Afraa Chagroufi (p), Adil Zabadi, Nacer El Kadiri

Ryusuke Ihara

see extended abstract

Karin Edmark (p)

Afraa Chagroufi

This paper studies the location decisions of Swedish start-up independent schools. It makes use of the great expansion of independent schools following a reform implemented in 1992 to test what local market characteristics are correlated with the likelihood of independent school entry.
The results suggest that independent schools are more likely to choose locations with a higher share of students with low-educated parents; a higher student population density; and a lower share of students with Swedish-born parents. Independent schools are also less likely to locate in municipalities with a left-wing political majority.
These results are robust to various alternative and flexible definitions of local school markets, which were employed in order to alleviate the risk of bias due to the Modifiable Areal Unit Problem. For some of the included variables, the definition of the local market however had a large impact on the results, suggesting that the issue of how to define regions in spatial analyses can be of great importance.

Ryusuke Ihara (p)

Karin Edmark

The productivity in cities is enhanced by the interaction between heterogeneous workers who were born and brought in various regions and countries. However, such a benefit does not last forever because workers in cities will be homogenized over generations. To see the agglomeration economy and diseconomy of labor heterogeneity, this paper constructs a two-region non-overlapping generations model. Workers are assumed to be differentiated in terms of where they were born, and foreign workers incur an adjustment cost for the cultural difference. Assuming that the births distribution of workers depends on their previous generation's residential choice, this paper obtains the following results. (i) In the short run, the residential choice leads the workers to disperse among the regions in each period. In the long run, however, the accumulation of the residential choice over periods makes the births population concentrate in one of the regions. Consequently, all the workers will be homogenized and keep residing in one region in the steady-state equilibrium. (ii) The social welfare is maximized by an even distribution of births which involves a persistent circulation of heterogeneous labor. A comparison between the social optimum and the steady-state equilibrium indicates a dynamic inefficiency due to the generational transition. (iii) When we introduce a housing consumption as a dispersion force, the social welfare can be maximized in a steady-state equilibrium in which the births population is evenly divided among the regions. (iv) Contrarily, even when we introduce another agglomeration economy due to labor amount, the births distribution in a steady-state equilibrium is still concentrated in comparison to the social optimum. (Please see the document attached.)