nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒03‒17
twenty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Regional and Gender Differentials in the Persistence of Unemployment By Maurizio Baussola; Chiara Mussida
  2. The productivity effects of worker mobility between heterogeneous firms By Stockinger, Bastian; Wolf, Katja
  3. Estimating participation responses using transfer program reform By Bastani, Spencer; Moberg, Ylva; Selin, Håkan
  4. The Labor Market Performance of Immigrants in Germany By Robert C. M. Beyer
  5. Accounting for business income in measuring top income shares. Integrated accrual approach using individual and firm data from Norway By Annette Alstadsæter; Martin Jacob; Wojciech Kopczuk; Kjetil Telle
  6. Migrants, Health, and Happiness: Evidence that Health Assessments Travel with Migrants and Predict Well-Being By Ljunge, Martin
  7. Social Contacts, Dutch Language Proficiency and Immigrant Economic Performance in the Netherlands: A Longitudinal Study By Chiswick, Barry R.; Wang, Zhiling
  8. Equal Opportunity? Gender Gaps in CEO Appointments and Executive Pay By Keluoharju, Matti; Knüpfer, Samuli; Tåg, Joacim
  9. CSR related management practices and Firm Performance: An Empirical Analysis of the Quantity-Quality Trade-off on French Data By Patricia Crifo; Marc-Arthur Diaye; Sanja Pekovic
  10. Combining Price and Quantity Controls under Partitioned Environmental Regulation By Sebastian Rausch; Jan Abrell
  11. Cost-Sharing and Use of Health Services in Italy: Evidence from a Fuzzy Regression Discontinuity Design By Ponzo, Michela; Scoppa, Vincenzo
  12. Getting the most from public R&D spending in times of budgetary austerity By Reinhilde Veugelers
  13. Visitor Attitudes to Deaccessioning in Italian Public Museums: An Econometric Analysis By Marilena Vecco; Andrej Srakar; Michele Piazzai
  14. Tackling Spillovers by Taxing Corporate Income in the European Union at Source By Sijbren Cnossen
  15. International Tax Evasion, State Purchases of Confidential Bank Data and Voluntary Disclosures By Dirk Bethmann; Michael Kvasnicka
  16. Health and Safety Risks in Britain's Workplaces: Where are They and Who Controls Them? By Bryson, Alex
  17. Policies to promote access to good-quality affordable housing in OECD countries By Angelica Salvi del Pero; Willem Adema; Valeria Ferraro; Valérie Frey
  18. Climate variability and infectious diseases nexus: evidence from Sweden By Franklin Amuakwa-Mensah; George Marbuah; Mwenya Mubanga
  19. University Innovation and the Professor's Privilege By Hvide, Hans K; Jones, Benjamin
  20. Family, Community and Long-Term Earnings Inequality By Paul Bingley; Lorenzo Cappellari; Konstantinos Tatsiramos
  21. The extension of short-time work schemes during the Great Recession: A story of success? By Björn Brey; Matthias Hertweck
  22. Unemployment risk and over-indebtedness : A micro-econometric perspective By Philip Du Caju; François Rycx; Ilan Tojerow

  1. By: Maurizio Baussola (DISCE, Università Cattolica); Chiara Mussida (DISCE, Università Cattolica)
    Abstract: The persistence of unemployment increased over the recent great recession in many European countries, however, with diversified impacts. We therefore analyse such impacts in four European countries – Italy, Spain, France, and the UK – representing different institutional frameworks which may reflect the so-called continental European and Anglo-Saxon framework, respectively. We analyse the determinants of unemployment persistence by using individual level data from the EU-SILC panel for the period 2007-2013. This data enables us to take into account initial conditions and state dependence in addition to individual and household characteristics. We primarily focus on gender and regional effects which indeed have a strong impact on the persistence in the state of unemployment.
    Keywords: unemployment persistence, state dependence, initial conditions, comparison across countries
    JEL: C23 C25 E24 J60 J64
    Date: 2015–12
  2. By: Stockinger, Bastian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Several empirical studies find that worker inflows from more productive or otherwise superior firms increase hiring firms' productivity. We conduct a similar analysis for Germany, using a unique linked employer-employee data set, and ranking sending and hiring establishments by their median wage. We find that inflows from superior (higher-paying) establishments do not increase hiring establishments' productivity, but inflows from inferior establishments seem to. Further analyses suggest this effect is due to positive selectivity of such inflows from their sending establishments. Our findings can be interpreted as evidence of a reallocation process by which the best employees of lower-paying establishments become hired by higher-paying establishments. This process reflects the increasingly assortative pattern of worker mobility in Germany, to which our findings suggest a micro-foundation at the establishment and worker levels." (Author's abstract, IAB-Doku) ((en))
    JEL: D24 J61 J62 R23
    Date: 2016–02–25
  3. By: Bastani, Spencer (Uppsala Center for Labor Studies); Moberg, Ylva (Uppsala Center for Labor Studies); Selin, Håkan (Uppsala Center for Labor Studies)
    Abstract: In this paper we estimate labor force participation responses for married women in Sweden using population-wide register data and detailed information about individuals’ budget sets. For identification we exploit a reform in the system for housing allowances in 1997 which affected participation tax rates for households with/without children differently. Using a simple theoretical framework we provide a structural interpretation of our estimates and highlight how the employment response depends on the employment level. Our central estimate of the participation elasticity is 0.13. When splitting the treated sample into four quartiles based on the wife’s skill level we find that the participation elasticity is more than twice as large for the lowest-skill sample than for the highest-skill sample.
    Keywords: labor supply; social assistance; housing allowance; in-work tax credits; take up of transfer programs
    JEL: H20 J22
    Date: 2016–02–17
  4. By: Robert C. M. Beyer
    Abstract: The paper uses a large survey (GSOEP) to analyze the labor market performance of immigrants in Germany. It finds that new immigrant workers earn on average 20 percent less than native workers with otherwise identical characteristics. The gap is smaller for immigrants from advanced countries, with good German language skills, and with a German degree, and larger for others. The gap declines gradually over time. Less success in obtaining jobs with higher occupational autonomy explains half of the wage gap. Immigrants are also initially less likely to participate in the labor market and more likely to be unemployed. While participation fully converges after 20 years, immigrants always remain more likely to be unemployed than the native labor force.
    Keywords: Europe;Unemployment;Wages;Germany;Migration;labor market, participation, immigrants, immigrant, immigration, International Migration, Economics of Minorities, Time Allocation and Labor Supply,
    Date: 2016–01–21
  5. By: Annette Alstadsæter; Martin Jacob; Wojciech Kopczuk; Kjetil Telle (Statistics Norway)
    Abstract: Business income is important in the upper tail of the personal income distribution, but the extent to which it is captured by measures of personal income varies substantially across tax regimes. Using linked individual and firm data from Norway, we are able to attribute business income to personal owners as it accrues rather than when it is realized. This adjustment leads to an increase in top income shares, and the size of this effect varies dramatically depending on the tax regime in place. After a tax reform in 2005 that created strong incentives to retain earnings in the business, the increase is massive: accounting for earnings retained in the corporate sector leads to more than doubling of the share of income of top 0.1% in some years. As the result, traditional measures of top income shares become misleadingly low (even when accounting for capital gains). We speculate on the implications of our findings for levels and trends in top income shares observed in other countries. In particular, we note that the major tax reforms of the 1980s in the United States correspond to a shift in the direction of business income being passed through to personal owners, and argue that top income shares constructed using income tax statistics before 1987 are likely to be significantly understated relative to those afterwards.
    Keywords: top income share; corporate income; business income; tax; inequality
    JEL: H3 H2 D22 G3 J3
    Date: 2016–02
  6. By: Ljunge, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: Health assessments correlate with health outcomes and subjective well-being. Immigrants offer an opportunity to study persistent social influences on health where the social conditions are not endogenous to individual outcomes. This approach provides a clear direction of causality from social conditions to health, and in a second stage to well-being. Natives and immigrants from across the world residing in 30 European countries are studied using survey data. The paper applies within country analysis using both linear regressions and two stage least squares. Natives’ and immigrants’ individual characteristics have similar predictive power for health, except Muslim immigrants who experience a sizeable health penalty. Average health reports in the immigrant’s birth country have a significant association with the immigrant’s current health. Almost a quarter of the birth country health variation is brought by the immigrants, while conditioning on socioeconomic characteristics. There is no evidence of the birth country predictive power declining neither as the immigrant spends more time in the residence country nor over the life course. The second stage estimates indicate that a one standard deviation improvement in health predicts higher happiness by 1.72 point or 0.82 of a standard deviation, more than four times the happiness difference of changing employment status from unemployed to employed. Studying life satisfaction yields similar results. Health improvements predict substantial increases in individual happiness.
    Keywords: Health status; Self-reported health; Subjective well-being (SWB); Happiness; Life satisfaction; Immigrant health
    JEL: F22 I12 I31 J15
    Date: 2016–02–25
  7. By: Chiswick, Barry R. (George Washington University); Wang, Zhiling (Vrije Universiteit Amsterdam)
    Abstract: Using longitudinal data on immigrants in the Netherlands for the years 1991, 1994, 1998, 2002, we examined the impacts of social contacts and Dutch language proficiency on adult foreign-born men's earnings, employment and occupational status. The main conclusions are as follows. On average, social contacts and a good mastery of the Dutch language enhance immigrants' economic performances. The effects are stronger for immigrants with low-skill-transferability than for immigrants with high-skill-transferability, and are stronger for economic migrants than for non-economic migrants. Contact with Dutch people and Dutch organisations unambiguously enhances all aspects of immigrants' economic performance, however, we found no evidence for the positive effect of co-ethnic contact on employment status.
    Keywords: social capital, Dutch language proficiency, labour market performance, Dutch immigrants, skill transferability
    JEL: J15 J61 Z13
    Date: 2016–02
  8. By: Keluoharju, Matti (Aalto University School of Business); Knüpfer, Samuli (BI Norwegian Business School); Tåg, Joacim (Research Institute of Industrial Economics (IFN))
    Abstract: This paper uses exceptionally rich data on Swedish corporate executives and their personal characteristics to study gender gaps in CEO appointments and pay. Both gaps are sizeable: 18% for CEO appointments and 27% for pay. At most one-eight of the gaps can be attributed to observable gender differences in executives’ and their firms’ characteristics. Further tests suggest that unobservable gender differences in characteristics are unlikely to account for the remaining gaps. Instead, our results are consistent with the view that male and female executives sharing equal attributes neither have equal opportunities to reach the top, nor are they equally paid.
    Keywords: CEOs; Compensation; Discrimination; Executives; Gender differences
    JEL: G34 J16 J24 J31
    Date: 2016–02–18
  9. By: Patricia Crifo (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - Université de Montréal, Economix, Université Paris Ouest Nanterre la Défense, 200 Avenue de la République, 92001 Nanterre Cedex - affiliation inconnue); Marc-Arthur Diaye (EPEE - Centre d'Etudes des Politiques Economiques - Université d'Evry-Val d'Essonne); Sanja Pekovic (DRM - Dauphine Recherches en Management - Université Paris IX - Paris Dauphine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper analyzes how different combinations of Corporate Social Responsibility (CSR) dimensions affect corporate economic performance. We use various dimensions of CSR to examine whether firms rely on different combinations of CSR, in terms of quality versus quantity of CSR practices. Our empirical analysis based on an original database including 10,293 French firms shows that different CSR dimensions in isolation impact positively firms’ profits but their effect in term on intensity varies among CSR dimensions. Moreover, the findings on the qualitative CSR measure, based on interaction between its dimensions, show that the substitutability of these dimensions is highly significant for firm performance. However, in terms of the intensity, those interactions produce differential effects. Actually, asking whether a firm starting with a certain configuration cannot perform better by adding or removing some dimension(s) we found that only one configuration fulfills this requirement: green and HR. The interpretation is that when a firm starts with this configuration then it is better not to move to another configuration. In all other configurations, firms can always improve their profits either by adding or removing some dimensions. Finally, the profitability of CSR investments in French firms seems to rely on a specific qualitative mix of different CSR dimensions rather than a pure quantitative approach accumulating practices without designing a consistent set of interactions among them.
    Keywords: Corporate social responsibility,Firm performance,Substitutability,Complementarity,Trade-off,Simultaneous equations models
    Date: 2016
  10. By: Sebastian Rausch (ETH Zurich, Switzerland); Jan Abrell (ETH Zurich, Switzerland)
    Abstract: This paper analyzes hybrid emissions trading systems (ETS) under partitioned environmental regulation when firms’ abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds as they also use information on firms’ abatement technologies while abatement bounds can only address emissions uncertainty. Using a numerical stochastic optimization model with equilibrium constraints for the European carbon market, we find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emissions reductions under EU climate policy by up to 89 percent. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions.
    Keywords: Emissions trading, Partitioned environmental regulation, Uncertainty, Prices, Quantities, EU ETS
    JEL: H23 Q54 C63
    Date: 2016–03
  11. By: Ponzo, Michela (University of Naples Federico II); Scoppa, Vincenzo (University of Calabria)
    Abstract: We use a Regression Discontinuity Design (RDD) to evaluate the impact of cost-sharing on the use of health services. In the Italian health system, individuals reaching age 65 and earning low incomes are given total exemption from cost-sharing for health services consumption. Since the probability of exemption changes discontinuously at age 65, we use a Fuzzy RDD in which the age threshold is used as an instrument for exemption. We find that prescription drug consumption, specialist visits and diagnostic checks remarkably increase with exemption. However, using several measures of health outcomes we do not find any change in individual health.
    Keywords: health insurance, healthcare demand, cost-sharing, moral hazard, health outcomes, fuzzy regression discontinuity design, instrumental variables
    JEL: I10 I13 I11 I18 C26
    Date: 2016–02
  12. By: Reinhilde Veugelers
    Abstract: Highlights This working paper reviews the evidence on the impact of public R&D spending. The authors first look at the evidence from micro-analysis of the impact of public intervention on private R&D and innovation, with a focus on the latest results from crosscountry micro-research performed within SIMPATIC. To analyse the impact of public R&D on growth, the micro-results on private R&D investment effects are complemented with a macro-perspective. To this end, the authors look at how public R&D performs in affecting GDP growth and jobs in applied macro-models most commonly used in EU policy analysis. They focus particularly on the NEMESIS model in development within the SIMPATIC project. The authors conclude with some policy recommendations from the reviewed micro and macro SIMPATIC evidence for designing public R&D projects and programmes.
    Date: 2016–02
  13. By: Marilena Vecco (Erasmus University Rotterdam, The Netherlands); Andrej Srakar (Institute for Economic Research, Faculty of Economics, University of Ljubljana, Slovenia); Michele Piazzai (Delft University of Technology, The Netherlands)
    Abstract: Deaccessioning is a largely controversial practice involving the sale or disposal of objects from a museum’s collection. Although it has received increasing attention in the past few decades as a solution to museums’ financial concerns, its implications have rarely been researched in academia which is mainly due to the ‘barely legal’ status of deaccessioning as a management practice. Previous research suggests that visitors’ responses may vary depending on some factors, such as the destination of income generated by deaccessioning operations and the public’s perception of the museum collection as a public good. We address this question by analysing visitors’ responses in Italian public museums. Specifically, we hypothesize that stronger public cultural identity of the collection and the purpose of the income generated by deaccessioning strongly affect the attitudes to deaccessioning. Using structural equation modelling, we estimate several important determinants of visitors’ responses. We also show that attitudes to deaccessioning do not influence the decision to visit a museum. The findings of the article have implications for museum governance and particularly for the knowledge about deaccessioning in cultural economics and museum management.
    Keywords: public museums, deaccessioning, visitor attitudes, structural equation models, Italy
    JEL: Z11 Z18 H40 D12 C36 C38
    Date: 2016–02
  14. By: Sijbren Cnossen
    Abstract: This paper surveys and evaluates the corporation tax (CT) systems of the Member States of the European Union on the basis of a comprehensive taxonomy of actual and potential regimes, which have as their base either profits, profits and interest, or economic rents. The current regimes give rise to various instate and interstate spillovers, which violate the basic tenets – neutrality and subsidiarity – of the single market. The trade-offs between the implications of these tenets – harmonization and diversity, respectively – can be reconciled by a bottom-up, reversible strategy of strengthening source-based taxation and approximating tax rates. The strategy starts with dual income taxation, proceeds with final source withholding taxes and rate approximation, and is made complete by comprehensive business income taxation. Common base taxation, if desired, should probably be left to the Member States themselves.
    JEL: F23 H25 H26 H87
    Date: 2016–02
  15. By: Dirk Bethmann (Department of Economics, Korea University, Seoul, Republic of Korea); Michael Kvasnicka (Otto von Guericke University Magdeburg, Universitatsplatz 2, 39016 Magdeburg, Germany)
    Abstract: International tax evasion is a major source of discontent for tax authorities. State purchases of bank data on suspected tax evaders from international tax havens constitute one tool to combat such tax evasion. Increasing the risks of detection, such purchases may spur voluntary disclosures for fear of facing charges for tax fraud. Tax authorities in Germany have made repeated use of this tool in recent years, above all in North-Rhine Westphalia, Germany's most populous federal state. Using self-compiled data for North-Rhine Westphalia on the timing and content of data acquisitions and on monthly voluntary disclosures of international tax evasion involving Swiss banks, we study the e ects that such acquisitions had on the evolution of voluntary disclosures over time. Our results show that purchases of data on potential tax evaders had a positive and sizeable e ect on voluntary disclosures. Various robustness checks and additional explorations corroborate this conclusion.
    Keywords: Tax Evasion, Tax Havens, Whistle-blowers, Tax Data, Voluntary Disclosures
    JEL: H2 H3 H26
    Date: 2016
  16. By: Bryson, Alex (University College London)
    Abstract: This is the first paper to identify the correlates of workplace managers' perceptions of the health and safety risks faced by workers and the degree to which workers have control over those risks. The risks workers face and the control they have over those risks are weakly negatively correlated. Managerial risk ratings are positively associated with both injury and illness rates, but not with absence rates. The control rating is also positively associated with injury and illness rates, but it is negatively correlated with absence rates. Workers are more likely to be exposed to health and safety risks when their workplace is performing poorly and where it has been adversely affected by the recession. Union density is positively associated with risks but is not associated with worker control over risks. Having on-site worker representatives dealing with health and safety is linked to lower risks than direct consultation between management and employees over health and safety. However, there is no evidence that particular types of health and safety arrangement are related to worker control over health and safety risks.
    Keywords: workplace safety, working conditions, unions
    JEL: J81
    Date: 2016–02
  17. By: Angelica Salvi del Pero; Willem Adema; Valeria Ferraro; Valérie Frey
    Abstract: Many households across OECD countries are overburdened by housing costs. On average nearly 15% of tenants and 10% of mortgage-payers spend over 40% of their disposable income on housing costs in OECD countries. The incidence of housing cost overburden is much higher among low-income households: 39% both for mortgage-payers and private sector tenants. Middle-class households are not immune: on average nearly 9% of mortgaged middle-class homeowners are overburdened by their monthly mortgage payment across OECD countries. Access to housing and housing quality also remain pressing concerns in many OECD countries. Significant numbers of people are homeless: while statistics are difficult to compare, most OECD countries report that 1 to 8 people in every thousand lack regular access to housing. In addition, many households live in low-quality dwellings: 15% of low-income households live in overcrowded dwellings and 14% do not have access to an indoor flushing toilet. Neighbourhood crime and pollution are also problematic for many households throughout the OECD.
    Keywords: Homeownership subsidies, Private rental housing subsidies, Social housing subsidies, Spatial segregation, Housing need, housing policies, Housing affordability
    JEL: H24 I38 R21 R31
    Date: 2016–02–26
  18. By: Franklin Amuakwa-Mensah (Department of Economics, Swedish University of Agricultural Sciences); George Marbuah (Department of Economics, Swedish University of Agricultural Sciences); Mwenya Mubanga (Dept. of Medical Sciences, Uppsala University)
    Abstract: In this paper, we present evidence based on a theoretical model developed that links the impact of climate variability on health. Using Swedish data on infectious diseases, we empirically estimate the causal relationship between climate variability and health outcomes. Generally, we find that the number of infectious disease patients and admissions are significantly driven by indicators of climate variability and socio-economic variables such as income and number of immigrants. Specifically, the effect of temperature variation on the health outcomes is ambiguous and sensitive to the choice of winter, summer or average temperature. Precipitation is relevant in explaining the number of infectious disease patients and admissions only when summer temperature considered in the model. Further, we find that an increase in carbon emissions directly causes the number patients and admissions in the summer. The relationship between infectious disease proxies (i.e. patients and admissions) and income per capita follows an inverted-U shape.
    Keywords: Climate change, Infectious diseases, Migration, Sweden
    JEL: Q54
    Date: 2016–02
  19. By: Hvide, Hans K; Jones, Benjamin
    Abstract: National policies take varied approaches to encouraging university-based innovation. This paper studies a natural experiment: the end of the "professor's privilege" in Norway, where university researchers previously enjoyed full rights to their innovations. Upon the reform, Norway moved toward the typical U.S. model, where the university holds majority rights. Using comprehensive data on Norwegian workers, firms, and patents, we find a 50% decline in both entrepreneurship and patenting rates by university researchers after the reform. Quality measures for university start-ups and patents also decline. Applications to literatures on university technology transfer, innovation incentives, and taxes and entrepreneurship are considered.
    Date: 2016–02
  20. By: Paul Bingley; Lorenzo Cappellari; Konstantinos Tatsiramos
    Abstract: Correlations between the earnings of siblings reflect shared family and community background, but evidence is mixed on the relative magnitudes of these influences. Using administrative data on the Danish population we link brothers, schoolmates and teenage neighbors and estimate a model of multiple group earnings dynamics to measure jointly the relative importance of family, neighborhoods and schools for long-term earnings. We find that: (1) family is by far the most relevant factor; (2) the influence of neighborhoods and schools falls rapidly, becoming insignificant by age 30; and (3) community effects are persistent and upward biased by a factor of five if family effects are ignored.
    Keywords: Sibling correlations; Neighbourhoods; Schools; Life-cycle earnings; Inequality
    Date: 2016
  21. By: Björn Brey (Department of Economics, University of KOnstanz, Germany); Matthias Hertweck (Department of Economics, University of KOnstanz, Germany)
    Abstract: This paper evaluates the effectiveness of short-time work [STW] extensions — e.g. relaxing eligibility criteria or implementing new STW schemes — in the OECD during and after the Great Recession. First, we find that the dampening effect of STW on the unemployment rate diminishes at higher take-up rates. Second, only countries with preexisting STW schemes were able to fully exploit the benefits of STW. Third, the effects of STW are strongest when GDP growth is deeply negative at the beginning of recessions. Our results indicate that STW is most effective when used as a fast-responding automatic stabilizer.
    Keywords: job destruction, labor policy, short-time work, unemployment
    JEL: E24 J23 J63 J65 J68
    Date: 2016–02–16
  22. By: Philip Du Caju; François Rycx (Université Libre de Bruxelles); Ilan Tojerow (Université Libre de Bruxelles)
    Abstract: We study how unemployment effects the over-indebtedness of households using the new European Household Finance and Consumption Survey (HFCS). First, we assess the role of different labor market statuses (i.e. employed, unemployed, disabled, retired, etc.) and other household characteristics (i.e. demographics, housing status, household wealth and income, etc.) to determine the likelihood of over-indebtedness. We explore these relationships both at the Euro area level and through country-specific regressions. This approach captures country-specific institutional effects concerning all the different factors which can explain household indebtedness in its most severe form. We also examine the role that each country’s legal and economic institutions play in explaining these differences. The results of the regressions across all countries show that the odds of being over-indebted are much higher in households where the reference person is unemployed. These odds ratios remain fairly stable across different over-indebtedness indicators and specifications. Interestingly, we find similar results for secured debt only. Turning to country specific results, the role of unemployment varies widely across countries. In Spain, France or Portugal, for example, the odds ratio for the unemployed group is just below 2, whereas in Austria, Belgium, or Italy the odds ratio is higher than 4. Secondly, we situate the analysis in a macro-micro frame to identify households and countries that are especially vulnerable to adverse macroeconomic shocks in the labor market. For the Euro area, we find that the percentage of households plagued by overindebtedness increased by more than 10%, suggesting that another unemployment shock could have a major impact on the financial solvency of Euro area households. Finally, the impact of this shock on single-headed households is much higher than on couple-headed ones.
    Keywords: Household finance, Over-indebtedness, Financial Fragility, Unemployment, Labor market status, HFCS
    JEL: D14 D91 J12
    Date: 2016–02

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