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on Microeconomic European Issues |
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Issue of 2022‒08‒08
twenty-two papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | F. Aresu; E. Marrocu; R. Paci |
| Abstract: | This paper investigates the role played by public capital on the production level of Italian regions by specifically accounting for the quality of institutions. Our analysis, carried out over the period 2000-2019, benefits from the use of a rich dataset on public expenditures which allows us to build the regional series of public capital stock by distinguishing among public institutions in charge of the investments and sectors of intervention. While controlling for several contextual variables (human capital, social capital, technological capital, population density), main results show that public capital has a positive and significant effect on production. Most interestingly, looking at the Mezzogiorno s regions, public capital carried out by local institutions turns out to have a lower impact than in the rest of the Italian regions. On the other hand, central bodies in the South exhibit an impact higher than the average. Moreover, institutions quality exhibits a positive and significant effect on regional economic performance. These results cast serious doubts about the actual capacity of the local Southern administrations to effectively manage the enormous resources of the National Recovery and Resilience Plan and of the new European Union cohesion framework 2021-2027. Our results are also relevant for other European regions that, featuring structural traits similar to Southern Italian regions, are expected to face the same difficulties in managing public funding. |
| Keywords: | Public capital stock; Productivity; Italian regions; Institutions' Quality |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:202202&r= |
| By: | François Rycx; Giulia Santosuosso; Guillaume Vermeylen |
| Abstract: | While the literature on the incidence and wage effects of over-education is substantial, specific results for doctoral graduates are surprisingly scarce. This article aims to fill this gap, not only by measuring the prevalence of over-educated PhD holders in Europe (i.e. in EU Member States and the UK), but also by estimating their wage penalty relative to what they could have earned in a job corresponding to their level of education. Using a unique pan-European dataset, we rely on two alternative measures of over-education and control stepwise for four groups of covariates (i.e. socio-demographic characteristics, skills needed for the job, other job-specific characteristics and motivations for employment) in order to interpret the over-education wage penalty in light of theoretical models. Depending on the specification adopted, we find that over-educated PhD holders face a wage penalty ranging from 25 to 13.5% with respect to their well-matched counterparts. Our results also show that the over-education wage penalty is significantly higher for PhD holders who are both over-educated and over-skilled and especially for those who are both over-educated and dissatisfied with their jobs. Finally, unconditional quantile regressions highlight that the over-education wage penalty among PhD holders increases greatly along the wage distribution. |
| Keywords: | PhD Graduates; Over-Education; Over-Skilling; Job Satisfaction; Wages; Europe |
| JEL: | J21 J24 |
| Date: | 2022–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/346031&r= |
| By: | Halvarsson, Daniel (The Ratio Institute); Lark, Olga (Lund University); Gustavsson Tingvall, Patrik (The National Board of Trade) |
| Abstract: | In this paper, we study foreign ownership as a vehicle for transferring gender norms across international borders. Specifically, we analyze how the wage differential between men and women in Swedish firms is affected by the degree of gender inequality in the home country of foreign investors. The results suggest that gender norms of the home country matter—the gender wage gap in foreign-owned subsidiaries appears to increase with the degree of gender inequality prevailing in the investors’ home market. This finding is identified from within job-spell variation in wages and proves robust across a series of specifications. |
| Keywords: | Foreign ownership; Gender inequality; Gender wage gap; Internationalization; Gender norms |
| JEL: | F66 J16 J31 |
| Date: | 2022–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1433&r= |
| By: | VERA-TOSCANO Esperanza; FANA Marta (European Commission - JRC); FERNANDEZ MACIAS Enrique (European Commission - JRC) |
| Abstract: | Using Census data, this paper proposes an empirical approach to look at differences and changes in the composition of employment across NUTS-3 level regions of six European Union countries over the period 1981 – 2011. We focus on jobs (defined as specific occupations within specific sectors) as our unit of analysis. We rank all jobs based on their average educational level and divide these distribu-tions into terciles. We accommodate the approach to compare regions to their national average and see how they evolve compared to the national trend. Our aim is to determine if regional employment structures converge over time and whether they are polarising, upgrading or downgrading. Several hypotheses regarding possible underlying factors of structural changes are further discussed. Results show a high degree of heterogeneity in the different regions. This presents considerable challenges for policymakers, as they need to gear their efforts at regional, more localised level. |
| Keywords: | Job polarisation, economic restructuring, technological change, Census data, regional heterogeneity |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:202203&r= |
| By: | Hall, Caroline (IFAU - Institute for Evaluation of Labour Market and Education Policy); Liljeberg, Linus (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper presents evidence on how firms react to a more generous insurance against high sick pay costs. We exploit a reform launched in Sweden in 2015, which introduced different thresholds for insurance reimbursement depending on firm size. By comparing workers in smaller firms with workers in large firms over time, we evaluate the effects of the reform. We find no indication of changed behaviour among employees in the smallest firms (on average 15 employees), but an increase in sickness absence among those employed in middle-sized firms (on average 38 employees). The increased absence in middle-sized firms is entirely driven by new hires, but the newly hired employees do not seem to be differently selected. We find no evidence indicating that the more generous insurance made firms more inclined to employ more sick-prone individuals. Further analysis suggests that the absence of behavioural responses among employees in the smallest firms might be related to a large production loss from an absent worker, which the insurance cannot fully compensate for. Taken together, we find no support for any societal benefits of a more generous insurance against high sick pay costs in terms of an increased employment-probability among more sick-prone individuals. |
| Keywords: | sickness absence; sick pay; firm size; insurance; recruitment |
| JEL: | J22 J23 L23 M51 |
| Date: | 2022–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_014&r= |
| By: | N. Denisa Naidin; Sofie R. Waltl; Michael H. Ziegelmeyer |
| Abstract: | Reliable macroeconomic housing and wealth statistics as well as counterfactual analyses across housing tenure status require hypothetical sales and rent prices for properties off the market reflecting current market conditions and representing the entire housing stock. We replace subjective values reported by participants in the Luxembourg Household Finance and Consumption Survey by objectified values imputed via hedonic models estimated on observable market data. We find that the participants’ tendency to overand under-report values is strongly correlated with tenure length, tenure type, dwelling type, household income and wealth. We find shifts in the wealth distribution, detect large regional variation in price-to-rent, price-to-income and rent-to-income ratios as well as significant affordability concerns: only 18% of all renting households could theoretically afford to purchase the dwelling they currently rent at market conditions. These renters are usually younger, at the top of the wealth and income distribution, and reside outside Luxembourg City. |
| Keywords: | Macroeconomic Statistics; Subjective Assessments; Surveys; Measurement Errors; Housing and Rent Markets; Housing Wealth; Affordability |
| JEL: | E58 G51 R21 R31 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp160&r= |
| By: | Mehdi EL HERRADI; Aurélien LEROY |
| Abstract: | This paper assesses whether monetary policy announcements have an impact on households’ (subjective) well-being by analysing life satisfaction on the days before and after monetary surprises in Germany. To do so, we use individual-level information on life satisfaction from the German Socio-Economic Panel (SOEP) survey and identify the day on which each answer is submitted to the survey. We also exploit the Euro Area Monetary Policy event study Database (EA-MPD) to obtain daily-level information on European Central Bank (ECB) monetary surprises. Our results show that life satisfaction is significantly affected by monetary policy surprises: tightening surprises decrease life satisfaction, while easing surprises increase it. |
| Keywords: | Monetary policy, Subjective Well-Being, Survey data, European Central Bank |
| JEL: | E52 E58 I31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2022-09&r= |
| By: | Pietro De Ponti; Valeria Gattai |
| Abstract: | This paper empirically analyses input procurement using Italian firm-level data. Combining the international economics literature on global sourcing with the family business and international business literature on family firms (FFs)’ internationalization, we build a comprehensive framework in which sourcing is shaped by location (domestic versus foreign sourcing) and ownership (integration versus outsourcing) decisions. Relying on a new firm-level, cross-sectional dataset on a large and stratified sample of Italian manufacturing firms, we address the relationship between global sourcing and firm-level features, such as family presence in ownership and control, productivity, and input specificity. Our probit and multinomial probit estimates suggest that the FF status is negatively related to foreign sourcing, and it plays little role in orienting firms’ ownership decision; moreover, firms’ productivity fosters foreign sourcing, and reliance on specific inputs favours integration. Our study contributes to the International Economics literature on global sourcing by studying factors other than productivity and input specificity that affect input procurement; moreover, it contributes to the Family Business and International Business literature on FFs’ internationalization by taking a supply-side perspective and investigating sourcing through the interplay between location and ownership choices. |
| Keywords: | productivity, input specificity, family firms, input procurement, sourcing |
| JEL: | F23 D23 C35 L24 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:499&r= |
| By: | Kaufmann, Katja Maria (University of Mainz); Özdemir, Yasemin (University of Mainz); Ye, Han (University of Mannheim) |
| Abstract: | We study the impact of grandparental retirement decisions on family members' labor supply and child outcomes by exploiting a Dutch pension reform in a fuzzy Regression Discontinuity design. A one-hour increase in grandmothers' hours worked causes adult daughters with young children to work half an hour less. Daughters without children, with older children and sons/daughters-in-law are not affected. We show important long-run impacts on maternal labor supply and on the child penalty. Test score effects are positive for children aged 4-7 (substitution from grandparental to maternal care), and negative for children aged 11-12 (substitution from grandparental to formal childcare). |
| Keywords: | spillover effects, retirement, grandparental childcare, maternal labor supply, child development |
| JEL: | J22 J26 I38 D64 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15388&r= |
| By: | Merja Kauhanen (Palkansaajien tutkimuslaitos) |
| Abstract: | Multiple job holding concerns a considerable share of workers in the Finnish labour market, yet there is still only scarce research on its determinants and even less research that would take into account the heterogeneity within the group of multiple job holders. Utilising large register-based panel data from the 2010’s this paper studies determinants of multiple job holding treating multiple job holders as one group and of different types of multiple job holding, and also investigates its permanence. The paper finds that men, younger, more educated and living in countryside are more likely to hold multiple jobs relative to the reference groups. For wage and salary earners having temporary contract and part-time work are strongly positively associated with multiple job holding. Economic necessity seems to be an important driver for multiple job holding albeit not for all groups. There is also quite a lot of heterogeneity in the determinants of different types of multiple job holding. |
| Keywords: | multiple job holding, types of multiple job holding, determinants |
| JEL: | J22 J23 |
| Date: | 2021–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:pst:wpaper:331&r= |
| By: | Marta Fana (European Commission - JRC); Davide Villani (European Commission - JRC) |
| Abstract: | The original assumption behind the measurement of functional income distribution was that this measure would reflect uniquely the income allocated to different social classes. However, this straightforward dichotomy is more complicated today than it was 200 years ago for different reasons, such as the diversification of sources of income, and the role of managers. This paper proposes a new estimation of factors income distribution that is based not only on the source of income but also considers class belonging. We provide an empirical estimate for Italy (1991-2016) using the Survey on Households Income and Wealth (Bank of Italy). The revised labourers share is lower than the standard wage share. Moreover, we show that the size of the labour class is growing considerably due to the expansion of wage earners while at the same time they suffer a remarkable loss of income. Despite some labourers move towards the top of the distribution, most of the growing presence of wage income in the top of the distribution is imputable to managers. |
| Keywords: | Social classes, Functional Income Distribution, Inequality. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:dclass:202205&r= |
| By: | Yakymovych, Yaroslav (Department of Economics, Uppsala University) |
| Abstract: | Routine-biased technological change has led to the worsening of labour market prospects for workers in exposed occupations as their work has increasingly been done by machines. Routine workers who have lost their jobs in mass displacement events are likely to have been a particularly affected group, due to potential difficulties in finding new employment that matches their skills and experience. In this study, the annual earnings, employment, monthly wages and days of unemployment of displaced routine workers are compared to those of displaced non-routine workers using Swedish matched employer-employee data. The results show substantial routine-occupation penalties among displaced workers, which persist in the medium to long term. Compared to displaced non-routine workers, displaced routine workers lose an additional year’s worth of pre-displacement earnings and spend 180 more days in unemployment. A possible channel for this effect is the loss of occupation- and industry-specific human capital, as routine workers are unable to find jobs similar to those they had before becoming displaced. I do not find evidence that switching to a non-routine occupation reduces routine workers’ losses, but rather there are indications that switchers do worse in the short-to-medium run. The findings suggest that the effects of labour-replacing technological change on the most exposed individuals can be severe and difficult to ameliorate. |
| Keywords: | Routine-biased technological change; Mass layoffs |
| JEL: | J63 O33 |
| Date: | 2022–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_015&r= |
| By: | Rania Gihleb; Osea Giuntella; Luca Stella; Tianyi Wang |
| Abstract: | This study explores the relationship between the adoption of industrial robots and workplace injuries. Using establishment-level data on injuries, we find that a one standard deviation increase in our commuting zone-level measure of robot exposure reduces work-related annual injury rates by approximately 1.2 cases per 100 workers. US commuting zones more exposed to robot penetration experience a significant increase in drug- or alcohol-related deaths and mental health problems. Employing longitudinal data from Germany, we exploit within-individual changes in robot exposure and document that a one standard deviation change in robot exposure led to a 4% decline in physical job intensity and a 5% decline in disability, but no evidence of significant effects on mental health and work and life satisfaction. |
| JEL: | I10 J0 J28 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30180&r= |
| By: | Andrea Fazio (University of Pavia, Pavia, Italy); Francesco Scervini (University of Pavia, Pavia, Italy); Tommaso Reggiani (Masaryk University, Brno, Czech Republic) |
| Abstract: | Social media play a relevant role in shaping social attitudes and economic behaviors of individuals. One of the first very well-known examples of social media campaign is the Ice Bucket Challenge (IBC), a charity campaign that went viral on social networks in August 2014 aiming at collecting money for the research on amyotrophic lateral sclerosis (ALS). We rely on UK longitudinal data to investigate the causal impact of the Ice Bucket Challenge on pro-social behaviors. In detail, this study shows that having been exposed to the IBC increases the probability of donating money, and it increases the amount of donating money among those who donate at most £100. We also find that exposure to the IBC has increased the probability of volunteering and the level of interpersonal trust. However, all these results, but the one on the intensive margins of donations, have a short duration, limited to less than one year, supporting the prevalent consensus that social media campaigns may have only short-term effects. |
| Keywords: | Donations, Volunteering, Altruism, Social media campaigns, Ice bucket challenge |
| JEL: | D64 O35 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2022-09&r= |
| By: | Eric French; Attila S. Lindner; Cormac O'Dea; Tom A. Zawisza |
| Abstract: | We estimate the impact of public pension systems on labor supply far from the normal retirement age by exploiting Poland's switch from a Defined Benefit to a Notional Defined Contribution scheme for men born after 1948. Using the universe of taxpayers and this sharp cohort-based discontinuity in the link between current contributions and future benefits, we estimate an employment elasticity with respect to the return to work of 0.44 for ages 51-54. We estimate a lifecycle model that matches these results. The model implies that the change in the contribution-benefit link from the reform increases employment among those in their 30s but decreases it at older ages, reducing overall labor supply across the lifecycle by 2 months. |
| JEL: | D15 H55 J22 J26 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30184&r= |
| By: | Karmann, Alexander; Sugawara, Shinya |
| Abstract: | This research provides a comparative study of the Japanese and German nursing home sectors. Faced with aging populations, both countries share similar long-term care policies based on social insurance. However, descriptive statistics indicate significant differences in the outcomes and costs in their respective nursing home sectors. This research aims to identify the reasons for this state of affairs by examining demographic and policy differences between the two countries. To shed light on the subject from multiple angles, we conduct three types of empirical analysis - regression, the Blinder-Oaxaca decomposition, and data envelopment analysis - on regional data from the past decade. Our findings indicate that the different outcomes are driven by both demographic and policy differences where policy relates to long-term care as well as to additional welfare aid. In terms of policy, a key difference is found in the designs of the welfare programs for low-income elders. In Germany, our results are consistent with moral hazard due to the generous design of the welfare program, while in Japan, our results do not indicate moral hazard, which may be due to strict nursing home admission rules for welfare recipients. |
| Keywords: | Japanese and German nursing home sectors,long-term care insurance,Blinder-Oaxaca decomposition,comparative study,moral hazard,welfare policy |
| JEL: | I13 I18 J14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0222&r= |
| By: | Bart Cockx; Koen Declercq; Muriel Dejemeppe (-) |
| Abstract: | Providing income support to unemployed education-leavers reduces the returns to investments in education because it makes the consequences of unemployment less severe. We evaluate a two-part policy reform in Belgium to study whether conditioning the prospective entitlement to unemployment benefits for education-leavers on age or schooling attainment can affect educational achievements. The results show that the prospect of financial loss in case of unemployment can significantly raise degree completion and reduce dropout in higher education, but not in high school. We argue that the higher prevalence of behavioral biases among lower educated and younger students could explain these contrasting findings. |
| Keywords: | Unemployment insurance, conditionality, degree completion, school dropout, behavioral biases |
| JEL: | H52 I21 I26 I28 J08 J18 J24 J65 J68 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1049&r= |
| By: | Perrotta Berlin, Maria (Stockholm Institute of Transition Economics); Gerrell, Manne (Malmo University) |
| Abstract: | We document an increase in intimate partner violence (IPV) against women in Sweden during the first wave of the Covid-19 pandemic, notwithstanding the famously lasseiz-faire approach taken by the country. We investigate the role of different mediating factors, affected by the pandemic, by the containment policies, or by their economic consequences, and spilling over to violence incidence, connecting to established theories of violence. We find support for the importance of time spent at home and female unemployment. We also find a positive correlation with alcohol sales. |
| Keywords: | COVID-19; domestic violence; unemployment; self-incapacitation |
| JEL: | J12 J16 K14 |
| Date: | 2022–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hasite:0060&r= |
| By: | Andersen, Carsten (Aarhus University); Houmark, Mikkel Aagaard (Aarhus University); Nielsen, Helena Skyt (Aarhus University); Svarer, Michael (Aarhus University) |
| Abstract: | In this paper we study effects of mass layoffs on parents and their children in the aftermath of the Great Recession using staggered difference-in-differences (DiD). We exploit quasi-experimental variation in announcements of mass layoffs in Danish firms in 2008-2019. We document that parents exposed to a mass layoff during and immediately after the Great Recession are negatively affected 6 years after the event; more so and for a longer period of time for parents at high risk of long term unemployment. Perhaps surprisingly, we find no overall significant negative effects of parental mass layoffs on children; neither academic achievement, absenteeism nor well-being are affected. We even find some positive effects for the children of parents who were more adversely affected by the layoff, consistent with an increase in parental time investment following unemployment. This last finding would not have appeared using a traditional two-way fixed effects approach, which appears to be biased towards zero in our setting. |
| Keywords: | mass layoff, unemployment, school outcomes, academic achievement, wellbeing |
| JEL: | I20 J63 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15389&r= |
| By: | Draca, Mirko (University of Warwick, Department of Economics); Duchini, Emma (University of Essex, Department of Economics); Rathelot, Roland (Institut Polytechnique de Paris); Turrell, Arthur (Office for National Statistics); Vattuone, Giulia (University of Warwick) |
| Abstract: | The pandemic was accompanied by a wave of adoption of remote work practices. This paper uses online job vacancy data to study how UK firms have adopted remote work. Overall, remote work increased by 300%. Our analysis finds little evidence that occupations have fundamentally changed to better accommodate remote work tasks, nor evidence of changes in the occupational composition of jobs. We find that the overall increase in remote working is driven by the increasing use of remote work at the firm level, especially among firms that were less likely to use remote work before the pandemic. This is consistent with changes in organisational practices or updated information about the viability of large-scale remote working. JEL codes: J23 ; J32. |
| Keywords: | vacancies ; remote working ; pandemic |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1408&r= |
| By: | Guglielmo Barone; Fabiano Schivardi; Enrico Sette |
| Abstract: | We study the effects on corporate loan rates of an unexpected change in the Italian legislation which forbade interlocking directorates between banks. Exploiting multiple firm-bank relationships to fully account for all unobserved heterogeneity, we find that prohibiting interlocks decreased the interest rates of previously interlocked banks by 16 basis points relative to other banks. The effect is stronger for high quality firms and for loans extended by interlocked banks with a large joint market share. Interest rates on loans from previously interlocked banks become more dispersed. Finally, firms borrowing more from previously interlocked banks expand investment, employment and sales. |
| JEL: | G21 G34 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1173&r= |
| By: | Damon Clark |
| Abstract: | For much of the 20th century, British students were tracked into higher-track (for the "top" 20%) or lower-track (for the rest) secondary schools. Opponents of tracking contend that the lower-track schools in these systems will inevitably provide low-quality education. In this paper I examine this claim using a 1947 reform that increased the minimum school leaving age from 14 to 15. First, I show that over 95% of the students affected by the reform ("compliers") attended lower-track schools. Second, using new data, I show that for both men and women, the additional schooling induced by the reform had close to zero impact on a range of labor market outcomes including earnings. Third, I show that lower-track schools featured, among other things, large classes and a curriculum that promoted practical education. I conclude that my findings shed new light on the potential consequences of educational tracking. |
| JEL: | I21 J24 J31 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30174&r= |