nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2016‒11‒27
28 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Labour outcomes and family background: Evidence from the EU during the recession By Silvia Avram; Olga Canto
  2. Channels of inequality of opportunity: The role of education and occupation in Europe By Juan C. Palomino; Gustavo A. Marrero; Juan G. Rodriguez
  3. Ecological Fiscal Transfers in Europe: Evidence-based design options of a transnational scheme By Droste, N.; Ring, I.; Santos, R.; Kettunen, M.
  4. Is it Better to Work When We Are Older? An Empirical Comparison Between France and Great Britain By Kadija Charni
  5. Employment effects of innovations over the business cycle: Firm-level evidence from European countries By Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
  6. Birthright citizenship and parental labor market integration By Sajons, Christoph
  7. Pay less, consume more? Estimating the price elasticity of demand for home care services of the disabled elderly By Quitterie Roquebert; Marianne Tenand
  8. Upcoding and heterogeneity in hospitals’ response: A Natural Experiment By Carine Milcent
  9. The Distribution of Household Savongs in Germany By Jochen Späth; Kai Daniel Schmid
  10. Automation and Job Polarization: On the Decline of Middling Occupations in Europe By Vahagn Jerbashian
  11. Career Breaks after Childbirth: The Impact of Family Leave Reforms in the Czech Republic By Alena Bicakova; Klara Kaliskova
  12. Field-of-Study Homogamy By Alena Bicakova; Stepan Jurajda
  13. The socioeconomic gradient in health: The role of intra-household resource allocation By Bárcena, Elena; Blázquez, Maite; Moro-Egido, Ana I.
  14. Innovation, creative destruction and structural change: Firm-level evidence from European Countries By Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
  15. The EU cohesion policy in context: does a bottom-up approach work in all regions? By Riccardo Crescenzi; Mara Giua
  16. Management Practices and Productivity in Germany By Broszeit, Sandra; Fritsch, Ursula; Görg, Holger; Laible, Marie-Christine
  17. Firm Size Distribution and Employment Fluctuations: Theory and Evidence By Görg, Holger; Henze, Philipp; Jienwatcharamongkhol, Viroj; Kopasker, Daniel; Molana, Hassan; Montagna, Catia; Sjöholm, Fredrik
  18. The Effect of Foreign Investors on Local Housing Markets: Evidence from the UK By Filipa Sa
  19. The Rise of the Free Movements: How Posting Shapes a Hybrid Single European Labour Market By Mussche, Ninke; Corluy, Vincent; Marx, Ive
  20. Heterogeneity and Persistence in Returns to Wealth By Fagereng, Andreas; Guiso, Luigi; Malacrino, Davide; Pistaferri, Luigi
  21. Skilled or educated? Educational reforms, human capital and earnings. By Lorenzo Cappellari; Paolo Castelnovo; Daniele Checchi; Marco Leonardi
  22. The Ant or the Grasshopper? The Long-term Consequences of Unilateral Divorce Laws on Savings of European Households By Angelini, Viola; Bertoni, Marco; Stella, Luca; Weiss, Christoph T.
  23. The Life-saving Effect of Hospital Proximity By Paola Bertoli; Veronica Grembi
  24. Childhood Obesity and Maternal Education in Ireland By David Madden
  25. Tuition Fees and Student Effort at University By P. Beneito; J.E. BoscaÌ; J. Ferri
  26. The shorter workweek and worker wellbeing: Evidence from Portugal and France By Anthony Lepinteur
  27. The Evolving Composition of Intra-EU Trade By Sandra M. Leitner; Manual Macias; Daniel Mirza; Olga Pindyuk; Iulia Siedschlag; Robert Stehrer; Roman Stöllinger; Zuzanna Studnicka
  28. Inclusive growth? The relationship between economic growth and poverty in British cities By Neil Lee; Paul Sissons

  1. By: Silvia Avram (ISER, University of Essex, U.K.); Olga Canto (Universidad de Alcalá and EQUALITAS, Spain)
    Abstract: A large body of literature in economics aims to understand the transmission mechanisms through which intergenerational economic and social advantage persists. Evidence shows that individuals born into low socioeconomic status families tend to experience worse labour outcomes when adults than otherwise similar peers. Recessions, however, may have a significant impact on how certain elements of this transmission process operate in some countries but not in others (e.g. due to diverse changes in returns to education or occupation and the role of family networks). Using EU-SILC data for 2005 and 2011 we compare the different role of family background on labour outcomes in five EU countries before and after the Great Recession using a multidimensional family background indicator, that avoids undesirable cohort effects. Our results suggest that family background affects employment prospects and job quality (wages and being on a temporary contract) beyond its effect on education but we do not find significant evidence that this effect is substantially moderated by the economic cycle.
    Keywords: family background, labour outcomes, returns to education, European Union, recession.
    JEL: I24 I26 J31 J62
    Date: 2016–10
  2. By: Juan C. Palomino (Universidad Complutense de Madrid, EQUALITAS and CEDESOG, Spain); Gustavo A. Marrero (Universidad de la Laguna, EQUALITAS and CEDESOG, Spain); Juan G. Rodriguez (Universidad Complutense de Madrid, EQUALITAS and CEDESOG, Spain)
    Abstract: This paper studies the contribution of individual education and occupation to individual opportunity in Europe. Although the differences in inequality of opportunity (IO) among European countries are significant, no systematic approach has yet been proposed to analyse the channels through which different individual circumstances turn into different income levels. Here, we propose a simple two-step method to quantify the contribution to IO of individual education and occupation across Europe in 2004 and 2010. We find that the level of education channels up to 30\% of total IO, with important differences across Europe but no clear patterns of change over time. Moreover, we observe a negative correlation between the share of IO channelled through education and the share of the population with tertiary education. Once education is taken into account, the occupational category of individuals explains less than 5\% of total IO in most European countries.
    Keywords: Inequality of opportunity, education, occupation, Europe.
    JEL: D63 I24 J24
    Date: 2016–10
  3. By: Droste, N.; Ring, I.; Santos, R.; Kettunen, M.
    Abstract: Ecological Fiscal Transfers (EFT) have recently gained attention as a promising instrument to provide incentives for nature conservation addressing public authorities. In parallel, both the EU and different European countries are exploring new mechanisms to mobilise funding to support biodiversity conservation. So far, existing EFT mechanisms in Europe have been implemented at the national level in Portugal and, to some extent, in France while in Brazil EFT schemes exist between the state and local level. In this paper we develop a proposal for an EFT design within the supranational context of the EU and assess its potential effects with evidence-based estimates. To provide such a knowledge base for a potential supranational EU-EFT implementation, we i) provide a theoretical underpinning, and an analytical synthesis of the current experiences both with the uptake of EFT and the implementation of EU's nature conservation legislation (i.e. the Habitats and Bird Directives), ii) propose a model for an EFT implementation within the existing EU funding framework for N2k financing which is built upon both quantitative and qualitative conservation indicators, iii) compute fiscal effects of our suggested model and analyse how the resulting payments would be (spatially) distributed among European regions, and iv) discuss the model outcomes in terms of ecological effectiveness, distributive effects, and cost-efficiency. Thereby we aim at stimulating a debate about how to better integrate ecological public functions within multi-level and supra-national governance structures.
    Keywords: Ecological Fiscal Transfers,European Union,Natura 2000 network,policy advice,spatial econometrics
    JEL: C31 H77 H87 P48 R12 Q57
    Date: 2016
  4. By: Kadija Charni (Aix-Marseille University (Aix-Marseille School of Economics), CNRS, & EHESS)
    Abstract: Classical literature uses the cross-sectional age-earnings profile to describe how the earnings evolve over the life cycle. Using a cohort analysis, I argue that this interpretation of age-earnings profile is not correct. I show that the cohort effects largely explain the decline observed at older ages. I illustrate this point by using a rotating panel data from France and a British longitudinal panel dataset for the period 1991 to 2007. I find no clear evidence that the earnings decline at older age, although the profiles are different between countries. Earnings for French workers rise linearly with age, with a further increase at the end of career, while it becomes flat for older workers in Great Britain. Overlapping cohorts provide an explanation of the observed decline of earnings for older workers in cross-sectional data. This suggests that cross-section age-earnings profile fails to represent the individual age-earnings profile.
    Keywords: age-earnings profile, older workers, cohort analysis
    JEL: J3 J14 J24
    Date: 2016–10
  5. By: Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
    Abstract: A growing literature investigates how firms' innovation input reacts to changes in the business cycle. However, so far there is no evidence whether there is cyclicality in the effects of innovation on firm performance as well. In this paper, we investigate the employment effects of innovations over the business cycle. Our analysis employs a large data set of manufacturing firms from 26 European countries over the period from 1998 to 2010. Using the structural model of Harrison et al. (2014), our empirical analysis reveals four important findings: First, the net effect of product innovation on employment growth is pro-cyclical. It turns out to be positive in all business cycle phases except for the recession. Second, product innovators are more resilient to recessions than non-product innovators. Even during recessions they are able to substitute demand losses from old products by demand gains of new products to a substantial degree. As a result their net employment losses are significantly lower in recessions than those of non-product innovators. Third, we only find resilience for SMEs but not for large firms. Fourth, process and organizational innovations displace labor primarily during upturn and downturn periods.
    Keywords: innovation,employment,business cycle,resilience,Europe
    JEL: O33 J23 C26 D2
    Date: 2016
  6. By: Sajons, Christoph
    Abstract: Do migrant parents change their labor market behavior when their children are born with the citizenship of the host country? In this study, I implement a difference-in-discontinuities approach to examine possible adjustments in employment and working hours following the introduction of birthright citizenship for immigrant children in Germany in 2000. In particular, I compare the changes in labor market outcomes between the parents of migrant children born before and after the enactment date with those of children of mixed couples (migrants and Germans) who were unaffected by the law change. The analysis of data from the Microcensus from 2001 to 2008 suggests that mothers and fathers react differently to having a German-citizen child: While fathers' labor force participation is unaffected, I find mothers to be more likely to stay at home. By contrast, there seems to be no effect on the number of hours in the job.
    Keywords: Birthright citizenship,Integration,Naturalization,Labor force participation
    JEL: J15 J22 J61
    Date: 2016
  7. By: Quitterie Roquebert (UP1 - Université Paris 1, Panthéon-Sorbonne - Université Paris I - Panthéon-Sorbonne - Pres Hesam); Marianne Tenand (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC))
    Abstract: Although the consumption of home care is increasing with population ageing, little is known about its price sensitivity. This paper estimates the price elasticity of the demand for home care of the disabled elderly, using the French home care subsidy program ("APA"). We use an original dataset collected from a French District Council with administrative records of APA out-of-pocket payments and home care consumption. Identification primarily relies on inter-individual variations in producer prices. We use the unequal spatial distribution of producers to address the potential price endogeneity arising from non-random selection into a producer. Our results point to a price elasticity around -0.4: a 10% increase in the out-of-pocket price is predicted to lower consumption by 4%, or 37 minutes per month for the median consumer. Copayment rates thus matter for allocative and dynamic efficiencies, while the generosity of home care subsidies also entails redistributive effects.
    Keywords: Long-term Care,Price elasticity,Public policies,Disabled elderly,Censored regression,Dépendance chez la personne âgée,Elasticité-prix,Politiques publiques,Régression censurée
    Date: 2016–08
  8. By: Carine Milcent (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications)
    Abstract: How has this administrative change affcted the healthcare providers behaviour? Using a unique longitudinal database with 145 million stays, I study the dependence of the severity classification associated with hospital stays on a financial incentive, as well as the resulting budgetary reallocations. The classification of diagnosis-related groups (DRGs) in France changed in 2009. The number of groups was multiplied by 4. Controlling for pathology indicators and hospital fixed e↵ects, I unambiguously demonstrate that a finer classification led to an “upcoding” of stays. Because of a fixed annual budget at the national level, these results directly imply that the upcoding led to a budget reallocation which increased the share of health spending that went to for-profit hospitals, at the expense of public nonresearch hospitals. This budget reallocation did not correspond to any change in the actual production of care.
    Keywords: Hospital stays,Diagnosis-related groups (DRGs),Upcoding,heterogeneity in responses
    Date: 2016–07
  9. 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: 2016–11
  10. By: Vahagn Jerbashian
    Abstract: Using data from 10 Western European countries, I provide evidence that the fall in 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 in 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 in IT prices. This is consistent with arguments that women hold a comparative advantage in communication and social skills, which are complementary to IT and in demand in high wage occupations.
    Keywords: job polarization; information technologies; gender; age; education-level
    JEL: J23 J24 O33
    Date: 2016–11
  11. By: Alena Bicakova; Klara Kaliskova
    Abstract: The Czech Republic is a country with a strong attachment of women to the labor market, but with one of the longest paid family leaves, which is often followed by a spell of unemployment. Using a difference–in–differences methodology, we study the impact of two reforms of the duration of the parental allowance on the labor market status of mothers 2–7 years after childbirth. While the 1995 reform prolonged the allowance from 3 to 4 years, the 2008 reform allowed some parents to shorten the duration of the allowance to only 2 or 3 years with an equivalent total monetary amount. The impact of the reforms on the length of women’s career breaks following childbirth is substantial.
    Keywords: family leave; female labor supply; unemployment; policy evaluation;
    JEL: J13 J18 J22
    Date: 2016–08
  12. By: Alena Bicakova; Stepan Jurajda
    Abstract: This paper reports evidence on the strong tendency of the college educated to match with partners who graduated in the same field of study-a dimension of assortative matching that has been overlooked thus far. We employ Labor Force Survey data covering most EU countries to measure the extent of field-of-study homogamy in prevailing married and cohabiting couples within several years of college graduation. We find that field-of-study homogamy increases almost immediately after graduation to reach very high levels, especially for spouses working in the same industry, and that it varies dramatically across countries. Graduates in Social Sciences display a particularly strong tendency towards homogamy and also have the highest matching theory-implied match gains from homogamous matches.
    Keywords: field-of-study homogamy; college graduates; marriage and cohabitation;
    JEL: I23 J13 J16
    Date: 2016–03
  13. By: Bárcena, Elena (Departamento de Estadística y Econometría, Universidad de Málaga.); Blázquez, Maite (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Moro-Egido, Ana I. (Departamento de Teoría e Historia Económica, Universidad de Granada.)
    Abstract: This paper aims to analyse the impact of different household financial regimes on the health status of males and females in a number of European countries. Using the EU-SILC 2010 on intra-household sharing of resources, we find that each member of the couple is worse off if his/her partner has most decision-making responsibilities. Additionally, the presence of children in the household plays a role in the effect that household financial regimens exert on individual self-assessed health, especially among females. We conclude that family arrangements regarding resource allocation and decision-making have important consequences and should be given some attention in the task of identifying individuals predisposed to health problems.
    Keywords: self-assessed health, intra-household allocation, decision-making process, financial regime
    JEL: C21 D13 I14
    Date: 2016–11
  14. By: Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina
    Abstract: The shift of employment from lower to higher productive firms is an important driver for structural change and industry dynamics. We investigate this reallocation in terms of employment gains and losses from innovation. New employment created by product innovation may be offset by employment losses in related products, known as 'cannibalisation' or 'business stealing' effects in the literature, by employment losses from process and organisational innovation and by general productivity increases. The paper investigates this effect empirically with a large dataset from the European Community Innovation Survey (CIS). We find that employment gains and losses increase with technology intensity of the sector. High-technology manufacturing shows the strongest employment gains and losses from innovation, followed by knowledge-intensive services, low-technology manufacturing and less knowledge-intensive services. The net contribution of innovation to employment growth is mostly positive, an exception being manufacturing industries in recession periods.
    Keywords: innovation,employment,reallocation,technology intensity,compensation effect,displacement effect,cannibalisation effect
    JEL: O33 J23 C26 D2
    Date: 2016
  15. By: Riccardo Crescenzi; Mara Giua
    Abstract: This paper looks at the European Union as a laboratory to study how ‘spatially-targeted’ policies (i.e. the EU Cohesion and Rural Development Policies) interact with sectoral ‘spatially-blind’ policies (i.e. the Common Agricultural Policy - CAP), jointly shaping regional growth dynamics. The analysis of the drivers of regional growth shows that the EU Regional Policy has a positive influence on economic growth in all regions. However, its impact is stronger in the most socio-economically advanced areas and is maximised when its expenditure is complemented by Rural Development and CAP funds. The top-down funding of the CAP seems to be able to concentrate some benefits in the most deprived areas of the Union. This suggests that bottom-up policies are not always the best approach to territorial cohesion. Top-down policies may – in some cases – be effective in order to channel resources to the most socio-economically deprived areas. Territorial cohesion requires the flexible integration and coordination of both bottom-up and top-down approaches.
    Keywords: regional policy; European Union; regional growth; bottom-up policies; rural development; common agricultural policy
    JEL: O18 R11 R58
    Date: 2016–10–26
  16. By: Broszeit, Sandra (Institute for Employment Research (IAB), Nuremberg); Fritsch, Ursula (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Laible, Marie-Christine (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Based on a novel dataset, the "German Management and Organizational Practices" (GMOP) Survey, we calculate establishment specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small firms having lower scores than large firms on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with firm size. Comparison to a similar survey in the US indicates that the average management score is lower in Germany than in the US. Overall, our results point towards lower management quality being at least in part to blame for the differences in aggregate productivity between Germany and the US.
    Keywords: management practices, firm performance, labor productivity, GMOP, MOPS
    JEL: D24 L2 M2
    Date: 2016–11
  17. By: Görg, Holger (Kiel Institute for the World Economy); Henze, Philipp (University of Kiel); Jienwatcharamongkhol, Viroj (University of Nottingham); Kopasker, Daniel (University of Aberdeen); Molana, Hassan (University of Dundee); Montagna, Catia (University of Aberdeen); Sjöholm, Fredrik (Lund University)
    Abstract: This paper studies the effect of the firm-size distribution on the relationship between employment and output. We construct a theoretical model, which predicts that changes in demand for industry output have larger effects on employment in industries characterised by a distribution that is more skewed towards smaller firms. Industry-specific shape parameters of the firm size distributions are estimated using firm-level data from Germany, Sweden and the UK, and used to augment a relationship between industry-level employment and output. Our empirical results align with the predictions of the theory and confirm that the size distribution of firms is an important determinant of the relationship between changes in output and employment.
    Keywords: firm distribution, firm size, employment, fluctuations
    JEL: E20 E23 L20
    Date: 2016–11
  18. By: Filipa Sa (School of Management and Business King's College; Centre for Macroeconomics (CFM))
    Abstract: I use newly-released administrative data on properties owned by overseas companies to study the effect of foreign investment on the housing market in England and Wales. To estimate the causal effect, I construct an instrument for foreign investment based on economic shocks abroad. Foreign investment is found to have a positive effect on house price growth. This effect is present at different percentiles of the distribution of house prices and is stronger in local authorities where housing supply is less elastic. Foreign investment is also found to reduce the rate of home ownership. There is no evidence of an effect on the housing stock or the share of vacant homes.
    Keywords: Foreign investors, House prices
    JEL: R21 F21
    Date: 2016–11
  19. By: Mussche, Ninke (University of Antwerp); Corluy, Vincent (University of Antwerp); Marx, Ive (University of Antwerp)
    Abstract: Intra‐EU mobility has been the subject of debate from its very inception. Some scholars argue that intra‐EU labour migration improves the allocation of human capital in the EU and contend that the level of permanent‐type labour mobility is still too low to talk of a single European labour market. Others point to the social downside of both free labour mobility and free service mobility, such as the increased precariousness of industrial relations, and problems of wage dumping. Since the downsides are acute and demand attention, less attention has been given to the origins, destinations and nature of the posting flows more generally. One of the reasons for this is the fact that data on posting are still scarce. This article aims to fill this gap by exploring unique posting data for Belgium. Based on these data we argue that while the free movement of labour and a single European labour market has been a policy goal for decades, it is the free movement of services that is well on its way to shape a hybrid single European labour market. Permanent type mobility is greatly complemented with high levels of short term service mobility. Service mobility/posting is as much a phenomenon of intra‐EU15 mobility, than it is of EU12 mobility. Moreover, posting is set to remain more popular than classical free movement of labour among EU12 citizens. Service workers circumvent the most important linguistic, cultural, institutional and social hurdles that classical mobile workers face in a diverse EU. The free movement of services is developing to such an extent that it complements permanent type free labour mobility in shaping a single but typically European labour market that is driven by diversity and circular mobility.
    Keywords: posting, migration, labor mobility
    JEL: J61
    Date: 2016–11
  20. By: Fagereng, Andreas; Guiso, Luigi; Malacrino, Davide; Pistaferri, Luigi
    Abstract: We provide a systematic analysis of the properties of individual returns to wealth using twenty years of population data from Norway's administrative tax records. We document a number of novel results. First, in a given cross-section, individuals earn markedly different returns on their assets, with a difference of 500 basis points between the 10th and the 90th percentile. Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth. Fourth, returns have an individual permanent component that accounts for 60% of the explained variation. Fifth, for wealth below the 95th percentile, the individual permanent component accounts for the bulk of the correlation between returns and wealth; the correlation at the top reflects both compensation for risk and the correlation of wealth with the individual permanent component. Finally, the permanent component of the return to wealth is also (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
    Keywords: Heterogeneity; intergenerational mobility; returns to wealth; Wealth Inequality
    JEL: D31 D91 E21 E24 G11
    Date: 2016–11
  21. By: Lorenzo Cappellari (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Paolo Castelnovo; Daniele Checchi; Marco Leonardi
    Abstract: We use OECD-PIAAC data to estimate the earnings effects of both years of education and of numerical skills. Our identification strategy exploits differential exposure to educational reforms across birth cohorts and countries. We find that education has the strongest earnings effect. A one standard deviation increase in years of education raises earnings by almost 22 percentage points (corresponding to a return to education above 7 percentage points), which compares with a lower percentage points return to an equivalent increase in numerical skills. Our results suggest that the same set of unobservables drives the accumulation of both formal years of education and numeracy skills. OLS estimates underestimate returns to human capital, consistently with the idea that educational reforms favour the human capital acquisition of abler children from disadvantaged parental backgrounds. When we consider numerical skills alone education reforms cannot identify any significant effect of skills on wages, however, when we jointly consider schooling and skills as endogenous factors in a recursive structure we find a significant role for skills in determining wages.
    Keywords: Returns to human capital, cognitive skills, educational reforms, PIAAC.
    JEL: I21 I24 I26 J24 J31
    Date: 2016–11
  22. By: Angelini, Viola (University of Groningen); Bertoni, Marco (University of Padova); Stella, Luca (University of Wuppertal); Weiss, Christoph T. (European Investment Bank)
    Abstract: By allowing people to obtain divorce without the consent of their spouse, Unilateral Divorce Laws (UDLs) increase the risk of divorce. Using the staggered introduction of UDLs across European countries, we show that households exposed to UDLs for longer time accumulate more savings. This effect holds for both financial and total wealth and is stronger at higher quantiles of the wealth distribution. Longer exposure to UDLs also increases female labour market participation and financial literacy, contributing to uncover the mechanisms through which the risk of divorce may affect savings. Our results are consistent with a precautionary motive for saving.
    Keywords: household savings, financial literacy, divorce
    JEL: G11 J12 J22 J32
    Date: 2016–11
  23. By: Paola Bertoli; Veronica Grembi
    Abstract: We provide a new assessment of the effect of hospital proximity in an emergency situation exploiting the exogenous variation in the proximity to cities that are legally allowed to have a hospital based on their population size. Based on Italian municipal data, our instrumental variable results show that a one-standard-deviation increase in the distance to the nearest hospital (5 km) raises the fatality rate by 13.84% at the sample average. This figure is equal to 0.92 additional deaths per 100 accidents. We show that both OLS and DD estimates, generally used in the literature, provide a downward-biased measure of the true effect of hospital proximity because they do not fully solve spatial sorting problems. Proximity is more important when the level of road safety is low, when emergency services are less responsive, and when the nearest hospital has relatively low quality standards.
    Keywords: access to care; hospital proximity; road-traffic accidents; instrumental variables; difference in differences;
    JEL: C26 I10 R41
    Date: 2016–05
  24. By: David Madden
    Abstract: This paper analyses the socioeconomic gradient of chilidhood obesity in Ireland using the Growing Up in Ireland data with three innovations compared to previous work in the area. A different measure of socioeconomic status, maternal education, is employed. In addition, the depth and severity of obesity are examined as well as the incidence. Finally, the use of two waves of longitudinal data permits the analysis of the persistence of obesity. Results show that overall childhood obesity stabilised between the two waves. However the socioeconomic gradient becomes steeper in wave 2 for girls and in particular when depth, severity and persistence of obesity are accounted for. Girls whose mothers fail to complete secondary education are shown to be at a particular disadvantage.
    Keywords: Obesity; Socioeconomic gradient; Persistence
    JEL: I14 I31 J13
    Date: 2016–11
  25. By: P. Beneito; J.E. BoscaÌ; J. Ferri
    Abstract: This paper presents theoretical and empirical evidence that an increase in tuition fees may boost university students’ academic effort. We examine the tuition fee rise introduced in 2012 by Spanish universities, where students reg- ister and pay for their chosen modules and fees increase each time students retake a module until they pass it. Data refer to students of economics, busi- ness and medicine at the University of Valencia during 2010-2014. The fact that some students pay fees in full while others are exempt from payment provides an identifying source of variation that we exploit using a flexible difference-in-differences methodology.
    Date: 2016–11
  26. By: Anthony Lepinteur (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Mandatory reductions in the workweek can be used by governments to attempt to reduce unemployment, and are usually assumed to improve the well-being of workers. Nevertheless, the net impact of shorter workweeks on worker welfare is ambiguous ex ante and little empirical effort has been devoted to identify how worker satisfaction changes with mandatory reductions in working time. Using data from the European Community Household Panel, this paper evaluates the impact of the exogenous reductions in weekly working hours induced by reforms implemented in Portugal and France. Difference-in-difference estimation results suggest that reduced working hours generated significant and robust increases in job and leisure satisfaction of the workers affected in both countries, with the rise in the former mainly being explained by greater satisfaction with working hours and working conditions.
    Keywords: Working-hours reductions,job satisfaction
    Date: 2016–10
  27. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Manual Macias; Daniel Mirza; Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Iulia Siedschlag; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw); Zuzanna Studnicka
    Abstract: Abstract Global trade in goods and services was severely hit by the economic crisis in 2008, which initiated a pronounced but short-lived trade collapse. Until 2011 trade flows recovered relatively quickly, but since then global trade in goods has been rather anaemic. This development is partly the result of the low dynamics of EU-related trade which accounts for a large share of global trade flows. Regarding intra-EU trade a strong increase in overall bilateral trade intensities is observed. The process of EU integration before the crisis and differentiated growth patterns of goods and services exports implied that exporting activities became slightly less concentrated across EU Member States. However, specialisation dynamics implied an increasing geographic clustering and specialisation of goods and services exports across Europe. These changes in the geographical patterns of intra-EU trade activities were mostly driven by changes in the patterns of trade in the medium-quality segment which can be interpreted as a ‘climbing up’ phenomenon of less advanced countries. Results from a gravity framework suggest a structural break of these trends after the crisis. Another aspect of the increasing trade intensity is the role and magnitudes of intra-firm trade and potential determinants thereof. However, research on this is hampered by a severe lack of data and only a few insights can be gained, mostly for extra-EU trade. Results based on foreign affiliates’ trade statistics (FATS) data indicate that intra-firm trade flows were responsible for more than half of total trade between the EU and the US in 2012. Results also suggest that intra-firm trade has been more resilient to the trade crisis despite the more difficult global environment for foreign direct investment and export activities. Based on a gravity approach, overall EU intra-firm trade is estimated to be lower, though these results need to be interpreted with caution. In a case study based on Irish firm-level data it is shown that intra-firm trade accounts for 30% of exports and 25% of imports.
    Keywords: EU trade, trade slowdown, trade specialisation and concentration, intra-firm trade
    JEL: F14 F15
    Date: 2016–11
  28. By: Neil Lee; Paul Sissons
    Abstract: There is growing concern in many developed economies that the benefits of economic growth are not shared equitably. This is particularly the case in the UK, where economic growth has been geographically uneven and often biased towards already affluent cities. Yet there is relatively little evidence on the relationship between growth and poverty in the UK. This paper addresses this gap with an analysis of the links between economic growth and poverty in British cities between 2000 – 2008. We find little evidence that output growth reduced poverty. While growth was associated with wage increases at the top of the distribution, it was not associated with wage growth below the median. And there was no relationship between economic growth and the low skilled employment rate. These results suggest that growth in this period was far from inclusive.
    Keywords: Growth; poverty; cities; social exclusion; great Britain
    JEL: N0
    Date: 2016–10–26

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