nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒10‒09
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Why does emissions trading under the EU ETS not affect firms' competitiveness? Empirical findings from the literature By Joltreau, Eugénie; Sommerfeld, Katrin
  2. Natives and migrants in home production: The case of Germany By Forlani, Emanuele; Lodigiani, Elisabetta; Mendolicchio, Concetta
  3. Spousal and Survivor Benefits in Option Value Models of Retirement: An Application to Belgium By Jousten, Alain; Lefèbvre, Mathieu
  4. The Distribution of Household Savings in Germany By Jochen Späth; Kai Daniel Schmid
  5. History dependence in wages and cyclical selection: Evidence from Germany By Bauer, Anja; Lochner, Benjamin
  6. Personnel policy adjustments when apprentice positions are unfilled: Evidence from German establishment data By Hinz, Tina
  7. The effect of economic crisis on regional income inequality in Italy By Chiara Mussida; Maria Laura Parisi
  8. Financial constraints and the failure of innovation projects By José García-Quevedo; Agustí Segarra-Blasco; Mercedes Teruel
  9. Automation and Job Polarization: On the Decline of Middling Occupations in Europe By Vahagn Jerbashian
  10. The gender wage gap and the early-career effect education By Hildegunn E. Stokke
  11. The Influence of the European Union Consumer Protection Policy on Croatian Consumers By Simon Stickelmann
  12. Ideal workers and ideal parents: Working-time norms and the acceptance of part-time and parental leave at the workplace in Germany By Lott, Yvonne; Klenner, Christina
  13. More Female Manager Hires through More Female Managers? Evidence from Germany By Bossler, Mario; Mosthaf, Alexander; Schank, Thorsten
  14. The Third Worker: Assessing the Trade-off between Employees and Contractors By Martins, Pedro S.
  15. The Development and Happiness of Very Young Children By Anand, Paul; Roope, Laurence
  16. Do all sporting prizes have a significant positive impact on attendance in a European national football league? Competitive intensity in the French Ligue 1 By Scelles, Nicolas; Durand, Christophe; Bonnal, Liliane; Goyeau, Daniel; Andreff, Wladimir
  17. Why demotion of older workers is a no-go area for managers By van Dalen, Harry; Henkens, Kene
  18. On the Economics and Politics of Refugee Migration By Christian Dustmann; Francesco Fasani; Tommaso Frattini; Luigi Minale; Uta SchÓ§nberg
  19. The Socioeconomic Determinants of Crime in Ireland from 2003-2012 By Brosnan, Stephen
  20. Does Relative Grading Help Male Students? Evidence from a Field Experiment in the Classroom By Eszter Czibor; Mirjam van Praag; Randolph Sloof; Sander Onderstal
  21. The effects of Assortative Matching on Job and Marital Satisfaction through University Attendance By Alessandro Tampieri; Majlinda Joxhe
  22. Does it pay to study abroad? Evidence from Poland By Jacek Liwinski
  23. Single Mothers and Their Children: Evaluating a Work-Encouraging Welfare Reform By Loken, Katrine Vellesen; Lommerud, Kjell Erik; Reiso, Katrine Holm

  1. By: Joltreau, Eugénie; Sommerfeld, Katrin
    Abstract: Environmental policies may have important consequences for firms' competitiveness or profitability. However, the empirical literature shows that hardly any statistically significant effects on firms can be detected for the European Union Emissions Trading Scheme (EU ETS). On the basis of existing literature, we focus on potential explanations for why the empirical literature finds hardly any significant competitiveness effects on firms, least not during the first two phases of the scheme (2005-2012). We also reason why the third phase (2013-2020) could reveal similar results. We show that the main explanations for this finding are a large over-allocation of emissions ertificates leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may limit the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. These different aspects may explain why the empirical literature does not find significant effects from the EU ETS on firms' competitiveness.
    Keywords: Cap and Trade system,EU ETS,firm-level competitiveness
    JEL: Q52 Q58 D22
    Date: 2016
  2. By: Forlani, Emanuele; Lodigiani, Elisabetta; Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: In this paper, we assess the impact of international migration, and the induced home-care service labour supply shock, on fertility decisions and labour supply of native females in Germany Specifcally, we consider individual data of native women from the German Socio-Economic Panel and we merge them with the data on the share of female immigrants and other regional labour market characteristics We fnd that an increase of the share of female immigrants at the local level induces women to work longer hours and positively afects the probability to have a child This efect strengthens for (medium) skilled women and, among them, for women younger than 35 years of age The negative change in household work attitude confrms the behavioural validity of our results.
    JEL: J13 J22 J61
    Date: 2016–10–04
  3. By: Jousten, Alain (University of Liège); Lefèbvre, Mathieu (Université de Strasbourg)
    Abstract: We study retirement incentives with augmented option value model à la Stock and Wise (1990). We propose methodological extensions to better reflect the respective incentives faced by singles and couples. Our results show that a more comprehensive modelling of couples' incentives leads to very different patterns of retirement incentives – particularly for women. We apply the new indicators to data from the Survey of Health, Ageing and retirement in Europe (SHARE) in Belgium and find two key results. First, contrary to several previous studies, we obtain a positive signed income effects. Second, we find very different retirement incentives for men and women, with little flexibility in the retirement decision for men and substantially more flexibility for women as a function of financial incentives and household composition.
    Keywords: retirement, social security, dependent benefits
    JEL: H55 J21 J26
    Date: 2016–09
  4. By: Jochen Späth; Kai Daniel Schmid
    Abstract: Savings are, apart from inheritances and transfers, the corner stone for the accumulation of wealth. Against the background of rising economic inequality in industrialized countries and the ongoing assessment of its root causes, analyses of the distribution of savings along the income and wealth distribution are of high interest for the question on whether mutual stimulation between income flows and wealth stocks contributes to rising inequality. We analyze the extent of the concentration of household savings in Germany by estimating saving amounts, saving rates and shares in aggregate savings for different classes of household income and household wealth in Germany. Our calculations are based on the Sample Survey of Household Income and Expenditure (in German: Einkommens- und Verbrauchsstichprobe - EVS), a large sample containing more than 40,000 households in Germany. We show that the concentration of savings in Germany is substantial, as in 2013 the top income decile's share in aggregate savings amounts to about 60 percent, whereas the lower half of the income distribution actually does not save at all. Conditional on the distribution of wealth the concentration of savings is somewhat less pronounced, but still apparent. Over the years 2003 till 2013 we find an increase of the concentration of household savings across the income and wealth distribution. Finally, based on a set of assumptions, we look beyond the top income threshold underlying the EVS dataset (18,000 euros of monthly net household income) in order to estimate bias-corrected saving rates for the top income groups which are considerably higher than those that can be calculated with our data set alone. Using these corrected saving rates as input parameters for a macro simulation of the distribution of household incomes and savings we find that the aggregate saving rate increases by two to three percentage points compared to the estimate based on EVS data alone. Also, the top decile and percentile groups' shares in aggregate savings are substantially higher compared to the estimates solely based on EVS data.
    Keywords: Household Savings, Saving Rate, EVS, Administrative Data, Inequality, Endogenous Accumulation
    JEL: D14 E21
    Date: 2016
  5. By: Bauer, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lochner, Benjamin
    Abstract: "Using administrative data from Germany, this paper analyzes the relation between wages and past and current labor market conditions. Specifically, it explores whether the data is more consistent with implicit contract models (Beaudry/DiNardo, 1991) or a matching model with on-the-job search and cyclical selection (Hagedorn/Manovskii, 2013). The data suggests that wages are related to past labor market conditions as contract theories postulate. However, past labor market conditions also affect contemporaneous wages through the evolution of the match qualities over a worker's job history - the main hypothesis of the selection model. Refining the selection model by taking into account within company job regrading, we find that wages of workers who switched employers and occupations at the same time respond stronger to the cycle than wages of job stayers. In contrast, wages of workers who only switch employers or occupations are not more cyclical than wages of workers who stay at their previous employer and in their previous occupation." (Author's abstract, IAB-Doku) ((en))
    JEL: E24 E32 J31 J41
    Date: 2016–09–29
  6. By: Hinz, Tina
    Abstract: German firms have increasing difficulties in filling apprentice positions. I study how firms adjust their personnel policies when they face unfilled apprentice positions. Using the IAB Establishment Panel (2008-2014) and applying fixed effects panel estimations, I find that small firms react by hiring more unskilled workers. I do not observe an intensified use of personnel policies directed at the existing workforce, such as further training, retention of apprenticeship graduates or conversion of fixed-term into permanent contracts. Moreover, the results do not indicate that firms with unfilled apprentice positions turn away from apprenticeship training. My findings suggest that most training firms may not regard unfilled apprentice positions as a serious problem (so far).
    Abstract: Deutsche Betriebe haben immer größere Schwierigkeiten ihre Ausbildungsstellen zu besetzen. Dieses Papier untersucht, wie Betriebe ihre personalpolitischen Maßnahmen anpassen, wenn Ausbildungsstellen unbesetzt bleiben. Unter Verwendung des IAB-Betriebspanels (2008-2014) und Schätzung mit betriebsfixen Effekten zeigt sich, dass kleine Firmen mehr geringqualifizierte Beschäftigte einstellen. Betriebe reagieren nicht mit einer intensiveren Nutzung von Maßnahmen der betrieblichen Weiterbildung, Übernahme von Auszubildenden oder Entfristung von Beschäftigten. Zusätzlich gibt es kein Anzeichen dafür, dass Betriebe mit unbesetzten Ausbildungsstellen ihre Ausbildungsaktivität verringern. Somit deuten die Ergebnisse darauf hin, dass Ausbildungsbetriebe mit unbesetzten Ausbildungsstellen (noch) keinen Handlungsbedarf sehen.
    Keywords: apprenticeship training,personnel policy,Germany
    JEL: I29 J24 J63 M53
    Date: 2016
  7. By: Chiara Mussida (DISCE, Università Cattolica); Maria Laura Parisi (Dipartimento di Economia e Management, Università degli Studi di Brescia)
    Abstract: This paper analyzes the determinants of unequal income distribution across macro-regions in Italy, and whether the latest economic crisis has had an effect on income inequality within or between regions. Inequality between individuals and between families appears greatest in the south, and the crisis has exacerbated this phenomenon. Econometric analyses by population groups and by nationality suggest that high educational attainment levels and larger households contribute to increasing the household income, whereas being female and foreign tend to reduce household income. The income distribution of foreign-born individuals tends to be more asymmetric, with heavier tails, compared to that of nationals.
    Keywords: regional income inequality, household income inequality, economic crisis
    JEL: D31 F22 O15 R23
    Date: 2016–07
  8. By: José García-Quevedo (IEB, Universitat de Barcelona); Agustí Segarra-Blasco (GRIT, Universitat Rovira i Virgili); Mercedes Teruel
    Abstract: Theoretical and empirical approaches have stressed the existence of financial constraints in firms’ innovative activities. Although a large number of innovation projects are abandoned before their completion, the empirical evidence has focused on the determinants of innovation while failed projects have received little attention. This paper analyses the role of financial obstacles on the likelihood of abandoning an innovation project by using panel data of potential innovative Spanish firms for the period 2005–2013. Our analysis differentiates between internal and external barriers on the probability of abandoning a project and we examine whether the effects are different depending on the stage of the innovation process. Controlling for potential endogeneity, we use a bivariate probit model to take into account the simultaneity of financial constraints and the decision to abandon an innovation project. Our results show that financial constraints most affect the probability of abandoning an innovation project during the concept stage.
    Keywords: barriers to innovation, failure of innovation projects, financial constraints
    JEL: O31 D21
    Date: 2016–09
  9. By: Vahagn Jerbashian (Universitat de Barcelona)
    Abstract: Using data from 10 Western European countries, I provide evidence that the fall of prices of information technologies (IT) is associated with a lower share of employment in middle wage occupations and a higher share of employment in high wage occupations. The decline of IT prices has no robust effect on the share of employment in the lowest paid occupations. Similar results hold within gender, age and education-level groups, with notable differences in these groups. For instance, the share of employment in high wage occupations among females has increased more than among males with the fall of IT prices. This is consistent with arguments that women hold a comparative advantage in communication and social skills, which are in demand in high wage occupations.
    Keywords: Job Polarization, Information Technologies, Gender, Age, Education-Level.
    JEL: J23 J24 O33
    Date: 2016
  10. By: Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology)
    Abstract: This paper identifies the sources of the gender wage gap across education groups and studies how the gap develops with work experience throughout the career. The analysis applies matched employer-employee register data for Norway covering hourly wages for all full-time workers 20-40 years old in 2008 and with information on actual work experience the previous 15 years. Overall, less than half the male wage premium is explained by differences in observable factors. The remaining gap follows from lower returns to worker characteristics for women, especially lower returns to experience. The gender wage gap between observable equal workers is non-existing upon entry to the labor market, while it increases rapidly throughout the early career, before stabilizing. The findings of early-career effects are robust to an analysis following cohorts during 1993-2008. The degree of gender discrimination in the labor market decreases with the level of education. Low educated women have lower returns to experience and lose more from entering family life compared to highly educated women.
    Keywords: gender wage gap; return to experience; early-career effect; register data
    JEL: J16 J31 J71
    Date: 2016–03–29
  11. By: Simon Stickelmann (Visiting Scholar)
    Abstract: The European Union Consumer Protection Policy (EU CPP) focuses on the awareness and active participation of consumers in the internal market and therefore counts on consumers’ knowledge of their own conferred rights. Since it is not yet clear what Croatian consumers’ attitudes towards the EU Consumer Protection Policy are, this paper attempts to analyze the impact of the EU Consumer Protection Policy on Croatian consumers’ interest, knowledge, their source of information and their perceived security as consumers. Quantitative (survey) data collection among consumers within the entire Croatia has been used for the analysis. The collected data has been analyzed by using descriptive statistics, correlation and regression analysis, and the analysis of variance (ANOVA). The paper eventually finds significant correlations between Croatian consumers’ degrees of interest, actual knowledge, preferred information sources and perceived security. It furthermore shows that the attitude of Croatian consumers towards the European Union’s system of consumer protection currently shows a significant lack of interest and knowledge. The paper concludes with a premise which states that the attempts to increase interest and knowledge among Croatian consumers require the use of information provided via visible Internet sources.
    Keywords: European Union, Croatia, Europeanisation, consumer protection, consumer awareness
    JEL: D18 K20
    Date: 2016–09
  12. By: Lott, Yvonne; Klenner, Christina
    Abstract: This study examines the extent to which the use of part-time work and parental leave is accepted in German workplaces for women and men as well as various work positions and professions. Interviews were conducted with 95 employees and 26 experts in hospitals, police stations and industrial companies. The results indicate that the working-time norms not only vary according to gender, but to the position in the workplace hierarchy and profession. Moreover, working-time norms are shifting. Part-time work and parental leave is gradually more accepted in higher status position and for men. In addition to the norms, other factors - especially staffing issues and the behavior of management personnel - are decisive for acceptance, and thus for the work behavior of employees.
    Date: 2016
  13. By: Bossler, Mario (Institute for Employment Research (IAB), Nuremberg); Mosthaf, Alexander (University of Mainz); Schank, Thorsten (University of Mainz)
    Abstract: This paper investigates if there is state dependence in the gender composition of managers in German establishments. We analyze whether the number of hired female managers (respectively the share of females within hired managers) depends on the past hiring decisions of an establishment. Using administrative data, we apply dynamic linear models and dynamic tobit models accounting for unobserved heterogeneity and the endogeneity of lagged dependent variables. We find that an increase of female manager hires in present leads to more female hired managers in the future. Similarly, the number of male manager hires also exhibits state dependence.
    Keywords: female managers, gender discrimination, state dependence, dynamic panel data models
    JEL: C23 J16 J71 M12
    Date: 2016–09
  14. By: Martins, Pedro S. (Queen Mary, University of London)
    Abstract: Firms make labour demand decisions not only between permanent and non-permanent employees but also increasingly more between employees and contractors. Indeed, this third work format can be attractive, also when employment protection law is restrictive. This paper examines empirically this scarcely researched trade-off drawing on a recent reform in Portugal that cut the severance pay of new employee hires while leaving unchanged the regulations affecting contractors. Our analysis draws on difference-in-differences methods and original high-frequency firm-level panel data on both employees and contractors. We find that the reduction in severance pay had a large relative positive effect on the wage bills and worker counts of employees compared to contractors. This result, robust to a number of checks, highlights the role of labour regulations as an additional driver of more flexible labour formats.
    Keywords: employment law, segmentation, duality, future of work
    JEL: J23 J41 J63
    Date: 2016–09
  15. By: Anand, Paul (The Open University); Roope, Laurence (University of Oxford)
    Abstract: The paper demonstrates how Sen's (1985) alternative approach to welfare economics can be used to shed light on the wellbeing of very young children. More specifically, we estimate versions of the three key relations from his framework using data from the German Socio-Economic Panel (GSOEP) Survey. Our primary models provide evidence that skills are related to involvement in cognate activities with a parent, indicating a behavioural relationship between capabilities and activities which is not explicit in Sen's original set-up, but is key to the development and happiness of young children. A second set of models indicates that the daily activities of very young children are related to household income but that in some cases the association with parenting inputs is stronger. Thirdly, we report happiness regressions for the children which seem to suggest that shopping and reading are valued but that their distribution is limited in some cases – probably either by household income or parental education. Across the piece, we find that the number of siblings is negatively related to activity involvement with parents, as hypothesised by Becker, but positively related to everyday, motor and social skills. Combined with evidence from other studies, we conclude that the capability approach provides a useful framework for understanding the economics of wellbeing across the entire life course.
    Keywords: child development, well-being, happiness, daily activities, capabilities
    JEL: D60 I31 J13
    Date: 2016–09
  16. By: Scelles, Nicolas; Durand, Christophe; Bonnal, Liliane; Goyeau, Daniel; Andreff, Wladimir
    Abstract: Research question: This article investigates the determinants of attendance at French football Ligue 1 matches over the 2008-2011 period, with a focus on the effect of competitive intensity. This is measured by dummies that are functions of the point difference for the home team in relation to the different sporting prizes: title, qualification in UEFA (Union of European Football Associations) club competitions, relegation. The objective is to answer the following question: do all sporting prizes have a significant positive impact on attendance? Research methods: We specified and estimated a standard attendance equation including 35 explanatory variables of which 9 are related to sporting prizes. The estimations are based on a Tobit model with individual cut-off points to allow for truncation of attendance at the upper bound given by stadia capacity (i.e. sold-out games). 1135 observations are included. Results and findings: Our results show that all sporting prizes have a significant positive impact on attendance. In particular, there is a significant impact of prizes for potential qualification in the UEFA Europa League which are dependent on the outcome of domestic cups (known only in the last part of season). Implications: This research contributes to the optimisation of competition format and knowledge on competitive intensity and determinants of attendance. It provides an argument in favour of current sporting prizes for managers in the main European national football leagues.
    Keywords: competitive intensity, sporting prizes, attendance, European football, French Ligue 1
    JEL: L83
    Date: 2016–06
  17. By: van Dalen, Harry (Tilburg University, School of Economics and Management); Henkens, Kene (Tilburg University, School of Economics and Management)
    Abstract: Demotion – the reduction of an employee’s rank and salary – is often mentioned by managers and policy-makers as a means of increasing the employability of older workers in an ageing labour force. However, so far in practice demotion is rarely applied. This paper is the first empirical investigation of how managers perceive demotion as an instrument of human resource management. By means of a survey and a vignette study among managers in the Netherlands (N = 355), we examine whether managers consider demotion of poorly performing older workers a fair solution. Three contributions stand out. First, based on attribution theory we find support for the hypothesis that managers judge demotion to be fair in those cases where deterioration in task performance is caused by controllable factors (such as work motivation) and unfair when the causes are uncontrollable (such as age). Second, the expectations of managers about the organization-wide consequences of introducing demotion as a human resource policy play a significant role in considering demotion. Most managers perceive negative organizational externalities (e.g. decrease in loyalty and motivation of staff) to arise when introducing demotion and are reluctant to apply demotion in practice. And a third contribution: positive (negative) beliefs of managers about the hard skills – e.g. creativity, willingness to learn, flexibility – of older workers make demotion less (respectively more) likely.
    Date: 2016
  18. By: Christian Dustmann (University College London); Francesco Fasani (Queen Mary University London); Tommaso Frattini (University of Milan); Luigi Minale (Universidad Carlos III de Madrid); Uta SchÓ§nberg (University College London)
    Abstract: This paper provides a comprehensive analysis of refugee migration, with emphasis on the current refugee crisis. After first reviewing the institutional framework laid out by the Geneva Convention for Refugees, we demonstrate that, despite numerous attempts at developing a common European asylum policy, EU countries continue to differ widely in interpretation and implementation. We then describe key features of the current refugee crisis and document the overall magnitudes and types of refugee movements, illegal border crossings, and asylum applications to EU member states. We next turn to the economics of refugee migrations, contrasting economic and refugee migrants, discussing the trade-offs between long-term asylum and temporary protection, and highlighting the economic advantages of increasingly coordinating the different national asylum policies. Finally, we illustrate the economic integration of past refugee migrants to EU countries and conclude with several policy recommendations.
    Keywords: asylum policy, asylum seekers, refugee crisis
    JEL: F22 J15 J61
    Date: 2016–09–28
  19. By: Brosnan, Stephen
    Abstract: This paper analyses the socioeconomic determinants of property crime and violent crime in Ireland between 2003 and 2012. The aim of the study is to determine whether individuals respond to incentives when deciding to engage in crime and whether this decision is dependent on the type of crime an individual engages in. The results of the paper support the economic theory of crime which indicates that criminals respond to incentives, particularly for property crimes. Higher rates of crime detection are associated with a fall in crime rates across all property crimes. Higher detection rates have been found to reduce crime rates for property crimes while the impact on violent crimes is found to be insignificant. The socioeconomic determinants of crime tend to be more ambiguous.
    Keywords: crime, crime rates, deterrence, unemployment, GMM
    JEL: Z00
    Date: 2016–05–07
  20. By: Eszter Czibor; Mirjam van Praag; Randolph Sloof; Sander Onderstal
    Abstract: We conduct a framed field experiment in a Dutch university to compare student effort provision and exam performance under the two most prevalent evaluation practices: absolute (criterion-referenced) and relative (norm-referenced) grading. Based on the empirical stylized fact of gender differences in competitiveness we hypothesize that the rank-order tournament created by relative grading will increase male, but not female, performance. Contrary to our expectations, we find no impact of competitive grading on preparation behavior or exam scores among either gender. Our result may be attributed to the low value students in our sample attach to academic excellence.
    Date: 2016
  21. By: Alessandro Tampieri (University of Greenwich, United Kingdom); Majlinda Joxhe (CREA, Université du Luxembourg)
    Abstract: This paper examines how the decision to acquire higher education may affect job and marital satisfaction. We propose a theoretical model where individuals decide whether to attend university both for obtaining higher job satisfaction and for meeting potential partners. As the probability of marrying an educated partner increases (due to positive educational assortative matching), the average ability of university students falls, since more (low ability) students are willing to attend university. Two effects can be withdrawn: (i) average job satisfaction decreases, while (ii) marital satisfaction increases. We then test the model using the British Household Panel Survey for years 1996-2008, using a dynamic bivariate model. Consistent with the theoretical predictions, we find that higher education is correlated with lower average job satisfaction. In addition, the higher education of the partner increases marital satisfaction.
    Keywords: higher education, job satisfaction, marital satisfaction
    JEL: I21 J12
    Date: 2016
  22. By: Jacek Liwinski (University of Warsaw)
    Abstract: Tertiary education has been perceived in Poland as a key determinant of success in the labour market, as clearly shown by the increase of the net enrolment ratio in tertiary education from 9.8% in 1990 up to 40.9% in 2009. However, as tertiary education becomes more and more popular, it does not signal skills as well as before. It seems that employers may treat students' participation in international exchange programs as a new signaling tool since according to them international students’ skills – both cognitive and non-cognitive – are well above the average. On the other hand, students participating in exchange programs underline a positive impact of studying abroad on their personal development, i.e. on their general skills. Thus, from a theoretical point of view we may expect a positive correlation between studying abroad and wages, which follows from both signaling theory and human capital theory. On the average, 16% of European students report a positive impact of participation in Erasmus exchange program on their incomes, but interestingly, those from the CEE countries, including Polish students, report it much more often. The aim of this paper is to determine whether studying abroad for at least one semester has an impact on wages of higher education graduates in Poland. To answer this question, an extended Mincer wage equation was estimated using OLS on the basis of data from the nationwide tracer survey of Polish graduates conducted in 2007 (Graduate Tracer Study 2007). The hourly net wage rate in the first job after graduating from a higher education institution was the dependent variable in the wage equation. In order to reduce the selection bias, three groups of variables depicting students’ abilities and skills were included in the model. The results of the analysis show that Polish students who completed at least one semester of studies abroad, enjoy a wage premium of 35% in their first workplace after graduation. Moreover, the wage premium is higher in case of graduates holding Bachelor’s degree (48%) than those with Master’s degree (26%).
    Keywords: investment in human capital, studying abroad, international exchange programs, wage premium, wage equation
    JEL: J24 J31 I29
  23. By: Loken, Katrine Vellesen (University of Bergen); Lommerud, Kjell Erik (University of Bergen); Reiso, Katrine Holm (Norwegian School of Economics)
    Abstract: Using rich administrative data from Norway, we evaluate a 1998 work-encouraging reform targeted at single parents. We especially focus on educational performance for children of the involved single mothers. For all children of single mothers, the effect on school grades at completion of junior high school at age 16 is near zero and insignificant. If one concentrates on younger single mothers, those most likely to be affected by the reform, the grade point average of their children drops significantly by 7% of a standard deviation. We isolate groups of mothers who are affected by the reform either primarily by having less time at home, or by reduced income. The children of both groups of mothers experience drops in school grades, so both reduced parental time and reduced income matter. The effect of reduced parental time, though, seems to be the more important.
    Keywords: welfare reform, single mothers, child development, time and money investments
    JEL: I24 I38 J13
    Date: 2016–09

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