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on Microeconomic European Issues |
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Issue of 2018‒07‒16
34 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Sascha O. Becker (University of Warwick); Thiemo Fetzer (University of Warwick) |
| Abstract: | The 2004 accession of 8 Eastern European countries to the European Union (EU) was accompanied by fears of mass migration. The United Kingdom - unlike many other EU countries - did not opt for temporary restrictions on the EU’s free movement of labour. We document that following EU accession more than 1 million people (ca. 3% of the UK working age population) migrated from Eastern Europe to the UK. We show that they mostly settled in places that had limited prior exposure to immigration. We provide evidence that these areas subsequently saw smaller wage growth at the lower end of the wage distribution and increased pressure on the welfare state, housing and public services. Using novel geographically disaggregated data by country-of-origin, we measure the effects of Eastern European migration on these outcomes for the UK-born and different groups of immigrants. Our results are important in the context of the UK’s Brexit referendum and the ongoing EU withdrawal negotiations in which migration features as a key issue. |
| Keywords: | Political Economy, Migration, Globalization, EU JEL Classification: R23, N44, Z13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:376&r=eur |
| By: | Gürtzgen, Nicole (Institute for Employment Research (IAB), Nuremberg); Nolte, André (ZEW Mannheim); Pohlan, Laura (University of Mannheim); van den Berg, Gerard J. (University of Bristol) |
| Abstract: | This paper studies effects of the introduction of a new digital mass medium on reemployment of unemployed job seekers. We combine data on high-speed (broadband) internet availability at the local level with individual register data on the unemployed in Germany. We address endogeneity by exploiting technological peculiarities in the network that affected the roll-out of high-speed internet. The results show that high-speed internet improves reemployment rates after the first months of the unemployment spell. This is confirmed by complementary analysis with individual survey data suggesting that online job search leads to additional formal job interviews after a few months in unemployment. |
| Keywords: | unemployment, online job search, information frictions, matching technology, search channels |
| JEL: | J64 K42 H40 L96 C26 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11555&r=eur |
| By: | Pellegrino, Gabriele; Piva, Mariacristina; Vivarelli, Marco |
| Abstract: | In this work, we test the employment impact of distinct types of innovative investments using a representative sample of Spanish manufacturing firms over the period 2002-2013. Our GMM-SYS estimates generate various results, which are partially in contrast with the extant literature. Indeed, estimations carried out on the entire sample do not provide statistically significant evidence of the expected labor-friendly nature of innovation. More in detail, neither R&D nor investment in innovative machineries and equipment (the so-called embodied technological change, ETC) turn out to have any significant employment effect. However, the job-creation impact of R&D expenditures becomes highly significant when the focus is limited to the high-tech firms. On the other hand - and interestingly - ETC exhibits its labor-saving nature when SMEs are singled out. |
| Keywords: | Innovation,R&D,Embodied Technological Change,Employment,GMM-SYS |
| JEL: | O33 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:214&r=eur |
| By: | Gürer, Eren; Weichenrieder, Alfons J. |
| Abstract: | This paper studies the distributional consequences of a systematic variation in expenditure shares and prices. Using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct household-specific price indices and reveal the existence of a pro-rich inflation in Europe. Particularly, over the period 2001-15, the consumption bundles of the poorest deciles in 25 European countries have, on average, become 10.5 percentage points more expensive than those of the richest decile. We find that ignoring the differential inflation across the distribution underestimates the change in the Gini (based on consumption expenditure) by up to 0.03 points. Cross-country heterogeneity in this change is large enough to alter the inequality ranking of numerous countries. The average inflation effect we detect is almost as large as the change in the standard Gini measure over the period of interest. |
| Keywords: | inequality,Gini,EU countries,income dependent inflation |
| JEL: | D31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:209&r=eur |
| By: | Elena Grinza; Francesco Quatraro |
| Abstract: | In this paper, we explore the impact of a firm's workers' replacements on innovation performance, by using rich matched employer-employee panel data for the Veneto region of Italy. We take the well-known resource-based theory of the firm as our departure point, and develop a set of hypotheses which we test empirically with negative binomial regressions. Coherently with our theoretical framework, we find that workers' replacements significantly dampen innovation performance, because they generate losses in the tacit knowledge base of the firm. We also nd that workers' replacements are especially detrimental to large and young rms, because large companies have more hierarchical rigidities and innovative capabilities in young rms are mostly dependent on specific human capital. Finally, our results show that firms' localization in industrial districts significantly mitigates the negative impact of workers' replacements, and that a similar picture emerges when firms are more exposed to knowledge spillovers, particularly of related knowledge. |
| Keywords: | Workers' replacements, excess worker turnover, innovation performance, tacit knowledge, knowledge spillovers, employer-employee matched longitudinal data. |
| JEL: | J63 O30 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:550&r=eur |
| By: | MAZEIKAITE Gintare; O'DONOGHUE Cathal; SOLOGON Denisa |
| Abstract: | In this paper, we study the effects of the 2008 economic crisis on general health in one of the most severely affected EU economies ? Ireland. We examine the relationship between compositional changes in demographic and socio-economic factors, such as education, income, and financial strain, and changes in the prevalence of poor self-assessed health over a 5-year period (2008-2013). We apply a generalised Oaxaca-Blinder decomposition approach for non-linear regression models proposed by Fairlie (1999, 2005). Results show that the increased financial strain explained the largest part of the increase in poor health in the Irish population and different sub-groups. Changes in the economic activity status and population structure also had a significant positive effect. The expansion of education had a significant negative effect, preventing further increases in poor health. Wealthier and better-educated individuals experienced larger relative increases in poor health, which led to reduced socioeconomic health inequalities. |
| Keywords: | population health; economic crisis; decomposition; socio-economic factors; EU-SILC; self-assessed health |
| JEL: | I10 J00 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2018-12&r=eur |
| By: | Luke Munford (Manchester Centre for Health Economics, University of Manchester); Nigel Rice (Centre for Health Economics & Department of Economics and Related Studies, University of York); Jennifer Roberts (Department of Economics, University of Sheffield); Nikita Jacob (Centre for Health Economics, University of York) |
| Abstract: | Commuting is an extremely important modern phenomenon characterised by the spatial interaction of housing and labour markets. The average commuter in the UK spends nearly an hour a day travelling to and from employment. Standard economic theory postulates that commuting is a choice behaviour undertaken when compensated through either lower rents or greater amenities in the housing market or through greater wages in the labour market. By exploiting exogenous shocks to commuting time, this paper investigates the impact on wellbeing of increased commuting. Ceteris paribus, exogenous increases in commuting time are expected to lower wellbeing. We find this holds for women but not men. This phenomenon can be explained, in part, by the different labour markets in which women operate. Where local labour markets are thin, women report significantly lower wellbeing when faced with an increased commute. This does not hold for tight local labour markets. Further our findings reveal that it is full-time working women in the managerial and professional tier of the occupational hierarchy who are most affected. |
| Keywords: | commuting; exogenous shocks; well-being; panel data econometrics |
| JEL: | C1 I1 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2018010&r=eur |
| By: | Joep Tijm; Thomas Michielsen; Raoul van Maarseveen; Peter Zwaneveld |
| Abstract: | Infrastructure projects are increasingly aiming to improve liveability, in particular in urban areas. We analyse a specific case in which an existing highway in an urban area was moved underground in order to improve intercity traffic flows and to reduce traffic externalities. As travel times within the city hardly changed, this allows for a clean identification of the value of traffic externalities. We find that the liveability benefits of such integrated infrastructure are substantial relative to the construction costs. Each halving of distance to the tunneled segment is associated with 3.5% more appreciation in house prices since the start of the project. |
| JEL: | H40 R20 R40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7089&r=eur |
| By: | Danzer, Alexander M. (KU Eichstätt-Ingolstadt); Feuerbaum, Carsten (KU Eichstätt-Ingolstadt); Piopiunik, Marc (ifo Institute at the University of Munich); Woessmann, Ludger (ifo and LMU Munich) |
| Abstract: | Does a high regional concentration of immigrants of the same ethnicity affect immigrant children\'s acquisition of host-country language skills and educational attainment? We exploit the exogenous placement of guest workers from five ethnicities across German regions during the 1960s and 1970s in a model with region and ethnicity fixed effects. Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children\'s host-country language proficiency and increases school dropout. A key mediating factor for this effect is parents\' lower speaking proficiency in the host-country language, whereas inter-ethnic contacts with natives and economic conditions do not play a role. |
| Keywords: | immigrant children; ethnic concentration; language; education; guest workers; |
| JEL: | J15 I20 R23 J61 |
| Date: | 2018–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:104&r=eur |
| By: | Iga Magda; Aneta Kiełczewska; Nicola Brandt |
| Abstract: | In 2016 the Polish government introduced a large new child benefit, called “Family 500+”, with the aim to increase fertility from a low level and reduce child poverty. The benefit is universal for the second and every further child and means-tested for the first child. Increasing out-of-work income significantly, the transfer can reduce incentives to participate in the labour market. We study the impact of the new benefit on female labour supply, using Polish Labour Force Survey data. Based on a difference-in-differences methodology we find that the labour market participation rates of women with children decreased after the introduction of the benefit compared to childless women. The estimates suggest that by mid-2017 the labour force participation rate of mothers dropped by 2- 3 percentage points, depending on the estimation specification, as a result of the “Family 500+” benefit. The effect was higher among women with lower levels of education and living in small towns. |
| Keywords: | child allowance, family policy, labour market participation, Poland, social transfers |
| JEL: | E24 H53 I38 J13 J21 J22 |
| Date: | 2018–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1481-en&r=eur |
| By: | Bachmann, Ronald (RWI); Cim, Merve (RWI); Green, Colin (Norwegian University of Science and Technology (NTNU)) |
| Abstract: | The past four decades have witnessed dramatic changes in the structure of employment. In particular, the rapid increase in computational power has led to large-scale reductions in employment in jobs that can be described as intensive in routine tasks. These jobs have been shown to be concentrated in middle skill occupations. A large literature on labour market polarisation characterises and measures these processes at an aggregate level. However to date there is little information regarding the individual worker adjustment processes related to routine-biased technological change. Using an administrative panel data set for Germany, we follow workers over an extended period of time and provide evidence of both the short-term adjustment process and medium-run effects of routine task intensive job loss at an individual level. We initially demonstrate a marked, and steady, shift in employment away from routine, middle-skill, occupations. In subsequent analysis, we demonstrate how exposure to jobs with higher routine task content is associated with a reduced likelihood of being in employment in both the short term (after one year) and medium term (five years). This employment penalty to routineness of work has increased over the past four decades. More generally, we demonstrate that routine task work is associated with reduced job stability and more likelihood of experiencing periods of unemployment. However, these negative effects of routine work appear to be concentrated in increased employment to employment, and employment to unemployment transitions rather than longer periods of unemployment. |
| Keywords: | polarization, occupational mobility, worker flows, tasks |
| JEL: | J23 J24 J62 E24 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11570&r=eur |
| By: | Rowena Crawford (Institute for Fiscal Studies and Institute for Fiscal Studies); George Stoye (Institute for Fiscal Studies and Institute for Fiscal Studies); Ben Zaranko (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | Recent years have seen substantial reductions in public spending on social care for older people in England. This has not only led to large falls in the number of people over the age of 65 receiving publicly funded social care, but also to growing concern about the potential knock-on effects on other public services, and in particular the National Health Service (NHS). In this paper, we exploit regional variation in the reductions in public funding for social care to examine the impact on Accident and Emergency (A&E) departments in NHS hospitals. We find that reductions in social care spending on people aged 65 and above have led to increased use of A&E services, both in terms of the average number of visits per resident and the number of unique patients visiting A&E each year. We estimate that the average cut to social care spending for the older population over the period (£375) led to an increase of 0.09 visits per resident, compared to a mean of 0.37 visits in 2009. The effects are most pronounced among people aged 85 and above. This has also led to a modest increase in the cost of providing A&E care, increasing A&E costs by an additional £3 per resident for each £100 cut in social care funding. |
| Keywords: | health, social care, spillovers |
| Date: | 2018–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:18/15&r=eur |
| By: | Ba M. Chu; Kim Huynh; David T. Jacho-Chávez; Oleksiy Kryvtsov |
| Abstract: | We propose a functional principal components method that accounts for stratified random sample weighting and time dependence in the observations to understand the evolution of distributions of monthly micro-level consumer prices for the United Kingdom (UK). We apply the method to publicly available monthly data on individual-good prices collected in retail stores by the UK Office for National Statistics for the construction of the UK Consumer Price Index from March 1996 to September 2015. In addition, we conduct Monte Carlo simulations to demonstrate the effectiveness of our methodology. Our method allows us to visualize the dynamics of the price distribution and uncovers interesting patterns during the sample period. Further, we demonstrate the efficacy of our methodology with an out-of-sample forecasting algorithm that exploits the time dependence of distributions. Our out-of-sample forecast compares favorably with the random walk forecast. |
| Keywords: | Econometric and statistical methods, Inflation and prices |
| JEL: | C14 C83 E31 E37 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:18-25&r=eur |
| By: | Cormac O'Dea (Institute for Fiscal Studies); David Sturrock (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | This paper investigates individuals’ expectations about their own survival to older ages and compares these to projected and actual survival rates. The extent to which individuals have, on average, reasonable expectations about survival to older ages is important in a context of increasing personal responsibility for, and control over, the accumulation and use of retirement savings. We use data from the English Longitudinal Study of Ageing, which surveyed a representative sample of the English household population aged 50 and over between 2002–03 and 2014–15, and the ONS 2014-based life tables for England and Wales. Subjective expectations of survival Modern surveys ask individuals about their probability of survival to specific older ages. In only a small proportion of cases is there clear evidence that these questions are not understood. 98% of individuals gave an answer to a question asking their chances of surviving to older ages and of these just 14% – i.e. fewer than one-in-six – showed clear evidence of misunderstanding (e.g. by reporting no chance of death in the coming 10-year period). Individuals’ stated beliefs about their probability of survival are correlated with known risk factors such as smoking and the age that their parents died. Those who currently smoke report on average 6–8 percentage points lower chance of surviving to an age 11–15 years ahead than do people who have never smoked. Those whose mother died at age 85 or older report on average 5-7 percentage points higher chance of surviving to an age 11–15 years ahead than do those whose mother died aged 60-64. Beliefs about probability of survival are also correlated with the individual’s actual age of death and respond to new diagnoses of health conditions. Those reporting a 10% or less chance of survival to an age 11–15 years ahead were more than twice as likely to die in the following 10 years than those who reported a 50% or greater chance of survival. A new cancer diagnosis was associated with a 5 percentage point reduction in the stated probability of surviving to an age 11–15 years ahead. Comparing subjective expectations with life table estimates and mortality data Relative to life tables, individuals from a range of ages and birth cohorts underestimate their chances of survival to ages 75, 80 and 85, on average. Those in their 50s and 60s underestimate their chances of survival to age 75 by around 20 percentage points and to 85 by around 5 to 10 percentage For example, men born in the 1940s who were interviewed at age 65 reported a 65% chance of making it to age 75, whereas the official estimate was 83%. For women, the equivalent figures were 65% and 89%. Individuals in their late 70s and 80s are, on average, optimistic about surviving to ages 90, 95 and above. This optimism becomes larger at older ages (10–15 percentage points when looking at age 95) and is larger for men than for women, amongst those born in the 1920s and 1930 For example, men born in the 1930s who were interviewed at age 80 reported a 32% chance of making it to age 95, whereas the official estimate was 17%. For women, the equivalent figures were 37% and 24%. Figure 1.1. Comparing subjective reports and “objective” life table estimates of survival probabilities (for men born 1930-39) |
| Keywords: | Survival expectations, savings, wealth accumulation, annuitisation |
| JEL: | D14 D84 D91 J14 |
| Date: | 2018–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:18/14&r=eur |
| By: | Ilaria De Angelis (Bank of Italy); Guido de Blasio (Bank of Italy); Lucia Rizzica (Bank of Italy) |
| Abstract: | We study the relationship between the accrual of large financial transfers from a central level of government and the incidence of white collar crimes against public administration and public faith at the local level. We analyse the case of EU funding to Southern Italy and make use of within-municipality variation in the flow of funds between 2007 and 2014. We find a statistically significant effect of transfers on white collar crimes: our estimates suggest that in the absence of EU funding disbursements, the annual number of white collar crimes in Southern Italy would have been 4 per cent lower. We acknowledge that the evidence we provide cannot be taken as fully conclusive given the possible simultaneity of criminal activities and funding assignments and disbursements. Nevertheless, we provide evidence that the correlations we estimated between transfers and white collar crimes are unlikely to be spurious or due to confounding effects. |
| Keywords: | regional transfers, white collar crimes, EU funds |
| JEL: | D7 H3 H7 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1180_18&r=eur |
| By: | Duca, Ioana A.; Montero, José M.; Riggi, Marianna; Zizza, Roberta |
| Abstract: | We consider a standard result of customer market theory: if firms have stable customer relations and face financial frictions, they may keep prices relatively high on their locked-in shoppers to maintain short-term profits at the expense of future market shares in times of low demand and vice versa in times of high demand. We extend this theoretical framework so that the countercyclical behaviour of price margins is strengthened by the expected persistence of demand and the procyclicality of competitive pressures. We test these predictions for Italian firms participating in the 2014 Wage Dynamics Network Survey. All things being equal, financially constrained firms charge higher markups when faced with low demand; this behaviour is more evident when demand is perceived as being persistent. Our findings suggest that the severity of financial constraints in Italy was one of the causes of the sustained growth of prices in 2010-2013. JEL Classification: C25, C26, D22, L11 |
| Keywords: | customer market, financial frictions, markups |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20182164&r=eur |
| By: | Lorenz, Svenja; Pfister, Mona; Zwick, Thomas |
| Abstract: | "We analyse how administrative data on the labour history of individuals can be used to identify financial incentives within the pension system, even though these data do not include information on pension-relevant periods. We apply the Sample of Integrated Labour Market Biographies (SIAB 7514). The data consist of a two percent sample of the population of the Integrated Employment Biographies from 1975 to 2014 and are provided by the German Federal Employment Agency. We present a method for identifying the pensionable periods for old age pensions. In addition to birth date and gender, we show how to identify the qualification periods to determine whether an individual is eligible for one of the old age pension types (standard old age pension, old age pension for women, old age pension for the unemployed or under a progressive retirement plan, old age pension for persons with a long insurance record). Eligibility for a pension type then determines the earliest statutory retirement dates (normal retirement age (NRA) and early retirement age (ERA)). The knowledge about eligibility for a pension type enables us to compare the actual labour market exit age with the NRA and ERA for each birth cohort from 1936 to 1948 and to calculate the proportions of employees for the different paths out of the labour market. First, we explain the information that is necessary to identify the statutory retirement dates. We cannot identify periods of illness, inability to work, maternity, parenting, caregiving on a non-commercial basis or voluntary insurance payments from the SIAB. To assess the accuracy of pensionable periods calculated using the SIAB, we therefore use a high-quality administrative biographical dataset (Biographical Data of Selected Insurance Agencies in Germany (BASiD 5109)) that combines information on individual employment biographies (including qualification periods) with retirement information from the statutory retirement insurance records. We use the BASiD to collect information on employment states and other relevant variables that are not available in the SIAB. Moreover, we show that we can reduce the errors in identifying the relevant eligibility criteria for old age pension types to a negligible amount when we restrict our sample to employees with a high labour market attachment and short gaps in their labour market histories. We argue that the employees in our reduced sample are the employees of interest for analysing the impact of the financial incentives of the pension system on the labour market behaviour of older employees. Only these employees have a real choice of whether to work another year or to retire. We conclude that we can reliably identify individual statutory retirement dates in conventional individual labour market history datasets that do not directly contain retirement information. The additional information we generate makes these data sets a valuable alternative for the analysis of the labour market behaviour of older employees." (Author's abstract, IAB-Doku) ((en)) |
| Date: | 2018–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfme:201808_en&r=eur |
| By: | Herwig Immervoll; Carlo Knotz |
| Abstract: | This paper presents new information on activity-related eligibility criteria for unemployment and related benefits in OECD- and EU-countries in 2017, comparing the strictness of “demanding” elements built into unemployment benefits across countries and over time. Eligibility criteria for unemployment benefits determine what claimants need to do to successfully claim benefits initially or to continue receiving them. Benefit systems feature specific rules that define the type of job offers that claimants need to accept, requirements for papering on the outcomes of independent job-search efforts, obligations to participate in active labour market programmes, as well as sanctions for failing to meet these requirements. Such rules aim to strengthen incentives to look for, prepare for, and accept employment. They may also be used as a targeting device to reduce demands on benefit systems, and on associated employment services. While this may serve to limit support to genuine jobseekers, strict requirements can also exclude some intended recipients from financial and re-employment support, e.g., by discouraging them from applying. This paper presents detailed information on policy rules in 2017, summarises them into an overall policy indicator of eligibility strictness, and gauges recent policy trends by documenting changes in the strictness measures. A novelty is the inclusion of lower-tier unemployment or social assistance benefits in the compilation of policy rules. Results document a large number of reforms enacted after the Great Recession and suggest a slight convergence of policy rules across countries even though overall measures of the strictness of activity-related eligibility criteria have remained broadly unchanged during the recent past. In countries with multiple layers of support for the unemployed, availability requirements tend to be more demanding for lower-tier assistance benefits, while sanction rules tend to be more stringent for first-tier programmes. |
| JEL: | I38 J08 J65 J68 |
| Date: | 2018–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:215-en&r=eur |
| By: | Audinga Baltrunaite (Banca d'Italia); Cristina Giorgiantonio (Banca d'Italia); Sauro Mocetti (Banca d'Italia); Tommaso Orlando (Banca d'Italia) |
| Abstract: | Public procurement outcomes depend on the ability of the procuring agency to select high-performing suppliers. Should public administrations be granted more or less discretion in their decision making? Using Italian data on municipal public works tendered in the period 2009-2013, we study how a reform extending the scope of bureaucrat discretion affects supplier selection. We find that the share of contracts awarded to firms having a local politician among its administrators or shareholders increases, while the (ex-ante) labor productivity of the winning firms decreases, thus suggesting a potential misallocation of public funds. These effects are concentrated among lower quality procurement agencies. |
| Keywords: | discretion, supplier selection, public procurement, transparency, corruption |
| JEL: | D72 D73 H57 P16 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1178_18&r=eur |
| By: | Eckhoff Andresen, Martin (Statistics Norway); Havnes, Tarjei (University of Oslo) |
| Abstract: | We study the impact of child care for toddlers on the labor supply of mothers and fathers in Norway. For identification, we exploit the staggered expansion across municipalities following a large reform from 2002. Our IV-estimates indicate that child care use causes an increase in the labor supply of mothers. Results suggest that cohabiting mothers move towards full time employment, while single mothers move to part time. Meanwhile, we find no impact for fathers or grandparents. We also find an increase in the taxes paid from cohabiting mothers, lending some support to the argument that parts of the cost of child care is offset by increased taxes. |
| Keywords: | child care, female labor supply, tax revenue, instrumental variables |
| JEL: | H24 H52 J13 J22 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11576&r=eur |
| By: | Michele Battisti; Giovanni Peri; Agnese Romiti |
| Abstract: | This paper investigates how the size of co-ethnic networks at the time of arrival affect the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes. We also look at those who were assigned to an initial location independently of their choice allows a causal interpretation of our estimates. We find that immigrants initially located in places with larger co-ethnic networks are more likely to be employed at first, but have a lower probability of investing in human capital. |
| Keywords: | networks, immigration, human capital, employment |
| JEL: | J24 J61 R23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7084&r=eur |
| By: | Pieter Bakx (Erasmus University Rotterdam); Bram Wouterse (CPB); Eddy (E.K.A.) van Doorslaer (Erasmus School of Economics Rotterdam); Albert Wong (RIVM) |
| Abstract: | Aging-in-place policies substitute home care for nursing home admissions (NHA). They appear to be a win-win by keeping public spending in check and being in line with personal preferences, but have hitherto not been evaluated. We study the impact of NHA eligibility using Dutch administrative data and exploiting variation between randomly assigned assessors in their tendency to grant admission. The impact on mortality is zero, but with considerable effect heterogeneity. Moreover, aging-in-place policies come at the cost of increased curative care, especially hospital admissions, and do not reduce total healthcare spending, suggesting they may not be a win-win after all. |
| Keywords: | long-term care; policy evaluation; instrumental variables |
| JEL: | C26 I10 |
| Date: | 2018–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180060&r=eur |
| By: | Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Carpenter, Christopher S. (Vanderbilt University); Frank, Jeff (University of London); Huffman, Matt L. (University of California, Irvine) |
| Abstract: | A burgeoning literature has examined earnings inequalities associated with a minority sexual orientation, but far less is known about sexual orientation-based differences in access to workplace authority – in contrast to well-documented gender and race-specific differences. We provide the first large-scale evidence on this question using confidential data from the 2009-2014 UK Integrated Household Surveys (IHS) (N = 607,709). We are the first to document that gay men and lesbians are significantly more likely to have objective measures of workplace authority compared to otherwise similar heterosexual men and women. However, we also find clear evidence that gay men face glass ceilings: their higher likelihood of attaining workplace authority is driven entirely by their significantly higher odds of being low-level managers. In fact, gay men are significantly less likely than comparable heterosexual men to be in the highest-level managerial positions that come with higher status and pay. Oaxaca decompositions suggest that this differential access to workplace authority for gay men is due to discrimination as opposed to different skills and characteristics. Moreover, this "gay glass ceiling" is stronger for racial minorities than for whites. Corresponding effects for lesbians exist but are notably weaker. These results provide the first direct evidence of social stratification in the workplace associated with a minority sexual orientation and reveal that differences are exacerbated for individuals with multiple marginalized identities. |
| Keywords: | sexual orientation, workplace authority, supervisory authority, managerial occupations |
| JEL: | J15 J71 M54 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11574&r=eur |
| By: | Gerard Van Den Berg (Institute for Fiscal Studies and University of Mannheim); Antoine Bozio (Institute for Fiscal Studies and Institut des Politiques Publiques, Paris School of Economics); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | Causal effects of a policy change on the hazard rates of a duration outcome variable are not identifi ed from a comparison of spells before and after the policy change when there is unobserved heterogeneity in the effects and no model structure is imposed. We develop a discontinuity approach that overcomes this by considering spells that include the moment of the policy change and by exploiting variation in the moment at which different cohorts are exposed to the policy change. We prove identi cation of average treatment effects on hazard rates without model structure. We estimate these effects by kernel hazard regression. We use the introduction of the NDYP program for young unemployed individuals in the UK to estimate average program participation effects on the exit rate to work as well as anticipation effects. |
| Keywords: | policy evaluation, hazard rate, identi fication, causality, regression discontinuity, selectivity, kernel hazard estimation, local linear regression, average treatment effect, job search assistance, youth unemployment |
| Date: | 2018–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:18/10&r=eur |
| By: | Antonio Cabrales; Maia Güell; Rocio Madera; Analía Viola |
| Abstract: | In Europe, the need for additional funding coming from either budget cuts and/or increased costs due to increased competition has reopened the debate on the financing of university systems. An attractive alternative to the current general-tax financed subsidies are Income Contingent Loans (ICL), a flexible scheme that puts more weight on private resources while enhancing progressivity. One challenge of the viability of ICL systems is the functioning of the labor market for university graduates. This paper offers a general analysis of the economics of ICL, followed by an application to Spain. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdapop:2018-06&r=eur |
| By: | de la Porte Simonsen, Lasse; Petrella, Ivan; Santoro, Emiliano |
| Abstract: | Using microdata underlying the UK consumer price index we study how the capacity of nominal demand shocks to stimulate the rate of inflation has evolved over the last two decades. To this end, we estimate a generalized $Ss$ model of lumpy price adjustment, and document sizeable time variation in the behavior of price flexibility. Most notably, the latter shoots up in the aftermath of the Great Recession and rapidly falls thereafter, with these sharp movements reflecting into increased inflation volatility. These features map into a marked non-linearity of inflation dynamics with respect to the degree of price flexibility, with mean reversion being significantly faster when prices are relatively more flexible. State dependence plays a major role for price setting at the microeconomic level, and more so when inflation is particularly high and volatile. Neglecting these facts may severely bias our understanding of inflation dynamics. |
| Keywords: | inflation; price flexibility; Ss models. |
| JEL: | C22 E30 E31 E37 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13027&r=eur |
| By: | Antoine Goujard; Pierre Guérin |
| Abstract: | Poland’s productivity has grown strongly over the past two decades. However, the public and private capital stock is weak, and investment remains focused on the adoption of existing technologies, which weighs on future productivity gains and innovation. Many micro enterprises have low productivity, and structural bottlenecks reduce start-ups' growth and their chances of survival. The EU and the government are stepping up funding for business research and development, collaboration with the public sector, entrepreneurship and innovation. This is an opportunity to improve the management of public business support, and the large new programmes should be carefully discussed with stakeholders and regularly evaluated to avoid the risks of subsidising low-productivity firms and to strengthen the take up from the most productive small and medium-sized enterprises. The sustainability of this ambitious package of measures will also require significant public revenues and promoting alternative market-based financing instruments will be critical over the medium term. Ongoing improvements in insolvency procedures and efforts to reduce the regulatory burden are set to ease reallocation of resources through the economy. However, the level of state involvement would remain important, and ensuring the independence of the network industry regulators and the Competition Authority and a level playing field between alternative technologies, as well as easing labour mobility would be good moves. |
| Keywords: | business environment, financial markets, financing, innovation, investment, Poland |
| JEL: | E22 G24 O16 O38 O44 O47 |
| Date: | 2018–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1480-en&r=eur |
| By: | Aleksandr Proshin; Alexandre Cazenave-Lacroutz; Zeynep Or (IRDES - Institut de Recherche et Documentation en Economie de la Santé - Institut de la Recherche et Documentation en Economie de la Santé); Lise Rochaix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, Hospinomics - PSE - Paris School of Economics) |
| Abstract: | Studying quasi-experimental data from French hospitals from 2010 to 2013, we test the effects of a considerable diagnosis related group (DRG) refinement that occurred in 2012. As a result, the reform had a direct impact on hospital-level financial incentives but did not immediately concern individual providers. Using a difference-in-differences approach, controlling for multiple patient, hospital and regional characteristics and allowing for hospital and year effects, we show that introducing new severity levels and clinical factors into the reimbursement algorithm had no significant effect on the probability of a scheduled C-section being performed. The results are robust to multiple formulations of financial incentives, to restricting the sample to bigger (>15%) DRG tariff incentive changes and to analyzing policy effects for individual years following the reform. Our results suggest that the DRG refinement did not lead to a transmission of hospital-level stimuli to midwifes and obstetricians. Our paper is the first study that focuses on the consequences of DRG refinement in obstetrics and develops an approach suitable for measuring monetary incentives in this setting. |
| Keywords: | C-section,DRG,midwifes,obstetricians,refinement,tariffs,vaginal labor |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01812107&r=eur |
| By: | Sue Roberts (University of Portsmouth, UK) |
| Abstract: | Following the 2017 UK terrorist attacks by extremist religious individuals, it is notable that politicians and individual commentators remarked on the pressing need for local partnership working in England (BBC question time, 5 June 2017; Faith Matters 2017; Brendan Cox 19 June 2017). For it is by this means, people working together in a community, that local information and intelligence can be accessed, especially relating to emerging radicalisation. The early warning signs that could lead to active terrorism of the kind witnessed in the 2017 attacks (UNISON 2016) are being missed, and there are reasons why. This paper looks at why local information and multi-agency partnership are important to policing and community safety in the context of concerns about radicalisation and extremism, reviewing the policy changes, and their effects in partnership arrangements that have occurred in the UK since 2010. The paper goes on to present findings about the crucial significance of local partnership working in detecting radicalisation and some of the challenges faced by professionals now. The third part of the paper considers the question of how relevant agencies can monitor ongoing extremism and terrorism in communities through local intelligence gleaned through partnership working and other means. |
| Keywords: | extremism, terrorism, partnerships, multi-agency, communities, collaboration, governance |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:smo:ppaper:003&r=eur |
| By: | Ulceluse; Magdalena |
| Abstract: | The paper investigates whether self-employment represents a way to reduce overeducation and improve labour market matching, in a comparative analysis between immigrants and natives. Using the EU Labour Force Survey for the year 2012, and controlling for a list of demographic characteristics and general characteristics of 30 destination countries, I find that the likelihood of being overeducated decreases for self-employed immigrants, with inconclusive results for self-employed natives. The results shed light on the extent to which immigrants adjust to labour market imperfections and barriers to employment and might help explain the higher incidence of self-employment that immigrants exhibit, when compared to natives. This is the first study to systematically study the nexus between overeducation and self-employment in a comparative framework. Moreover, the paper tests the robustness of the results by employing two different measures of overeducation, contributing to the literature of the measurement of overeducation. |
| Keywords: | self-employment,immigrants,skills mismatch,overeducation |
| JEL: | J15 J24 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:219&r=eur |
| By: | Sabatini, Fabio; Sarracino, Francesco |
| Abstract: | Online social networks, such as Facebook, amplify the occasions for social comparisons which are detrimental to well-being. The authors test the hypothesis that the use of social networking sites (SNS) increases social comparisons using Italian data from the Multipurpose Household Survey, and European data from Eurobarometer. The results suggest that SNS users have a higher probability to compare their achievements with those of others. This evidence is robust to endogeneity concerns. The authors conclude that, by increasing the opportunities for social comparisons, SNS can be an engine of income dissatisfaction for their users. |
| Keywords: | social networks,social networking sites,social comparisons,satisfaction with income,relative deprivation |
| JEL: | D83 I31 O33 Z1 Z13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201843&r=eur |
| By: | Bogdan Włodarczyk (University of Warmia and Mazury in Olsztyn); Marek Szturo (University of Warmia and Mazury in Olsztyn); George Ionescu (Romanian-American University); Daniela Firoiu (Romanian-American University); Ramona Pirvu (University of Craiova); Roxana Badircea (University of Craiova) |
| Abstract: | Existing research proves that companies' access to bank loans or other external sources of financing for business development is one of the defining factors of the survival and development of a company on the market. This is all the more important in the case of small and medium-sized companies, knowing that they face a series of difficulties in obtaining financing from banking institutions, especially due to an insufficient amount of information needed provided to banks and needed by them to analyze the opportunity for a loan. However, as the economic and financial conditions of a company are better, the more information is available to banks and the credit availability is higher. By this research we analyse the factors affecting the credit availability and their influence on development of Polish small and medium companies, such as company’s size and age, financial results or the length of relationship with the banking institution, as well as the features characterizing the banking sector. The results demonstrate that in Poland, similarly to other European countries, small and medium companies have a more limited access to credit availability than large companies. Moreover, a significant dependence of bank credit availability from the size of the company, liquidity, profitability and the situation in the banking sector was demonstrated. |
| Keywords: | banking sector,credit availability,small and medium enterprises |
| Date: | 2018–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01773998&r=eur |
| By: | Richard Disney (Institute for Fiscal Studies and University of Sussex); Helen Miller (Institute for Fiscal Studies and Institute for Fiscal Studies); Thomas Pope (Institute for Fiscal Studies and Institute for Fiscal Studies) |
| Abstract: | Firm-level investment paths are commonly characterised by periods of low or zero investment punctuated by large investment ‘spikes’. We document that such spikes are important for understanding ?rm and aggregate level investment in the UK. We show that annual variation in aggregate investment is driven by variation in the number of ?rms undertaking investment spikes rather than in the size of spikes or in investment outside of spikes. Our main contribution is to set out and estimate a ?rm-level model of the timing of investment spikes that: (i) incorporates measures of macroeconomic conditions and can be used to replicate movements in aggregate investment; (ii) incorporates a role for ?rm capital structure, which we demonstrate explains part of ?rms’ heterogeneous investment responses to the Great Recession. We ?nd an important role for low demand growth in depressing investment in the recession and for ongoing uncertainty in prolonging investment weakness in later years. The minority of ?rms that persistently operate with high debt levels were signi?cantly less likely to undertake an investment spike after the recession, which is consistent with them having been more exposed to ?nancial distress. |
| Keywords: | Business investment; adjustment cost; recession; hazard functions; capital structure |
| JEL: | C41 D22 E22 E32 G31 G32 L25 |
| Date: | 2018–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:18/03&r=eur |
| By: | Golsteyn, Bart H.H. (Maastricht University); Hirsch, Stefa (Maastricht University) |
| Abstract: | Intergenerational mobility is often studied using survey data. In such settings, selective unit or item non-response may bias estimates. Linking Dutch survey data to administrative income data allows us to examine whether selective responses bias the estimated relationship between parental income and children's mathematics and language test scores in grades 6 and 9. We find that the estimates of these relationships are biased downward due to parental unit non-response, while they are biased upwards due to item non-response. In the analyses of both unit and item non-response, the point estimates for language and mathematics test scores point in the same direction but only one of the two relationships is significant. These findings suggest that estimates of intergenerational mobility based on survey data need to be interpreted with caution because they may be biased by selective non-response. The direction of such bias is difficult to predict a priori. Bias due to unit and item non-response may work in opposing directions and may differ across outcomes. |
| Keywords: | intergenerational mobility, unit non-response, item non-response |
| JEL: | I24 J62 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11561&r=eur |