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on Microeconomic European Issues |
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Issue of 2016‒02‒17
33 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Schön, Matthias |
| Abstract: | This paper studies the relationship between sick leave, income and unemployment. In particular, it investigates this relationship under the generous German sick leave regulation of 100\% wage replacement, i.e., in an environment where workers do not bear any direct costs from missing work due to sickness. Using information from the German Socioeconomic Panel (GSOEP) I identify three stylized facts of sick leave in Germany. First, sick days show a strong pro-cyclical pattern. Second, average use of sick days is hump-shaped over income quintiles. Third, the number of sick days is a strong predictor of becoming unemployed. Using this micro-evidence I develop a structural model that rationalizes these facts. I argue that in absence of direct costs of sick leave the fear of future unemployment is the main driving force restraining sick leave. I then use the model to do counterfactual policy analysis. |
| JEL: | I14 I18 J20 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113013&r=eur |
| By: | Brunow, Stephan; Grünwald, Luise |
| Abstract: | Theoretical and empirical contributions on export behavior highlight the importance of firms' productivity and their levels of economies of scale on firms' export success in `foreign markets. In the context of agglomeration economies, firms enjoy produc-tivity gains when they are located close to competitors or upstreaming industries and they benefit from knowledge spillovers and other positive externalities. In such a stimulating environment, firms become more prone to be exporters. Beyond the role played by externalities, firms may benefit when they employ a diverse workforce and when the interaction of distinct knowledge and related problem-solving abilities increases productivity and secures export success. In this paper, we ask whether German firms (i.e., establishments) benefit from localization and urbanization exter-nalities and face higher export proportions. We also control for a variety of estab-lishment characteristics and workforce diversity. For this purpose, a comprehensive German data set that combines survey data and administrative data is used. While controlling for firm heterogeneity in a fractional response model, we provide evi-dence that manufacturing establishments and smaller establishments (up to 250 employees) benefit most from externalities and especially from knowledge spillover. There is weak evidence supporting the benefit of workforce diversity; however, that factor could explain between-establishment variation. |
| JEL: | D22 F14 M14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113182&r=eur |
| By: | Huber, Katrin |
| Abstract: | Can moving to an earnings-related parental leave system influence children s well-being and are heterogeneous effects on parents carried over to the entire family, making special groups of children worse off than others? To answer this question, this study exploits a large and unanticipated parental leave reform in Germany as a natural experiment. By replacing a means-tested by an earnings-related system the reform affected different groups of families to a variable extent. I find significant negative effects on newborns personality, while 2-3-year-old children improve their basic life skills and language skills. The first effect is especially pronounced in families who would be subject to a non-positive change in the overall benefit amount compared to the pre-reform situation, the second one is rather driven by those coming out as the reform s winners. |
| JEL: | J13 J18 J22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113044&r=eur |
| By: | Rinawi, Miriam; Backes-Gellner, Uschi |
| Abstract: | The US and many European countries are witnessing substantial changes in the wage structure (Autor et al. 2006; Dustmann et al., 2009). Previous research has focused on changing returns to education and experience (Katz and Murphy, 1992), changes in the workforce composition (Lemieux, 2006), or the decline in unionization (DiNardo et al., 1996) as possible explanations for the observed changes. Until recently, little attention has been paid to the potential role of the returns to skills. However, the demand for different skills has shown vivid dynamics both within and between industries (Autor et al., 2003). A prominent idea in the more recent literature is that structural changes have depressed the relative demand for certain types of tasks performed on the job. A common finding is that returns to routine tasks have been decreasing over time, while returns to abstract tasks have been increasing. Yet, measuring and defining different types of task categories has been proven to be empirically difficult (Autor, 2013). In our study, we avoid potential measurement issues by using a skill approach as opposed to a task approach to characterize occupations. Instead of focusing on the tasks performed on the job, we examine the skills that individuals acquire during their education. For our empirical analysis we use the Sample of Integrated Labour Market Biographies (SIAB), a sample of social security records in Germany from 1975 through 2008. The information on skills taught in an occupation come from the BIBB/IAB Employment Survey, a representative worker survey. We construct occupation-specific skill portfolios and identify changes in the skill portfolios over the observed time period. We then match the skill portfolios to the corresponding occupations in the SIAB, thereby following the procedure utilized in Gathmann and Sch nberg (2010). In the descriptive analysis, we provide evidence that both the wage level across occupations and the skill portfolios within the same occupation have changed substantially over the observed time period. Then, we investigate whether the observed are related. Following Firpo et al. (2011), we run regressions of wage changes on the base period wage for each percentile of the within-occupation wage distribution and link the estimated intercepts and slopes to the skill portfolios of each occupation. Our results suggest that overall skills that used to be valuable in low-wage occupations have decreased in value, while the opposite has happened in high-wage occupations. Finally, we use a decomposition method based on the re-centered influence function regression approach by Firpo et al. (2007; 2009) to explicitly quantify the contribution of the skill portfolios to changes in the wage structure. Quantifying the contribution of single skills to the evolution of wages allows us to better understand why some occupations have experienced sharp decreases in wages, while others have experienced sharp increases. We thereby contribute to the recent literature on wage inequality. Finally, calculating skill prices can provide guidance for policy makers on how to design training curricula. |
| JEL: | J24 J31 J40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112801&r=eur |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Weißenberger, Martin (University of Potsdam) |
| Abstract: | Many countries support business start-ups to spur economic growth and reduce unemployment with different programmes. Evaluation studies of such programmes commonly rely on the conditional independence assumption (CIA), allowing a causal interpretation of the results only if all relevant variables affecting participation and success are accounted for. While the entrepreneurship literature has emphasised the important role of personality traits as predictors for start-up decisions and business success, these variables were neglected in evaluation studies so far due to data limitations. In this paper, we evaluate a new start-up subsidy for unemployed individuals in Germany using propensity score matching under the CIA. Having access to rich administrative-survey data allows us to incorporate usually unobserved personality measures in the evaluation and investigate their impact on the estimated effects. We find strong positive effects on labour market reintegration and earned income for the new programme. Most importantly, results including and excluding individuals' personalities do not differ significantly, implying that concerns about potential overestimation of programme effects in absence of personality measures might be less justified if the set of other control variables is rich enough. |
| Keywords: | start-up subsidies, evaluation, self-employment, personality, treatment effects |
| JEL: | C14 L26 H43 J68 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9628&r=eur |
| By: | Hoffmann, Malte; Dr. Boll, Christina |
| Abstract: | In this paper, we use GSOEP 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. |
| JEL: | D13 J62 J22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112933&r=eur |
| By: | Moczall, Andreas |
| Abstract: | What happens to the wages of regular workers in establishments subsidized with hiring subsidies? Does hiring programme participants result in windfalls that are dis-tributed among regular workers? Do these reduce their wage demands to avoid be-ing substituted by subsidized workers? Using linked employer-employee data from Germany, I estimate the effects of subsidizing an establishment on regular workers' wages using spell fixed effects regression. I find that hiring subsidy schemes do increase the daily wages of regular workers by up to almost one per cent in the manufacturing sector. These effects are limited to large establishments and above-median local unemployment rates. They occur within the establishment itself and are not merely the result of varying regional exposure to ALMP programmes. I conclude that hiring subsidies have a notable impact on regular workers beyond mere substitution. |
| JEL: | J38 H25 C23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113225&r=eur |
| By: | Ochsen, Carsten |
| Abstract: | This paper analyzes the contribution of flow rates and flow probabilities for unemployment dynamics of different age groups using administrative panel data for Germany. I consider a three-state model and allow for flows from/to inactivity (out of the labor force) to/from unemployment. The dynamics that arise from the inactivity and activity flows account for about 40% of unemployment dynamics (inactivity is more important), while the contribution of separation and job finding is roughly 40% and 20% respectively. Across five age cohorts I find remarkable differences in flow contributions. In the steady state approach the overall contribution of inflow and outflow rates is roughly 50%:50%, but for the non-steady state approach I find a slightly stronger contribution of the outflow rates. I also point out the possibility of a regional aggregation bias that can be of similar importance as the time aggregation bias. |
| JEL: | J63 J64 J10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113223&r=eur |
| By: | Steinhardt, Max Friedrich; Poutvaara, Panu |
| Abstract: | Immigration is a major challenge and opportunity for rich Western countries. Integration of immigrants is a two-way process, the success of which depends both on immigrants and on natives. We provide new evidence on the determinants of individual attitudes towards immigration, using data from the 2005 and 2010 waves of the German Socio-Economic Panel. In particular, we show that bitterness in life is strongly associated with worries about immigration. This effect cannot be explained just by concerns that immigrants are competing with oneself in the labor market. Instead, it appears that people who feel that they have not got what they deserve in life oppose immigration for spiteful reasons. As economic crises foster bitterness, they are likely to increase public opposition towards immigration, and by this harm integration of immigrants. |
| JEL: | F22 J61 D72 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113094&r=eur |
| By: | Michelsen, Claus; Kholodilin, Konstantin |
| Abstract: | Concerns about global warming and growing scarcity of fossile fuels require substantial changes in energy consumption patterns and energy systems, as targeted by many countries around the world. One key element to achieve such transformation is to increase energy efficiency of the housing stock. In this context, it is frequently argued that private investments are too low in the light of the potential energy cost savings. However, heterogenous incentives to invest in energy efficiency, particularly for owner-occupants and landlords, may serve as one explanation. This is particularly important for countries with a large rental sector, like Germany. Nevertheless, previous literature largely focuses on the pay offs owner-occupants receive, leaving out the rental market. This paper addresses this gap by comparing the capitalization of energy efficiency in selling prices (rents) for both types of residences. For this purpose data from the Berlin housing market are analyzed in hedonic regressions. The estimations reveal that energy efficiency is well capitalized in apartment prices and rents. The comparison of implicit prices and the net present value of energy cost savings/rents reveals that investors anticipate future energy and house price movements reasonably. However, in the rental segment, the value of future energy cost savings exceeds tenants' implicit willingness to pay by factor 2.98. This can either be interpreted as a result of market power of tenants, uncertainty in the rental relationship, or the "landlord-tenant dilemma." |
| JEL: | R21 R31 Q40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112881&r=eur |
| By: | Bernt Bratsberg (Frisch Centre for Economic Research); Oddbjørn Raaum (Frisch Centre for Economic Research); Knut Røed (Frisch Centre for Economic Research) |
| Abstract: | While integration policies typically focus on labor market entry, we present evidence showing that immigrants from lowâ€income countries tend to have more precarious jobs, and face more severe consequences of job loss, than natives. For immigrant workers in the Norwegian private sector, the probability of job loss in the near future is twice that of native workers. Using corporate bankruptcy for identification, we find that the adverse effects of job loss on future employment and earnings are more than twice as large for immigrant employees. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1602&r=eur |
| By: | Reinhold, Mario; Thomsen, Stephan |
| Abstract: | Recent evidence for the US labour market indicates that despite supply of higher skilled job market entrants rose, there was a (permanent) decline in demand for those qualifications in the aftermath of the Tech Bust in 2000. Since Germany experienced also an increase in high-skilled labour supply, and both economies depend on similar factors, we analyse the corresponding situation of the demand-supply relation. Based on data of the German SocioEconomic Panel Study (GSOEP) for the years 1984 to 2012, we present long-run wage and occupational trends of the increasing number of labour market entrants with higher education. The results indicate that job entrants with a university (postgraduate) degree have faced steadily high occupational shares in the cognitive sector accompanied with high and increasing wages. Job market entrants from college or universities of applied sciences, however, experienced a decline in employment shares in the cognitive sector associated with declining wages. The provided evidence shows that occupational success of university graduates is heterogenous with distinct and different patterns for the high and highest educated. |
| JEL: | J21 J23 O33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113018&r=eur |
| By: | Peters, Cornelius |
| Abstract: | In Germany as in many other European countries there will be a shift in the age structure of the workforce in the next decades. The number of older workers will increase whereas the number of young and middle aged workers will decline. This paper provides evidence how the demographic ageing affects labor productivity. It focuses on age complementarities between workers. Using a cross sectional linked employer-employee data set from 2012 translog cost functions are estimated. To maintain consistency with microeconomic theory, several parameter constraints are imposed. To control for the skill level of the workers a nested production structure is applied. In addition, this allows to analyse the complementarities between different age groups by skill level. Based on the estimated parameters pairwise elasticities of complementarity and factor price elasticities are calculated. The results indicate that workers belonging to different age groups are complementary factors. The complementarities especially arise between young and medium aged workers and are higher within groups of high skilled labor. Simulating the expected shift in the age structure due to the demographic ageing indicates that the productivity of younger and middle aged workers will increase whereas the productivity of older workers will decline due to the complementary relationship between the different age groups. |
| JEL: | C31 D24 J11 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112941&r=eur |
| By: | Caroli, Eve (Université Paris-Dauphine); Weber-Baghdiguian, Lexane (Université Paris-Dauphine) |
| Abstract: | We investigate the role of social norms in accounting for differences in self-reported health as reported by men and women. Using the European Working Conditions Survey (EWCS, 2010), we first replicate the standard result that women report worse health than men, whatever the health outcome we consider – i.e. general self-assessed health but also more specific symptoms such as skin problems, backache, muscular pain in upper and lower limbs, headache and eyestrain, stomach ache, respiratory difficulties, depression and anxiety, fatigue and insomnia. We then proxy social norms by the gender structure of the workplace environment and study how the latter affects self-reported health for men and women separately. Our findings indicate that individuals in workplaces where women are a majority tend to report worse health than individuals employed in male-dominated work environments, be they men or women. These results are robust to controlling for a large array of working condition indicators, which allows us to rule out that the poorer health status reported by individuals working in female-dominated environments could be due to worse job quality. We interpret this evidence as suggesting that social norms associated with specific gender environments play an important role in explaining differences in health-reporting behaviours across gender, at least in the workplace. |
| Keywords: | health, gender, social norms, job quality |
| JEL: | I12 I19 J16 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9670&r=eur |
| By: | Plum, Alexander; Knies, Gundi |
| Abstract: | There is considerable debate on whether the prospects of entering a high-paid job are better for those in low-paid jobs compared to the unemployed. Whilst some scholars argue that there is a scarring effect of unemployment others highlight that low pay might signal a low productivity and furthermore reduce the time searching for a better paid job. Using longitudinal data for working age men in England matched with local labor market indicators, we estimate several random-effects probit models and find no difference in the probability of becoming high-paid employed between low-paid workers and the unemployed in areas with low unemployment. However, in areas with high unemployment and high pay, low-paid workers have a higher probability of entering high-paid employment than the unemployed. Moreover, there is a penalty for low-wage workers compared to the unemployed in low-pay areas in their probability of entering high-paid employment. |
| JEL: | J64 J62 J31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112845&r=eur |
| By: | Koning, Pierre (Vrije Universiteit Amsterdam); van Sonsbeek, Jan-Maarten (Free University Amsterdam) |
| Abstract: | This study provides insight in the responsiveness of disabled workers to financial incentives, using administrative individual data from the Netherlands from 2006 to 2013. We focus on workers receiving partial DI benefits and with substantial residual work capacities that can be exploited. After the first phase of benefit entitlement, workers that do not use their residual income capacity experience a large drop in benefit income. In effect, this implies a substantial increase in incentives to resume work. With entitlement periods in the first phase of DI benefits varying across individuals, we use a difference-in-difference approach to analyze the effects on the incidence of work, the wage earnings and full work resumption of disabled workers. Based on the effect estimate on work incidence, we infer a labor elasticity rate of 0.12. Elasticity estimates are highest among younger DI recipients, as well as individuals with mental impairments. The incentive change has only a limited impact on wage earnings of partially disabled workers and no significant impact on work resumption rates. |
| Keywords: | disability insurance, work incentives |
| JEL: | C52 H53 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9624&r=eur |
| By: | Preugschat, Edgar; Kaas, Leo; Kocharkov, Georgi |
| Abstract: | The nine largest countries in the Euro area have surprisingly different degrees of wealth inequality. At the same time, there is a strong negative correlation between wealth inequality and homeownership rates across countries. To account for this fact, we first analyze decompositions of the Gini coefficient across subgroups of households. The main contributing factor for the negative correlation with homeownership appears to be inequality between homeowners and renters. In a second step, we estimate the effects of homeownership on the Gini using a Recentered Influence Function (RIF) regression approach. The coefficients on homeownership are significantly negative and are positively correlated with between group Ginis (owners vs renters) across countries. To better understand the effect of ownership on inequality we regress ownership on individual quantiles. For most countries the effect of ownership is strongest for quantiles below the median. This suggests that policies promoting homeownership for lower wealth groups should have the largest impact wealth inequality. |
| JEL: | D31 E21 G11 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113026&r=eur |
| By: | Berger, Melissa; Heinemann, Friedrich |
| Abstract: | The experiences of the ongoing refugee crisis in Europe highlight the failures of the current model of having the EU and its members states share responsibility for asylum policies. Based on standard criteria of fiscal federalism, this paper analyses the shortcomings of the status quo. We show that European asylum policies stand in sharp contradiction to the optimal assignment of tasks within a federal system. For example, the current system creates substantial incentives for free-riding and foregoes the potential benefits of European economies of scale. Given this diagnosis, we explore the pros and cons of different options for a more European approach. In particular, we analyze and provide estimates of the quantitative implications for the options of: (A) quotas that would distribute refugees across countries according to a pre-determined calculation of reception capacity; (B) EU financing of national service provision; and (C) EU service provision in asylum policies. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewpbs:12016&r=eur |
| By: | Bittschi, Benjamin; Borgloh, Sarah; Wigger, Berthold |
| Abstract: | Using German administrative income tax data we investigate economic consequences of an increasingly secular society for prosocial behavior. For this purpose, we establish initially a simple household model to formalize the relationship between religious giving in form of the German church tax and other tax deductible donations. We test the model hypotheses empirically and compare how income and the tax-price of giving differ as incentives to give between individuals leaving church and church members. While we find evidence for crowding in between religious giving and other donations for church members, we do not observe such a relation for church leavers. Moreover, donation behavior of church-leavers is much more responsive to tax incentives of charitable giving compared to church members. Moreover, we find that non-donors have a significantly increased probability of leaving church compared to donors. We trace this results back to the fact that non-donors are not able to compensate higher church taxes by reducing their donations. |
| JEL: | H24 H41 Z12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113065&r=eur |
| By: | Baert, Stijn (Ghent University); van der Klaauw, Bas (Vrije Universiteit Amsterdam); van Lomwel, Gijsbert |
| Abstract: | We investigate whether interventions by (i) medical doctors and (ii) occupational specialists are effective in reducing sick leave durations among self-employed workers. To this end, we exploit unique administrative data comprising all sick leave claims by self-employed workers insured with the major Dutch private insurer between January 2009 and March 2014. We estimate a multivariate duration model dealing with non-random selection into the two intervention types by controlling for observable and unobservable claimant characteristics. We find adverse treatment effects for both interventions, which are heterogeneous by the physical toughness of the claimants' occupation. |
| Keywords: | sickness absenteeism, self-employment, medical interventions, dynamic treatment effects |
| JEL: | C41 I13 J22 R31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9692&r=eur |
| By: | Dörsam, Michael; Lauber, Verena |
| Abstract: | A recent education reform in Germany reduced the duration of high school by one year, but left the curriculum unchanged. We use a unique data set on university students to investigate the effects of this reform on academic achievement at the tertiary level. By applying a difference-in-differences identification strategy, we isolate the causal effect of the reform from cohort and state effects. We find that the first cohort of treated students performed slightly worse in their first semesters, while we find no effects for the second cohort of treated students. The negative effects on the students of the first cohort are mainly driven by male as well as lower-ability students. Overall, our results suggest that the reform has improved the efficiency of the German high school system. |
| JEL: | I21 J18 C21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112876&r=eur |
| By: | Meyer, Tobias; Thomsen, Stephan |
| Abstract: | Most German states have reformed university preparatory schooling by reducing duration from 13 to 12 years with unchanged graduation requirements. The reform was implemented in the states during the last decade in several consecutive years. In this paper, we use nationwide data on high school graduates to evaluate the reform effects on post-school education decisions. The results show that the reform has reduced (or at least delayed) university enrollment of females, but increased the probability of starting vocational education. A similar trend is found for male students, but only in the first year after school graduation. In addition, students are slightly more likely to do voluntary service or spend a year abroad after high school graduation. |
| JEL: | I21 J18 C21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112910&r=eur |
| By: | Anger, Silke; Dahmann, Sarah |
| Abstract: | Western labor markets face major challenges caused by demographic changes. They increasingly experience a shortage of skilled workers and face the problem of an increasing disparity between a reduced group of active workers contributing to the pension scheme and a rising share of an older population receiving pension benefits. Starting in 2001, Germany therefore introduced an educational reform enabling high school graduates earlier labor market entry. By shortening the length of upper secondary school leaving the overall curriculum unchanged, the reform did not only make German graduates more competitive on the international labor market and reduce costs in the German education system, but also increased the labor force by one birth cohort, relieving the shortage of skilled workers and disburdening the pension scheme. However, the reform may have led to unintended consequences on individuals' human capital. This paper investigates this reform's short-term effects on students' personality exploiting the variation in high school duration over time and across states as a quasi-natural experiment. Using rich data from the German Socio-Economic Panel (SOEP) study on adolescents' Big Five personality traits and on their locus of control, our estimates show that shortening high school caused students on average to be less emotionally stable. Moreover, the personality of male students and students from disrupted families changed more strongly following the reform: they became more agreeable and more extroverted, respectively. We conclude that the educational system plays a role in shaping adolescents' personality, which in turn impacts labor market success and further later life outcomes. |
| JEL: | I21 I28 J24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112902&r=eur |
| By: | Büttner, Thiess; Erbe, Katharina; Grimm, Veronika |
| Abstract: | This paper explores whether tax planning by households is consistent with a minimization of the family tax burden or whether and to what extent altruism and concerns about the tax loss of individual household members matter. To this end, we take advantage of a specific feature of the German tax system which allows married couples to decide which of three different payroll tax regimes applies. Using a 10% random sample of the individual income tax files of all German tax payers, we find that a substantial fraction of all couples choose equal treatment of partners although a preferential tax treatment of the high income earner would yield a higher net family income. Our findings indicate that this result can be partly attributed to equity concerns. Tax planning is used not only to lower the overall tax burden but also to reduce the tax burden on the partner with the lower income. |
| JEL: | H24 H31 J22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113011&r=eur |
| By: | De Paola, Maria (University of Calabria); Ponzo, Michela (University of Naples Federico II); Scoppa, Vincenzo (University of Calabria) |
| Abstract: | We aim to investigate if men receive preferential treatment in promotions using the Italian system for the access to associate and full professor positions that is organized in two stages: first, candidates participate in a national wide competition to obtain the National Scientific Qualification (NSQ), then successful candidates compete to obtain a position in University Departments opening a vacancy. We investigate the probability of success in the two stages in relation to the candidate's gender, controlling for several measures of productivity and a number of individual, field and university characteristics. Whereas no gender differences emerge in the probability of obtaining the NSQ, females have a lower probability of promotion at the Department level. Gender gaps tend to be larger when the number of available positions shrink, consistent with a sort of social norm establishing that men are given priority over women when the number of positions is limited. |
| Keywords: | gender discrimination, glass ceiling, academic promotions, natural experiment |
| JEL: | J71 M51 J45 J16 D72 D78 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9658&r=eur |
| By: | Luna Bellani (Department of Economics, University of Konstanz, Germany); Michela Bia (Luxembourg Institute of Socio-economic Research, Luxembourg) |
| Abstract: | This paper examines the role of education as causal channel through which growing up poor affects the individual’s economic outcomes as an adult. We contribute to the literature on intergenerational transmission in two ways. First, we apply a potential outcomes approach to quantify the impact of experiencing poverty while growing up and we provide a sensitivity analysis on the unobserved parental ability. Second, we analyze the role of individual human capital accumulation as an intermediate variable and we provide a sensitivity analysis on further possible unobserved confounders. The analysis is based on the module on intergenerational transmission of 2011 of the EU-SILC data, where retrospective questions about parental characteristics (such as education, age, occupation) were asked. We find that, on average, over the 27 European countries considered, growing up poor leads to an increase of 4 percentage points in the risk of being poor and to a decrease of 5% in the adult equivalent income. Moreover, we find that experiencing poverty during childhood will more likely translate into an exclusion from secondary education (of 12 percentage points on average) and that education plays indeed a substantial role accounting for almost 35% of the total effect on adult income. |
| Keywords: | Poverty, Intergenerational transmission, Potential outcome, Causal mediation analysis, Education |
| JEL: | D31 I32 J62 |
| Date: | 2016–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1602&r=eur |
| By: | Bannier, Christina E.; Neubert, Milena |
| Abstract: | This study examines the role of actual and perceived financial sophistication (i.e., financial literacy and confidence) for individuals' wealth accumulation. Using survey data from the German SAVE initiative, we find strong gender- and education-related differences in the distribution of the two variables and their effects on wealth: As financial literacy rises in formal education, whereas confidence increases in education for men but decreases for women, we observe that women become strongly underconfident with higher education, while men remain overconfident. Regarding wealth accumulation, we show that financial literacy has a positive effect that is stronger for women than for men and that is increasing (decreasing) in education for women (men). Confidence, however, supports only highly-educated men's wealth. When considering different channels for wealth accumulation, we observe that financial literacy is more important for current financial market participation, whereas confidence is more strongly associated with future-oriented financial planning. Overall, we demonstrate that highly-educated men's wealth levels benefit from their overconfidence via all financial decisions considered, but highly-educated women's financial planning suffers from their underconfidence. This may impair their wealth levels in old age. |
| Keywords: | financial literacy,financial sophistication,confidence,wealth,household finance,behavioral finance,gender,formal education |
| JEL: | D91 G11 D83 J26 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:528&r=eur |
| By: | Sell, Friedrich L.; Öllinger, Michael |
| Abstract: | The paper first aims at showing that personal income distribution - at least after government intervention - tends to be a stationary variable for many European countries. This finding backs earlier results achieved by Ramser (1987). Furthermore, personal incomes follow a log-normal distribution, regardless of time and location. The authors set up a theoretical equilibrium concept for personal income distribution which is located in status theory and which can explain why a certain or likewise 'optimal' degree of inequality is warranted in the society. In the empirical section of the paper, the authors present an in-depth analysis of personal income distribution (before and after government intervention) in 17 European countries (2004-2012). Linear regression exercises - which make use of Gini coefficients 'ex-ante' and Gini coefficients 'ex-post' - show that the total sample can be clustered into three subgroups. The main group of 10 countries (Germany, Czech Republic, Denmark, Finland, Belgium, Slovenia, Estonia, France, Luxembourg and Austria) seems to have already achieved equilibrium in income distribution. The other two, smaller groups (the so-called 'GIIPS': Greece, Ireland, Italy, Portugal, Spain on the one hand and Poland and Slovakia on the other hand) seem to be on the way to let their personal income distribution converge towards equilibrium, either 'from below' or 'from above'. |
| Keywords: | Personal Income Distribution,Redistributive Policies,Globalization |
| JEL: | D63 H23 O15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ubwwpe:20151&r=eur |
| By: | Schaubert, Marianna |
| Abstract: | This paper is about the compatibility of a career and a private life among collegeeducatedWest German women. More precisely, it explicitly investigates the degree to which the concurrence of career and cohabitation or motherhood can affect women’s well-being. I attempt to overcome the difficulties associated with estimating this causal relationship by using fixed-effects models. Thus, I exploit the variation over time for each individual woman in order to estimate the interaction effect of career and private life on life satisfaction. The results suggest that only a small fraction of women achieve career and cohabitation or motherhood simultaneously. In addition, this proportion remains small across the younger birth cohorts of college-educated females. More importantly, the estimates do not show greater life-satisfaction gain for those women who have both – a career and a private life. To the best of my knowledge, no previous study has examined this link between career and cohabitation or motherhood for female graduates in Germany. |
| JEL: | D19 J17 J19 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113042&r=eur |
| By: | Dolls, Mathias (ZEW Mannheim); Doorley, Karina (LISER (CEPS/INSTEAD)); Paulus, Alari (ISER, University of Essex); Schneider, Hilmar (LISER (CEPS/INSTEAD)); Siegloch, Sebastian (University of Mannheim); Sommer, Eric (IZA) |
| Abstract: | The effect of demographic change on the labor force and on fiscal revenues is topical in light of potential pension shortfalls. This paper evaluates the effect of demographic changes between 2010 and 2030 on labor force participation and government budgets in the EU-27. Our analysis involves the incorporation of population projections, and an explicit modeling of the supply and demand side of the labor market. Our approach overcomes a key shortcoming of most existing studies that focus only on labor supply when assessing the effects of policy reforms. Ignoring wage reactions greatly understates the increase in fiscal revenues, suggesting that fiscal strain from demographic change might be less severe than currently perceived. Finally, as a policy response to demographic change and worsening fiscal budgets, we simulate the increase in the statutory retirement age. Our policy simulations confirm that raising the statutory retirement age can balance fiscal budgets in the long run. |
| Keywords: | demographic change, fiscal effects, labor supply, labor demand, pension systems |
| JEL: | H68 J11 J21 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9618&r=eur |
| By: | Auer, Wolfgang |
| Abstract: | I study the short- to medium-run effects on subsequent health outcomes of starting a career on a fixed-term contract. I focus on career start since I expect that temporary contracts and their inherent economic uncertainty imply a path dependence that might have spill-over effects on other domains of life. The empirical analysis is based on rich data from the German Socio-Economic Panel, which provides comprehensive information about individuals labor market history as well as health conditions. My main results are the following. (i) Women react to fixed-term employment at the beginning of their career by experiencing worse mental health in the short run. This relationship is driven by the subjective perception of stress and pressure in these jobs, fades out over time, and is strongest in the sam-ple of women with secondary education. (ii) Women s physical health is not af-fected at all. (iii) Economic uncertainty due to fixed-term employment has no fu-ture consequences for men s mental or physical health. I argue that these findings are robust to several sensitivity tests as well as to potential endogeneity threats. |
| JEL: | I31 I12 J41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:113080&r=eur |
| By: | Bach, Stefan; Thiemann, Andreas; Zucco, Aline |
| Abstract: | In this study we analyze the top tail of the wealth distribution in Germany and France based on the Household Finance and Consumption Survey (HFCS). Since top wealth is likely to be underrepresented in household surveys we integrate the big fortunes from rich lists, estimate a Pareto distribution, and impute the missing rich. As a result, the top percentile share of household wealth in Germany jumps up from 24 percent based on the HFCS alone to 34 percent after top wealth imputation. For France there is only a small effect of the imputation since rich households are better captured in the survey. |
| JEL: | D31 C46 C81 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc15:112953&r=eur |
| By: | Nikolova, Milena (IZA); Nikolaev, Boris (Emory University) |
| Abstract: | We examine the effect of joining the European Union on individual life satisfaction in Bulgaria and Romania in the context of the 2007 EU enlargement. Although EU membership is among the most important events in Bulgaria and Romania's modern histories, there is no evidence on how it affected the subjective well-being of ordinary people in the two countries. Using a difference-in-differences strategy and Eurobarometer data, we provide the first evidence that joining the EU increased average life satisfaction in Bulgaria and had a positive but statistically insignificant effect in Romania. One explanation is that trust towards the EU increased only in Bulgaria but not in Romania after both countries joined in 2007. Furthermore, Romania's political war of 2007 may have mired the country's positive life satisfaction experiences related to EU membership. We also show that the younger, the employed, and those with a high-school education were the winners from EU integration. Our results are robust to two placebo tests, in which we use two fake entry dates to the EU, and to an estimation using bootstrapped standard errors. Our findings have implications for EU integration policy and future enlargements. |
| Keywords: | subjective well-being, happiness, transition economies, EU enlargement, difference-in-differences, European Union |
| JEL: | I31 I39 P20 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9636&r=eur |