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  1. Literature Review on the Determinants of Residential Employment, Working Paper 033 [Download]

    Title: Literature Review on the Determinants of Residential Employment, Working Paper 033
    Author: Levy, Alice
    Description: The purpose of this literature review is to summarize the theoretical and empirical literature on the determinants of residential employment. Findings from this literature review will provide the necessary background for our proposal to conduct research on the factors affecting the probability of employment for the residents of Washington, DC. This review is a counterpart to the review by Wolman, Levy, Young, and Blumenthal (2008) also provided to the Office of Revenue Analysis, that focused on the determinants of area economic competitiveness. Here our concern is not with the determinants of the number and types of jobs in the District of Columbia, but with the employment of DC residents, regardless of where they work. While a competitive advantage for the District will provide more opportunities for employment of District residents, the factors that drive residential employment differ from those that determine how many jobs are in a region. Local jobs may go to persons outside of the jurisdiction and local residents may work in jobs that are outside of the jurisdiction. There is little academic literature on employment by place of residence per se. There is however an extensive literature addressing various aspects of employment in ways relevant to residential employment. The focus of our review is on literature that addresses the question of what factors account for the number or percentage of city (or some sub-regional area) residents who are employed or, put in other terms, what are the factors that determine the probability that a resident of a particular sub-regional area will be in employment? The literature that is relevant will thus be research on individual employment generally and employment for particular classes of individuals (by race, gender, age, etc.).
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  2. Comparing Local Government Autonomy Across States, Working Paper 035 [Download]

    Title: Comparing Local Government Autonomy Across States, Working Paper 035
    Author: Wolman, Hal
    Description: Local autonomy is a term that is frequently employed in both academic and popular discussions of local government, but it is rarely defined conceptually in a careful way or operationalized and subject to empirical research. In this paper we present a working definition of “local government autonomy” based on dimensions fundamental to the concept, identify variables to operationalize those dimensions, utilize factor analysis to combine those variables into underlying component factors, and create an overall Local Government Autonomy index that can be used as a variable in future research. We also use cluster analysis to create a classification scheme for different forms of local government autonomy. Finally, by using our local government autonomy index and factors as independent variables in a regression model we find they are highly useful for predicating the consequences of related local finance research questions.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  3. Economic Competitiveness and the Determinants of Sub-National Area Economic Activity, Working Paper 034 [Download]

    Title: Economic Competitiveness and the Determinants of Sub-National Area Economic Activity, Working Paper 034
    Author: Wolman, Hal
    Description: The purpose of this paper is to review the empirical and theoretical literature on area economic competitiveness and the sub-national location of economic activity. Thus, we are interested in why economic activity locates where it does, and, from the perspective of a given sub-national area, what is it about the area and its characteristics that make it competitive, i.e., an attractive or unattractive place for the location of different kinds of economic activity. The framework we employ for our review is that of “competitive advantage.” The basic premise underlying the concept of competitive advantage is that a firm will locate in an area where it can produce and bring to market the goods and services it produces at greatest profit. The locational characteristics that determine where a firm will be able to produce at greatest profit vary by sector (the outputs the firm produces). A particular area can be thought of as competing against other areas as a potential location for economic activity. Some of its characteristics and attributes will be favorable to the location of a particular form of economic activity relative to those of other areas, while others may be unfavorable. An area will have a competitive advantage for a particular kind of economic activity if that activity can produce and bring to market its goods or services in that area and derive a greater profit than it would if it located elsewhere. Since competitive advantage conceptually relates to specific types of economic activity, an area may have competitive advantage for some kinds of economic activity but not for others. Nonetheless, the term is frequently used to characterize an area with respect to its entire economy, i.e., an area has a competitive advantage or disadvantage for the location of economic activity in general. Since the purpose of this re view is to serve as a back-drop for a study that we propose on the competitiveness of the Washington DC regional and city economies, our discussion is directed towards that end. The project will consist of two parts: research on the Washington, DC region and its competitive advantages – i.e., the determinants of the location of economic activity in the DC region relative to other regions - and research on the economy of the city of Washington, DC and, in particular, the determinants of location of economic activity within the region. This approach is consistent with the literature, which makes clear that location decisions generally consist of a two-step process with the first step consisting of a regional choice and the second, but later, decision consisting of a specific location within the chosen region (Cohen 2000). As Blair and Premus (1987) observe, after a review of surveys of business executives, for the first stage -- regional or state selection -- variations in labor availability and quality, state taxes, climate, and market proximity tend to be key determinants. In the next step, choice of a specific location within the region, factors that are available throughout the region, but vary with specific sites become predominant considerations – land costs, access to major roads, and school quality being three major factors. Anderson and Wassmer (2000) similarly argue that first a firm chooses a “market” in which to locate, which is a regional decision, and then chooses a “site,” which is a local decision within the preselected region. Fiscal characteristics of an area (including but not limited to targeted economic development incentives) become important to firms once they have reached the phase of decision-making focusing on “site” location (P.25-26).
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  4. Understanding the Economic Performance of Metropolitan Areas in the United States, Working Paper 032 [Download]

    Title: Understanding the Economic Performance of Metropolitan Areas in the United States, Working Paper 032
    Author: Blumenthal, Pamela
    Description: Examining the drivers of metropolitan economic performance, we model two dependent variables: change from 1990 to 2000 in gross metropolitan product and MSA employment. We find that initial year economic structure (an above average share of manufacturing employment), agglomeration economies, human capital (share of population with bachelor degrees or higher), and presence of state Right-to-Work laws are positively and significantly related to GMP and employment growth, while economic age of the area, percentage of black non-Hispanic residents, and average wage at the beginning of the period are negatively and significantly related to both. We augment the regional dummy variables commonly used to explain economic growth, and typically highly significant, by including climate-related amenity, business environment, and economic age. When these three variables are included in the model as independent variables with the regional dummy variables, all three are significant for growth in GMP and the significance of region largely disappears.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  5. States and Their Cities: Partnerships for the Future, Working Paper [Download]

    Title: States and Their Cities: Partnerships for the Future, Working Paper
    Author: Wolman, Hal
    Description: Cities are an important determinant of state economic performance. As a consequence, states that ignore the economic well-being of their cities risk falling behind. Cities whose economies are stagnant, whose residents suffer from poverty and unemployment, whose budgets are in chronic fiscal stress, and who require state aid to sustain basic services are a drag on the entire state economy. Cities whose economies are vibrant, whose residents are productive, whose budgets are fiscally stable, and who do not require massive infusions of state aid are assets to the entire state. Our study examines the relationship between states and their cities and the impact of state activity on cities. To understand how states can help cities - and thereby themselves - succeed, the George Washington Institute of Public Policy and Cleveland State University's Office of Economic Development began a study of state policies that contribute to successful urban performance. As background for this paper, we visited seven states (California, Illinois, Michigan, North Carolina, Oregon, Pennsylvania, and Washington; see Box 1 on p. 5 for selection criteria). As a result of our research in these states, we identified a set of principles that, when they serve as guides to state actions and policies, can help cities prosper and at the same time benefit all state residents.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  6. Capital Cities and their National Governments: Washington, DC in Comparative Retrospective, Working Paper 030 [Download]

    Title: Capital Cities and their National Governments: Washington, DC in Comparative Retrospective, Working Paper 030
    Author: Wolman, Hal
    Description: Along numerous dimensions Washington, D.C. differs substantially from the rest of the United States. It is a city that lacks the support and resources of a state. It performs many of the same functions as a state while lacking most of the rights, powers, and privileges guaranteed to states under the U.S. Constitution. The District of Columbia lacks full representation in the U.S. Congress, has limited autonomy over its own governance and fiscal policy, while carrying numerous burdens associated with hosting the national capital. While unique in the American context, how unique is the District in the international context? All nations have capitals. In what ways do the circumstances of capitals in other nations resemble or differ from the District’s? In what ways are capital cities treated differently from other cities in the respective nation?
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  7. Local Democratic Governance: What Is It and How We Manage It?, Working Paper 031 [Download]

    Title: Local Democratic Governance: What Is It and How We Manage It?, Working Paper 031
    Author: Bell, Michael
    Description: The purpose of this paper is twofold. The first task is to develop a conceptual framework for thinking about local democratic governance. Once that framework is developed, specific indicators will be proposed to monitor the quality of key features or characteristics of a process of local democratic governance. The indicators will be “actionable” and can be used to guide CDD operations and track progress in strengthening local democratic governance. In order to address these topics, the next section discusses the meaning of local democratic governance. That is followed by a discussion of why local democratic governance is important. The following section then turns to a discussion of the formal and informal arrangements which combine to produce a vibrant process of local democratic governance. The final section proposes actionable indicators for measuring different dimensions of the process of local democratic governance.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  8. What Explains Central City Performance?, Working Paper 029 [Download]

    Title: What Explains Central City Performance?, Working Paper 029
    Author: Wolman, Hal
    Description: The fundamental question we address is: What accounts for urban performance? By urban performance we mean change over time in important indicators of urban well-being such as income, jobs, crime rate, housing affordability, etc. Change in these indicators might result from several factors, including 1) structural factors that were present at the beginning of the period and predispose the city indicators to change in a predictable way (economic structure, skill level of the population), 2) exogenous changes that occurred during the period (natural disasters, immigration, new state or federal policies), and 3) endogenous changes that occurred during the period (city policy, behavior of private and public-sector elites). In the popular writing (and often in public policy literature as well), urban performance is frequently attributed largely to explicit policy decisions of local (and/or state) public officials or civic elites. We wish to examine this attribution in the context of other factors that might also affect performance.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  9. Estimating Economic Impacts of Homeland Security Measures, Working Paper 022 [Download]

    Title: Estimating Economic Impacts of Homeland Security Measures, Working Paper 022
    Author: Cordes, Joseph
    Description: The terrorist attacks of Sept. 11, 2001 have prompted the federal government to adopt a number of different measures that are intended to reduce the probability of future successful terrorist attacks and/or reduce the impact of any future attacks should they occur. These measures are grouped together under the broad rubric of preserving and increasing homeland security. Public policies that increase the level of homeland security require that government, individuals, and businesses devote more time and money to protective measures, which exacts an economic cost. Using a broad definition of “homeland security” to consist of “all expenditures possibly aimed at either preventing damage due to terrorist attacks or at preparedness for the response to potential attacks,” the Federal Reserve Bank of New York (FRBNY) has estimated that in 2003 total public and private sector outlays on increased security equaled just over $70 billion or just under 0.7% of the nation’s gross domestic product. In addition, the FRBNY report estimates that “indirect costs” such as travel delays related to heightened airport security added an additional $12 billion, for a total estimated cost of more than $80 billion. Whether costs of this magnitude are viewed as “large” or “small” depends on one’s perspective. On the one hand, as noted in the FRBNY article, when viewed against the landscape of a $11 trillion national economy, the estimated costs of attaining homeland security are relatively small; and clearly, measures of macroeconomic performance such as economic growth and employment indicate that the national economy has been able to take these additional costs in stride. Yet this does not mean that such costs should be ignored in the design, implementation and evaluation of homeland security policies. •The magnitude of the aggregate costs associated with homeland security are quite comparable in size to estimates that have been made by OMB and others of the economic cost of environmental and social regulations, and there is general agreement that there is a public interest to be served in ensuring that such regulations achieve the maximum social benefit at minimum social cost. Presumably the same logic should apply to homeland security measures. •There has been criticism that outlays made with the ostensible purpose of fostering greater homeland security have been wasteful. Focusing more attention on the economic cost and economic impact of proposed homeland security measures can help reduce such wasteful expenditures, just as more careful analysis of these factors has led to more cost-effective governmental regulatory policies in other areas (as documented by the Office of Management and Budget). •Although the impact of a single, or multiple homeland security measures may seem “small” in the context of the national economy, these costs are typically concentrated on certain stakeholders, such as local governments, specific business sectors, or consumers of particular goods and services. To these stakeholders, the cost of achieving greater homeland security can be quite palpable and substantial, and should receive their proper due in the design and evaluation of homeland security measures. •At a practical policy level, unlike national defense, policies intended to promote homeland security, are not exempt from OMB requirements that government regulatory programs with cost of impacts of $100 million or greater be subject to regulatory analysis which requires a careful analysis of the costs of such such measures in relation to the benefits to be derived.
    Keywords: Public policy
    Date Uploaded: 10/16/2015
  10. Toward Understanding Urban Pathology: Creating a Typology of 'Weak Market' Cities, Working Paper 021 [Download]

    Title: Toward Understanding Urban Pathology: Creating a Typology of 'Weak Market' Cities, Working Paper 021
    Author: Furdell, Kimberly
    Description: Not all distressed cities are the same, either in the causes of their distress or in its manifestations. In this paper, we empirically develop a typology of economically distressed cities which differentiates among types of cities based on different aspects of economic distress and its impact on city residents. We measure two facets of distress by using eight indicators to create two distinct distress indexes, the City Economic Condition index and the Residential Economic Wellbeing index. Cities that fall in the bottom third of the distribution on these indexes are considered economically distressed, or “Weak Market” cities. We then use cluster analysis to differentiate among the weak market cities based on different aspects of distress, and to explore the relationship between the economic health of cities and that of their metropolitan areas. We argue that urban policy makers must recognize that distressed cities are not a homogenous group, and that appropriate policy solutions will reflect the differences among such cities.
    Keywords: Public policy
    Date Uploaded: 10/16/2015