Today's episode features Gilles Duranton and Diego Puga on their new working paper, "Urban Growth and its Aggregate Implications." This paper builds a detailed theoretical model that includes urbanization, agglomeration economies, inter-city migration, congestion externalities, and land-use restrictions. We develop an urban growth model where human capital spillovers foster entrepreneurship and learning in heterogeneous cities. Incumbent residents limit city expansion through planning regulations so that commuting and housing costs do not outweigh productivity gains. The model builds on strong microfoundations, matches key regularities at the city and economy-wide levels, and generates novel predictions for which we provide evidence. It can be quantified relying on few parameters, provides a basis to estimate the main ones, and remains transparent regarding its mechanisms. We examine various counterfactuals to assess quantitatively the effect of cities on economic growth and aggregate income. 

Cities and Growth with Gilles Duranton and Diego Puga

Economics Detective Radio is a podcast about markets, ideas, institutions, and all things related to the field of economics. Episodes consist of long-form interviews and are generally released on Fridays. Topics include economic theory, economic history, the history of thought, money, banking, finance, macroeconomics, public choice, business cycles, health care, education, international trade, and anything else of interest to economists, students, and serious amateurs interested in the science of human action. For additional content and links related to each episode, visit economicsdetective.com.

Social Sciences

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Science

Government

 Michael Heller joins the podcast to discuss his new book, Mine! How the Hidden Rules of Ownership Control Our Lives. This book explores the implicit social rules governing ownership. In brief, these rules are as follows:  Attachment ("it's mine because it's connected to something of mine") Possession ("it's mine because I physically control it") First-in-time ("it's mine because I was here first") Labour ("it's mine because I worked for it") Self-ownership ("it's mine because it came from my body") Family ("it's mine because my grandfather left it to me")  We discuss these six rules with reference to many examples of how they play out in the modern world, from conflicts over airline seats to the rise and fall of Soviet communism. 

The Hidden Rules of Ownership with Michael Heller

On today's episode, I discuss Adam Smith's Wealth of Nations with Sarah Skwire. Sarah is part of the team tweeting through the book @AdamSmithWorks. We discuss the project and talk through the first few chapters of the Wealth of Nations.

The Wealth of Nations with Sarah Skwire

Today's guest is Michael McCullough of the University of California, San Diego. We are discussing his book The Kindness of Strangers: How a Selfish Ape Invented a New Moral Code. How did humans, a species of self-centered apes, come to care about others? Since Darwin, scientists have tried to answer this question using evolutionary theory. In The Kindness of Strangers, psychologist Michael E. McCullough shows why they have failed and offers a new explanation instead. From the moment nomadic humans first settled down until the aftermath of the Second World War, our species has confronted repeated crises that we could only survive by changing our behavior. As McCullough argues, these choices weren’t enabled by an evolved moral sense, but with moral invention — driven not by evolution’s dictates but by reason.  Today's challenges — climate change, mass migration, nationalism — are some of humanity’s greatest yet. In revealing how past crises shaped the foundations of human concern, The Kindness of Strangers offers clues for how we can adapt our moral thinking to survive these challenges as well. 

The Kindness of Strangers with Michael McCullough

Today's guest is Nina Roussille of UC Berkeley and we discuss her working paper, The central role of the ask gap in gender pay inequality. The gender ask gap measures the extent to which women ask for lower salaries than comparable men. This paper studies the role of the ask gap in generating wage inequality using novel data from Hired.com, a leading online recruitment platform for full time engineering jobs in the United States. To use the platform, job candidates must post an ask salary, stating how much they want to make in their next job. Firms then apply to candidates by offering a bid salary they are willing to pay the candidate. If the candidate is hired, final salary is recorded. After adjusting for resume characteristics, the ask gap is 3.3%, the bid gap is 2.4% and the gap in final offers is 1.8%. Remarkably, further controlling for the ask salary explains all of the gender gaps in bid and final salary on the platform. To estimate the market-level effects of an increase in women’s ask salary, I exploit a sudden change in how candidates were prompted to provide their ask salary. For a subset of candidates, in mid-2018, the answer box used to solicit the ask salary went from an empty field to a pre-filled entry with the median salary on the platform for a similar candidate. Comparing candidates creating a profile before and after the feature change, I find that this change drove the ask gap and the bid gap to zero. In addition, women received the same number of bids before and after the change, suggesting they face little penalty for demanding wages comparable to men.  Related links: During the conversation, Nina mentions Sheryl Sandberg's Lean In: Women, Work, and the Will to Lead. Among other things, encourages women to negotiate higher salaries, a strategy Nina's research would support.

The Gender Salary Ask Gap with Nina Roussille

 Anton Howes returns to the podcast to discuss his new book, Arts and Minds: How the Royal Society of Arts Changed a Nation. From its beginnings in a coffee house in the mid-eighteenth century, the Royal Society for the Encouragement of Arts, Manufactures and Commerce has tried to improve British life in every way imaginable. It has sought to influence how Britons work, how they are educated, the music they listen to, the food they eat, the items in their homes, and even how they remember their own history. Arts and Minds is the remarkable story of an institution unlike any other—a society for the improvement of everything and anything.  Drawing on exclusive access to a wealth of rare papers and artefacts from the Society’s own archives, Anton Howes shows how this vibrant and singularly ambitious organisation has evolved and adapted, constantly having to reinvent itself to keep in step with changing times. The Society has served as a platform for Victorian utilitarian reformers, purchased and restored an entire village, encouraged the planting of more than sixty million trees, and sought technological alternatives to child labour. But this is more than just a story about unusual public initiatives. It is an engaging and authoritative history of almost three centuries of social reform and competing visions of a better world—the Society’s members have been drawn from across the political spectrum, including Adam Smith, Edmund Burke, and Karl Marx.  Informative and entertaining, Arts and Minds reveals how a society of public-spirited individuals tried to make their country a better place, and draws vital lessons from their triumphs and failures for all would-be reformers today. 

Cities and Growth with Gilles Duranton and Diego Puga

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