The Coherence of US Cities

Diversified economies are critical for cities to sustain their growth and development, but they are also costly because diversification often requires expanding a city’s capability base. We analyze how cities manage this trade-off by measuring the coherence of the economic activities they support, defined as the technological distance between randomly sampled productive units in a city. We use this framework to study how the US urban system developed over almost two centuries, from 1850 to today. To do so, we rely on historical census data, covering over 600M individual records to describe the economic activities of cities between 1850 and 1940, as well as 8 million patent records and detailed occupational and industrial profiles of cities for more recent decades. Despite massive shifts in the economic geography of the United States over this 170-year period, average coherence in its urban system remains unchanged. Moreover, across different time periods, datasets, and relatedness measures, coherence falls with city size at the exact same rate, pointing to constraints to diversification that are governed by a city’s size in universal ways.

Public-Private Dialogs to Spur Export-led Growth: The Case of Productivity Taskforces in Namibia

This case study examines the implementation of Namibia’s first Productivity Task Force focused on the high-value fruit sector from 2021 to 2024. Productivity task forces, modeled after Peru’s Mesas Ejecutivas, facilitate public-private dialogues to resolve sector-specific productivity issues. The Namibian Investment Promotion and Development Board, the Ministry of Agriculture, Water and Land Reform, and the Ministry of Finance led the Namibian task force. The study highlights critical stages, including the task force’s management and organization, political authorization, and the identification and resolution of productivity problems. While some challenges remain unsolved, the PTF has laid the groundwork for long-term improvements in government capacity, better public-public coordination, public-private collaboration, and a more business-friendly environment. The study offers valuable insights for implementing similar public-private initiatives in other developing countries. This title is also available as Open Access on Cambridge Core.

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Cambridge Elements are a new concept in academic publishing and scholarly communication, combining the best features of books and journals. They consist of original, concise, authoritative, and peer-reviewed scholarly and scientific research, organised into focused series edited by leading scholars, and provide comprehensive coverage of the key topics in disciplines spanning the arts and sciences.

Regularly updated and conceived from the start for a digital environment, they provide a dynamic reference resource for graduate students, researchers, and practitioners.

Leaving Home: Cumulative Climate Shocks and Migration in Sub-Saharan Africa

We combine a multi-country household panel dataset with high-resolution gridded precipitation data to investigate how cumulative climatic shocks affects the decision to leave the households in five sub-Saharan African countries. We find that while the effect of recent adverse weather shocks is on average modest, the cumulative effect of a persistent exposure to droughts over several years leads to a significant increase in the probability for a household member to leave the household. We speculate that this pattern can be indicative of increased migratory flows due to increase in the frequency of extremes.

GLocal: A global development dataset of subnational administrative areas

The purpose of the GLocal dataset is to enable research in international development that requires both global scope and local precision. Leveraging modern geospatial analysis tools, we process a diverse array of sources to provide researchers with a growing set of economic, demographic, ecological and socio-political variables for geographic units relevant to public policy. We provide separate data files for different levels of administrative and periodic aggregation, along with ad-hoc files with more detailed information on specific topics. In this data descriptor paper, we discuss both our data processing methodologies and validation pipelines, and provide a short case study to illustrate the research potential of the dataset. We also introduce a simple web app, glocal.streamlit.app, which offers a user-friendly interface for exploring and visualizing the dataset. Given the growing number of public and granular sources of relevance for international development research, we hope to continue adding features and expand the GLocal dataset in the future.

A journey through time: the story behind ‘eight decades of changes in occupational tasks, computerization and the gender pay gap’

In this interview article, we embark on a fascinating journey through time alongside the winners of the 2023 DRUID Best Paper Award. DRUID, an annual research conference renowned as the hub of cutting-edge research on innovation and the dynamics of structural, institutional, and geographic change, bestows this award on the most innovative and exceptional conference submission. As longstanding allies of DRUID, Industry and Innovation offers an exclusive peek behind the curtains, unveiling the untold stories that underlie award-winning research.

In 2023, this coveted DRUID prize was awarded to a paper by Ljubica Nedelkoska, Shreyas Gadgin Matha, James McNerney, Andre Assumpcao, Dario Diodato, and Frank Neffke. Their work stands out through an impressive data collection effort and the exploration of a compelling and urgent research question – how technological change has impacted the gender pay gap. Throughout this interview, the author team takes us down memory lane, retelling the story behind their research project. On this journey through time, we trace the genesis of the authors’ innovative ideas and the intricate pathways they navigated in their quest to understand the past as a means of unravelling the future of work and its implications for gender inequality in the labour market. This journey not only takes us back in time but also points to potential avenues for future research and open questions that lie ahead.

On the Design of Effective Sanctions: The Case of Bans on Exports to Russia

We build on Baqaee and Farhi (2019, 2021) and derive a theoretically-grounded criterion that allows targeting bans on exports to a sanctioned country at the level of ∼5000 6-digit HS products. The criterion implies that the costs to the sanctioned country are highly convex in the market share of the sanctioning parties. Hence, there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia reveals that sanctions imposed by the EU and the US in response to Russia’s invasion of Ukraine are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. We discuss drivers of these differences, and then provide a quantitative evaluation of the export bans to show that (i) they are very effective with the welfare loss typically ∼100 times larger for Russia than for the sanctioners; (ii) improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 80% with little to no extra cost to the sanctioners; and (iii) there is scope for increasing the cost to Russia further by expanding the set of sanctioned products.

Crime, Inequality and Subsidized Housing: Evidence from South Africa

We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crime at the police station level with census data. Our analysis shows that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of roughly one standard deviation in housing inequality explains 10–12 percent of total crime increases. Additionally, we analyze a prominent housing program for low-income South Africans to show that policies that decrease inequality in housing conditions may also reduce crime. We suggest that these policies can help mitigate the societal and individual strains that are often correlated with criminal engagement.

COVID-19 and emerging markets: A SIR model, demand shocks and capital flows

We quantify the macroeconomic effects of COVID-19 for a small open economy. We use a two-country framework combined with a sectoral SIR model to estimate the effects of collapses in foreign demand and supply. The small open economy (country one) suffers from domestic demand and supply shocks due to its own pandemic. In addition, there are external shocks coming from the rest of the world (country two). Aggregate exports of the small open economy decline when foreign demand goes down, and aggregate imports suffer from lockdowns in the rest of the world. We calibrate the model to Turkey. Our results show that the optimal policy, which yields the lowest output loss and saves the maximum number of lives, for the small open economy, is an early and globally coordinated full lockdown of 39 days.

Mental health concerns precede quits: shifts in the work discourse during the Covid-19 pandemic and great resignation

To study the causes of the 2021 Great Resignation, we use text analysis and investigate the changes in work- and quit-related posts between 2018 and 2021 on Reddit. We find that the Reddit discourse evolution resembles the dynamics of the U.S. quit and layoff rates. Furthermore, when the COVID-19 pandemic started, conversations related to working from home, switching jobs, work-related distress, and mental health increased, while discussions on commuting or moving for a job decreased. We distinguish between general work-related and specific quit-related discourse changes using a difference-in-differences method. Our main finding is that mental health and work-related distress topics disproportionally increased among quit-related posts since the onset of the pandemic, likely contributing to the quits of the Great Resignation. Along with better labor market conditions, some relief came beginning-to-mid-2021 when these concerns decreased. Our study underscores the importance of having access to data from online forums, such as Reddit, to study emerging economic phenomena in real time, providing a valuable supplement to traditional labor market surveys and administrative data.

Media release: What can we learn from the Great Resignation?

The impact of return migration on employment and wages in Mexican cities

How does return migration from the US to Mexico affect local workers? Return migrants increase the local labor supply, potentially hurting local workers. However, having been exposed to a more advanced U.S. economy, they may also carry human capital that benefits non-migrants. Using an instrument based on involuntary return migration, we find that, whereas workers who share returnees’ occupations experience a fall in wages, workers in other occupations see their wages rise. These effects are, however, transitory and restricted to the city-industry receiving the returnees. In contrast, returnees permanently alter a city’s long-run industrial composition, by raising employment levels in the local industries that hire them.