nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒01‒01
thirty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. EU Blue Card: A promising tool among labour migration policies? A comparative analysis of selected countries By Bellini, Simona
  2. Helping with the Kids? How Family-Friendly Workplaces Affect Parental Well-Being and Behavior By Verena Lauber; Johanna Storck
  3. The Migrant Health Gap and the Role of Labour Market Status: Evidence from Switzerland By Sara Rellstab; Marco Pecoraro; Alberto Holly; Philippe Wanner; Karine Renard
  4. European Identity and the Learning Union By Ritzen, Jo; Haas, Jasmina; Neeleman, Annemarie; Teixeira, Pedro N.
  5. The German statutory pension scheme: Balance sheet, cross-sectional internal rates of return and implicit tax rates By Metzger, Christoph
  6. Ageing by feet? Regional migration, neighbourhood choice and local demographic change in German cities By Neumann, Uwe
  7. Financialisation and work: New transdisciplinary insights from micro-level survey data By Betzelt, Sigrid; Santos, Ana C.; Lopes, Cláudia A.
  8. Individual and structural influences on the entrepreneurial activities of academics By Bijedić, Teita; Maaß, Frank; Schröder, Christian; Werner, Arndt
  9. Innovation, Creative Destruction and Structural Change: Firm-level Evidence from European Countries By Bernhard Dachs; Martin Hud; Christian Köhler; Bettina Peters
  10. Recruiting for Small Business Growth: Micro-level Evidence By Gidehag, Anton; Lodefalk, Magnus
  11. The growth and human capital structure of new firms over the business cycle By Brixy, Udo; Murmann, Martin
  12. Should there be a more active role of family care assistants in long-term care provision? – survey evidence on the view of German citizens By Ivo Bischoff; Nataliya Kusa
  13. A nonparametric analysis of the healthy immigrant effect By Antonio Fidalgo; Alberto Holly; Marco Pecoraro; Philippe Wanner
  14. How inheritances shape wealth distributions: An international comparison By Bönke, Timm; von Werder, Marten; Westermeier, Christian
  15. Knowledge Creates Markets: The Influence of Entrepreneurial Support and Patent Rights on Academic Entrepreneurship By Dirk Czarnitzk; Thorsten Doherr; Paula Schliessler; Katrin Hussinger; Andrew Toole
  16. The role of an EMU unemployment insurance scheme on income protection in case of unemployment By Jara Tamayo, Holguer Xavier; Sutherland, Holly; Tumino, Alberto
  17. Why Has Income Inequality in Germany Increased from 2002 to 2011? A Behavioral Microsimulation Decomposition By Robin Jessen
  18. Putting Subjective Well-being to Use for Ex-ante Policy Evaluation By Jara Tamayo, Holguer Xavier; Schokkaert, Erik
  19. Citizens‘ support for inter-municipal cooperation: evidence from a survey in the German state of Hesse By Christian Bergholz; Ivo Bischoff
  20. How do Entrepreneurial Bosses influence their Employees' Future Entrepreneurship Choices? By Vera Rocha; Mirjam van Praag
  21. The Impact of the 2012 Spanish Labour Market Reform on Unemployment Inflows and Outflows: a Regression Discontinuity Analysis using Duration Models By J. Ignacio GarciÌ a PeÌ rez; Josep Mestres DomeÌ€nech
  22. Assessing selection patterns and wage differential of high-skilled migrants. Evidence from the AlmaLaurea dataset on Italian graduates working abroad By Gilberto Antonelli; Sara Binassi; Giovanni Guidetti; Giulio Pedrini
  23. A Cost-Benefit Analysis of Universal Preschool Education: Evidence from a Spanish Reform By T.M. van Huizen; E. Dumhs; J. Plantenga
  24. On the Relationship between Lifestyle and Happiness in the UK By Adelina Gschwandtner; Sarah L. Jewell; Uma Kambhampati
  25. EU Wholesale Trade: Analysis of the Sector and Value Chains By Ella Broos; Bernhard Dachs; Martina Dünser; Doris Hanzl-Weiss; Kristof Mertens; Doris Schartinger; Robert Stehrer; Valentijn Vanoeteren
  26. An Evaluation of German Active Labor Market Policies and its Entrepreneurship Promotion By Moritz Zöllner; Michael Fritsch; Michael Wyrwich
  27. Digital Reading in PISA 2012 and ICT Uses: How do VET and General Education Students Perform? By Patricia Dinis Mota da Costa; Luisa De Sousa Lobo Borges de Araujo
  28. Higher education, career opportunities, and intergenerational inequality By Claire Crawford; Paul Gregg; Lindsey Macmillan; Anna Vignoles; Gill Wyness
  29. Do You Dare? The Effect of Economic Conditions on Entrepreneurship among College Graduates By Hendrik Beiler
  30. Tracking and the Intergenerational Transmission of Education: Evidence from a Natural Experiment By Simon Lange; Marten von Werder
  31. Economy 4.0 and its labour market and economic impacts : Scenario calculations in line with the BIBB-IAB qualification and occupational field projections By Wolter, Marc Ingo; Mönnig, Anke; Hummel, Markus; Weber, Enzo; Zika, Gerd; Helmrich, Robert; Maier, Tobias; Neuber-Pohl, Caroline

  1. By: Bellini, Simona
    Abstract: In 2007 the Commission proposed a Directive aimed exclusively at third-country nationals moving to Europe for the purpose of highly qualified employment that would set up a harmonized entry procedure, lay down common residence conditions and facilitate mobility through Europe. The Directive, named Blue Card, was meant to make Europe more attractive for highly qualified migrants by offering a fast-track entry procedure and social benefits in the EU. The Commission, despite the reluctance of Member States, managed to push through the Directive, which was finally approved in 2009. In the first three years since the Blue Card first entered into force in the majority of Member States in 2012, no more than 30,352 cards have been issued, of which about 26,200 by a single Member State. Why? Through a detailed analysis of the conditions set by the Directive and their comparison with the ones posed by the national labour migration schemes - in particular in Germany, Sweden and the Netherlands -, this paper aims to demonstrate that the causes of failure are not to search in the Blue Card instrument per se, but rather in the ways this has been implemented in the single Member States.
    Keywords: European Blue Card,labour migration,third-country migrants,labour shortage,high-skilled migrants,European economic competitiveness,free movement of labour,harmonization,knowledge economy,reallocation of workers,single market,sovereignty,shared competences
    JEL: K37 J20 J23 J31 J61 J88
    Date: 2016
  2. By: Verena Lauber; Johanna Storck
    Abstract: Despite political efforts, balancing work and family life is still challenging. This paper provides novel evidence on the effect of firm level interventions that seek to reduce the work-life conflict. The focus is on how a specific workplace policy, namely childcare support, affects the well-being, working time, and caring behavior of mothers with young children. We exploit the fact that since the mid 2000s an increasing number of employers have become proactive and implemented more family-friendly workplaces. These changes over time allow us to identify causal effects of childcare support using a difference-in-differences approach combined with matching. Based on a large panel dataset on families with children in Germany (FiD), we find evidence pointing to welfare enhancing effects of childcare support, as it strongly increases both childcare satisfaction and job satisfaction. In particular mothers who worked limited hours before the introduction, possibly due to constraints, increase their working time and use formal care more intensively. Satisfaction levels are also more strongly affected if mothers are career-orientated. In comparison, flexible work schedules, another family-friendly policy, only affect job satisfaction. Paternal well-being and behavior is not affected by the workplace policy.
    Keywords: Family-friendly workplace policies, well-being, work-life balance, difference-in-differences, matching
    JEL: I31 J13 J22 J28
    Date: 2016
  3. By: Sara Rellstab (TI, Erasmus University Rotterdam); Marco Pecoraro (SFM, University of Neuchatel); Alberto Holly (IEMS, University of Lausanne); Philippe Wanner (I-Demo, University of Geneva); Karine Renard (SFM, University of Neuchatel)
    Abstract: With more than a fifth of the population being foreign citizens, Switzerland offers an ideal case to study the migrant health gap and the role of labour market status on the migrants' health. This paper examines the potential health gaps between Swiss nationals and different migrant groups (from the permanent foreign resident population), and how alternative types of labour market status affect health among each selected groups. Using a sample of working-age males from the Swiss Labour Force Survey for the years 2003-2009, we estimate a model with a dichotomic dependent variable and test the potential endogeneity of labour market status. Our empirical strategy avoids inconsistencies incurred by unobserved heterogeneity and simultaneity of the choice of labour market status. We observe a health gap in terms of chronic illness between Swiss nationals and all considered migrant groups. Compared to the Swiss, nationals from former Yugoslavia and Turkey have a worse health status whereas Germans have a lower prevalence of chronic illness. Our findings show a negative influence of part-time work, unemployment, and inactivity on health for all groups under study. Labour market status and standard individual characteristics (human capital, demographic attributes, etc.) explain the health disadvantage for migrants from Italy and Portugal/Spain entirely, whereas it does not for migrants from Turkey and former Yugoslavia. We provide insights on the unconditional health gap between migrants and Swiss nationals and estimate the causal effect of labour market status on chronic illness for different groups of the permanent resident population in Switzerland. The results show a negative correlation between non-employment (i.e. unemployment and inactivity) and health but this effect is reduced when taking into account the endogeneity of this variable. The same conclusion applies when labour market status is subdivided into three types: part-time work, unemployment, and inactivity.
    Keywords: Migration, Health, Labour Market, Latent Variable Models, Simultaneous Equation, Panel Data Analysis
    Date: 2016–12
  4. By: Ritzen, Jo (IZA and Maastricht University); Haas, Jasmina (Maastricht University); Neeleman, Annemarie (Maastricht University); Teixeira, Pedro N. (University of Porto)
    Abstract: Europe and the European Union are close in values, in culture and in attitudes. Yet the EU has made little attempt to jointly reinforce the emotional attachment to Europe. Member States stress their differences in national identity through education and language. When the EU made the borderlines between European countries less visible, the language boundary remained, standing in the way of easy communication between citizens of different EU countries. We advance the "Learning Union" as a necessary complement to the EU. The Learning Union has three components: contributing to a sense of European belonging, the "communication EU" as well as the "competency EU". Belonging should be reinforced by aiming the content of education at underlining the common heritage, history and the common future. In communication every EU citizen should learn in school to be competent in one common European language (English is the likely candidate), next to one's own language. Competency is essential for competitiveness. Competency is bred by learning in settings decided by pedagogics, not by (the whims of) well-meaning politicians. The Learning Union is at "arm's length" distance from Governments with autonomy and funding designed to incentivize learning goals as well as equality of opportunity. Universities are a special case with regard to increasing competitiveness, but also for their impact on identity. If anything has contributed to a European identity to this day, it has been the exchange of students in full or part time studies in the EU. This brought about far more than the understanding of subjects and the development of competences: it also has enriched inter-European understanding. As next steps, firstly European student mobility should be increased by more transparency on the value added in learning in Higher Education in different EU countries. Secondly, basic education could increasingly be a source of intra-European social cohesion, equality of opportunity and of economic growth if countries would follow the principles of effective schools, of school autonomy and allocate sufficient funding. This would be convergence in structure, not necessarily in content/curriculum.
    Keywords: european identity, european citizenship, student mobility, higher education, citizen education, language
    JEL: D7 H7 I2 O4
    Date: 2016–12
  5. By: Metzger, Christoph
    Abstract: We present a framework for accounting of the German statutory pension scheme and estimate a balance sheet for the years 2005 until 2012. Extending and applying the methodology proposed by Settergren and Mikula (2005), we estimate the cross-sectional internal rates of return of the German pension scheme over this period. We are able to show that the cross-sectional internal rate of return is mainly financed by increasing contributions and by changing the liabilities not backed by assets. Additionally, our results reveal that from an expenditure perspective, the major part of the internal rate of return is resulting from changing longevity rather than indexation of pension entitlements. Finally, we prove that from a cross-sectional perspective the implicit tax of a pension scheme can mainly be interpreted as an “implicit wealth tax” on pension wealth and subsequently present empirical estimates for these cross-sectional implicit tax rates.
    Keywords: accounting of pension schemes,balance sheet,internal rate of return,implicit tax,fiscal sustainability
    JEL: E01 H55 H83 H87
    Date: 2016
  6. By: Neumann, Uwe
    Abstract: In countries with an ageing population, regional migration may accentuate local progress in demographic change. This paper investigates whether and to what extent diversity in ageing among urban neighbourhoods in Germany was reinforced by regional migration during the past two decades. The old-industrialised Ruhr in North Rhine- Westphalia serves as a case study representing an advanced regional stage in ageing. The analysis proceeds in two steps. First, variation in the pace of neighbourhood-level demographic change over the period 1998-2008 is examined using KOSTAT, an annual time series compiled by municipal statistical offices. Second, a discrete choice model of household location preferences is applied to study the underlying demographic sorting process. The second step draws on microdata from a representative population survey carried out in 2010. During the 1990s and 2000s, in contrast to earlier decades, age differentials in location preferences became more profound and city centres became more popular as residential location. Rapid "ageing by feet" now affects neighbourhoods, where the influx is low, particularly low-density housing areas of the outer urban zone. Neighbourhood-level demographic sorting proceeds at a somewhat slower pace in the Ruhr than in the more prosperous cities of the nearby Rhineland (Bonn, Cologne and Dusseldorf). In the process of regional adaptation to demographic change, greater diversity in the age structure of neighbourhood populations may turn out to be an advantage in the long-run competition over mobile households.
    Keywords: ageing,segregation,neighbourhood sorting,discrete choice
    JEL: C21 C25 O18 R23
    Date: 2016
  7. By: Betzelt, Sigrid; Santos, Ana C.; Lopes, Cláudia A.
    Abstract: The paper examines the interdependencies of financialisation and working conditions by exploring the comparative findings of a micro-level survey on household income, household debt, and working conditions which was conducted in five European countries representing different institutional and socio-economic contexts (Sweden, Germany, the UK, Portugal, Poland). Referring to different strands of debate in economics and sociology in a transdisciplinary way, four hypotheses on the impact of financialisation on the worker-consumer nexus are selected and tested: 1) the social inequality thesis, 2) the debt-income compensation thesis, 3) the cultural transformation thesis, and 4) the disciplinary thesis. The findings reveal that, notwithstanding differences across the five countries, living conditions have worsened after the Global Financial Crisis for many households, with declining household incomes, higher household indebtedness to cover living expenses, and deteriorated working conditions. Surprisingly, the finance-work nexus has been more detrimental to low-income and non-standard workers in Germany and Poland. Hence, it is concluded that the impact of financialisation on well-being cannot simply be read from the size of national financial systems or the extent of household engagement with finance, nor from mainstream welfare regime typologies. Instead, to better understand these impacts we need to consider the more indirect influence of financialisation on labour market polarization and income distribution.
    Keywords: EU,financialisation,inequality,household debt,working conditions,labour market segmentation
    JEL: D14 G01 I31 J50 J81 P16
    Date: 2016
  8. By: Bijedić, Teita; Maaß, Frank; Schröder, Christian; Werner, Arndt
    Abstract: In this paper we study how and to what extend (i) individual working conditions (e.g. peers, working atmosphere, work contract incentives, wage satisfaction), (ii) institutions (e.g. technology transfer offices, patent exploitation agencies, chair in entrepreneurship or awards for academic entrepreneurship) and (iii) network relationships simultaneously affect the likelihood of engaging in entrepreneurial activities (nascent entrepreneurship) in academia. Using unique data collected from 5.992 academic scientists in 73 German Universities Germany, we find that entrepreneurial peers and performance based monetary incentives have a strong positive effect on the entrepreneurial intentions. We show that, although there is a comprehensive support infrastructure for start-ups in German academic institutions, these services are little known amongst their staff. Finally we find that market related networks show a high correspondence with high entrepreneurial intentions, whereas networks within the own university do not have any impact. Several mentioned aspects were analyzed before, but mostly on a limited sample (e.g. only stem field), isolated personal variables (e.g. gender) or isolated environmental aspects (e.g. peer groups). Our study provides a holistic view on the impact of several university-specific structural factors on entrepreneurial intentions among academic scientists in Germany by simultaneously focusing on personal and occupational characteristics for different faculties. @Wissenschaftliches Hochschulpersonal generiert im Rahmen seiner Forschungstätigkeit Innovationen und verfügt über aktuelles Wissen, das als Basis für eine innovative Unternehmensgründung betrachtet werden kann. Bisher fehlte jedoch eine umfassende empirische Analyse, inwieweit die bestehenden institutionellen Rahmenbedingungen die Gründungsneigung von Wissenschaftlern beeinflussen. Hier setzt die vorliegende Studie an, indem sie die Wirkung personenbezogener und institutioneller Einflussfaktoren (wie Arbeitsbedingungen, Netzwerkbeziehungen und gründungsfördernde Hochschulangebote) untersucht und potenzielle institutionelle Handlungsfelder identifiziert. Die Befragung von 5.992 Wissenschaftlern an 73 deutschen Hochschulen hat gezeigt, dass insbesondere monetäre Anreize im Forschungskontext aber auch Rollenvorbilder im kollegialen Umfeld, Netzwerke - hier insbesondere außerhalb der eigenen Institution - und spezifische Infrastrukturangebote gründungsfördernd wirken.
    Keywords: Academic Entrepreneurship,Nascent Entrepreneurship,German Universities,Institutions,Working Conditions,Knowledge Transfer
    JEL: O32 M13 J24
    Date: 2016
  9. By: Bernhard Dachs (Austrian Institute of Technology, Vienna); Martin Hud (ZEW Centre for European Economic Research, Mannheim); Christian Köhler (ZEW Centre for European Economic Research, Mannheim); Bettina Peters (ZEW, Mannheim, and CREA, University of Luxembourg)
    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
  10. By: Gidehag, Anton (Örebro University and HUI Research); Lodefalk, Magnus (The Ratio Institute)
    Abstract: We examine the link between new employees in leading positions and subsequent productivity in small- and medium-sized (SME) enterprises. Managers and professionals are likely to possess important tacit knowledge. They are also in a position to influence the employing firm. Exploiting rich and comprehensive panel data for Sweden in the 2001-2010 period and employing semi-parametric and quasi-experimental estimation techniques, we find that newly recruited leading personnel have a positive and statistically significant impact on the productivity of the hiring SME. Interestingly, our results suggest that professionals with experience from international firms and enterprise groups contribute the most to total factor productivity. Overall, the findings suggest the importance of mobility of leading personnel for productivity-enhancing knowledge spillovers to SMEs.
    Keywords: recruitment; knowledge spillovers; firm growth; productivity; SME
    JEL: D22 D24 D83 J24 J62
    Date: 2016–12–15
  11. By: Brixy, Udo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Murmann, Martin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Recent research suggests that employment in young firms is more negatively impacted during economic downturns than employment in incumbent firms. This questions the effectiveness of policies that promote entrepreneurship to fight crises. We complement prior research that is mostly based on aggregate data by analyzing cyclical effects at the firm level. Using new linked employer-employee data on German start-ups we show that under constant human capital of the firms' founders, employment growth in less than 11/2-yearold start-ups reacts countercyclically and employment growth in older start-ups reacts procyclically. The young start-ups realize their countercyclical growth by hiring qualified labor market entrants who might be unable to find employment in incumbent firms during crises. This mechanism is highly important in economic and management terms and has not been revealed by prior research." (Author's abstract, IAB-Doku) ((en))
    JEL: E32 J23 L26 M13 L25 L11 D22
    Date: 2016–12–19
  12. By: Ivo Bischoff (University of Kassel); Nataliya Kusa (University of Kassel)
    Abstract: This paper deals with the public acceptance of policies that pave the way for a more active role of family care assistants in long-term care provision. Family care assistants, i.e. non-relatives providing homecare services in the own private home of the care recipient, provide valuable help for adult children organizing long-term care for their parents. However, their support comes at the price of transferring more family-owned wealth to non-relatives. Based on a survey among German citizens, we provide empirical evidence on the factors that drive the support for a more active role of family care assistants. We find support to be higher among subjects who gave long-term care personally. Monetary self-interest is found to matter. In addition, we find evidence of a clear line of conflict: Citizens with alive parents are more likely to support a more active role of family care assistants than citizens whose parents are dead.
    Keywords: long-term care, intergenerational transfers, citizens’ preferences, inheritance taxation, filial responsibility
    JEL: H27 D31 D72
    Date: 2016
  13. By: Antonio Fidalgo (SFM, University of Neuchatel and I-Demo, University of Geneva); Alberto Holly (IEMS, University of Lausanne); Marco Pecoraro (SFM, University of Neuchatel); Philippe Wanner (I-Demo, University of Geneva)
    Abstract: This paper uses data from the Swiss Labour Force Survey to evaluate the existence of the healthy immigrant effect (HIE) which would translate in i. a health advantage of immigrants upon their arrival in Switzerland compared to individuals with similar characteristics but Swiss-born and ii. an erosion of that advantage over the time of residence until convergence in the levels of health between these two groups. Our original contribution is to address this issue by taking a nonparametric approach in order overcome any potential danger of misspecification that would preclude valid inference. We find little empirical support for the HIE: i. no initial advantage and ii. no convergence but the health status of immigrants is shown to deteriorate more than Swiss-born individuals with similar characteristics. Significant differences appear when disaggregating among immigrants' country of origin. Interestingly, we show that a standard parametric approach, in contrast to our findings, would fully confirm the existence of the HIE with the same data set.
    Keywords: Migration, Health, Labour Market
    Date: 2016–12
  14. By: Bönke, Timm; von Werder, Marten; Westermeier, Christian
    Abstract: We use data from the European Household Finance and Consumption Survey in order to examine the distributional effect of intergenerational wealth transfers on the net worth distribution in 8 European countries and compare it to recent findings for the US. To do so, we resort to the decomposition of the coefficient of variation as suggested and applied by Wolff (1987, 2002, 2015) and Wolff and Gittleman (2014). The results hint that inheritances and gifts have a vastly equalizing effect on inequality in household wealth in all 8 countries.
    Keywords: Inheritance,Household wealth,Inequality
    JEL: D31 E21
    Date: 2016
  15. By: Dirk Czarnitzk (KU Leuven, Belgium); Thorsten Doherr (Centre for European Economic Research (ZEW), Mannheim); Paula Schliessler (Centre for European Economic Research (ZEW), Mannheim); Katrin Hussinger (CREA, Université du Luxembourg); Andrew Toole (US Patent and Trademark Office, Alexandria, USA)
    Abstract: We use an exogenous change in German Federal law to examine how entrepreneurial support and the ownership of patent rights influence academic entrepreneurship. In 2002, the German Federal Government enacted a major reform called Knowledge Creates Markets that set up new infrastructure to facilitate university-industry technology transfer and shifted the ownership of patent rights from university researchers to their universities. Based on a novel researcher-level panel database that includes a control group not affected by the policy change, we find no evidence that the new infrastructure resulted in an increase in start-up companies by university researchers. The shift in patent rights may have strengthened the relationship between patents on university-discovered inventions and university start-ups; however, it substantially decreased the volume of patents with the largest decrease taking place in faculty-firm patenting relationships.
    Keywords: Intellectual property, patents, technology transfer, policy evaluation
    JEL: O34 O38
    Date: 2016
  16. By: Jara Tamayo, Holguer Xavier; Sutherland, Holly; Tumino, Alberto
    Abstract: The aim of this paper is to explore the potential of an EMU unemployment insurance scheme (EMU-UI) to improve the income protection available to individuals and their families in case of unemployment. Our analysis uses an illustrative EMU-UI scheme, which has a common design across member states and can therefore be considered as a benchmark with respect to which gaps in national unemployment insurance schemes are assessed. We make use of EUROMOD, the EU-wide tax-benefit microsimulation model, to simulate entitlement to the national and EMU-UI and calculate their effect on household disposable income for all individuals currently in work and those with the highest unemployment risk, in case they would become unemployed. Our results show that the EMU-UI has the potential to reduce current gaps in coverage where these are sizeable due to stringent eligibility conditions, to increase generosity where current unemployment benefits are low relative to earnings and to extend duration where this is shorter than twelve months. The illustrative EMU-UI would reduce the risk of poverty for the potentially new unemployed and would have a positive effect on household income stabilization. The extent of these effects varies in size across EMU member states for two main reasons: differences in the design of national unemployment insurance schemes and differences in labor force characteristics across member states.
    Date: 2016–12–19
  17. By: Robin Jessen
    Abstract: I propose a method to decompose changes in income inequality into the contributions of policy changes, wage rate changes, and population changes while considering labor supply reactions. Using data from the Socio-Economic Panel (SOEP), I apply this method to decompose the increase in income inequality in Germany from 2002 to 2011, a period that saw tax reductions and a controversial overhaul of the transfer system. The simulations show that tax and transfer reforms have had an inequality reducing effect as measured by the Mean Log Deviation and the Gini coefficient. For the Gini, these effects are offset by labor supply reactions. In contrast, policy changes explain part of the increase in the ratio between the 90th and the 50th income percentile. Changes in wage rates have led to a decrease in income inequality. Thus, the increase in inequality was mainly due to changes in the population.
    Keywords: Inequality, Decomposition, Labor Supply, Microsimulation, Policy Reform
    JEL: D31 I38 J31
    Date: 2016
  18. By: Jara Tamayo, Holguer Xavier; Schokkaert, Erik
    Abstract: Most studies using microsimulation techniques have considered the effect of potential reforms, but only regarding income distribution. However, it has become increasingly recognised, both at the academic and political level, that focusing purely on income provides a limited picture of social progress. We illustrate how ex-ante policy evaluation can be performed in terms of richer concepts of individual well-being, such as subjective life satisfaction and equivalent incomes. Our analysis makes use of EUROMOD, the EU-wide tax-benefit microsimulation model, along with 2013 EUSILC data for Sweden, which for the first time provides information on subjective wellbeing. Our results show that the effect of potential reforms varies widely depending on the well-being concept used in the evaluation. We discuss the normative questions that are raised by this finding.
    Date: 2016–12–19
  19. By: Christian Bergholz (University of Kassel); Ivo Bischoff (University of Kassel)
    Abstract: Inter-municipal cooperation (IMC) is promoted as a way in which small, fiscally weak municipalities can cope with intensified interregional competition and demographic change. We provide first evidence on citizens’ support for IMC using survey data from rural Germany. We cover different fields of public services and find the support for IMC to be lower for services where IMC implies intensified interaction with citizens from neighboring municipalities. The main research question asks whether citizens’ support for IMC is larger in municipalities that can – by the logic of normative theory – expect higher net benefits from IMC. The answer is largely negative: While support for IMC decreases in the travel-time to neighboring municipalities, we do not find the support for IMC to be higher among citizens in small and/or fiscally weak municipalities, nor do we find the available of suitable partners to matter. At the same time, citizens’ policy preferences strongly depends on individual-level factors. Believing that IMC reduces citizens’ influence and control reduces the support for IMC substantially. Trust in local politicians and a high degree of emotional attachment to the home municipality reduce citizens’ support for IMC.
    Keywords: fiscal federalism, inter-municipal cooperation, voter preferences, survey, Germany
    JEL: H77 D72
    Date: 2016
  20. By: Vera Rocha (Copenhagen Business School, Denmark); Mirjam van Praag (Copenhagen Business School, Faculty of Economics and Business, University of Amsterdam and Tinbergen Institute, The Netherlands)
    Abstract: We adopt a process-based approach to investigate the influence of entrepreneurial bosses on the two main decisions of employees towards becoming entrepreneurs: exit from the current firm and entry into entrepreneurship. In other words, we study the push and pull mechanisms possibly underlying the influence of entrepreneurial bosses. We do so by employing an identification strategy based on comparisons of same-gender matches of bosses and employees, using rich register data for Denmark. We show that same-gender entrepreneurial bosses have a great impact on employees’ future entrepreneurship choices, especially among women. We do not find any evidence that female bosses push female employees out of the workplace, by creating a discriminatory environment that forces them to search for alternative career paths. Instead, our analysis finds consistent support for pull mechanisms, with role modeling being the main explanation for the positive influence of female entrepreneurial bosses on female employees’ transition into entrepreneurship. We show that the female boss effect is greater than other social interactions identified in prior research. We conclude that entrepreneurial bosses can be role models and female entrepreneurial bosses may thus act as a lever to reducing gender gaps in entrepreneurship rates.
    Keywords: Entrepreneurship; role models; gender gaps; female leadership
    JEL: J19 J24 L26 M12 M13
    Date: 2016–12–16
  21. By: J. Ignacio GarciÌ a PeÌ rez; Josep Mestres DomeÌ€nech
    Abstract: This paper studies the impact of the 2012 Spanish labour market reform on the probability of exiting and entering unemployment using a regression discontinuity approach based on duration models. The 2012 reform modified important aspects of hiring and dismissal procedures in Spain and, by doing that, affected the probability of exiting both unemployment and employment. Comparing labour market performance before and after February 2012 and using a competing risk duration model for the exit from both unemployment and employment, we find that the reform has helped employment creation in two ways. First, it has increased the likelihood of exiting from unemployment to employment. Secondly, it has reduced the probability of dismissal for workers on a temporary contract.
    Date: 2016–12
  22. By: Gilberto Antonelli (Department of Economics and SDIC, University of Bologna; AlmaLaurea Interuniverisity Consortium); Sara Binassi (AlmaLaurea Interuniversity Consortium); Giovanni Guidetti (Department of Economics and SDIC, University of Bologna); Giulio Pedrini (Interuniversity Research Centre on Public Services (CRISP) and SDIC, University of Bologna)
    Abstract: This paper aims at investigating the phenomenon of graduates’ migration from an OECD country at microeconomic level in order to offer an insight into the scholarly debate on migration decision of high-skilled workers living in a developed country. By merging data on working conditions on Italian graduates with the results of an ad-hoc survey on Italian graduates working abroad, the paper assesses the selectivity of migration choices, the wage premium associated to migration decision on their earnings, and the determinants of the earning function for those graduates that work abroad. Results partially confirms the applicability of the Borjas model on selectivity of migration choice. It also shows the existence of a substantial wage premium associated with the decision to work abroad in line with an extended human capital approach. However, it also suggests a greater complexity of both the selection and the earning function of high-skilled workers, due to their longer and differentiated educational career, the stronger weight attached to preference variables, the degree of skills’ portability attached to university’s location and fields of study, and, in general, to the capability of a tertiary education system to provide their graduates with the skills required by international labour markets.
    Keywords: higher education, migration, international labour markets, inequality
    JEL: J61 I26 J24
    Date: 2016–12
  23. By: T.M. van Huizen; E. Dumhs; J. Plantenga
    Abstract: This study provides a cost-benefit analysis of expanding access to universal preschool education. We focus on a Spanish reform that lowered the age of eligibility for publicly provided universal preschool from age 4 to age 3. We extrapolate the benefits in terms of maternal employment and child development using ‘natural experiment’ evidence on the causal effects of this reform. In our base line estimation the benefit-cost ratio is around 4, indicating sizeable net societal benefits of the preschool investment. Our results show that the child development effects are the major determinant of the cost-benefit ratio; the employment gains for parents appear to play a minor role. Sensitivity tests show that, although the size of the societal gains is rather uncertain, in most scenarios the expansion of preschool generates positive societal returns. Furthermore, as sufficient high quality levels of preschool are required to generate significant improvements in (non-)cognitive skills of children and thereby long-run benefits for society, our cost-benefit analysis provides support for investing in high-quality preschool.
    Keywords: preschool, cost-benefit analysis, child development, female employment
    Date: 2016
  24. By: Adelina Gschwandtner; Sarah L. Jewell; Uma Kambhampati
    Abstract: In the present paper we attempt to analyse the relationship between ‘lifestyle’ and happiness in the UK using fixed effects and granger causality tests to test for endogeneity. We split the analysis by gender and find different effects between women and men. While men seem to be more physically active and this active lifestyle impacts stronger on their wellbeing than on the one of women, women seem to be more conscientious with respect to nutrition and nutrition impacts stronger on the wellbeing of women than on the wellbeing of men. In general lifestyle variables have a significantly positive impact on happiness and the impact remains significant with the use of fixed effects for both genders. This suggests that a ‘healthy lifestyle’ has a positive impact on happiness and that any policy improving our lifestyle proxies would also make people happier in the UK.
    Keywords: Wellbeing; Life Satisfaction; Happiness; Nutrition; Exercise; Lifestyle; Fixed Effects; Granger Causality
    JEL: D31 I31
    Date: 2016–12
  25. By: Ella Broos; Bernhard Dachs; Martina Dünser; Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Kristof Mertens; Doris Schartinger; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Valentijn Vanoeteren
    Abstract: Abstract This report investigates wholesale as one of the main service industries in the European economy. Wholesale is the resale of new and used goods to retailers, industrial, commercial, institutional or professional users, or to other wholesalers on their own account or for third parties. It plays a pivotal role in the European Single Market by bridging national markets and connecting producers, retail trade and industrial demand across Europe. Wholesale employs about 10 million persons in the EU-28 and accounts for a share of 7-9% in total employment in most EU Member States. The share of micro and small enterprises is considerably higher than in manufacturing. The sector reveals considerable heterogeneity in terms of firm size, productivity and profitability across EU Member States and wholesale sub-sectors. Moreover, the report sheds light on the integration of the wholesale sector in value chains with upstream manufacturers and downstream retailers, and on the role of technology and innovation in wholesale.
    Keywords: wholesale, EU integration, value chains, services, innovation
    JEL: L16 L81
    Date: 2016–12
  26. By: Moritz Zöllner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: This paper reviews the results of studies that investigate the most important active labour market policy (ALMP) measures in Germany. A particular focus is on programs devoted to foster entrepreneurship which can make important contributions to a country's growth and social welfare. The available evidence suggests that most ALMP measures increase labour market prospects of the participants. Evaluations of the entrepreneurship promotion activities show high success rates as well as high cost efficiency. The bulk share of participants of entrepreneurship measures is still self-employed after several years and nearly one third of these businesses had at least one employee. We mention problems regarding the evaluation of previous programs and highlight future challenges of German ALMP.
    Keywords: Active labour market policy, evaluations, effectiveness, entrepreneurship
    JEL: J08 J64 J68 L26
    Date: 2016–12–14
  27. By: Patricia Dinis Mota da Costa (European Commission - JRC); Luisa De Sousa Lobo Borges de Araujo (European Commission - JRC)
    Abstract: The analyses presented in this report indicate that in several Member States (MS) 15 year-old students in vocational-oriented programmes (VET) perform better in digital reading than in print reading in PISA 2012. When differentiated by programme of study – VET versus general education programmes – VET students perform better in digital than in print reading in Belgium, France, Italy, Portugal and the Slovak Republic. Moreover, VET students display specific patterns of ICT-related practices. For example, they have more access to computers at school than at home and their engagement in frequent browsing of the internet for school work is associated with higher digital reading achievement. Results suggest that schools should help VET students develop further digital skills to support their learning.
    Keywords: Vocational Education, Digital Reading,PISA 2012
    Date: 2016–12
  28. By: Claire Crawford; Paul Gregg; Lindsey Macmillan; Anna Vignoles; Gill Wyness
    Abstract: The UK government has expressed a desire to increase social mobility, with policies to help achieve this aim focused on reducing inequalities in educational attainment. This paper draws together established and new information about the contribution that higher education can make to social mobility using a life-course approach, considering differences by family background in terms of university attendance and achievement, as well as occupation and earnings following graduation. We find substantial socio-economic differences at each stage. Young people from poorer backgrounds are, on average, less likely to go to university than their richer peers. Even among the selected group who do go to university, they are less likely to attend the highest status institutions, less likely to graduate, and less likely to achieve the highest degree classes. These differences in degree outcomes contribute to the lower average earnings of graduates from poorer families, but earnings differentials go well beyond those driven purely by degree attainment or institution attended. The evidence strongly suggests that, even after taking these factors into account, graduates from affluent families are more likely to obtain a professional job and to see higher earnings growth in the labour market. We discuss the implications of these findings for the prospects of higher education as a route to greater social mobility
    Keywords: higher education; social mobility; widening participation
    JEL: I23 J24
    Date: 2016–10–13
  29. By: Hendrik Beiler
    Abstract: I estimate the effect of business cycle conditions on the decision to enter entrepreneurship after college graduation. I proxy for economic conditions at the field of study level, constructed from industry growth rates which I weight to fields of study using employees' industry - college major distribution. This enables to control for unobserved differences between graduation cohorts such as technological change or shifts in cohort composition. Using administrative survey data for Germany, I find that a one percentage point increase in employment growth in the year of graduation raises entry into entrepreneurship by about 30% in the first year after graduation. The effect halves in the second year and is close to zero in the third and fourth year after graduation. Interestingly, exit from entrepreneurship decreases slightly, which suggests that the additional entrepreneurs are fairly stable in the first years after entry. Taken together, my results imply that "lucky" graduation cohorts are persistently more likely to enter and persist in entrepreneurship than "recessionary" cohorts, at least during the first four years after graduation that I examine. My results have relevant implications for policy measures such as startup subsidies, since entrepreneurship is commonly acknowledged as a central source of job creation and economic dynamism.
    Keywords: Entrepreneurship, Business Cycles, Higher Education, Occupational Choice, Firm Entry
    JEL: L26 E32 I23 J23 J24 M13
    Date: 2016–11–01
  30. By: Simon Lange; Marten von Werder
    Abstract: Proponents of tracking argue that the creation of more homogeneous classes increases effciency while opponents point out that tracking aggravates initial differences between students. We estimate the effects on the intergenerational transmission of education of a reform that delayed tracking by two years in one of Germany's federal states. While the reform had no effect on educational outcomes on average, it increased educational attainment among individuals with uneducated parents and decreased attainment among individuals with educated parents. The effect is driven entirely by changes in the gradient for males and to a large extent by an effect on the likelihood to complete the academic secondary track.
    Keywords: tracking; educational institutions; educational inequality; equality of opportunity; intergenerational mobility
    JEL: I21 I24 I28 J62
    Date: 2016
  31. By: Wolter, Marc Ingo; Mönnig, Anke; Hummel, Markus (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zika, Gerd (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Helmrich, Robert; Maier, Tobias; Neuber-Pohl, Caroline
    Abstract: This study focuses on the economic effects of the phenomenon of "Economy 4.0", the digitalisation of the economy as a whole and not only in industrial production processes. These developments involve considerable challenges at enterprise and political level. The five-step scenario analysis begins with the impacts of increased investments of enterprises in equipment (1) and of the state in the network infrastructure (2) on the overall economy and the labour market. On this basis we further model the consequent personnel and material costs of the enterprises (3) and a changed pattern of demand for occupations and skills (4). In a further scenario the effects on the labour market of a potentially increasing demand for goods (5) are taken into consideration. The cumulative effects of these five partial scenarios are compared with a baseline scenario which contains no advanced development path to Economy 4.0. The results show that Economy 4.0 will accelerate the structural change towards more services. In this process labour force movements between branches, occupations and job requirements are much larger than the change of the number of gainfully employed persons in total. The turnover on the labour market are accompanied by an increasing value added which is leading not only to more economic assets but also - due to higher requirements for the labour force - to higher aggregate wages. The underlying assumptions have a positive effect on the economic development. But this also means that, given a delayed realization, the assumptions are turning against the business location Germany: We will export less and demand more 'new' goods from abroad. In order to analyse the effects of digitization on the future occupational structure, but also to improve the knowledge about the economic interdependencies, further advances of the QuBe-E4.0 project are planned.
    Keywords: technischer Wandel - Auswirkungen, BIBB/IAB-Qualifikations- und Berufsfeldprojektionen, Szenario, Internet, Investitionsquote, volkswirtschaftliche Kosten, Beschäftigungseffekte, Gewinn, Qualifikationsanforderungen, Arbeitskräftenachfrage, Berufsstruktur, Qualifikationsstruktur, Gütermarkt, Nachfrageentwicklung, Wirtschaftsstrukturwandel, Wertschöpfung, Einkommenseffekte, Wirtschaftsentwicklung, Bauinvestitionen, Arbeitsmarktprognose, Digitale Arbeitswelt
    Date: 2016–12–21

This nep-eur issue is ©2017 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.