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Urban Rent Gradients Have Flattened During the Pandemic

Rents and housing prices are usually highest at the center of dense urban areas, reflecting the value that residents place on short commutes and proximity to cultural amenities, shopping, and restaurants. The decline in rents with distance from center cities is know as the "rent gradient." House prices display a similar pattern. The COVID-19 pandemic has shuttered many of the businesses and institutions that city-dwellers value, and turned density from a positive to a negative community attribute. The coincident rise in work from home has eliminated the value of short commutes to downtown for many individuals. The result has been a decline in rents in center cities relative to those in lower-density, more-suburban areas. NBER Research Associate Stijn Van Nieuwerburgh of Columbia Business School, along with Arpit Gupta, Vrinda Mittal, and Jonas Peeters, studies the evolution of rent- and price-gradients in 30 large metropolitan areas over the last three years (28675).  Pre-pandemic, the researchers find clear evidence of declining rents and house prices as distance to downtowns rises, but the rent gradient began to decline in March 2020 and was nearly gone by year’s end. The house price gradient declined much less. Van Nieuwerburgh summarizes these findings in the video below. An archive of NBER videos on pandemic-related research may be found here.

 

Three NBER working papers distributed this week report on the economic, health, and related consequences of the COVID-19 pandemic, or on the impact of public policies that respond to it. One studies how domestic travel bans affect the rate at which the virus spreads (28699). A second examines the consequences of temporary lockdown policies on firm and labor market dynamics, with particular attention to labor market frictions (28704). The third estimates that the pandemic induced a decline of nearly 15 percent in community college enrollment in California (28715).

More than 400 NBER working papers have addressed various aspects of the COVID-19 pandemic. These papers are open access and have been collected for easy reference. Like all NBER papers, they are circulated for discussion and comment, and have not been peer-reviewed. View them in reverse chronological order or by topic area.


From the NBER Digest

...a free monthly publication of non-technical summaries of research on topics of broad public interest

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The state-sponsored automatic enrollment program facilitates saving among lower-wage workers without access to an employer’s retirement plan, but take-up is modest. Roughly half of Americans working in the private sector lack access to a company-sponsored retirement plan. Typically, they work for smaller companies that pay lower-than-average earnings and have higher-than-average turnover.  To help these workers, Oregon has created a state-sponsored...

Inequality, Discrimination, and the Financial Services Sector

Marianne Bertrand of the University of Chicago and NBER, Raphael Bostic of the Federal Reserve Bank of Atlanta, and Sean Woodroffe of TIAA There are substantial disparities across racial and ethnic groups in net worth of households, homeownership rates, and indicators of financial distress such as bankruptcy and low credit ratings. Women and individuals from minority groups are also under-represented in the financial services workforce. Three panelists at a recent NBER conference, organized in collaboration with The Review of Financial Studies, discussed a range of business practices at financial institutions that may affect wealth inequality, as well as strategies for increasing workforce diversity in this sector. Marianne Bertrand of the University of Chicago and NBER, Raphael Bostic of the Federal Reserve Bank of Atlanta, and Sean Woodroffe of TIAA explored these issues in a conversation moderated by Amit Seru of Stanford University and NBER. The panel discussion may be viewed here.


Isaiah Andrews Wins John Bates Clark Medal

Isaiah Andrews/Clark MedalNBER Research Associate Isaiah Andrews of Harvard University is year’s recipient of the John Bates Clark Medal, which is awarded by the American Economic Association to the American economist under the age of 40 who has made the most substantial contribution to economic thought and knowledge.

Andrews has made pathbreaking contributions in econometric theory and in the application of empirical methods in applied economics. He has provided new tools for assessing the sensitivity of parameter estimates to data inputs, explored the role of publication bias and potential corrections for it when evaluating published research, and advanced the analysis of weak identification in econometric models. The prize citation notes that he is "playing a key role in the recent turn of econometrics back toward the study of the most important problems faced in empirical research." The full citation for his award may be found here.

Andrews is affiliated with the NBER Labor Studies Program. He received his BA from Yale University, and his PhD from MIT.


From the Bulletin on Health

...a free summary of recent NBER Working Papers on health topics, distributed three times a year

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Do treatment guidelines encourage use of effective treatment or impede provision of personalized health care? In Rules vs. Discretion: Treatment of Mental Illness in US Adolescents (NBER Working Paper 27890), researchers Emily Cuddy and Janet Currie address this important issue in the context of mental illness among adolescents. They use claims data from the Blue Cross Blue Shield Alliance for Health Research to evaluate the effect of the initial treatment choice on...

From the NBER Reporter

...a free quarterly featuring affiliates writing about their research, program updates, and NBER news

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Author(s): Andrew Atkeson
During the first half of the 20th century, Americans enjoyed tremendous gains in health and life expectancy as large investments in sanitation, public health, and medicine resulted in the conquest of infectious diseases. Crude annual mortality rates from infectious disease in the United States fell by an order of magnitude: from nearly 800 per 100,000 in 1900 to fewer than 50 per 100,000 by 1960, with the steady downward trend interrupted dramatically by the Great Influenza...

From the Bulletin on Retirement and Disability

...a free quarterly summarizing research in the NBER's Retirement and Disability Research Center

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The recent policy debate over a possible increase in the federal minimum wage has renewed interest in understanding its effects. While much attention has been paid to possible effects of minimum wage increases on employment, their potential effects on the Social Security Disability Insurance (SSDI) program have received far less scrutiny. SSDI applications increase during times of high unemployment, suggesting that the demand for SSDI is affected by the availability of...

Featured Working Papers

Economic efficiency would increase if two tradable performance standard programs of environmental regulation, China’s new national carbon market and the California Low Carbon Fuel Standard, were shifted to price-based mechanisms, Banban Wang, William A. Pizer, and Clayton Munnings calculate.

A potential reason that measured US productivity growth remains sluggish despite dramatic increases in R&D is that much of the increase in spending is geared toward consumer products such as pharmaceuticals that benefit individuals in ways that do not raise measured GDP, Efraim Benmelech, Janice C. Eberly, Joshua L. Krieger, and Dimitris Papanikolaou find.

 

Matthew Backus, Christopher Conlon, and Michael Sinkinson test the hypothesis that when several firms in an industry share common owners, they are less likely to compete aggressively.  Analyzing data on product prices and quantities in the breakfast cereal industry, the find that even with shared ownership, firms appear to maximize their own profits.

A 43 percent decrease last year in new enrollments of foreign students at US universities and drastic declines in granting of academic visas are impacting college-town economies and university dorm revenues, with possible longer-term impacts on university finances and academic outcomes, according to John Bound, Breno Braga, Gaurav Khanna, and Sarah Turner.
 

Comparing workers with more cash on hand with those having less, Supreet Kaur, Sendhil Mullainathan, Suanna Oh, and Frank Schilbach find that those with more cash are more productive and make fewer mistakes. The effects are concentrated among the most-impoverished workers.

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In the News

Recent citations of NBER research in the media
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Source: Driving
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Source: Kiplinger
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Research Spotlights

NBER researchers discuss their work on subjects of wide interest to economists, policymakers, and the general public. Recordings of more-detailed presentations, keynote addresses, and panel discussions at NBER conferences are available on the Lectures page.
Urban Rent Gradients Have Flattened During the Pandemic Graph
Research Spotlight
Rents and housing prices are usually highest at the center of dense urban areas, reflecting the value that residents...
Prioritization and mitigation policies
Research Spotlight
As vaccines to protect against SARS-CoV-2 have become increasingly available in the U.S. and other nations, how to...
Gendered Impact of COVID-19
Research Spotlight
Historically, the employment rate for men has fallen more during recessions than that for women, largely because men...
Covid and Debt Relief Slide
Research Spotlight
Between March and October 2020, required payments on nearly $2 trillion of household debt were suspended, meaning that...
Covid Mortality Graph
Research Spotlight
The burden of COVID-19 infections and deaths has not fallen equally on members of different racial or ethnic groups. A...
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