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on Microeconomic European Issues |
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Issue of 2016‒05‒21
twenty-one papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Stefan P. Schleicher (Wegener Center for Climate and Global Change at the University of Graz); Angela Köppl (Austrian Institute of Economic Research); Alexander Zeitlberger (Wegener Center for Climate and Global Change at the University of Graz) |
| Abstract: | Pursuing an evidence based approach we summarize the key elements of the European Commission’s proposal of July 2015 for a reform of the EU Emissions Trading System and offer facts about the current state of EU ETS that underline the needs for such a reform. We supply key data for understanding the current state of EU ETS and report in particular the share of freely allocated allowances in emissions for the various sectors since the start of EU ETS in 2005. This is the most relevant parameter for evaluating the stringency and cost impacts of the EU ETS on sectors and installations. We provide propositions for enhancing the allocation procedure of both free and auctioned allowances, the fundamental element in the cap and trade design of this system. We link this procedure closely to the relevant suggestions of the Commission proposal and offer extensions that can make in particular the allocation of free allowances more targeted and effective. We indicate how the impacts of free allowances can be calculated both for sectors and installations and conclude that these reform steps could reduce the administrative burden of the system. |
| Keywords: | EU Emissions Trading System, Reform Options, EU Commission’s Proposal |
| JEL: | Q53 Q54 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.27&r=eur |
| By: | Iga Magda; Micha³ Brzeziñski |
| Abstract: | We study changes in income inequality and inequality of opportunity (IO) in seven Central and Eastern European (CEE) countries. Using EU SILC 2005 and 2011 data, we make a first attempt to apply inequality decompositions based on RIF regression to the problem of changes in IO over time. Our results indicate that there is considerable heterogeneity in levels of inequality and in the evolution of inequality over time in CEE countries, linked to both changes in the parental backgrounds of individuals and the effects of these changes on current incomes, and to micro-economic factors that correspond to the labour market status and educational attainment levels of households. Differentiating between the CEE countries, we provide evidence of a strong decrease in both overall income inequality and absolute IO in Poland; a decrease in absolute IO accompanied by modest changes in income distribution in Lithuania; and a relatively high and growing share of “unfair” inequality accompanied by a low levels of overall income dispersion in Hungary. |
| Keywords: | inequality of opportunity, income inequality, RIF decomposition, Central and Eastern Europe |
| JEL: | D31 D63 E24 O15 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp052016&r=eur |
| By: | Werner, Max (Helmut Schmidt University, Hamburg); Eißing, Klaus (Olympus AG); Langton, Sebastian (GUS Group) |
| Abstract: | This research estimates the shared value created by constructing a hypothetical Hyperloop to transport cargo along 300 km in Northern Germany. Following Porter-Kramer (2011), we identified and evaluated eight factors that create shared value: travel speed, operating costs, safety, noise pollution, air pollution, climate effect/carbon footprint, separation effect/ property efficiency, and maintenance. Using official data compiled by several German institutes and organizations, we conducted comparative analysis to quantify and compare the abovementioned factors for Hyperloop and over-the-road cargo transport in Germany. Then, we monetized the individual and collective benefits of the shared value created by Hyperloop replacing a significant share of cargo transported by truck. Our findings indicate that the hypothetical Hyperloop project in Northern Germany would create €660 to €900 million of shared value annually. Our research method establishes a framework for assessing future transportation projects like Hyperloop, and our findings can be generalized to industrialized nations beyond Germany. |
| Keywords: | Transportation; Technology; Innovation; Logistic; Shared Value; Cargo transportation |
| JEL: | L99 Q55 R49 |
| Date: | 2016–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2016_166&r=eur |
| By: | Boltho, Andrea; Carlin, Wendy; Scaramozzino, Pasquale |
| Abstract: | In an earlier paper (Journal of Comparative Economics, 1997) the authors argued, against the conventional wisdom of the time, that East Germany was unlikely to follow a development path similar to that of the Italian Mezzogiorno. This paper revisits the issue some 25 years after German reunification. Statistical tests show that the absence of income per capita convergence between South and North that has characterized Italy since the war, continued over the last two or more decades. Germany, on the other hand, has, over the same period, seen significant income convergence between East and West. The main explanations that are provided for such contrasting outcomes stress differences between the two countries (and within the two countries) in investment performance, in labour market flexibility, and, in particular, in developments in the tradeable sector whose performance in East Germany has been much superior to that of the Mezzogiorno. These differences, in turn, are linked to very different standards of institutional quality and governance which are almost certainly rooted in the two "poor" regions' longer-run history. |
| Keywords: | convergence; institutional quality; labour market flexibility; tradeables |
| JEL: | O57 R12 R58 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11266&r=eur |
| By: | Angela Greulich (Centre d'Economie de la Sorbonne); Olivier Thévenon (Institut National d'Etudes Démographiques (INED) & OECD Social Policy Division); Mathilde Guergoat-Larivière (Conservatoire National des Arts et Métiers (CNAM-LIRSA) & Centre d'Etudes de l'Emploi (CEE)) |
| Abstract: | This article gives evidence that differences in completed fertility among European countries emerge mainly as a result of fewer women having a second child in low fertility countries and analyses the impact of women's employment on the probability of second child birth. With longitudinal data from the European Survey of Income and Living conditions (EU-SILC) and aggregated data from the OECD Family Database, we find that, on average within European countries, women in stable employment have a significantly higher probability of second childbirth than inactive or unemployed women. However, while female employment generally favours a transition to second childbirth in high-fertility countries, the impact is heterogenous in low-fertility countries. This points to a work-life balance conflict that is stronger in low-fertility countries. To address this issue, multilevel models are run to compare the role of various policies: not surprisingly, they show that childcare policies – which are the most effective policies to secure women's employment – are the most likely to encourage couples to enlarge their families and that the positive effect of stable employment on fertility is reinforced by this policy |
| Keywords: | low fertility; female employment; work-life balance; Europe; family enlargement |
| JEL: | J13 J16 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:16024&r=eur |
| By: | Castellani, Davide (Henley Business School, University of Reading); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Schubert, Torben (CIRCLE, Lund University); Vivarelli, Marco (Università Cattolica del Sacro Cuore, IZA, UNU-MERIT) |
| Abstract: | Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which - instead of purely aiming at stimulating higher R&D expenditures - works on improving the firms’ capabilities to transform R&D into productivity gains. |
| Keywords: | R&D; productivity; economic crisis; US; EU |
| JEL: | O33 O51 O52 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_015&r=eur |
| By: | M. E. Bontempi; L. Lambertini; E. Medeossi |
| Abstract: | Studies about innovation find evidence of a positive relationship between technological advancement and firm performance, in particular when the innovative effort is continuous. This paper aims to further the analysis on the duration of R&D investment at the firm level. The contribution of this study is threefold: first, we extend Máñez et al. [2014], Triguero et al. [2014] analysis for Spain to the Italian case: we use a panel of manufacturing and service companies, thus enlarging the view of R&D duration within the European countries. Secondly, from a methodological point of view, we employ both discrete- and continuous-time duration models, in order to test the Proportional Hazards (PH) assumption, i.e. the assumption that the hazard rate is equivalent over time across groups. Last, but not least, we assess whether a firm’s likelihood of continuing investment in R&D depends on the market power of companies. We test alternative measures for market power: the classical price-cost margin and a new proxy for the firm demand elasticity, obtained from a specific survey question. Results are in line with the hypothesis that R&D presents considerable temporal spill overs and strong persistence, even once unobserved heterogeneity is controlled for. Also, we argue that the appropriate proxy for market power is the firm demand elasticity, and we find support for the Schumpeterian hypothesis. |
| JEL: | C23 C41 D22 G32 L10 O30 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1057&r=eur |
| By: | Pablo Pintos (Universidad Pontificia Comillas and Economics for Energy); Pedro Linares (Instituto de Investigación Tecnológica, Universidad Pontificia Comillas,Harvard Kennedy School; and Economics for Energy.) |
| Abstract: | The European Emissions Trading System (EU ETS) is the main instrument of the European Union (EU) against climate change. This mechanism is considered, from the theoretical point of view, as the most cost-effective method to reduce greenhouse gases (GHG). However, previous studies show that the agents who participate in these markets can behave in a way which may lead to inefficient CO 2 prices, creating doubts about the effectiveness of the system. This paper analyzes these possible anomalies by modeling the EU ETS under a rational market hypothesis and comparing the results with real market transactions. For this, we have built a bottom-up model, which represents the EU ETS in an integrated way, paying particular attention to the interactions among the most emissions intensive industries. The results show the benefits of this integrated modeling approach and how it better reflects real market conditions. We also present some preliminary conclusions regarding the behavior of the agents in the ETS market. |
| Keywords: | Keywords: EU ETS; industry; GHG emissions; behavior modeling; costs |
| JEL: | Q31 Q37 Q48 Q56 Q58 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:efe:wpaper:01-2016&r=eur |
| By: | Hamann, Silke; Niebuhr, Annekatrin; Peters, Jan Cornelius |
| Abstract: | We analyse whether the size of the local labour market allows for better matching between job seekers and vacancies, which is thought to enhance productivity. This analysis is based on a large data set providing detailed micro-level information on new employment relationships in Germany. Our results suggest rather small matching benefits. Doubling employment density increases the productivity of new employment relationships by 1.1% to 1.2%. Moreover, the findings indicate that the benefits accrue only to persons experiencing job-to-job transitions and short-term unemployed. We detect no important impact of agglomeration on transitions from long-term non-employed. |
| Keywords: | agglomeration economies,matching,urban wage premium,transitions to employment |
| JEL: | R23 J31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201607&r=eur |
| By: | Richard Cookson (Centre for Health Economics, University of York, UK.); Carol Proppper (Business School, Imperial College London and Centre for Market and Public Organisation, University of Bristol and CEPR); Miqdad Asaria (Centre for Health Economics, University of York, UK.); Rosalind Raine (Department of Applied Health Research, University College London) |
| Abstract: | This paper reviews what is known about socioeconomic inequalities in health care in England, with particular attention to inequalities relative to need that may be considered unfair (‘inequities’). We call inequalities of 5% or less between most and least deprived socioeconomic quintile groups ‘slight’; inequalities of 6-15% ‘moderate’, and inequalities of > 15% ‘substantial’. Overall public health care expenditure is substantially concentrated on poorer people. At any given age, poorer people are more likely to see their family doctor, have a public outpatient appointment, visit accident and emergency, and stay in hospital for publicly funded inpatient treatment. After allowing for current self-assessed health and morbidity, there is slight pro-rich inequity in combined public and private medical specialist visits but not family doctor visits. There are also slight pro-rich inequities in overall indicators of clinical process quality and patient experience from public health care, substantial pro-rich inequalities in bereaved people’s experiences of health and social care for recently deceased relatives, and mostly slight but occasionally substantial pro-rich inequities in the use of preventive care (e.g. dental checkups, eye tests, screening and vaccination) and a few specific treatments (e.g. hip and knee replacement). Studies of population health care outcomes (e.g. avoidable emergency hospitalisation) find substantial pro-rich inequality after adjusting for age and sex only. These findings are all consistent with a broad economic framework that sees health care as just one input into the production of health, alongside many other socioeconomically patterned inputs including environmental factors (e.g. living and working conditions), consumption (e.g. diet, smoking), self care (e.g. seeking medical information) and informal care (e.g. support from family and friends). |
| Keywords: | health care, inequalities, socioeconomic factors |
| JEL: | I18 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:129cherp&r=eur |
| By: | Marianna Gilli (Department of Economics and Management, University of Ferrara, Italy.) |
| Abstract: | This paper aims to shed light on the role of environmental policies, technological change and their interaction, on CO2 emissions in Europe. Building on the literature, which studies the relationship between environmental performances and technological change, as well as the literature related to the effects of environmental policy, two hypothesis are framed: the first one is that both environmental policy and technological change have a negative effect on CO2 emissions level. The second one is that technological change and environmental policy are complementary determinants of a reduced CO2 level. Both a fixed effects model and IV model are applied. Results offer support to these hypothesis and highlight sectorial differences in policy and technology effects toward lower emissions levels. |
| Keywords: | technological change, environmental policy, pollution emissions |
| JEL: | L60 O33 Q53 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0516&r=eur |
| By: | Kureková, Lucia Mýtna (Slovak Governance Institute); Žilinčíková, Zuzana (Masaryk University) |
| Abstract: | This paper studies how attractive young returnees are in the labour market and how they behave relative to stayers. We use the online CVs of young people that are posted on the major Slovak job-search portal. The analysis is performed using a set of regression models that investigate attractiveness, salary expectations and positions of interest to returnees in comparison to stayers. We find that the post-accession foreign work experience increases the attractiveness of job candidates, but that attractiveness premium varies depending on the returnee's host country. Returnees are more demanding with respect to their minimum salary expectations and are more likely than stayers to apply for positions advertised abroad. Return migrants are a diverse group - women, graduates, or people returning to economically underperforming regions, continue to face disadvantages with labour market integration. |
| Keywords: | return migrants, employers, web data, labour market, integration, Slovakia |
| JEL: | F22 J23 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9921&r=eur |
| By: | Tobias C. Vogt (Max Planck Institute for Demographic Research, Rostock, Germany); Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany); Pavel Grigoriev (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Before the fall of the Berlin Wall, mortality was considerably higher in the former East than West Germany. The gap narrowed rapidly after German unification, particularly for women, to the point that Eastern women aged 50-64 now have lower mortality, despite lower incomes and worse overall living conditions. Prior research shows that lower smoking rates among East German females was a major contributor to this cross-over. However since 1990, higher smoking rates have been observed among women in the eastern part of Germany. We forecast the impact of this changing smoking behavior on East-West mortality differentials and find that the higher smoking rates among younger East German cohorts will reverse their contemporary mortality advantage. Experience from other countries show that smoking can be effectively reduced by strict anti-smoking policies. Instead, East Germany is becoming a warning example of the consequences of weakening anti-smoking policies and changing behavioral norms. |
| Keywords: | Germany, forecasts, mortality, smoking |
| JEL: | J1 Z0 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2016-004&r=eur |
| By: | Wagner, Joachim (Leuphana University Lueneburg, Germany, & Centre of Excellence for Science and Innovation Studies (CESIS), KTH, Sweden) |
| Abstract: | This paper looks at a hitherto neglected extensive margin of international trade by investigating for the first time the frequency at which German exporters and importers trade a given good with a given country. Imports and exports show a high degree of lumpiness. In a given year about half of all firm-good-country combinations are recorded only once or twice for trade with EU-countries, and this is the case for more than 60 percent of all firm-good-country combinations in trade with non-EU countries. The frequency of recorded transactions tends to decline with an increase in the number of transactions per year. This is in accordance with the presence of per-shipment fixed costs that provide an incentive for trading firms to engage in cross-border transactions infrequently. Empirical models show that for Germany the frequency of transactions at the firm-good-country level tends to decrease with an increase in per-shipment costs when unobserved firm and goods characteristics are controlled for. |
| Keywords: | Lumpiness of trade; imports; exports; Germany |
| JEL: | F14 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0438&r=eur |
| By: | Bossler, Mario (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Broszeit, Sandra (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "On 1 January 2015 a new statutory minimum wage of EURO 8.50 per hour of work was introduced in Germany. Using a difference-in-differences approach, we estimate effects on worker-level outcomes of continuing employees. The results reveal a meaningful absolute increase in the affected workers' pay satisfaction. The increase in job satisfaction is modest and predominantly driven by changes in pay satisfaction implying only a small effect on all other dimensions of job satisfaction. Moreover, effects from the minimum wage on work engagement and turnover intention are virtually zero." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Mindestlohn, Zufriedenheit , Arbeitsmotivation, Arbeitnehmerkündigung |
| JEL: | J28 J38 J63 |
| Date: | 2016–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201615&r=eur |
| By: | Georgios Alaveras (European Commission – JRC - IPTS); Estrella Gomez Herrera (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS) |
| Abstract: | The main objective of the present study is to measure the extent of market segmentation for video-on-demand (VoD) services in the EU. We examine access to VoD catalogues in other countries and compare the content of film catalogue available across countries. Using various sources of data on VoD services we find that cross-border access to VoD services in the EU28 is extremely limited at 1.9% of available VoD services in the EU. Cross-border availability of film titles reaches 16.8%. Netflix performs better with 31% cross-border availability. Cross-border availability in VoD catalogues remains far below the 40% availability observed in digital film downloads, 80% in digital music downloads and 93% in e-books catalogues. Even within EU Member States, the VoD market is very fragmented with catalogue overlaps between local VoD providers in the order of 30-50% only. Consumers incur high switching costs to access a wider variety of products in this segmented market. |
| Keywords: | video on demand, geographical market fragmentation, copyright, digital media, language barriers, online film |
| JEL: | F15 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:2015-12&r=eur |
| By: | Klaus Abberger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Andreas Dibiasi (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Siegenthaler (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jan-Egbert Sturm (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Does increased policy uncertainty dampen investment plans of firms? We provide direct evidence on this question by examining the effects of an unexpectedly accepted and farreaching referendum in Switzerland in February 2014. The vote has put several economically relevant agreements between Switzerland and its main trading partner, the European Union, at stake. Using firm-level survey data levied before and after the vote, we examine whether firms that reported to be affected by the induced policy uncertainty have revised their investment plans differently from those that did not perceive an increase in uncertainty. We find strong evidence that an increase in policy uncertainty does lead firms to reduce their investment plans. As theoretically expected, these effects are concentrated among those firms that view their investments as largely irreversible. Moreover, the uncertainty shock mainly dampened firms’ plans to extend their production capacities, while other types of investment such as replacement investment were not affected. |
| Keywords: | investment, uncertainty, irreversibility, business survey |
| JEL: | D81 D84 E22 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:16-406&r=eur |
| By: | Herber, Stefanie P.; Kalinowski, Michael |
| Abstract: | This paper estimates the percentage of students who do not take up their federal need-based student financial aid entitlements and sheds light on determinants of this behavior. Against the background that educational mobility in Germany is low although extensive student financial aid for needy students is available, it is crucial to know whether students assert their claims for student aid at all. To investigate non-take-up, we set up a microsimulation model for the German Socio-Economic Panel Study 2002-2013 and estimate the respective aid amounts students would have received, had they filed an application for need-based aid. The results indicate that about 40% of the eligible low-income students do not take up their entitlements. We employ instrumental variable techniques and a sample selection model to consider several potential explanatory factors for this behavior. Our results suggest that non-take-up is inversely related to the level of benefits, though the elasticity is rather low. Apart from that, a shorter expected duration of benefit receipt is related to a higher non-take-up rate, whereas the possibility to draw upon older siblings' experience with completing the complex application for aid is associated with higher probabilities to claim. Moreover, we find robust evidence that significantly more students socialized in the former socialist East Germany choose to take up student aid than similar West German students. Finally, in line with behavioral economic theory, debt aversion of highly impulsive and impatient students is associated with higher rates of non-take-up. |
| Keywords: | non-take-up of social benefits,welfare program participation,federal student aid,student loans,microsimulation,behavioral economics,debt aversion,self-control |
| JEL: | I22 I23 I24 I38 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:109&r=eur |
| By: | Sergi Jiménez-Martín; Arnau Juanmarti Mestres; Judit Vall Castelló |
| Abstract: | In this paper we evaluate the impact of the business cycle on participation in the Disability Insurance (DI) program in Spain in the context of the Great Recession, which has been particularly strong in this country. We follow two approaches. First, we use regional administrative data to estimate the effect of the regional unemployment rate on the number of applications, denials and allowances to the DI rolls. Second, we use longitudinal panel data to estimate the effect of the business cycle on transitions from different labor market states to the DI rolls. Our results show a pro-cyclical behavior of participation in DI during the years of the Great Recession. This is in contrast to the countercyclical response documented both for other countries as well as for Spain before 2008. We document some facts that partially explain why DI benefits have become pro instead of countercyclical during the Great Recession in Spain. Our results provide valuable evidence for policy-makers as they highlight that some of the disabled population may be left economically uncovered during the worst of times. |
| Keywords: | Disability, Great Recession, labour market transitions |
| JEL: | I13 I38 J14 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1519&r=eur |
| By: | Gloria Di Caprera (CEIS,University of Rome "Tor Vergata") |
| Abstract: | This work investigates the casual effect of childcare attendance on children's school achievements. We analyse data about children's school outcomes in mathematics and language focusing on pupils attending second and fifth grade in Italian primary school in conjunction with data providing public childcare coverage at provincial level. Using IV identification strategy, we show that childcare attendance leads to better school outcomes and early investment in education boosts both mathematics and language skills. For both school grades our results highlight a positive and significant effect of childcare attendance on children's school achievements which does not dissipate over time. |
| Keywords: | Early investment in education, childcare attendance, children's cognitive outcomes |
| JEL: | J13 I26 H75 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:378&r=eur |
| By: | Halla, Martin (University of Innsbruck); Mayr, Harald (University of Zurich); Pruckner, Gerald J. (University of Linz); Garcia-Gomez, Pilar (Erasmus University Rotterdam) |
| Abstract: | The incidence of Cesarean deliveries (CDs) has been on the rise. The procedure's cost and benefits are discussed controversially; in particular, since non-medically indicated cases seem widespread. We study the effect of CDs on subsequent fertility and maternal labor supply. Identification is achieved by exploiting variation in the supply-side's incentives to induce non-medically indicated CDs across weekdays. On weekends and public holidays obstetricians' are less likely to induce CDs (due tighter capacity constraints in hospital). On Fridays and other days preceding a holiday, they face an increased incentive to induce CDs (due to their demand for leisure on non-working days). We use high-quality administrative data from Austria. Women giving birth on different weekdays are pre-treatment observationally identical. Our instrumental variable estimates show that a non-planned CD at parity one decreases life cycle fertility by almost 17 percent. This reduction in fertility translates into a temporary increase in maternal employment. |
| Keywords: | Caesarean delivery, Caesarean section, fertility, female labor supply |
| JEL: | I12 J13 J11 J22 J21 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9905&r=eur |