Essays in applied economics

Abstract

The thesis is a collection of essays in Applied Economics. The first essay employs unique Italian data to jointly consider different aspects of the relationship between agglomeration and labor market pooling. The paper looks across all industries from the perspectives of both workers and firms. The study finds evidence of a positive relationship between turnover and agglomeration, evidence of on-the-job learning and evidence consistent with agglomeration improving job matches. However, the estimated labor market pooling gains seem unlikely to account for a substantial share of the agglomeration benefits accruing to workers and firms. The second essay evaluates the effectiveness of a major Italian place-based policy through which the government endorses and finances an industrialization plan proposed by private firms. By using as counterfactuals the areas exposed to the same policy later in time, the study finds little evidence of a positive effect of the program on plants and employment growth rates, which is confined to a small area (municipality) and crowds out the economic growth of the surroundings. The third essay uses the consolidation of Italian municipalities brought about by the fascist dictatorship in the 1920s to gauge the role of the size of local jurisdictions for economic development. It finds that the consolidation was associated with relevant net welfare gains for the communities involved. In particular, the advantages related to the bigger economies of scale in larger jurisdictions overwhelmed the costs owing to the higher heterogeneity. The fourth essay investigates the impact of financial development on the quantiles of the conditional growth distribution. The study presents a growth model showing the quantile effects of finance on growth and provides empirical evidence consistent with the idea that countries in the upper tail of the conditional growth distribution react more than countries in the lower tail to the same financial stimulus.