We study the impact of borrower protection on mortgage and housing demand using variation in the likelihood that houses are repossessed coming from heterogeneity in preferences of local judges. We develop a framework that provides conditions to identify the impact of repossession risk on housing and credit demand, holding supply fixed. Empirically, we exploit exogenous variation in risk created by boundaries of court catchment areas. We find that a one-standard-deviation decrease in borrower protection decreases borrowing and house prices by 4.5%.

Although school autonomy is often advocated as a way to improve student achievement, many countries are experiencing a counterbalancing trend: the emergence of ‘chains’ that bind schools together into structures with varying degrees of centralization. Despite their prominence, no evidence exists on the determinants and effects of differences in the organizational set-up of school chains. Our work aims to fill this gap. We use some of the key insights of the organizational economics of firms to study the organization of school chains. We match survey information on decentralization decisions of procurement activities for approximately 400 chains and 2,000 schools in England to student-, school and market-level administrative records. We find that chains with a larger share of schools whose leadership background is aligned with the chain board’s expertise, younger chains, and chains that are closer to the market value-added (productivity) frontier decentralize more. We find instead no association between the value-added heterogeneity of the markets in which chains operate and their decision to delegate. We also investigate the link between the structures of chains and their students’ performance. We find no association between decentralization and performance. This is consistent with the intuition that chains choose their organization in ways that maximize output (i.e., students’ learning) and so the equilibrium relationship between performance and organizational set-up is flat.

Spurred by mixed evidence on the effectiveness of resource-based interventions (Hanushek, 2003), policy makers around the world have come to promote reforms that aim to improve standards by injecting into the education system elements of school choice and autonomy -- and by promoting competition among schools. In this chapter, we review evidence on the effectiveness of school competition to raise the quality of education using the experience of four nations that pioneered reforms in this direction – namely, England, the US, Sweden and Chile. Our review reveals that findings are very mixed. We conclude by discussing possible institutional 'bottlenecks' that might explain why the benefits school competition have yet to materialise.

We study how demand responds to the rebranding of existing state schools as autonomous 'academies' in the context of a radical and large-scale reform to the English education system. The academy programme encouraged schools to opt out of local state control and funding but provided parents and students with limited information on the expected benefits. We use administrative data on school applications for three cohorts of students to estimate whether this rebranding changes schools' relative popularity. We find that families - particularly, higher income, White British - are more likely to rank converted schools above non-converted schools on their applications. We also find that it is mainly schools that are high-performing, popular and proximate to families' homes that attract extra demand after conversion. Overall, the patterns we document suggest that families read academy conversion as a signal of future quality gains - although this signal is in part misleading as we find limited evidence that conversion causes improved performance.

This article considers the heterogeneous microfoundations of agglomeration economies. It studies the co-location of industries to look for evidence of labour pooling, input sharing and knowledge spillovers. The novel contribution of the article is that it estimates single-industry models using a common empirical framework that exploits the cross-sectional variation in how one industry co-locates with the other industries in the economy. This unified approach yields evidence on the relative importance of the Marshallian microfoundations at the single-industry level, allowing for like-for-like cross-industry comparisons on the determinants of agglomeration. Using UK data, we estimate such microfoundation models for 97 manufacturing sectors, including the classic agglomeration cases of automobiles, computers, cutlery and textiles. These four cases-as with all of the individual industry models we estimate-clearly show the importance of the Marshallian forces. However, they also highlight how the importance of these forces varies across industries-implying that extrapolation from cases should be viewed with caution. The article concludes with an investigation of the pattern of heterogeneity. The degree of an industry's clustering (localisation), entrepreneurship, incumbent firm size and worker education are shown to contribute to the pattern of heterogeneous microfoundations.

Housing subsidies for low income households are a central pillar of many welfare systems, but an expensive one. This paper investigates the consequences of an unusual policy aimed at reducing the cost of these subsidies by rationing tenants' use of space. Specifically, we study a policy introduced by the UK Government in 2013, which substantially cut housing benefits for tenants deemed to have a ‘spare’ bedroom – based on specific criteria related to household composition. Our study is the first to evaluate the impacts of the policy on its target group using a strategy that compares the observed changes in behaviour of the treated households to those of a control group. The treatment and control groups are defined by the detail of the policy rules. We find that – as expected – the treated group loses housing benefits and overall income. Although the policy was not successful in encouraging residential moves (despite efforts to make mobility within the social sector easier), it did incentivise people who moved to downsize – suggesting some success in terms of one of the policy goals, namely reducing under-occupancy. The policy did not incentivise people to work more and we find no statistically significant effects on households' food consumption or saving behaviour. The implication of our findings is that this type of policy has limited power to change housing consumption or employment in the short run. While it might reduce the costs of housing subsidies to the taxpayer, it does so by imposing a direct financial cost to social tenants unable or unwilling to downsize.

By comparing siblings attending the same school at different points of time, we estimate the effects of schoolmates’ average parental education on lifetime earnings and other medium and long-term outcomes and investigate whether these effects vary with individual parental education. We find that exposure to privileged peers increases lifetime earnings and the probability of completing tertiary education. These effects are mainly concentrated among “disadvantaged” students. Lifetime earnings increase also with the dispersion of peers’ average parental education. These results suggest that school desegregation policies can produce long-term benefits. The size of the estimated effects, however, is small.

We study the link between mortgage debt and entrepreneurship using a model of occupational choice and housing tenure in a setting where loans are recourse—like in the UK and several US states. Our model shows that as long as the mortgage interest rate exceeds the risk-free rate: (i) mortgage debt diminishes the likelihood of entrepreneurship by amplifying risk aversion; and (ii) the negative relation between mortgage debt and entrepreneurship increases with income volatility. Our model also shows that the link between housing equity and entrepreneurship is ambiguously signed because of competing portfolio and wealth effects. We use the British Household Panel Survey to test and confirm the model predictions, and deal with unobservable heterogeneity employing three research designs—individual fixed effects, housing-spell fixed effects, and instrumental variables. A one standard deviation increase in leverage reduces the probability of entrepreneurship by 10–20 percent.

Housing subsidies for low income households are a central pillar of many welfare systems, but an expensive one. This paper investigates the consequences of an unusual policy aimed at reducing the burden of these subsidies by rationing tenants’ use of space. Specifically, we study a policy introduced by the UK Government in 2013 which substantially cut housing benefits for tenants deemed to have a ‘spare’ bedroom – based on specific criteria related to household composition. Our study is the first to evaluate the impacts of the policy on its target group considering a range of outcomes. To do so, we use a difference-in-difference methodology that compares the observed behaviour of the treated households relative to a control group determined from the details of the policy rules. We find that – as expected – the treated group experienced losses to housing benefit and overall income. Although the policy was not successful in encouraging residential moves, it did incentivise people who moved to downsize – suggesting some success in terms of one of the policy goals, namely reducing ‘underoccupancy’ in the long run. We find no statistically significant effects on households’ food consumption, savings or employment outcomes, despite the associated income reductions. Finally, we find some evidence of a reduction in self-reported satisfaction though this effect is not precisely estimated.

A comic strip visualisation of the 2017 article Neighbourhood turnover and teenage attainment by Stephen Gibbons, Olmo Silva and Felix Weinhardt, from the Journal of the European Economic Association. Made possible by the article being published under a Creative Commons licence

The 'bedroom tax' - a UK government policy introduced in 2013 that cut housing benefits for social tenants deemed to have a 'spare' bedroom - saved some public money, according to research by Steve Gibbons and colleagues. But the policy added further strain to the finances of people who were already disadvantaged. Their study, which examines whether the policy achieved its objectives and how the targeted families reacted, finds that the burden of the bedroom tax fell on social tenants who were unwilling or unable to move.

The English education system has undergone large-scale restructuring through the introduction of academy schools. The most salient feature of these schools is that, despite remaining part of the state sector, they operate with more autonomy than the predecessors they replaced. Two distinct periods of academy school introduction have taken place, under the auspices of different governments. The first batch was initiated in the 2002-03 school year by the Labour government of the time, and was a school improvement programme directly aimed at turning around badly performing schools. The second batch involved a mass academisation process following the change of government in May 2010 and the Academies Act of that year, which resulted in increased heterogeneity of new academies. This paper compares the two batches of introduction with the aim of getting a better understanding of their similarities and differences, and their importance for education policy. To do so, we study what types of schools were more likely to change to academy status in the two programmes, and the impact of this change on the quality of new pupil enrolments into the new types of school. Whilst we do point out some similarities, these are the exception rather than the norm. For the most part, our analysis reveals a number of marked dissimilarities between the two programmes, in terms of both the characteristics of schools that became academies and the changes in pupil intakes that occurred post-conversion.

Theories about neighbours' influence on children based on social capital, cohesion and disorganisation stress the importance of neighbourhood stability. However, amongst the vast number of studies on the effect of neighbours on a child's education, none has tested whether neighbourhood stability matters. We fill this gap by estimating the causal effect of residential turnover on student test score gains. We show that high neighbourhood turnover reduces value added for students who stay in their neighbourhood, and this effect is more pronounced in more deprived neighbourhoods. Estimation is based on administrative data on four cohorts of secondary school children in England, allowing us to control for unobserved confounding individual effects, neighbourhood fixed effects and trends, plus school-by-cohort shocks. These main results, coupled with auxiliary findings based on survey data, suggest that neighbourhood turnover damages education through the disruption of local ties and social capital, highlighting a so-far undiscovered externality of mobility.

Education policy worldwide has sought to incentivize school improvement and facilitate pupil-school matching by introducing reforms that promote autonomy and choice. Understanding the way in which families form preferences during these periods of reform is crucial for evaluating the impact of such policies. We study the effects on choice of a recent shock to the English school system – the academy programme – which gave existing state schools greater autonomy, but provided limited information on possible expected benefits. We use administrative data on school applications for three cohorts of students to estimate whether academy conversion changes schools’ popularity. We find that families – particularly non-poor, White British ones – rank converted schools higher on average. Expected changes in composition, effectiveness and other school policies cannot explain this updating of preferences. Instead, the patterns suggest that families combine the signal of conversion with prior information on quality, popularity and proximity as a heuristic for assessing a school’s expected future performance.

Many prior treatments of agglomeration explicitly or implicitly assume that all industries agglomerate for the same reasons. This paper uses U.K. establishment-level coagglomeration data to document substantial heterogeneity across industries in the microfoundations of agglomeration economies. It finds robust evidence of organizational and adaptive agglomeration forces as discussed by Chinitz (1961), Vernon (1960), and Jacobs (1969). These forces interact with the traditional Marshallian (1890) factors of input sharing, labor pooling, and knowledge spillovers, establishing a previously unrecognized complementarity between the approaches of Marshall and Jacobs, as well as others, to the analysis of agglomeration.

SUMMARY We study how demand responds to the rebranding of existing state schools as autonomous ‘academies’ in the context of a radical and large-scale reform to the English education system. The academy programme encouraged schools to opt out of local state control and funding, but provided parents and students with limited information on the expected benefits. We use administrative data on school applications for three cohorts of students to estimate whether this rebranding changes schools’ relative popularity. We find that families – particularly higher income, White British – are more likely to rank converted schools above non-converted schools on their applications. We also find that it is mainly schools that are high-performing, popular and proximate to families’ homes that attract extra demand after conversion. Overall, the patterns we document suggest that families read academy conversion as a signal of future quality gains – although this signal is in part misleading as we find limited evidence that conversion causes improved performance.

The English education system has undergone a large restructuring programme through the introduction of academy schools. The most salient feature of these schools is that, despite remaining part of the state sector, they operate with more autonomy than the predecessor schools they replace. Two distinct time periods of academy school introduction have taken place, under the auspices of different governments. The first batch was initiated in the 2002/03 school year by the Labour government of the time and was directly aimed at turning around badly performing schools. The second batch involved a mass academisation process following the change of government in May 2010 and the Academies Act of that year and resulted in increased heterogeneity of new academies. This paper compares the two batches of introduction with the aim of getting a better understanding of their similarities and differences. To do so, we study what types of schools were more likely to change to academy status in the two programmes, and the impact of this change on the quality of new pupil enrolments into the new types of school. Whilst we do point out some similarities, these are the exception rather than the norm. For the most part, our analysis reveals a number of marked dissimilarities between the two programmes in terms of both the characteristics of schools that become academies and the subsequent changes in intakes.

The English education system has undergone a large restructuring programme through the introduction of academy schools. The most salient feature of these schools is that, despite remaining part of the state sector, they operate with more autonomy than the predecessor schools they replace. Two distinct time periods of academy school introduction have taken place, under the auspices of different governments. The first batch was initiated in the 2002/03 school year by the Labour government of the time and was directly aimed at turning around badly performing schools. The second batch involved a mass academisation process following the change of government in May 2010 and the Academies Act of that year and resulted in increased heterogeneity of new academies. This paper compares the two batches of introduction with the aim of getting a better understanding of their similarities and differences. To do so, we study what types of schools were more likely to change to academy status in the two programmes, and the impact of this change on the quality of new pupil enrolments into the new types of school. Whilst we do point out some similarities, these are the exception rather than the norm. For the most part, our analysis reveals a number of marked dissimilarities between the two programmes in terms of both the characteristics of schools that become academies and the subsequent changes in intakes.