|
on Microeconomic European Issues |
|
Issue of 2016‒04‒16
seventeen papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Elena Gentili (Institute of Economics (IdEP), Università della Svizzera Italiana (USI), Switzerland); Giuliano Masiero (Institute of Economics (IdEP), Università della Svizzera Italiana (USI), Switzerland; Department of Management, Information and Production Engineering (DIGIP), University of Bergamo, Italy); Fabrizio Mazzonna (Institute of Economics (IdEP), Università della Svizzera Italiana (USI), Switzerland) |
| Abstract: | The aim of this paper is to assess the role of culture in shaping individual preferences to- wards different long-term care (LTC) arrangements. The analysis uses Swiss data from two administrative databases covering the universe of formal LTC providers between 2007 and 2013. Switzerland is a multi-cultural confederation where state administrative borders do not always coincide with cultural groups. For this reason, we exploit the within-state variation in cultural groups to show evidence about cultural differences in LTC use. In particular, we use spatial regression discontinuity design (RDD) at the language border between French-speaking and German-speaking individuals living in bilingual cantons to provide causal interpretation of the differences in formal LTC use between these two main cultural groups. Our results suggest a strong role of culture in shaping household decisions about formal LTC use. In particular, elderly people residing in regions speaking a Latin language (French, Italian and Romansh) use home-based care services more intensely and enter in nursing homes at older ages and in worse health conditions with respect to elderly people in German regions. This difference across the two cultural groups are driven by different preferences towards LTC arrangements. |
| Keywords: | Long-term care, Culture, Spatial RDD |
| JEL: | I11 I18 C26 |
| Date: | 2016–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpidep:1605&r=eur |
| By: | Tine Hufkens; Gerlinde Verbist |
| Abstract: | An aspect that has only recently received attention in the study of policy measures aimed at supporting families with young children in their work-family life balance is its distributive impact. Are these measures used by poor and rich families alike, or is there a ‘Matthew effect’ at play, in the sense that poor families are underrepresented in using such measures? In order to perform such an evaluation one needs to have a measure of both cash and in-kind benefits related to policies that help families cope with the care of young children and job expectations. In-kind benefits are offered mainly in the form of subsidized early childhood education and care (ECEC), for which an appropriate cash equivalent has to be derived. As the value of in-kind benefits from publicly provided services is not included in the EU-SILC data, we derive them for this paper in line with earlier studies (e.g. Matsaganis and Verbist, 2009; Vaalavuo, 2011; Förster and Verbist, 2012; Van Lancker, 2014; Van Lancker and Ghysels, 2014). In comparison to these earlier studies, however, our analysis is much more fine-grained as we use the microsimulation model EUROMOD to include more precise estimates of parental fees and related tax-benefit policies; thus, we will have a better estimate of the net in-kind benefit households derive from ECEC services. We focus on policy measures going to children under compulsory schooling age for a selection of seven EU-countries. These improved estimates allow us to analyze the work-family polices from three perspectives: 1) how do the distributive characteristics of cash and in-kind benefits compare to one another in this domain?; 2) how do countries compare to one another in their policy perspective in terms of supporting outsourcing or home-based care for young children?; 3) what is the balance between private and public efforts for outsourced childcare across countries? Our results show that including net fees in the analysis attenuates the Matthew effect, in the sense that net fees are relatively more heavy for richer households than for the poor. There is, however, considerable cross-country variation. |
| Keywords: | Family policy, child care, in-kind benefits, income distribution, microsimulation |
| JEL: | H23 I38 J13 C53 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:improv:1609&r=eur |
| By: | Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Olivier Thevenon (INED - Institut national d'études démographiques); Mathilde Guergoat-Larivière (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé) |
| Abstract: | This article gives evidence that differences in completed fertility among European countries emerge mainly as a result of fewer women having a second child in low fertility countries and analyses the impact of women’s employment on the probability of second child birth. With longitudinal data from the European Survey of Income and Living conditions (EU-SILC) and aggregated data from the OECD Family Database, we find that, on average within European countries, women in stable employment have a significantly higher probability of second childbirth than inactive or unemployed women. However, while female employment generally favours a transition to second childbirth in high-fertility countries, the impact is heterogenous in low-fertility countries. This points to a work-life balance conflict that is stronger in low-fertility countries. To address this issue, multilevel models are run to compare the role of various policies: not surprisingly, they show that childcare policies – which are the most effective policies to secure women’s employment – are the most likely to encourage couples to enlarge their families and that the positive effect of stable employment on fertility is reinforced by this policy. |
| Keywords: | low fertility, female employment, work-life balance, Europe, family enlargement |
| Date: | 2016–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01298862&r=eur |
| By: | Emre Akgunduz; Suzanne Heijnen |
| Abstract: | We analyze the effectiveness of the early childhood programme (ECP) in the Netherlands. The programme is designed for 2.5 to 4 year olds from disadvantaged backgrounds. 37 municipalities received an additional subsidy to expand ECP programmes, which allows us to analyze the effects of the programme within a difference-in-difference-in-differences framework. Most children first enroll in primary schools at age 4 in the Netherlands, but pupils begin to learn reading and mathematics in grade 3 at age 6. We use grade repetition constructed from school registry data from 2008 to 2015 in the first two grades as an indicator of school readiness. Our results show significantly lower grade repetition rates for targeted boys who are in regions that receive the subsidy. Grade repetition drops by 1 to 3 percentage points from a mean of 10.5 percent for the disadvantaged group targeted by the programme. |
| JEL: | C21 I28 I21 J13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:328&r=eur |
| By: | Landis, Florian; Heindl, Peter |
| Abstract: | We study how European climate and energy policy targets affect different member states and households of different income quintiles within the member states. We find that renewable energy targets in power generation, by reducing EU ETS permit prices, may make net permit exporters worse off and net permit importers better off. This effect appears to dominate the effciency cost of increasing the share of energy provided by renewable energy sources in the countries that adopt such targets. While an increase in prices for energy commodities, which is entailed by the policies in question, affects households in low income quintiles the most, recycling revenues from climate policy allows governments to compensate them for the losses. If renewable targets reduce the revenues from ets permit auctions, member states with large allocations of auctionable permits will lose some of the ability to do so. |
| Keywords: | distributional effects,EU climate policy,renewable energy target |
| JEL: | H23 Q52 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16026&r=eur |
| By: | Holmlund, Helena (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | Equality of opportunity has been one of the central ideas governing education policy in the Nordic welfare state. This paper takes its starting point in the shared history of educational reform in the Nordic countries, and presents evidence that the comprehensive school reforms that implied a shift from selective two-tier schooling systems to unified compulsory schools were beneficial for equality of opportunity. This evidence is compared to a choice and voucher reform that in the 1990's introduced pedagogical as well as organizational variety in the education system in Sweden. The Swedish choice reform is unique in an international perspective, and has reshaped the education sector dramatically as a growing number of pupils attend non-public independent schools. The current education debate shows a widespread concern that the introduction of choice has led to a backlash for equality of opportunity. Parental background remains a strong determinant of pupil performance. However, recent research finds no indication that family background has become more important over time in explaining pupil outcomes. The Swedish education system nevertheless faces a number of challenges if it is to level the playing field and create equal opportunities for all pupils: schools are becoming increasingly more segregated, much as a consequence of immigration, and disadvantaged pupils are less likely to exercise school choice compared to their more advantaged peers. |
| Keywords: | educational reform; equality of opportunity |
| JEL: | I20 I24 |
| Date: | 2016–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2016_005&r=eur |
| By: | Giovanni D'Alessio (Bank f Italy); Stefano Iezzi (Bank f Italy) |
| Abstract: | The purpose of this paper is to examine the measures of over-indebtedness proposed in the literature and to apply them to the Italian case from 2008 to 2014 by using the wide array of information available from the Bank of Italy’s survey on households. The numerous measures of over-indebtedness are critically analysed from both a cross-sectional and a historical perspective. The panel also enables us to analyse the transition into and out of over-indebtedness. Moreover, by using the Eurosystem’s Household Finance and Consumption Survey (HFCS), we can compare the over-indebtedness of Italian households with that of other euro-area countries. The paper also addresses the issue of the measurement errors that could bias both the level of over-indebtedness and estimates of the transition into and out of it. |
| Keywords: | household debts, over-indebtedness, poverty |
| JEL: | D12 D91 I32 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_319_16&r=eur |
| By: | Hippolyte D'Albis (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Paula Gobbi (UCL - Université Catholique de Louvain) |
| Abstract: | This paper shows that di erences in fertility across European countries mainly emerge due to fewer women having two children in low fertility countries. It further suggests that childcare services are an important determinant for the transition to a second child to occur. The theoretical framework we propose suggests that: (i) in countries where childcare coverage is low, there is a U-shaped relationship between a couple's probability to have a second child and female's wage, while ((ii)) in countries with easy access to childcare, this probability is positively related with the woman's potential wage. Data from the European Survey of Income and Living Conditions (EU- SILC) con rm these implications when estimating a woman's probability of having a second child as a function of education. This implies that middle income women are the most a ected ones by the lack of childcare coverage. |
| Keywords: | Childcare, Education, Fertility, Female Employment. |
| Date: | 2015–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01298943&r=eur |
| By: | Fassio, Claudio (LUISS School of European Political Economy) |
| Abstract: | This paper investigates the effect of exporting activities on the innovation strategies of European firms in France, Germany, Italy, Spain and UK. The paper puts forward the hypothesis that such a positive effect is driven two main mechanisms. The first is a technological learning effect that allows firms active in international markets to benefit from foreign knowledge spillovers in technologically advanced markets and decrease their research cost for the development of innovations. The second is a demand effect induced by fast-growing foreign markets that increase the potential output of firms. The empirical analysis, which addresses important endogeneity issues related with the strategic choice of the markets of destination operated by firms, shows that the two effects induce the adoption of different innovation strategies. While the technological learning effect positively affect the decision of firms to introduce brand new product innovations, the demand effect fosters the adoption of efficiency and imitation strategies. The paper shows that the effect of exporting activity on innovation strategies crucially depends on the type of export destinations. The lower levels of the technological learning effect which is found among the export destinations of Italian and Spanish firms might represent a possible obstacle for the ability of these countries to increase their future innovative capacities. |
| Keywords: | Exports; Innovation strategies; European Union economics |
| JEL: | F10 O33 P51 |
| Date: | 2015–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sepewp:2015_002&r=eur |
| By: | Antoine Dechezleprêtre; Elias Einiö; Ralf Martin; Kieu-Trang Nguyen; John Van Reenen |
| Abstract: | We present the first evidence showing causal impact of research and development (R&D) tax incentives on innovation outcomes. We exploit a change in the asset-based size thresholds for eligibility for R&D tax subsidies and implement a Regression Discontinuity Design using administrative tax data on the population of UK firms. There are statistically and economically significant effects of the tax change on both R&D and patenting, with no evidence of a decline in the quality of innovation. R&D tax price elasticities are large at about 2.6, probably because the treated group is from a sub-population subject to financial constraints. There does not appear to be prepolicy manipulation of assets around the thresholds that could undermine our design, but firms do adjust assets to take advantage of the subsidy post-policy. We estimate that over 2006-11 business R&D would be around 10% lower in the absence of the tax relief scheme. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp230&r=eur |
| By: | George Elias |
| Abstract: | Regulatory authorities in the European electricity sector use benchmarking techniques to determine the cost-e_cient production level for an incentive regulation of distribution system operators (DSOs). With nearly 900 DSOs operating in the German electricity sector, of which 200 subject to incentive regulation, the issue of heterogeneity of DSOs has to be addressed. Using publicly available data of 133 Norwegian DSOs and replicating the model employed by the German regulator (who refuses access to the data), I show its assumption of homogeneous technology cannot be maintained. Quantile regressions (QR) across the cost distribution reveal heterogeneity in the coe_cients of the explanatory variables, resulting in biased e_ciency scores derived from stochastic frontier analysis. To correct for this heterogeneity in coe_cients, I propose a Bayesian estimation of a more flexible SFA with latent classes for selected parameters that reflect variation in technologies. This estimation has better goodness of fit, reduced variance of all coe_cients, and higher e_ciency scores for nearly all DSOs, compared to the conventional alternative. |
| Keywords: | E_ciency measurement; cost function; incentive regulation; electricity sector |
| JEL: | C11 C21 D24 L94 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp1606&r=eur |
| By: | Lone Engbo Christiansen; Huidan Lin; Joana Pereira; Petia Topalova; Rima Turk |
| Abstract: | This paper examines the link between gender diversity in senior corporate positions and financial performance of 2 million companies in Europe. We document a positive association between corporate return on assets and the share of women in senior positions and establish two potential channels through which gender diversity may affect firm performance. The positive correlation is more pronounced in, first, sectors where women form a larger share of the labor force (such as the services sector) and, second, where complementarities in skills and critical thinking are in high demand (such as high-tech and knowledge-intensive sectors). |
| Keywords: | Euro Area;Gender diversity, senior management, firm performance, gender, women, female intensity, labor force, productivity, General, Economics of Gender, Public Policy, Personnel Economics: General, |
| Date: | 2016–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:16/50&r=eur |
| By: | Mendolia, Silvia; Paloyo, Alfredo R.; Walker, Ian |
| Abstract: | We investigate the relationship between peers' abilities and educational outcomes at the end of high school using data from the rich Longitudinal Study of Young People in England (LSYPE) matched to the National Pupil Database of children in state schools in England. In particular, we focus on the effect of peers' abilities, measured through achievements in Key Stage 3 (Age 14), on high powered test scores at Ages 16 and 18, and on the probability of attending university. Our identification strategy is based on a measure of the peers of peers' ability. In particular, for each individual, we look at her high school peers and select their primary school peers who do not attend the same high school and who did not attend the same primary school as the individual. We then use peers-of-peers ability, measured using Age 11 test scores as an instrument for high school average peer ability, measured using Age 14 test scores. We also use quantile regression to explore the effect of peers' ability on different parts of the distributions of the outcomes. Our results show that average of peers' abilities has a moderate positive effect on test scores at Ages 16 and 18, and that being in a school with a large proportion of low-quality peers can have a significantly detrimental effect on individual achievements. Furthermore, peers' ability seems to have a stronger effect on students at the bottom of the grade distribution, especially at Age 16. |
| Abstract: | Durch die Zusammenführung des "Longitudinal Study of Young People in England" (LSYPE) Datensatzes und des "National Pupil Database" Datensatzes soll der Zusammenhang von Begabung im Umfeld des Schülers und dessen schulischen Leistungen untersucht werden. Insbesondere konzentriert sich die Untersuchung auf den Effekt von der Begabung des Umfeldes - messbar durch Testergebnisse der (Mit-)Schüler im Alter von 14 Jahren - auf die Wahrscheinlichkeit des Besuchs einer Universität, bzw. auf Testergebnisse im Alter von 16 und 18 Jahren. Die Identifikationsstrategie basiert auf der Messung der Begabung des Umfeldes des Umfeldes der Schüler. Im Speziellen wird das Umfeld derjenigen Schüler, die zusammen mit einem Individuum die High School besucht haben, beleuchtet, indem Schüler ausgewählt werden, die mit diesen - jedoch nicht mit dem Individuum - die Grundschule, jedoch nicht die High School besucht haben. Diese "peers-of-peers" Begabung wird genutzt, indem Testergebnisse im Alter von 14 Jahren mit Testergebnissen im Alter von elf Jahren instrumentiert werden. Weiterhin werden Quantilsregressionen genutzt, um die Höhe des Einflusses von Mitschülern an verschiedenen Punkten der Ergebnisverteilung herauszuarbeiten. Die Ergebnisse zeigen, dass die Begabung der Mitschüler einen leichten Einfluss auf die Testergebnisse mit 16 bzw. 18 Jahren hat. Besonders groß ist der negative Einfluss auf die Ergebnisse eines Individuums an einer High School mit einem hohen Anteil vergleichsweise "schlechter" Mitschüler. Weiterhin konnte ein stärkerer Effekt auf Schüler am unteren Ende der Notenverteilung festgestellt werden, insbesondere im Alter von 16 Jahren. |
| Keywords: | peer effects,instrumental variables,test scores |
| JEL: | I20 J24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:612&r=eur |
| By: | Bicakova, Alena (CERGE-EI); Jurajda, Štepán (CERGE-EI) |
| Abstract: | This paper reports evidence on the strong tendency of the college educated to match with partners who graduated in the same field of study – a dimension of assortative matching that has been overlooked thus far. We employ Labor Force Survey data covering most EU countries to measure the extent of field-of-study homogamy in prevailing married and cohabiting couples within several years of college graduation. We find that field-of-study homogamy increases almost immediately after graduation to reach very high levels, especially for spouses working in the same industry, and that it varies dramatically across countries. Graduates in Social Sciences display a particularly strong tendency towards homogamy and also have the highest matching theory-implied match gains from homogamous matches. |
| Keywords: | field-of-study homogamy, college graduates, marriage and cohabitation |
| JEL: | I23 J13 J16 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9844&r=eur |
| By: | Riphahn, Regina T.; Wiynck, Frederik |
| Abstract: | We exploit the 1996 reform of the German child benefit program to identify the causal effect of child benefits on fertility. Generally, the reform increased child benefits. However, the exact amount of the increase varied by household income and sibship size. We use this heterogeneity of the reform to identify causal effects on fertility using a difference-in-differences setting. We apply the large samples of the German Mikrozensus and the rich data of the German Socioeconomic Panel (SOEP). The child benefit reform did not yield robust or statistically significant fertility effects for low income couples. We find some support for positive fertility effects for higher income couples deciding on a second birth. |
| Keywords: | child benefits,fertility,tax allowance,causal effect,difference-in-differences,Mikrozensus,SOEP |
| JEL: | J13 I38 C54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:042016&r=eur |
| By: | Elinder, Mikael (Research Institute of Industrial Economics (IFN)); Erixson, Oxcar (Research Institute of Industrial Economics (IFN)); Waldenström, Daniel (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We use new population-wide register data on inheritances and wealth in Sweden to estimate the causal impact of inheritances on wealth inequality. We find that inheritances reduce relative wealth inequality (e.g., the Gini coefficient falls by 5–10 percent) but that absolute dispersion increases. Examining different parts of the wealth distribution, we find that the top decile’s wealth share decreases substantially, whereas the wealth share of the bottom half increases from a negative to a positive share. In essence, wealthier heirs inherit larger amounts, but less wealthy heirs inherit more relative to their pre-inheritance wealth. We also find that post-inheritance behavioral adjustments mitigate the equalizing effect of inheritances because less wealthy heirs consume larger shares of their inheritances. Moreover, we find that the Swedish inheritance tax reduced the equalizing inheritance effect but that the redistribution of tax revenues could reverse this result. Finally, we show that inheritances increase wealth mobility. |
| Keywords: | Bequests; Estates; Net worth; Inheritance taxation; Wealth distribution |
| JEL: | D63 E21 H24 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1121&r=eur |
| By: | Maurice J.G. Bun; Leo Huberts (University of Amsterdam) |
| Abstract: | In recent years there has been wide criticism of bonuses and performance pay in different forms. This can often be traced back to the recent financial crisis. Empirical evidence on the effects of bonuses and performance related pay is increasing. We contribute to the discussion by analyzing the impact of changes in the payment structure of a large Dutch marketing company. Specifically, we investigate the consequences for company sales of higher fixed pay in combination with lower bonuses. Exploiting shift level data of individual workers we find that average productivity decreases when the pay structure shifts more to fixed pay. Further analysis shows that this is a pure incentive effect and not due to sorting. |
| Date: | 2016–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:ame:wpaper:1601&r=eur |