Public good provision and local employment – Evidence from grammar school closures in East Germany

Ronny Freier, Martin Simmler and Christian Wittrock

Regional Science and Urban Economics, 2021, vol. 88, issue C

Abstract: This paper assesses the impact of public good provision on the spatial distribution of employment as predicted by a local labor market model that allows for commuting. Using local grammar school closures in East Germany after 2000 in a difference-in-differences estimation framework coupled with an entropy balancing strategy, we find that the school closures triggered a decline in the number of (employed) residents by 11%. The number of local employees, in contrast, decreases by just 5% as in-commuters do not respond to the school closures. Moreover, we find – as predicted – that the school closures reduce house prices and that the share of land used for housing declines, albeit only to a small extent.

Keywords: Local schools; Employment; House price; Land use; Commuting (search for similar items in EconPapers)
JEL-codes: H4 J4 R3 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:88:y:2021:i:c:s0166046221000326

DOI: 10.1016/j.regsciurbeco.2021.103672

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