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Regional firm subsidies: Direct, spillover, and welfare effects

Ajay Agrawal, Iain Cockburn, Alberto Galasso, Alexander Oettl
In light of rising regional within-country inequality around the world (Moretti 2008, Ehrlich and Overman 2020, Rosés and Wolf 2018), many policymakers have discussed efficient and effective measures to counter the increasing spatial disparities. In this regard, place-based policies, which directly subsidise regions that are economically lagging behind, are a prominent instrument in policymakers’ toolkits (Glaeser and Gottlieb 2008). Between 2014 and 2020, the EU spent more than €350 billion – about a third of its budget – on regional policies (Ehrlich and Overman 2020). The US currently devotes about $60 billion to place-based policies – mostly through business tax incentives (Bartik 2020, Slattery and Zidar 2020). A recent wave of studies has demonstrated that place-based policies unfold positive economic effects on targeted regions (Kline and Moretti 2014, Neumark and Simpson 2015, Ku et al. 2020). Bu ....

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School closures did not contribute to the spread of the coronavirus in Germany

Nicola Fuchs-Schündeln, Dirk Krueger, Alexander Ludwig, Irina Popova
School closures are among the most controversial policies used to fight the pandemic, as their costs loom large. Prolonged teaching disruptions affect not only children’s learning outcomes but also their psychological and emotional development, with children from low socio-economic backgrounds particularly hurt (Engzell et al. 2020, Grenewig et al. 2020). School closures are also detrimental for the careers of parents who take on more educational responsibilities and have to reduce the number of hours worked (Fuchs-Schündeln et al. 2020). Since women typically shoulder most of the childcare responsibilities, school closures may also widen the gender wage gap (Alon et al. 2020). ....

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Weekly links April 9: Indian education policy, rubber banding as anti-poverty strategy, problems with complicated PAPs, publishing tips, and more…

Weekly links April 9: Indian education policy, rubber banding as anti-poverty strategy, problems with complicated PAPs, publishing tips, and more…
· BU’s The Brink on Mario Kart as an analogy for what social and economic programs need to do “the idea is a lot like the way that Mario Kart gives players falling behind in the race the best power-ups, designed to bump them towards the front of the pack and keep them in the race. Meanwhile, faster players in the front don’t get these same boosts, and instead typically get weaker powers, such as banana peels to trip up a racer behind them or an ink splat to disrupt the other players’ screens. This boosting principle is called “rubber banding,” and it’s what keeps the game fun and interesting, Bell says, since there is always a chance for you to get ahead. “And that’s exactly what we want to do in development,” he says. “And it is really, really difficult to do.”” ....

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