nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒03‒13
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Do Changes in Regulation Affect Temporary Agency Workers' Job Satisfaction? By Henna Busk; Elke J. Jahn; Christine Singer
  2. Sector-level strategies against precarious employment in Germany: Evidence from construction, commercial cleaning, hospitals and temporary agency work By Schulten, Thorsten; Schulze-Buschoff, Karin
  3. Credit constraints and the extensive margins of exports: First evidence for German manufacturing By Joachim Wagner
  4. As my parents at home? Gender differences in childrens’ housework between Germany and Spain By Giménez-Nadal, J. Ignacio; Molina, Jose Alberto; Ortega, Raquel
  5. Decomposing inequality `at work': Cross-country evidence from EU-SILC By Vincenzo Carrieri; Vito Peragine
  6. Micro-level dynamics of social assistance receipt. Evidence from 4 European countries By Sebastian Königs
  7. Towards a Multidimensional Poverty Index for Germany: Parents' Employment and Children's School Success in Germany By Nicolai Suppa
  8. It's Not All About Parents' Education, It Also Matters What They Do: Parents' Employment and Children's School Success in Germany By Christina Boll; Malte Hoffmann
  9. Do Earnings Really Decline for Older Workers? By Stephen Bazen; Kadija Charni
  10. Evaluating the Impact of Sunday Trading Deregulation By Svetoslav Danchev; Christos Genakos
  11. The impact of childhood obesity on health and health service use: an instrumental variable approach By Kinge, Jonas Minet; Morris, Stephan
  12. Regional heterogeneity and interregional research spillovers in European innovation: modeling and policy implications By Gianni Guastella; Frank van Oort
  13. Does the Burglar Also Disturb the Neighbor?: Crime Spillovers on Individual Well-being By Daniel Avdic; Christian Bünnings
  14. Costs and benefits of flexibility and autonomy in working time: The same for women and men? By Lott, Yvonne
  15. Public Health Insurance and Entry into Self-Employment By Frank M. Fossen; Johannes König
  16. Power Market Design beyond 2020: Time to Revisit Key Elements? By Karsten Neuhoff; Sophia Ruester; Sebastian Schwenen
  17. The effects of over-indebtedness on individual health By Blázquez, Maite; Budría, Santiago
  18. Language Skills and Labor Market Performance of Immigrants in the Netherlands By Yao, Y.; van Ours, J.C.
  19. Breaking the Glass Ceiling By Bertrand, Marianne; Black, Sandra; Jensen, Sissel; Lleras-Muney, Adriana
  20. How Has the Crisis of 2008-2009 Affected Subjective Well-Being? Evidence from 25 OECD Countries By Heinz Welsch; Jan Kühling

  1. By: Henna Busk; Elke J. Jahn; Christine Singer
    Abstract: This paper evaluates the impact on temporary agency workers’ job satisfaction of a reform that considerably relaxed regulations covering the temporary help service sector in Germany. We isolate the causal effect of this reform by combining a difference-in-difference and matching approach and using rich survey data. We find that the change of the law substantially decreased agency workers’ job satisfaction while regular workers’ job satisfaction remained unchanged. Further analysis reveals that the negative effect on agency workers’ job satisfaction can be attributed to a decrease in wages and an increase in perceived job insecurity. These results are also robust to the use of different specifications and placebo tests.
    Keywords: Temporary agency employment, deregulation, job satisfaction
    JEL: J28 J41 J88
    Date: 2015
  2. By: Schulten, Thorsten; Schulze-Buschoff, Karin
    Abstract: This study focuses on describing and analyzing the concrete initiatives taken by trade unions and employers to combat precarious employment. It is based on an evaluation of recent data, research literature and policy documents as well as a number of interviews with experts from all four sectors. The study is also part of a wider European project called "Bargaining for Social Rights at Sector Level" (BARSORIS) which include studies from seven European countries (Denmark, Germany, Italy, Netherlands, Slovakia, Spain and the UK).
    Date: 2015
  3. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper uses a unique newly constructed data set to investigate for the first time the link between credit constraints and the extensive margins of exports in Germany, one of the leading actors on the international market for goods. In line with theoretical considerations and comparable results reported for a small number of other countries we report a negative impact of credit constraints on both the number of goods exported and the number of export destination countries that is both statistically highly significant and large from an economic point of view.
    Keywords: Credit constraints, exports, extensive margins
    JEL: F14
    Date: 2015–03
  4. By: Giménez-Nadal, J. Ignacio; Molina, Jose Alberto; Ortega, Raquel
    Abstract: This paper analyzes the relationship between parents’ time devoted to housework and the time devoted to housework by their children. Using data of Germany and Spain from the Multinational Time Use Study, we find positive correlations, but gender differences, between parents and children’s housework time, which indicates that the more time parents devote to housework the more time their children devote to housework. While in Germany both fathers and mothers’ housework is positively related with the time devoted to housework by the children, in Spain it is only father’s time in housework that is positively related to children’s housework time. Thus, we find a different relationship between parents and children’s housework time in Mediterranean countries compared to other European countries. We also obtain that these results are not applicable to all sub-groups of population, as our analysis considering the labor force status and education of the parents yield mixed results.
    Keywords: Housework, Children, Time Use
    JEL: J16 J22
    Date: 2015–03
  5. By: Vincenzo Carrieri (CELPE and Universitty of Salerno, Italy); Vito Peragine (University of Bari ``Aldo Moro'', Italy)
    Abstract: We propose a structural model to estimate inequality of opportunity (IOp) among workers and to distinguish two different sources of inequality: (i) inequality in the labour attachment and (ii) inequality in the remuneration of each working hour. Considering working hours as a measure of effort, our model can also be conceived as an attempt of disentangling the direct from the indirect contribution of circumstances to IOp. We estimate a system of seemingly unrelated regression equations and we use an original identification strategy based on a local market condition variable acting as exclusion restriction. By using data from the 2011 wave of the EU-SILC data base, we find in general a strong positive direct effect and a negative indirect effect of circumstances on overall IOp. Moreover, we are able to identify three cluster of countries: a first cluster includes continental countries (Italy, Spain, France) and Sweden, which show a low degree of IOp. A second cluster shows ``moderate'' levels of IOp and includes Finland and United Kingdom. A third cluster of countries shows the highest levels of IOp and includes all eastern countries.
    Keywords: Inequality of Opportunity, income inequality, labour attachment.
    JEL: D60 D63 J62
    Date: 2015–02
  6. By: Sebastian Königs (Statistics Norway)
    Abstract: This paper presents a study of the monthly dynamics of social assistance benefit receipt – in particular the distribution of spell lengths and the incidence of repeat receipt – in four European countries: Luxembourg, the Netherlands, Norway and Sweden. The analysis is based on four separate administrative panel data sets with long observation periods. Benefit dynamics vary considerably across countries over the eight-year period from January 2001 to December 2008: In the two Nordic countries, short-term benefit receipt is the norm with only around 6% and 11% of spells in Norway and Sweden lasting longer than 12 months. Most recipients however have multiple spells, and the majority of benefit leavers return to benefits within three months of leaving. In Luxembourg and the Netherlands, long-term benefit receipt is frequent, with median spell lengths of 14 and 9 months, respectively, and one-third and one-quarter of all spells lasting 24 months or longer. Benefit leavers in these countries are by contrast much less likely to return to benefit receipt after exit. The total duration of benefit receipt per individual across spells is two to three times as high in the Netherlands and Luxembourg than in Norway and Sweden over the eight-year period.
    Keywords: Social assistance dynamics; Welfare benefit dynamics; Benefit spell lengths
    JEL: I38 J60
    Date: 2015–02
  7. By: Nicolai Suppa
    Abstract: This paper compiles a multidimensional poverty index for Germany. Drawing on the capability approach as conceptual framework, I apply the Alkire-Foster method using German panel data. I suggest new operationalizations for two dimensions: social participation and practical reason, the latter drawing on recent findings in experimental economics. The results are consistent with earlier findings, but also reveal several new insights. Specifically, numerous decompositions of the poverty index prove helpful in better tracking and understanding developments. Moreover, I find poor individuals to be adversely affected by general trends in deprivation indicators. Comparing multidimensional and income-based methods, I find only a modest overlap of people considered as poor by both approaches. Moreover, I address the role of income as a dimension in multidimensional poverty indices.
    Keywords: Multidimensional poverty, Alkire-Foster method, capability approach, SOEP
    JEL: I3 I32 D63 H1
    Date: 2015
  8. By: Christina Boll; Malte Hoffmann
    Abstract: In this paper, we use SOEP data to explore whether parents’ employment has an extra effect on the school achievement of their children, beyond the well‐established effects of education, income and demography. First, we test whether the source of income or parents’ unemployment determine children’s school achievements. Second, we analyze the effect of job prestige and factors of societal engagement on children’s performance. Our results indicate no clear income associations but the existence of an employment channel as well as a social channel from mothers to their kids. A negative role model for girls is found for maternal housework. Moreover, the fathers’ job prestige is substantial.
    Date: 2015
  9. By: Stephen Bazen (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS); Kadija Charni (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS)
    Abstract: Cross section data suggest that the relationship between age and hourly earnings is an inverted-U shape. Evidence from panel data does not necessarily confirm this finding suggesting that older workers may not experience a reduction in earnings at the end of their working life. In this paper we use panel data on males for Great Britain in order to examine why the two types of data provide conflicting conclusions. Concentrating on the over 50s, several hypotheses are examined: overlapping cohorts, job tenure, job-changing, labour supply behaviour and selectivity bias. Cohort and individual fixed effects partly explain the divergent conclusions. However, for fully, year-on-year employed individuals, there is no evidence of earnings decline at the end of working life. We find no role for selectivity due to retirement, although shorter working hours or partial retirement along with job-changing late in life do provide an explanation for why hourly earnings decline for certain older workers. We find no evidence that the process of ageing itself leads to lower earnings as suggested by the cross section profile.
    Keywords: age-earnings profile, older workers, Labour supply, cohort effects
    JEL: J3 J14 J24
    Date: 2015–02
  10. By: Svetoslav Danchev; Christos Genakos
    Abstract: During the past few decades a number of European countries lifted the regulations that restricted the opening hours of shops on Sunday. In this paper we examine the impact of Sunday trade deregulation on employment, expenditure, prices and market structure using a difference-in-difference empirical framework and data from 30 European countries over the period 1999-2013. The results exhibit significant heterogeneity across products and sectors. We find robust evidence of a positive overall impact on employment. Expenditure also increases, but not for all retail product categories. We find no evidence of a significant impact on prices. Our findings have important policy implications, particularly for governments that try to combat high unemployment in the aftermath of the economic crisis.
    Keywords: Sunday trading regulation, opening hours regulation, retail sector
    JEL: J23 L11 L51 L81
    Date: 2015–03
  11. By: Kinge, Jonas Minet (Norwegian Institute of Public Health); Morris, Stephan (University College London)
    Abstract: In the following paper we estimate the impact of obesity in childhood on health and health service use in England using instrumental variables. We use data on children and adolescents aged 3-18 years old from fifteen rounds of the Health Survey for England (1998-2012), which has measures of self-assessed health, primary care use, prescribed medication use, and nurse-measured height and weight. We use instruments for child obesity using genetic variation in weight. We detect a few potential issues with the validity of the instrument; however further testing does not suggest that this has an effect on our results. We find that obesity has a statistically significant and negative impact on self-rated health and a positive impact on health service use in girls, boys, younger children (aged 3-10) and adolescents (aged 11-18). We detect significant endogeneity, which suggest that previous studies underestimate the impact of childhood obesity on health and health service use. For example, obesity is associated with and increased probability of doctor utilisation of 2%, but the IV results show that obesity increase the probability of use by 10%. This suggests that obesity has consequences for health and health service use when the children are still young.
    Keywords: Children; Adolescents; Obesity; Body Mass Index; Self-assessed health; Doctor visits; Medication use
    JEL: H51 I10 I11 I12
    Date: 2015–03–04
  12. By: Gianni Guastella; Frank van Oort
    Abstract: In agglomeration studies, the effects of various regional externalities related to knowledge spillovers remain largely unclear. To explain innovation clustering, scholars emphasize the contribution of Localized Knowledge Spillovers (LKS) and, specifically when estimating the Knowledge Production Function (KPF), of (interregional) research spillovers. However, less attention is paid to other causes of spatial heterogeneity. In applied works, spatial association in data is econometrically related to evidence of research spillovers. This paper argues that, in a KPF setting, omitting spatial heterogeneity might lead to biased estimates of the effect of research spillovers. As an empirical test, a spatial KPF is estimated using EU25 regional data, including a spatial trend to control for unexplained spatial variation in innovation. Accounting for geographical characteristics substantially weakens evidence of interregional research spillovers.
    Keywords: Generalized Additive Models, Knowledge Spillovers, Regional Innovation, European Union
    JEL: R12 R58
    Date: 2015–03
  13. By: Daniel Avdic; Christian Bünnings
    Abstract: Indirect psychological effects induced by crime are likely to contribute significantly to the total costs of crime beyond the financial costs of direct victimization. Using detailed crime statistics for the whole of Germany and linking them to individual-level mental health information from the German Socio-Economic Panel, we analyze whether local crime rates affect the mental health of residents. We estimate that a one standard deviation increase in local violent crime rates significantly decreases individual mental well-being among residents by, on average, one percent. Smaller effects are found for property and total crime rates. Results are insensitive to migration and not isolated to urban areas, but are rather driven by less densely populated regions. In contrast to previous literature on vulnerability to crime, we find that men, more educated and singles react more to variation in violent crime rates in their neighborhoods. One potential explanation could be that those who are more fearful of crime have developed better coping strategies and, hence, react less to changes in crime.
    Keywords: Fear of crime, spillover effect, mental health, vulnerability, neighborhood effects, panel data
    JEL: C23 I18 K42 R23
    Date: 2015
  14. By: Lott, Yvonne
    Abstract: Using data from the German Socio-Economic Panel Study (SOEP, 2003, 2005, 2007, 2009, and 2011), the author scrutinizes the relations between women´s and men´s flexibility and autonomy in working time and two central work outcomes: overtime and income. Previously, research on flexibility and autonomy in working time mostly applied crosssectional data ignoring individuals self-selection into jobs. Furthermore, the association between flexibility and autonomy in working time and income has generally been neglected. Extending this literature, fixedeffects models show that flexible working time and working time autonomy are associated with an increase of overtime and income - but only for men. Whereas women in fulltime positions also increase their time investment with working time autonomy and employeeoriented flexibility to a similar extent, they do not receive similar financial rewards. These results point to gendered costs and benefits of working time flexibility and autonomy. Working time autonomy in particular is a crucial factor that reinforces gender inequality at the workplace and adds to the relatively high gender pay gap in Germany.
    Date: 2015
  15. By: Frank M. Fossen; Johannes König
    Abstract: We estimate the impact of a differential treatment of paid employees versus self-employed workers in a public health insurance system on the entry rate into entrepreneurship. In Germany, the public health insurance system is mandatory for most paid employees, but not for the self-employed, who usually buy private health insurance. Private health insurance contributions are relatively low for the young and healthy, and until 2013 also for males, but less attractive at the other ends of these dimensions and if membership in the public health insurance system allows other family members to be covered by contribution-free family insurance. Therefore, the health insurance system can create incentives or disincentives to starting up a business depending on the family’s situation and health. We estimate a discrete time hazard rate model of entrepreneurial entry based on representative household panel data for Germany, which include personal health information, and we account for non-random sample selection. We estimate that an increase in the health insurance cost differential between self-employed workers and paid employees by 100 euro per month decreases the annual probability of entry into self-employment by 0.38 percentage points, i.e. about a third of the average annual entry rate. The results show that the phenomenon of entrepreneurship lock, which an emerging literature describes for the system of employer provided health insurance in the USA, can also occur in a public health insurance system. Therefore, entrepreneurial activity should be taken into account when discussing potential health care reforms, not only in the USA and in Germany.
    Keywords: Health insurance, entrepreneurship lock, self-employment
    JEL: L26 I13 J2
    Date: 2015
  16. By: Karsten Neuhoff; Sophia Ruester; Sebastian Schwenen
    Abstract: We revisit key elements of European power market design with respect to both short term operation and longer-term investment and re-investment choices. For short term markets, the European policy debate focuses on the definition of common interfaces, like for example gate closure time. We argue that that this is insufficient if the market design is to accommodate for the different needs of renewable and conventional generation assets and different flexibility options. The market design needs to ensure resources are pooled over larger geographic areas, the full flexibility of different assets can be realized with complex bids and scarce network resources are efficiently used. For investment and re-investment choices we argue that different technology groups like wind and solar versus fossil fuel based generation may warrant different treatment – reflecting different level of publicly accessible information, requirements for grid infrastructure, types of strategic choices relevant for the sector and share of capital cost in overall generation costs. We discuss opportunities for such a differentiated treatment and implications for electricity consumers.
    Keywords: Power market design, regulation, investment framework
    JEL: L11 L94 G32
    Date: 2015
  17. By: Blázquez, Maite (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Budría, Santiago (ICADE, CEEAplA and IZA.)
    Abstract: This paper uses data from the 2002-2005-2008 waves of the Spanish Survey of Household Finances (EFF) to investigate whether debts burdens hamper people's health. Several measures of debt strain are constructed, including debt-to-income ratios, the existence of debt arrears and amounts of outstanding debts. The paper also differentiates between mortgage and non-mortgage debts and explores the role of social norm effects in the debt-health relationship. The results, based on a random effects model extended to include a Mundlak term, show that nonmortgage debt payments and debt arrears affect significantly people's health. Furthermore, mild social norm effects are detected, according to which being less indebted than the reference group results, ceteris paribus, in better health.
    Keywords: Over-indebtedness; self-assessed health; random effects model; social norm effects.
    JEL: G01 I13 I22
    Date: 2015–03
  18. By: Yao, Y. (Tilburg University, Center For Economic Research); van Ours, J.C. (Tilburg University, Center For Economic Research)
    Abstract: Many immigrants in the Netherlands have poor Dutch language skills. They face problems in speaking and reading Dutch. Our paper investigates how these prob-<br/>lems affect their labor market performance in terms of employment, hours of work<br/>and wages. We find that for female immigrants language problems have signifi-<br/>cantly negative effects on hourly wages but not on employment probability and<br/>hours of work. For male immigrants language problems do not affect employment<br/>probability, hours of work or hourly wages.
    Keywords: Language skills; immigrants; labor market performance
    JEL: J24 J5
    Date: 2015
  19. By: Bertrand, Marianne; Black, Sandra; Jensen, Sissel; Lleras-Muney, Adriana
    Abstract: In late 2003, Norway passed a law mandating 40 percent of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase representation of women in top positions in the corporate sector and decrease gender disparity in earning within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved representation of female employees at the very top of the earnings distribution(top 5 highest earners)within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of the board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in the female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally;it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernable impact on women in business beyond its direct effect on the newly appointed female board members.
    Keywords: affirmative action; boards; gender gap
    JEL: G38 J31 J7
    Date: 2015–03
  20. By: Heinz Welsch (University of Oldenburg - Department of Economics & ZenTra); Jan Kühling (University of Oldenburg - Department of Economics & ZenTra)
    Abstract: This paper uses life satisfaction data of almost 140,000 individuals in 25 OECD countries to study how changes in the rates of GDP growth, unemployment and inflation during the macroeconomic crisis of 2008-2009 have affected subjective well-being. The relative contributions of the three macroeconomic variables to individuals’ life satisfaction are used to assess how each country performed on balance during the crisis. This approach follows a recent trend of using subjective well-being data for monitoring economic performance and for policy appraisal. We find that in the countries most strongly affected by the crisis the effects on an average citizen’s well-being may be of a similar magnitude as the effects of the most serious personal life events. The main driver of these effects is the drop in GDP, whose impact is aggravated by the increase of unemployment. Though the inflation rate went down in several of the countries, the effect was too weak to significantly reduce the negative effect of the changes in GDP and unemployment. The results show that GDP fluctuations are important drivers of subjective well-being.
    Keywords: macroeconomic crisis, subjective well-being, life satisfaction
    JEL: E32 I31 E61
    Date: 2015–03

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