nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒04‒05
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Origin of FDI and domestic productivity spillovers: does European FDI have a ‘productivity advantage’ in the ENP countries? By Vassilis Monastiriotis
  2. Trends in Job Quality during the Great Recession: a Comparative Approach for the EU / Tendances de la qualité de l'emploi pendant la crise : une approche européenne comparative By Christine Erhel; Mathilde Guergoat-Larivière; Janine Leschke; Andrew Watt
  3. Transitions in labour market status in the European Union By Melanie Ward-Warmedinger & Corrado Macchiarelli
  4. Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany By Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
  5. Micro-based evidence of EU competitiveness: the CompNet database By Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
  6. How are Italian and Spanish cities tackling climate change? A local comparative study By Marta Olazabal; Sonia De Gregorio Hurtado; Eduardo Olazabal; Filomena Pietrapertosa; Monica Salvia; Davide Geneletti; Valentina D?Alonzo; Efrén Feliú; Senatro Di Leo; Diana Reckien
  7. Country Differences in the Relationship between Incomes and Wage Rates of Working Partners By Anja-Kristin Abendroth
  8. The Distribution of wealth and the MPC: implications of new European data By Carroll, Christopher D.; Slacalek, Jiri; Tokuoka, Kiichi
  9. Determining the Impact of Cultural Diversity on Regional Economies in Europe By Dirk Dohse; Robert Gold
  10. Immigrants and Firms' Productivity: Evidence from France By Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
  11. Inequality, poverty and social welfare in Greece: distributional effects of austerity By Theodore Mitrakos
  12. GINI Policy Paper 5: Towards a better marriage between job growth and poverty reduction By Ive Marx; Jeroen Horemans; Marchal, S.; Tim Rie; Corluy, V.
  13. Happiness - before and after the Kids By Mikko Myrskylä; Rachel Margolis
  14. Spatial dependence in commercial property prices: micro evidence from the Netherlands By Özyurt, Selin
  15. Does Social Capital Matter for European Regional Growth By Peiró Palomino Jesús; Forte Deltell Anabel; Tortosa-Ausina Emili
  16. Education and Intergenerational Mobility: Help or Hindrance? By Jo Blanden; Lindsey Macmillan
  17. The Behavioralist As Tax Collector: Using Natural Field Experiments to Enhance Tax Compliance By Michael Hallsworth; John A. List; Robert D. Metcalfe; Ivo Vlaev
  18. The Wear and Tear on Health: What Is the Role of Occupation? By Bastian Ravesteijn; Hans van Kippersluis; Eddy van Doorslaer
  19. My parents taught me. Evidence on the family transmission of values By Giuseppe Albanese; Guido de Blasio; Paolo Sestito
  20. The distribution of debt across euro area countries: the role of individual characteristics, institutions and credit conditions By Bover, Olympia; Casado, Jose Maria; Costa, Sonia; Du Caju, Philip; McCarthy, Yvonne; Sierminska, Eva; Tzamourani, Panagiota; Villanueva, Ernesto; Zavadil, Tibor

  1. By: Vassilis Monastiriotis
    Abstract: The process of approximation between the EU and its ‘eastern neighbourhood’ has created conditions for deepening economic interactions and market integration, giving to the EU –and to EU businesses– an elevated role in the process of economic modernisation and transition in the neighbourhood countries. This raises the question as to whether European business activity in these countries produces indeed measureable economic advantages both in absolute and in relative terms (e.g., compared to business activity from other parts of the world). Similarly, a question arises as to whether European business activity reduces or amplifies spatial imbalances within the partner countries. This paper examines these issues for the case of capital flows (foreign ownership) and the related productivity spillovers, using firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS) covering 28 transition countries over the period 2002-2009. We estimate the direct and intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), according to the origin of the foreign investor (EU versus non-EU), across geographical scales (pure industry versus regional spillovers) and for different types of locations (capital-city regions versus the rest). Our results suggest that FDI of EU origin plays a distinctive role in the countries concerned helping raise domestic productivity significantly more than investments from outside the EU. However, this process appears to operate in a spatially selective manner, thus enhancing regional disparities and spatial imbalances. This, then, assigns a particular responsibility for EU policy, as it continues to promote economic integration (and FDI flows) to its eastern neighbourhood, to devise interventions that will help redress these problems.
    Keywords: foreign direct investment
    Date: 2014–01–08
  2. By: Christine Erhel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé); Mathilde Guergoat-Larivière (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé); Janine Leschke (Copenhagen Business School - Copenhagen Business School); Andrew Watt (IMK - Macroeconomic Policy Institute - Macroeconomic Policy Institute)
    Abstract: This paper focuses on the consequences of the crisis on job quality in Europe. Its aim is twofold: first, to identify trends in job quality in the EU during the 2007-2009 crisis; secondly, to explore the link between these trends and cyclical as well as institutional factors. It relies on European surveys data (European Working Conditions Survey, Labour Force Survey, EU-SILC). A first step of the analysis relies on synthetic indices of job quality developed in previous researches (ETUI Job Quality Index) and compares 2005 and 2010. In average in the EU the aggregate index shows a marginal overall decline in job quality between 2005 and 2010. Improvements are visible with regard to working conditions, working-time and work-life balance. However, involuntary non-standard employment has increased and wages display a pronounced deterioration. Slight declines are also visible in skills and career development and in collective interest representation. At the national level some countries exhibit a more than marginal improvement in overall job quality (Poland, Czech Republic, Belgium and Denmark), whereas others see marked declines in job quality (Ireland and France). A second step builds on dynamic indicators calculated at the individual level. They account for individual transitions in terms of job quality during the trough of the economic downturn (between 2007 and 2009), using EU-SILC panel data. Using multi-level logistic regressions, the paper assesses the contribution of both individual and country-level characteristics (institutions and business-cycle indicators) to a possible deterioration in job quality. It shows that some socio-economic groups are more affected by decreasing trends in job quality (other things being equal), especially youth, older workers and low-educated workers. Women seem less affected by these negative trends than men but are more likely than men to become unemployed or inactive over the period. Cross-country heterogeneity in job quality trends can be related to economic trends (unemployment variation) and, to a minor extent, to the employment distribution by sectors. Some labour market institutions also seem to play a role in explaining the evolution of job quality in times of crisis: employment protection legislation (as defined by the OECD) prevents individual transitions to nonemployment (and has no direct effect on job quality) while public expenditure per unemployed slightly reduces the risk of job quality deterioration.
    Keywords: job quality; European comparisons; crisis; labour market transitions; labour market institutions; synthetic index
    Date: 2014–03–27
  3. By: Melanie Ward-Warmedinger & Corrado Macchiarelli
    Abstract: This paper presents information on labour market mobility in 23 EU countries, using Eurostat’s Labour Force Survey (LFS) data over the period 1998-2008. More specifically, it discusses alternative measures of labour market churning; including the ease with which individuals can move between employment, unemployment and inactivity over time. The results suggest that the probability of remaining in the same labour market status between two consecutive periods is high for all countries. Nonetheless, transitions from unemployment and inactivity back into the labour market are relatively weak in the euro area and central eastern European EU (CEE EU) countries compared to Denmark and, particularly, Sweden. Moreover, comparisons of transition probabilities over time suggest that – until the onset of the financial crisis – the probability of remaining in unemployment over two consecutive periods decreased in Sweden, the euro area, and, to a lesser extent, Denmark, while it increased in the average CEE EU countries. At the same time, however, successful labour market entries (from outside the labour market) increased in the average CEE EU countries, Denmark and Sweden. On the basis of an index for labour markets turnover used in the paper (Shorrocks, 1987), labour markets in Spain, Luxemburg, the Netherlands, Denmark and Sweden are the most mobile on average, with these results mainly reflecting higher mobility of people below the age of 29, highly educated and female workers. We also find that mobility of all worker groups has generally increased over time in the euro area, Denmark and Sweden. Finally, we ask whether some of the observed changes in mobility can be broadly restraint to some macro explanatory factors, including part time and temporary employment, unemployment and structure indicators. The results provide a mixed picture, suggesting that the sense of mobility strongly varies across countries.
    Keywords: transition processes
    Date: 2013–11–05
  4. By: Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
    Abstract: The impact of environmental regulation on technology diffusion and innovations is studied using a unique data set of German residential buildings. We analyze how energy efficiency regulations, in terms of minimum standards, affects energy-use in newly constructed buildings and how it induces innovation in the residential-building industry. The data used consists of a large sample of German apartment houses built between 1950 and 2005. Based on this information, we determine their real energy requirements from energy performance certificates and energy billing information. We develop a new measure for regulation intensity and apply a panel-error-correction regression model to energy requirements of low and high quality housing. Our findings suggest that regulation significantly impacts technology adoption in low quality housing. This, in turn, induces improvements in the high quality segment where innovators respond to market signals.
    Keywords: Environmental regulation, innovation, technology diffusion, residential real estate, energy efficiency
    JEL: D2 Q4 R5
    Date: 2014
  5. By: Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
    Abstract: Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, describes the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results. JEL Classification: L11, L25, D24, O4, O57
    Keywords: allocative efficiency, competitiveness, cross country analysis, firm-level data, productivity and size distribution, total factor productivity
    Date: 2014–02
  6. By: Marta Olazabal; Sonia De Gregorio Hurtado; Eduardo Olazabal; Filomena Pietrapertosa; Monica Salvia; Davide Geneletti; Valentina D?Alonzo; Efrén Feliú; Senatro Di Leo; Diana Reckien
    Abstract: Cities are widely recognised as being pivotal to fight climate change. They magnify the drivers of climate change, experience the impacts and also concentrate the highest room for action. Although urban areas are broadly claimed to be climate leaders, there is no archetype of right actions given the highly contextual differences among them. Yet, the how and why cities respond to global environmental challenges in the context of increasingly competitive economies needs further research. In this paper we aim at advancing in this regard by assessing the state of the art on urban climate actions in two European Mediterranean Countries: Spain and Italy that face similar climate change challenges. Based on an extensive review of documents, we analyse mitigation and adaptation plans of 26 Spanish and 32 Italian Urban Audit cities, as representative samples. Our results show relevant differences between Spanish and Italian cities in terms of the starting time of their climate actions as well their implementation. We concur with existing literature in that mitigation is more advanced than adaptation actions and take evidence in both countries and we also demonstrate that international and national networking initiatives are being instrumental in engaging cities in climate action.
    Keywords: urban climate action; mitigation plan; adaptation plan; Spain; Italy; Urban Audit
    Date: 2014–03
  7. By: Anja-Kristin Abendroth
    Abstract: This paper investigates the relevance of the cultural and economic country context for differences in the effect of male partner income on female income and wage rate for 9,373 respondents in 13 European countries. Data taken from the European Community and Household Panel (ECHP), which comprises information on partner income trends between 1994 and 2001, were used to estimate fixed effect models. We find differences between countries in the effect of male partner income on women’s income. In countries where average male salaries represent high purchasing power, male partner income has a negative influence on female income and wages. Less evidence was found for the argument that also gender cultures moderate partner income effects.
    Date: 2014
  8. By: Carroll, Christopher D.; Slacalek, Jiri; Tokuoka, Kiichi
    Abstract: Using new micro data on household wealth from fifteen European countries, the Household Finance and Consumption Survey, we first document the substantial cross-country variation in how various measures of wealth are distributed across individual households. Through the lens of a standard, realistically calibrated model of buffer-stock saving with transitory and permanent income shocks we then study how cross-country differences in the wealth distribution and household income dynamics affect the marginal propensity to consume out of transitory shocks (MPC). We find that the aggregate consumption response ranges between 0.1 and 0.4 and is stronger (i) in economies with large wealth inequality, where a larger proportion of households has little wealth, (ii) under larger transitory income shocks and (iii) when we consider households only using liquid assets (rather than net wealth) to smooth consumption. JEL Classification: D12, D31, D91, E21
    Keywords: consumption dynamics, cross-country comparisons, liquid assets, MPC, wealth inequality
    Date: 2014–03
  9. By: Dirk Dohse; Robert Gold
    Abstract: In recent decades, the ethnic composition of the European population has changed substantially, leading to a rapid increase of cultural diversity in the EU as a whole, at the level of individual member states, and at the regional level. This paper focusses on the regional level and investigates the relationship between cultural diversity and regional economic performance for the EU 27. Giving particular attention to regional innovation, GDP per capita, and its development over time, the paper finds that culturally more diverse regions are on average more innovative, which translates into higher growth and better economic performance. An important finding of this study is, however, that the positive effect of cultural diversity on regional economic performance is not present in all sub-samples of the European regions alike.
    Keywords: Regional Development, Cultural Diversity, Measurement Issues
    JEL: M13 O18 R11
    Date: 2014–03
  10. By: Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
    Abstract: Immigrants may complement native workers, allow reallocation by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firmes use immigrants. Allowing firms to have differential fixed cost in hiring immigrants, because of different information and access to their network, we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and productivity. Using micro-level data on French firms during the period 1995-2005, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially low (or zero) level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances (for extensive and intensive margin) of the firms. While these outcomes depend on the firm share of immigrants in employment we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations that is common to all firms in the district. Supply-driven increase in foreign born workers in a department (location) implies a re-allocation of native workers towards communication and cognitive intensive tasks.
    Keywords: immigrants;firms;productivity;heterogeneity;fixed cost of hiring
    JEL: F22 E25 J61
    Date: 2014–03
  11. By: Theodore Mitrakos (Bank of Greece)
    Abstract: This paper presents the recent trends and the characteristics of inequality, poverty and living conditions in Greece, emphasising the distributional effects of the austerity measures adopted during the current economic crisis. Moreover, the decomposition analysis of the study examines the structure of inequality and the contribution of various income sources in overall inequality, while the main characteristics of the Greek social solidarity system and the poor distributional impact of social benefits are also discussed. To this end, household income from the Greek Household Budget and the EU Statistics of Income and Living Conditions surveys are used. The available data indicate that income inequality and relative poverty has increased, yet not dramatically, during the current crisis, although the composition of the poor population changed considerably. However, the sharp decline in disposable income and the dramatic increase in unemployment has led to a significant deterioration in economic prosperity and absolute poverty, i.e. when the poverty line in real terms remains stable in the pro-crisis levels.
    Keywords: inequality;poverty;living conditions;redistribution impact
    JEL: D31 I31
    Date: 2014–02
  12. By: Ive Marx (Centre for Social Policy, University of Antwerp); Jeroen Horemans (Faculteit psw / departement arbeid, Universiteit Antwerpen); Marchal, S.; Tim Rie (Centrum voor Sociaal Beleid Herman Deleeck, Universiteit Antwerpen); Corluy, V.
    Abstract: Disproving fears of a future characterized by ‘jobless growth’, the decade prior to the crisis of 2008 was marked by strong net employment gains, even though many countries failed to achieve the employment targets set within the context of the Lisbon Agenda. Still, just prior to the crisis, employment rates had reached historically high levels. Unemployment in many EU Member States was at or below levels observers only a decade earlier deemed impossible to achieve. Yet it also became clear that employment growth in and out of itself did not produce the expected outcomes in terms of poverty reduction and other aspects of social inclusion. Marked increases in employment rates had gone accompanied with rising or stagnant relative poverty rates for the working aged population. Income inequality had mostly increased. The crisis period has been marked by equally if not more dramatic declines in employment in a number of countries. Yet ambitions to put more Europeans to work remain unabashed. First among the headlines targets formulated in the current Europe 2020 strategy is the objective of reaching an employment rate of 75 percent by 2020. Some countries have set even more ambitious national targets within this framework. Thus the idea that employment growth and poverty reduction need to go together remains at the core of the current Europe 2020 Agenda, but there seems to be an implicit recognition now that higher levels of employment may not automatically bring better social inclusion outcomes. The Europe 2020 Agenda also contains clear poverty and social inclusion targets. The European Commission (2010) recently stated that social protection is an additional cornerstone of an effective policy to combat poverty and social exclusion in Europe, complementing the effects of growth and employment. The European Commission (2013) has also launched a ‘Social Investment Package’ emphasizing human capital investment. This paper asks how a better marriage between employment participation and poverty reduction could be achieved. The paper starts with a sketch of current debates. The paper continues with a review and interpretation of past trends; why is it that employment growth has not brought lower poverty in the past? We then devote a sizable section to the issue of in-work poverty, as this is essential for optimal policy design. A second major part of this paper looks at what policy can do to achieve a better marriage between employment growth and poverty reduction. We discuss indirect policy options, which can help to tackle demand and supply barriers to higher work intensity, particularly among the poor. The major focus, however, is on policies for direct income support of workers. Here we discuss both incremental and innovative policy options. A final section contains some clear suggestions on directions policy could take so as to foster a stronger complementarity between employment and social inclusion .
    Date: 2013–09
  13. By: Mikko Myrskylä; Rachel Margolis
    Abstract: Understanding how having children influences the parents’ subjective well-being (“happiness”) has great potential to explain fertility behavior. We study parental happiness trajectories before and after the birth of a child using large British and German longitudinal data sets. We account for unobserved parental characteristics using fixed-effects models and study how sociodemographic factors modify the parental happiness trajectories. Consistent with existing work, we find that happiness increases in the years around the birth of the first child, then decreases to before-child levels. Moreover, happiness increases before birth, suggesting that the trajectories may capture not only the effect of the birth but also the broader process of childbearing which may include partnership formation and quality. Sociodemographic factors strongly modify this pattern. Those who have children at older ages or have more education have a particularly positive happiness response to a first birth, and although the first two children increase happiness, the third does not. The results are similar in Britain and Germany and suggest that up to two, children increase happiness, and mostly among those who postpone childbearing. This pattern is consistent with the fertility behavior emerging during the second demographic transition and provides new insights into low and late fertility.
    Keywords: Fertility, well-being, life course, parenthood
    Date: 2014
  14. By: Özyurt, Selin
    Abstract: Following a hedonic framework, this paper constructs various transaction-based commercial property price indicators for the Netherlands. Using quarterly data from the Investment Property Databank (IPD), the analysis covers a total of 10,000 listed properties over the period 2001-2011. The study contributes to the empirical literature by introducing a spatial econometric methodology into a hedonic framework, via a spatially lagged explanatory variable (spatially lagged valuations per square metre). The results provide significant evidence of the presence of spatial dependence in unit valuations in all sub-sectors of the commercial property market, namely retail, office, industrial and residential. Accordingly, high (low) priced commercial properties tend to be geographically clustered rather than randomly distributed over space. The comparison of the alternative transaction-based indices shows a systematic upward bias in the baseline transaction-based indicator that relies solely on prior appraisals. In addition, compared to the baseline indicator, the spatially augmented transaction-based price indicator appears to fluctuate less and is more robust to small sample sizes. These results are robust for alternative spatial weights matrix specifications. JEL Classification: R30, C31, C21, R12
    Keywords: commercial property prices, real estate economics, spatial dependence, spatial econometrics
    Date: 2014–01
  15. By: Peiró Palomino Jesús (Universidad Jaime I); Forte Deltell Anabel (Jaume I University); Tortosa-Ausina Emili (INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY JAUME I)
    Abstract: This working paper analyzes the role of different elements of social capital in economic growth for a sample of 85 European regions during the period 1995-2008. Despite the remarkable progress that social capital and European regional economic growth literatures have experienced over the last two decades, initiatives combining the two are few, and entirely yet to come for the post-1990s period. Recent improvements in data availability allow this gap in the literature to be closed, since they enable the researcher to consider the traditionally disregarded Central and Eastern European regions. This is particularly interesting, since they are all transition economies that recently joined the European Union, with relatively low levels of social capital. On the methodological side, we follow the Bayesian paradigm, which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty, leading to a deeper understanding of the relationships being investigated. Contrary to other contributions for the European context, results suggest, among other findings, that trust and social norms might have some implications for regional growth, whereas the role of active participation in groups remains unclear.
    Keywords: Bayesian inference, economic growth, European regions, social capital
    JEL: Z13 C15 R10
    Date: 2014–02
  16. By: Jo Blanden; Lindsey Macmillan
    Abstract: Evidence on intergenerational income mobility in the UK is dated. This paper seeks to update our knowledge by introducing new estimates of mobility for later measures of earnings in the 1958 and 1970 birth cohorts. Given poor or non-existent data on more recent cohorts we adopt an indirect approach to assessing more recent mobility trends. This exploits the close link between income persistence across generations and the gap in educational achievement by family background (referred to as educational inequality). We gather a comprehensive set of data which measures educational inequality for different cohorts at different points in the education system. We conclude that educational inequality has declined for cohorts born after 1980, and this is associated with rising average educational achievement. In contrast, evidence on high attainment does not reveal that educational inequality has declined; this suggests that policy seeking to promote equality of opportunity should encourage students to aim high.
    Keywords: Integenerational, income, social, mobility
    JEL: J13
    Date: 2014–01
  17. By: Michael Hallsworth; John A. List; Robert D. Metcalfe; Ivo Vlaev
    Abstract: Tax collection problems date back to the earliest recorded history of mankind. This paper begins with a simple theoretical construct of paying (rather than declaring) taxes, which we argue has been an overlooked aspect of tax compliance. This construct is then tested in two large natural field experiments. Using administrative data from more than 200,000 individuals in the UK, we show that including social norms and public goods messages in standard tax payment reminder letters considerably enhances tax compliance. The field experiments increased taxes collected by the Government in the sample period and were cost-free to implement, demonstrating the potential importance of such interventions in increasing tax compliance.
    JEL: C93 H2 H26
    Date: 2014–03
  18. By: Bastian Ravesteijn; Hans van Kippersluis; Eddy van Doorslaer
    Abstract: Although it seems evident that occupations affect health, effect estimates are scarce. We use a job characteristics matrix linked to German longitudinal data spanning 26 years to characterize occupations by their physical and psychosocial burdens. Employing a dynamic model to control for factors that simultaneously affect health and selection into occupations, we find that manual work and low job control both have a substantial negative effect on health that increases with age. The effects of late career exposure to high physical demands and low job control are comparable to a health deterioration due to aging 12 and 19 months, respectively.
    Date: 2013
  19. By: Giuseppe Albanese (Bank of Italy); Guido de Blasio (Bank of Italy); Paolo Sestito (Bank of Italy)
    Abstract: The paper uses questions included in the 2010 wave of the Bank of Italy’s Survey on Household Income and Wealth to investigate the role of family transmission of values. It presents three main empirical findings. First, the paper shows that a number of attitudes (generalized and personalized trusting behaviour, risk and time preferences) and outcomes (female labour force participation, fertility, entrepreneurship, productivity) are associated with the values received. Second, it documents that values received from parents are correlated with the values transmitted to descendants. Third, by using respondent moving patterns the paper highlights that there is little evidence that the values received are affected by the local environment before they are passed on further. This evidence is consistent with the idea that family transmission is a channel for historical persistence.
    Keywords: family, cultural transmission, values
    JEL: Z1 D10 C83
    Date: 2014–03
  20. By: Bover, Olympia; Casado, Jose Maria; Costa, Sonia; Du Caju, Philip; McCarthy, Yvonne; Sierminska, Eva; Tzamourani, Panagiota; Villanueva, Ernesto; Zavadil, Tibor
    Abstract: The aim of this paper is twofold. First, we present an up-to-date assessment of the differences across euro area countries in the distributions of various measures of debt conditional on household characteristics. We consider three different outcomes: the probability of holding debt, the amount of debt held and, in the case of secured debt, the interest rate paid on the main mortgage. Second, we examine the role of legal and economic institutions in accounting for these differences. We use data from the first wave of a new survey of household finances, the Household Finance and Consumption Survey, to achieve these aims. We find that the patterns of secured and unsecured debt outcomes vary markedly across countries. Among all the institutions considered the length of asset repossession periods best accounts for the features of the distribution of secured debt. In countries with longer repossession periods, the fraction of people who borrow is smaller, the youngest group of households borrow lower amounts (conditional on borrowing), and the mortgage interest rates paid by low-income households are higher. Regulatory loan-to-value ratios, the taxation of mortgages and the prevalence of interest-only or fixed rate mortgages deliver less robust results. JEL Classification: D14, G21, G28, K35
    Keywords: financial literacy, fixed rate mortgages, household debt and interest rate distributions, loan-to-value ratios, taxation, time to foreclose
    Date: 2014–02

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