nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒06‒27
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Number of Siblings and Educational Choices of Immigrant Children: Evidence from First- and Second-Generation Immigrants By Meurs, Dominique; Puhani, Patrick A.; von Haaren, Friederike
  2. Assessing the impact of social transfer income packages on child poverty. A European cross-national perspective By Elena Bárcena-Martín; Maria del Carmern; Salvador Perez-Moreno
  3. Appropriability Mechanisms, Innovation and Productivity:Evidence from the UK By Hall, Bronwyn H.; Sena, Vania
  4. Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe By Naci H. Mocan; Luiza Pogorelova
  5. Gender, class and the crisis By Valeria Cirillo; Marcella Corsi; Carlo D'Ippoliti
  6. How Natural Disasters Can Affect Environmental Concerns, Risk Aversion, and Even Politics: Evidence from Fukushima and Three European Countries By Jan Goebel; Christian Krekel; Tim Tiefenbach; Nicolas R. Ziebarth
  7. The impact of public smoking bans on well-being externalities By Miaoqing Yang; Eugenio Zucchelli
  8. Potential effects of a statutory minimum wage on the gender pay gap: A simulation-based study for Germany By Boll, Christina; Hüning, Hendrik; Leppin, Julian; Puckelwald, Johannes
  9. How Immigration Grease Is Affected by Economic, Institutional and Policy Contexts: Evidence from EU Labor Markets By Guzi, Martin; Kahanec, Martin; Kureková, Lucia Mýtna
  10. Why do girls' and boys' gender-(a)typical occupational aspirations differ across countries? How cultural norms and institutional constraints shape young adolescents' occupational preferences By Leuze, Kathrin; Helbig, Marcel
  11. Temporary employment protection reforms and productivity: evidence from an industry-level panel of EU countries By Kristel Jacquier
  12. Do Employment Protection Reforms Affect Well-Being? By Dräger, Vanessa
  13. Roadblocks on the Road to Grandma’s House: Fertility Consequences of Delayed Retirement By Erich Battistin; Michele De Nadai; Mario Padula
  14. The Changing Returns to Crime: Do Criminals Respond to Prices? By Draca, Mirko; Koutmeridis, Theodore; Machin, Stephen
  15. Distributional effects of subsidizing retirement savings accounts: Evidence from Germany By Corneo, Giacomo; Schröder, Carsten; König, Johannes
  16. The UK's Productivity Puzzle By Bryson, Alex; Forth, John
  17. What Drives the Reversal of the Gender Education Gap? Evidence from Germany By Riphahn, Regina T.; Schwientek, Caroline
  18. Recent trends in EU home ownership By Bouyon, Sylvain
  19. Take your time to grow: A field experiment on the hiring of youths in Germany By Kübler, Dorothea; Schmid, Julia
  20. Determinants of Residential end-use electricity demand: Evidence from Sweden By Vesterberg, Mattias; Kiran B. Krishnamurthy, Chandra; Bayrak, Oben

  1. By: Meurs, Dominique (University Paris Ouest-Nanterre); Puhani, Patrick A. (Leibniz University of Hannover); von Haaren, Friederike (NIW Hannover, Leibniz Universität Hannover)
    Abstract: We document the educational integration of immigrant children with a focus on the link between family size and educational decisions and distinguishing particularly between first- and second-generation immigrants and between source country groups. First, for immigrant adolescents, we show family-size adjusted convergence to almost native levels of higher education track attendance from the first to the second generation of immigrants. Second, we find that reduced fertility is associated with higher educational outcomes for immigrant children, possibly through a quantity-quality trade-off. Third, we show that between one third and the complete difference in family-size adjusted educational outcomes between immigrants from different source countries or immigrant generations can be explained by parental background. This latter holds true for various immigrant groups in both France and Germany, two major European economies with distinct immigration histories.
    Keywords: migration, integration, quantity-quality trade-off, decomposition
    JEL: J13 J15 J24
    Date: 2015–06
  2. By: Elena Bárcena-Martín (Dpto. Estadística y Econometría, University of Málaga.); Maria del Carmern (Dpto. Economia Aplicada, University of Málaga.); Salvador Perez-Moreno (Dpto. Economia Aplicada, University of Málaga.)
    Abstract: Children are generally at a higher risk of poverty than the population as a whole, although the mechanisms that lead to their socioeconomic vulnerability vary widely across European countries. This paper assesses to what extent some general characteristics of social transfer systems explain the variation in levels of child poverty across 30 European countries. In contrast to previous studies that mainly focus on the redistributive impact of social transfers, we examine several indicators of the generosity, efficiency and incidence of social transfers. Using a multilevel framework, we find lower child poverty rates in countries with more generous and more efficient social transfer that focus to a larger degree on children, even after controlling for country living standard and labour market performance. We confirm previous results that find that the variation in child poverty is mainly due to contextual factors and to a lesser degree to individual factors.
    Keywords: Child poverty, EU-SILC, European country, multilevel analysis, social transfers.
    JEL: D31 I32 I38
    Date: 2015–04–22
  3. By: Hall, Bronwyn H. (University of California at Berkeley and University of Maastricht; NBER, IFS London, and NIESR); Sena, Vania (Essex Business School, University of Essex)
    Abstract: We use an extended version of the wellestablished Crepon, Duguet and Mairesse model (1998) to model the relationship between appropriability mechanisms, innovation and firmlevel productivity. We enrich this model in several ways. First, we consider different types of innovation spending and study the differences in estimates when innovation spending (rather than R&D spending) is used to predict innovation in the CDM model. Second, we assume that a firm simultaneously innovates and chooses among different appropriability methods (formal or informal) to protect the innovation. Finally, in the third stage, we estimate the impact of the innovation output conditional on the choice of appropriability mechanisms on firms’ productivity. We find that firms that innovate and rate formal methods for the protection of Intellectual Property (IP) highly are more productive than other firms, but that the same does not hold in the case of informal methods for the protection of a firm’s IP, except possibly for large firms as supposed to SMEs. We also find that this result is strongest for firms in the services, trade, and utility sectors, and negative in the manufacturing sector.
    Keywords: productivity; innovation; intellectual property; appropriability; patents; CDM
    JEL: L25 O30 O34
    Date: 2015–06–18
  4. By: Naci H. Mocan; Luiza Pogorelova
    Abstract: We use micro data from the European Social Survey to investigate the impact of “culture of leisure” and taxes on labor force participation and hours worked of second-generation immigrants who reside in 26 European countries. These individuals are born in Europe, and they have been exposed to institutional, legal and labor market structures of their countries, including the tax rates. Fathers of these individuals are first-generation immigrants who migrated from 81 different countries. We construct measures of “taste for leisure” in the country of origin of each immigrant father. We employ average and marginal taxes for each country of residence, and control for a large set of individual characteristics, in addition to attributes of the country of residence and country of ancestry. The results show that for women, both taxes and culture of leisure impact participation and hours worked. For men, taxes influence labor supply both at the intensive and the extensive margins, but culture of leisure has no impact.
    JEL: H2 J22 J61 Z1
    Date: 2015–06
  5. By: Valeria Cirillo; Marcella Corsi; Carlo D'Ippoliti
    Abstract: The aim of this work is to combine the analysis of social classes in Europe on the basis of the functional distribution of incomes with a gender perspective at household level. Building on a Classical political economy approach, we aim to explore the link between households’ sources of income (rents, profits, wages and State transfers) and income changes during the crisis. Furthermore, we emphasize the role of gender with concern to the amount of income received. The empirical investigation is carried out on the European Union Statistics onIncome and Living Conditions (EU-SILC) database, covering 620,017 households in 27 EU countries for three years (2007, 2010, 2012). Over the period 2007-2012, at household level, incomes have been differently affected by the crisis. Labour incomes have been hit hardest than capital incomes, mostly in GIPSI countries. Men-headed households have benefited from capital growth more thanwomen-headed households, characterized by lower amounts of wages, capitals and State transfers.
    Keywords: Gender; class; crisis
    Date: 2015–06–19
  6. By: Jan Goebel; Christian Krekel; Tim Tiefenbach; Nicolas R. Ziebarth
    Abstract: We study the impact of the Fukushima disaster on environmental concerns, well-being, risk aversion, and political preferences in Germany, Switzerland, and the UK. In these countries, overall life satisfaction did not significantly decrease, but the disaster significantly increased environmental concerns among Germans. One underlying mechanism likely operated through the perceived risk of a similar meltdown of domestic reactors. After Fukushima, more Germans considered themselves as “very risk averse”. However, drastic German policy action shut down the oldest reactors, implemented the phaseout of the remaining ones, and proclaimed the transition to renewables. This shift in energy policy contributed to the subsequent decrease in environmental concerns, particularly among women, Green party supporters, and people living in close distance to the oldest reactors. In Germany, political support for the Greens increased significantly, whereas in Switzerland and the UK, this increase was limited to people living close to reactors.
    Keywords: Fukushima, nuclear phase-out, environmental concerns, well-being, risk aversion, Green party
    JEL: I18 I31 Q54
    Date: 2015
  7. By: Miaoqing Yang; Eugenio Zucchelli
    Abstract: Recent studies on the effects of anti-smoking policies on subjective well-being present mixed results and focus mainly on smokers. We contribute to the literature by exploiting the policy experiment provided by the UK public smoking bans and evaluating the impact of smoking bans on the subjective well-being of smokers, non-smokers and couples of different types of smokers. We employ matching techniques combined with flexible difference-in-differences fixed effects panel data models on data from the British Household Panel Survey. We find that the UK public smoking bans appear to have a statistically significant short-term positive impact on the well-being of married individuals, especially among couples with dependent children. These effects appear to be substantial in size, robust to alternative specifications and may be driven by positive externalities due to parental altruism.
    Keywords: subjective well-being, smoking bans, policy evaluation, BHPS
    JEL: C21 C23 I10 I18
    Date: 2015
  8. By: Boll, Christina; Hüning, Hendrik; Leppin, Julian; Puckelwald, Johannes
    Abstract: In a simulation-based study with data from the German Socio-Economic Panel Study (SOEP), we analyze the effects of the newly introduced statutory minimum wage of 8.50 Euro per working hour in Germany on the gender wage gap. In our first scenario where we abstain from employment effects, the pay differential is reduced by 2.5 percentage points from 19.6 % to 17.1 %, due to a reduction of the sticky-floor effect at the bottom of the wage distribution. In more realistic scenarios where we incorporate minimum wage effects on labor demand, a further reduction of the pay gap by 0.2 pp (1.2 pp) in case of a monopsonistic (neoclassical) labor market is achieved. However, this comes at the cost of job losses by which women are more strongly affected than men. The magnitude of job losses ranges between 0.2 % and 3.0 % of all employees. It is higher in a neoclassical market setting and positively related to the assumed wage elasticity.
    Keywords: minimum wage,labor demand,wage elasticity,gender pay gap,monopsony
    JEL: J31 J23 J16
    Date: 2015
  9. By: Guzi, Martin (Masaryk University); Kahanec, Martin (Central European University); Kureková, Lucia Mýtna (Slovak Governance Institute)
    Abstract: Theoretical arguments and previous country-level evidence indicate that immigrants are more fluid than natives in responding to changing labor shortages across countries, skill-groups or industries. The diversity across EU member states enables us to test this hypothesis across various institutional, economic and policy contexts. Drawing on the EU LFS and EU SILC datasets we study the relationship between residual wage premia as a measure of labor shortages in different skill-industry-country cells and the shares of migrants and natives working in these cells. We find that immigrants' responsiveness to labor market shortages exceeds that of natives in the EU15, in particular in member states with higher unemployment rates, higher levels of (recent) immigration, and more open immigration and integration policies; but also those with barriers to citizenship acquisition or family reunification. Whereas higher welfare expenditures seem to exert a lock-in effect, a comparison across different types of welfare states indicates that institutional complementarities neutralize that effect.
    Keywords: labor supply, skill matching, migration, labor shortage, welfare state, institutions, policy
    JEL: J15 J24 J61 J68
    Date: 2015–06
  10. By: Leuze, Kathrin; Helbig, Marcel
    Abstract: Occupational sex segregation persists in all European and OECD countries; yet in some countries, it is more pronounced than in others. In this paper we seek to explain these cross-national variations by analyzing the realistic occupational aspirations of 15-year-old pupils in 29 EU and OECD countries. Based on socialization and rational choice approaches we develop hypotheses for how cultural norms and national institutions might influence the gender-typing of occupations. These are tested by applying 2-step multi-level models to the OECD's 2006 PISA study merged with country-level data from various sources. Results indicate that girls develop gender-(a)typical occupational aspirations in response to structural education and labor market differences across countries, while boys' gender-(a)typical aspirations are mainly influenced by country variations in normative prescriptions of gender-essentialist cultures and self-expressive value systems. The findings point at the necessity for differentiating both between micro- and macrolevel explanations and between explanations for women and men.
    Keywords: occupational aspirations,socialization,rational choice,cross-national comparison,EU,OECD
    Date: 2015
  11. By: Kristel Jacquier (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: We investigate the impact of reforms on employment protection for temporary contracts on Total Factor Productivity (TFP) using panel data of industries across 14 European countries. Within-industry variation over the period 1992-2007 is exploited to capture reforms. The legislation on temporary contracts (EPT) affects the use of such contracts, making it a valid instrument to prove a causal relationship between a change in legislation and macroeconomic performances. Indeed, the two stage estimates emphasize the negative relationship between the share of temporary employment and TFP at the industrial level. Marginal effects prove that increasing regulation on temporary jobs has a strong negative impact on the use of fixed-term contracts if employment protection on regular contract (EPR) is low. When employment protection on open-ended contract reaches its highest level; this effect is stronger. Our study shows that asymmetric institutional change might indeed leads to lower productivity growth through a surge in temporary employment
    Keywords: Productivity; employment protection
    JEL: E02 O43
    Date: 2015–03
  12. By: Dräger, Vanessa (University of Cologne)
    Abstract: This paper examines reforms in German employment protection for permanent workers (EPLP) on workers' well-being. Using variation in how the reforms affected firms of different sizes, I apply a difference-in-differences approach in conjunction with individual fixed effects. I find that life satisfaction of temporary workers decreases by around 0.5 (10-point scale) when EPLP decreases. I investigate effect heterogeneity and discuss mechanisms. Placebo tests are conducted. An increase in EPLP had no effect. Due to the design of the EPLP reforms, the majority of permanent workers did not face major changes in EPLP.
    Keywords: employment protection reforms, well-being, quasi-experiment, difference-in-difference
    JEL: J32 J38
    Date: 2015–06
  13. By: Erich Battistin (Queen Mary University of London, IRVAPP and IZA); Michele De Nadai (University of New South Wales); Mario Padula (Università della Svizzera italiana, IdEP, CSEF and CEPR)
    Abstract: We investigate the role of grandparental childcare for fertility decisions of their offspring. Exploiting pension reforms in Italy, we argue that delayed retirement represents a negative shock to the supply of informal childcare for the next generation. We show that, when the maternal grandmother is not available, motherhood after age 30 is less likely. This effect persists as the woman ages, and parallels that on number of children. We argue that these are permanent changes to completed fertility for many cohorts in our data. Consistent with our interpretation, we show that results are limited to the most familistic close-knits where the role of grandparents is more important, and that are not the mechanical consequence of changes of living arrangements and labor supply. Given the Italian lowest low fertility, we conclude that pension reforms may have had unintended inter-generational effects.
    Keywords: Fertility, Informal child care, Pension reforms
    JEL: J08 J13 H42
    Date: 2015–06
  14. By: Draca, Mirko (London School of Economics); Koutmeridis, Theodore (University of Glasgow); Machin, Stephen (University College London)
    Abstract: In economic models of crime individuals respond to changes in the potential value of criminal opportunities. We analyse this issue by estimating crime-price elasticities from detailed data on criminal incidents in London between 2002 and 2012. The unique data feature we exploit is a detailed classification of what goods were stolen in reported theft, robbery and burglary incidents. We first consider a panel of consumer goods covering the majority of market goods stolen in the crime incidents and find evidence of significant positive price elasticities. We then study a particular group of crimes that have risen sharply recently as world prices for them have risen, namely commodity related goods (jewellery, fuel and metal crimes), finding sizable elasticities when we instrument local UK prices by exogenous shifts in global commodity prices. Finally, we show that changes in the prices of loot from crime have played a role in explaining recent crime trends.
    Keywords: crime, goods prices, metal crime, commodity prices
    JEL: K42
    Date: 2015–06
  15. By: Corneo, Giacomo; Schröder, Carsten; König, Johannes
    Abstract: We empirically investigate the distributional consequences of the Riester scheme, the main private pension subsidization program in Germany. We find that 38% of the aggregate subsidy accrues to the top two deciles of the population, but only 7.3% to the bottom two. Nonetheless the Riester scheme is almost distributionally neutral when looking at standard inequality measures. This is due to two offsetting effects: a progressive one stemming from the subsidy schedule and a regressive one from voluntary participation. Regressions of the participation decision suggest that a high level of household wealth significantly increases the probability of benefiting from the Riester scheme.
    Keywords: saving subsidies,retirement plans,income distribution
    JEL: D31 H55 J32 D14 I38
    Date: 2015
  16. By: Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Forth, John (National Institute of Economic and Social Research (NIESR))
    Abstract: The 2008 Great Recession was notable in the UK for three things: the enormity of the output shock; the muted unemployment response; and the very slow rate of recovery. We review the literature which finds most of the decline in productivity is within sector and within firm before presenting new micro-analysis of workplace-level behaviour between 2004 and 2011 to gain insights into the processes that may have contributed to this aggregate picture. We find clear evidence of labour intensification but employers appeared incapable of turning this effort into improved workplace level productivity. Widespread pay freezes and cuts were often initiated in direct response to the recession. Workplace closure rates were little different to those experienced prior to the recession, but there is some evidence of a "cleansing" effect with poorer performing workplaces being more likely to close. There is some evidence of labour "hoarding", especially hoarding of high skilled labour: this has had no discernible impact on the rate of innovation. There is no impact of recession on either the number of HRM practices workplaces invested in, nor their returns on those investments. There is no evidence that workplaces have benefited from Britain’s "flexible" labour market as indicated by using recruitment channels used by welfare recipients or the use of numerically flexible workers. On the contrary, workplaces with increasing unionisation appeared to benefit in terms of improved workplace performance.
    Keywords: productivity, recession
    JEL: D22 E22 E23 E24 J23 J24 J3
    Date: 2015–06
  17. By: Riphahn, Regina T. (University of Erlangen-Nuremberg); Schwientek, Caroline (University of Erlangen-Nuremberg)
    Abstract: We study the mechanisms that are associated with the gender education gap and its reversal in Germany. We focus on three outcomes, graduation from upper secondary school, any tertiary education, and tertiary degree. Neither individual and family background nor labor market characteristics appear to be strongly associated with the gender education gap. There is some evidence that the gender gap in upper secondary education reflects the rising share of single parent households which impacts boys' attainment more than girls'. The gender education gap in tertiary education is correlated with the development of class sizes and social norms.
    Keywords: educational attainment, wage premium, gender gap
    JEL: I21 J16
    Date: 2015–06
  18. By: Bouyon, Sylvain
    Abstract: Home ownership has been a source of concern for many EU28 governments, especially since the start of the economic crisis in 2008-09. After five-to-six years of persistently weak economic performance and in the context of the recently enacted mortgage credit directive - which should affect the principal funding channel of housing purchases – it seems timely to look at recent home ownership behaviours across the EU28, with special emphasis on the major changes. Recent macroeconomic data reveal three striking phenomena: highly diverse home ownership rates across countries – still; significant contractions in ownership in the UK and Ireland (especially among families); and marked contractions in ownership among poorer households in the EU15 since 2007. This ECRI Commentary is one of two on the topic of home ownership in the EU, published simultaneously by the same author; ECRI Commentary No.14, entitled “Home ownership, labour markets and the economic crisis” looks at the effects of high levels of home ownership, especially on labour markets.
    Date: 2015–06
  19. By: Kübler, Dorothea; Schmid, Julia
    Abstract: We investigate the effect of spells of no formal employment of young Germans on their chances of entering the labor market. We also study whether the potential negative effects of such spells can be mitigated by publicly provided training measures. In a field experiment, fictitious applications were sent to firms advertising an apprenticeship position for office manager. Our results show that applicants who have been out of school for two years are not less likely to be invited compared to applicants who apply during their last year of schooling. Among the two applicant types who have been out of school for two years, applicants who have taken part in a training course are significantly more likely to pass the first step in the recruitment process than those without supplementary schooling. Our findings can be explained with signaling and human capital theory while there is no evidence of stigma effects.
    Keywords: youth unemployment,hiring decisions,apprenticeships
    JEL: J64 C93
    Date: 2015
  20. By: Vesterberg, Mattias (Department of Economics, Umeå School of Business and Economics); Kiran B. Krishnamurthy, Chandra (Beijer Institute of Ecological Economics, The Royal Academy of Sciences); Bayrak, Oben (Department of Forest Economics, SLU)
    Abstract: Using a household appliance metering data set from the Swedish Energy Agency, this paper focuses on understanding the determinants of end-use electricity demand for Sweden. The focal point of the analysis is the estimation of end-use-specific income elasticity of electricity demand, for the first time for Sweden. A seemingly unrelated regression framework is used for understanding the determinants of end-use demand, with the end-uses being heating, kitchen, lighting, and residual. The main results of the analysis are: high aggregate elasticity (above 0.6), and very high income elasticity of electric heating (above 0.8). Other size-related variables (size of home, number of people) do not appear to have significant explanatory power. Overall, our analysis indicates that income is a key factor determining the demand for electricity, and to a much larger extent than usually considered.
    Keywords: Direct Metering; Residential Electricity Demand; income elasticity
    JEL: C30 D12 Q40 Q41
    Date: 2015–06–16

This nep-eur issue is ©2015 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.