital, we present a test based on worker productivity, entrepreneurship, and female labor market participation. Using as instruments regional differences in civic involvement in the late ninetieth century and local systems of government in the middle age, we show that social capital does have economic effects.Social Capital, Economic Development

Local electoral rules and political participation

The paper investigates the effect of local electoral rules on the political participation of the residents, as reflected in voter turnout. It focuses on Italy, where municipal voting schemes are differentiated by the size of the city: a single ballot system applies to municipalities with less than 15,000 inhabitants, while a dual ballot system is in place above that threshold. By exploiting this discontinuity, the paper finds that the dual ballot increases political participation. The magnitude of the effect is estimated at between 1 and 3 percentage points.

Where do human capital externalities end up?

Recent literature has aimed at evaluating human capital externalities by estimating the effect of human capital on wages at urban level. We argue that this methodology might not identify properly human capital spillovers. We consider a general equilibrium model based on Roback (1982) where both wages and rents are simultaneously determined at the local level. We show that human capital externalities cannot be identified unless the joint effect of local human capital on both wages and rents is considered. Empirically, we study the effects of local human capital on household-level rents and individual-level wages for a sample of Italian local labour markets. Our results show a positive and robust effect of local human capital on rents. This unambiguously demonstrates that the concentration of human capital at the local level generates positive externalities. As for the relative importance of consumption and production externalities, our results suggest that the two effects have a similar impact on wages.human capital; externalities; local markets