nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒02‒26
thirty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Pattern of Home Ownership Across Age Cohorts and its Impact on the German Net Wealth Distribution By Schmidt, Tobias; Alik-Lagrange, Arthur
  2. Innovation strategies of energy firms By Maria Teresa Costa-Campi; Néstor Duch-Brown; José García-Quevedo
  3. Does the economic crisis have an influence on the higher education dropout rate? By Fernandes, Graca; CHAGAS LOPES, MARGARIDA
  4. How Immigrants Helped EU Labor Markets to Adjust during the Great Recession By Kahanec, Martin; Guzi, Martin
  5. Labor Market Sorting in Germany By Schulz, Bastian; Lochner, Benjamin
  6. Labour market integration of immigrants - Evidence for the German guest workers By Smolny, Werner; Rieber, Alexander
  7. Actual and perceived financial sophistication and wealth accumulation: The role of education and gender By Neubert, Milena; Bannier, Christina E.
  8. Employment Effects of Innovations over the Business Cycle: Firm-Level Evidence from European Countries By Bernhard Dachs; Martin Hud; Christian Koehler; Bettina Peters
  9. Decomposing health inequality in the EU By MAZEIKAITE Gintare; O?DONOGHUE Cathal; SOLOGON Denisa
  10. Occupational Mobility, Educational Mobility and Intergenerational Transmission of Disadvantages in Europe By Zelinsky, Tomas; Mysikova, Martina; Vecernik, Jiri
  11. Reimbursement Schemes for Hospitals: Evidence from a Natural Experiment in Germany By Wohlschlegel, Ansgar; Feess, Eberhard; Mueller, Helge
  12. Innovation persistence and employment dynamics By Stefano Bianchini; Gabriele Pellegrino
  13. Does raising the retirement age increase older workers' activity? The case of the 2010 french pension reform By Y. DUBOIS; M. KOUBI
  14. Private wealth and retirement in France By T. BLANCHET; Y. DUBOIS; A. MARINO; M. ROGER
  15. EU Mobility By Ritzen, Jo; Kahanec, Martin; Haas, Jasmina
  16. Birth Order and Health of Newborns: What Can We Learn from Danish Registry Data? By Molitor, Ramona; Anne , Ardila Brenøe
  17. Demand Fluctuations and Innovation Investments: Evidence from the Great Recession in Spain By Armand, Alex; Mendi, Pedro
  18. The drivers of revenue productivity: a new decomposition analysis with firm-level data By di Mauro, Filippo; Mion, Giordano; Stöhlker, Daniel
  19. End-of-Year Spending and the Long-Run Employment Effects of Training Programs for the Unemployed By Fitzenberger, Bernd; Furdas, Marina; Sajons, Christoph
  20. University Students and Entrepreneurship. Some insights from a population-based survey By Ferrante, Francesco; Federici, Daniela; Parisi, Valentino
  21. Public vs Nonprofit Incarceration: The Case of The Netherlands By Mattheus Wassenaar; Raymond Gradus; Toon Molleman
  22. Short notice, big difference? The effect of temporary employment on firm competitiveness across sectors By Romina R. Giuliano; Stephan Kampelmann; Benoît Mahy; François Rycx
  23. The Effect of the Household Balance Sheet on Unemployment – Evidence from Spanish Provinces By Schlegel, Jonas; Watzka, Sebastian
  24. An integrated approach for top-corrected Ginis By Metzing, Maria; Bartels, Charlotte
  25. Behavioral Responses to Wealth Transfer Taxation: Bunching Evidence from Germany By Glogowsky, Ulrich
  26. Does electoral competition curb party favoritism? By Marta Curto‐Grau; Albert Solé‐Ollé; Pilar Sorribas‐Navarro
  27. Is Governance Related to Investment Performance and Asset Allocation? Empirical Evidence from Swiss Pension Funds By Ammann, Manuel; Ehmann, Christian
  28. Informal vs. Formal Care in Finland: Monetary Incentives and Fiscal Implications By Määttänen, Niku; Salminen, Tomi
  29. Being your own boss: the many faces of self-employment By Pamela Lenton
  30. European banks’ technical efficiency and performance: do business models matter? The case of European co-operatives banks By E. Avisoa
  31. Teacher Assessments versus Standardized Tests: Is Acting "Girly" an Advantage? By Di Liberto, Adriana; Casula, Laura
  32. Unit non-response in household wealth surveys By Osier, Guillaume

  1. By: Schmidt, Tobias; Alik-Lagrange, Arthur
    Abstract: We analyze the link between homeownership and the net wealth distribution using household-level micro data from Germany and the US. We are particularly interested in the effect of the pattern of ownership across cohorts. Given that wealth accumulates over the life-cycle and that owners are wealthier than renters, past tenure choices, affecting today’s share of owners for different cohorts, should be related to current wealth levels and inequality. In order to gauge the effect of the ownership structure over cohorts on the distribution of net wealth we impose the homeownership pattern of the US on Germany. This leads to a large increase in the German median net wealth and reduces wealth inequality. Past tenure choice seems to affects today’s net wealth distribution. Some of the effects can be attributed to the difference in ownership shares between old cohorts in Germany and the US, but this effect appears to be less pronounced than expected.
    JEL: D31 D30 D10
    Date: 2016
  2. By: Maria Teresa Costa-Campi (Universitat de Barcelona & IEB); Néstor Duch-Brown (Institute for Prospective Technological Studies); José García-Quevedo (Universitat de Barcelona & IEB)
    Abstract: Investment by energy firms in innovation can have substantial economic and environmental impacts and benefits. Internal R&D is the main input and driver of the innovation process, but innovation involves other activities, including capital purchases and other current expenditures. While the R&D activities of energy firms have been analysed, few studies have examined the typology of their innovation activities. Here, we analyse the impact of the main characteristics of the sector’s firms on their decisions to invest in each of three types of innovation activity: namely internal R&D; external R&D; and, the acquisition of advanced machinery, equipment or software. In conducting this analysis, we take the potential persistence of innovation activities into account. We also examine the role that different innovation objectives have on firms’ investment decisions. Given that engagement in a specific type of innovation may result from decisions that are not taken independently of each other, we analyse whether there is any complementarity between the three innovation activities. In carrying out the empirical analysis, we draw on data for private energy firms included in the Technological Innovation Panel (PITEC) for Spanish firms for the period 2004-2013. We use panel triprobit models to examine potential complementarity.
    Keywords: Energy, R&D, innovation, regulation, complementarity
    JEL: L94 Q40 O32
    Date: 2016
  3. By: Fernandes, Graca; CHAGAS LOPES, MARGARIDA
    Abstract: This research aims to identify the effects of the economic crisis on higher education (HE) dropout rates at Lisbon School of Economics and Management (ISEG) – Universidade de Lisboa, after having controlled for individual characteristics, family background, High School and HE trajectories. Our main hypothesis is that the economic crisis induces higher dropout rates. The research emphasizes that, in the context of the European crisis, social, economic and political context should be taken into account in the dropout analysis model, together with university and student behaviour determinants. To analyse the impact of the economic crisis on dropout rates, we use longitudinal data from the ISEG database, and apply statistical methodologies such as Chi-square tests for independence, and t-tests for the equality of means and proportions. Our main results point to the fact that the economic and social crisis has significantly affected the dropout rate of Portuguese students. Dropout during the crisis period spared neither younger students nor those with better High School trajectories. Moreover, during the crisis period, Portuguese students dropped out earlier during their HE trajectory. We believe that our conclusions can be extended to other European countries within a crisis context.
    Keywords: KEYWORDS: Economic crisis, higher education dropout, social and economic factors
    JEL: I23
    Date: 2016–09–16
  4. By: Kahanec, Martin (Central European University); Guzi, Martin (Masaryk University)
    Abstract: The economic literature starting with Borjas (2001) suggests that immigrants are more flexible than natives in responding to changing sectoral, occupational, and spatial shortages in the labor market. In this paper, we study the relative responsiveness to labor shortages by immigrants from various origins, skills and tenure in the country vis-à-vis the natives, and how it varied over the business cycle during the Great Recession. We show that immigrants in general have responded to changing labor shortages across EU member states, occupations and sectors more fluidly than natives. This effect is especially significant for low-skilled immigrants from the new member states or with the medium number of years since immigration, as well as with high-skilled immigrants with relatively few (1-5) or many (11+) years since migration. The relative responsiveness of some immigrant groups declined during the crisis years (those from Europe outside the EU or with eleven or more years since migration), whereas other groups of immigrants became particularly fluid during the Great Recession, such as those from new member states. Our results suggest immigrants may play an important role in labor adjustment during times of asymmetric economic shocks, and support the case for well-designed immigration policy and free movement of workers within the EU. Paper provides new insights into the functioning of the European Single Market and the roles various immigrant groups play for its stabilization through labor adjustment during times of uneven economic development across sectors, occupations, and countries.
    Keywords: immigrant worker, labor supply, skilled migration, labor shortage, wage regression, Great Recession
    JEL: J24 J61 J68
    Date: 2016–12
  5. By: Schulz, Bastian; Lochner, Benjamin
    Abstract: This paper analyzes how workers are allocated to jobs in Germany. Our main contribution is to show how labor market sorting has evolved over time across worker types and how these developments are related to wages and wage inequality. We show direct empirical evidence that wages are not necessarily increasing in the productivity of the firm a worker is matched with. This feature of the data is predicted by theoretical models of labor market sorting (Shimer and Smith, 2000; Eeckhout and Kircher, 2011). We use a structural search model and the identification procedure proposed by Hagedorn et al. (2014) to empirically identify worker and firm rankings as well as the bivariate density of matches in Germany. We compute rank correlations and find that low-type workers have become increasingly sorted into low-type firms in our period of observation (1998-2008), especially out of unemployment. Sorting of high-type workers into high-type firms has, if anything, slightly decreased during our period of observation.
    JEL: J31 J62 J64
    Date: 2016
  6. By: Smolny, Werner; Rieber, Alexander
    Abstract: During the 1960s and 1970s a large number of immigrants came to Germany as temporary labour migrants. Many of them remained, captured their family and their children entered the labour market since the eighties. Our paper analyses their labour market experience in terms of employment, unemployment and earnings. The recruitment stop induced by the first oil crisis in 1973 allows us to distinguish guest workers, on the one hand, and family members, on the other hand, in a natural experiment setting. The results reveal enormous differences between the groups. Guest workers who came until 1973 differ markedly from those migrants who came later as family members, especially in terms of unemployment. These differences are more pronounced for women than for men. The descendants of the European guest workers are very well integrated into the German labour market which points towards positive long-run effects of the guest worker policy measure. However, the migrants stemming from a different ethnic background face much more difficulties in terms of labour market integration.
    JEL: J15 J21 J61
    Date: 2016
  7. By: Neubert, Milena; Bannier, Christina E.
    Abstract: This study examines the role of actual and perceived financial sophistication (i.e., financial literacy and confidence) for individuals' wealth accumulation. Using survey data from the German SAVE initiative, we find first of all strong gender- and education-related differences in the distribution of the two variables: Whereas financial literacy rises in formal education, confidence increases in education for men but decreases for women. As a consequence, highly-educated women become strongly underconfident, while men remain overconfident. We then show that these differences influence wealth accumulation: The positive effect of financial literacy is stronger for women than for men and is increasing in women's education but decreasing in men's. For highly-educated men, however, overconfidence closes this gap by increasing wealth via stronger financial engagement. Interestingly, female underconfidence does not reduce current wealth levels though it weakens future-oriented financial engagement and may thus impair future wealth accumulation.
    JEL: D91 G11 D83
    Date: 2016
  8. By: Bernhard Dachs (AIT Austrian Institute of Technology GmbH); Martin Hud (Centre for European Economic Research (ZEW)); Christian Koehler (Centre for European Economic Research (ZEW)); Bettina Peters (Centre for European Economic Research (ZEW) - Industrial Economics and International Management Research)
    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: 2017–02
  9. By: MAZEIKAITE Gintare; O?DONOGHUE Cathal; SOLOGON Denisa
    Abstract: Despite high living standards and a nearly universal healthcare provision, large cross-country differences in population health exist in the European Union. More than half of this variation remains unexplained after accounting for macro-level factors. In our paper, we aim to understand how individual-level differences in demographic characteristics, education, labour market factors and income shape the prevalence of poor self-assessed health in the EU. For this purpose, we use a semi-parametric decomposition approach, which relies on constructing synthetic distributions of health that would prevail in each country if they had the distribution of the analysed factors as in the country with the best self-assessed population health ? Ireland. We find regional variation in the decomposition results. The analysed factors explain up to a third of the health inequality in the EU for Southern and Central and Eastern European (CEE) countries, but they fail to explain the health differences for the Western European countries. We suggest that cross-country variation in the reporting of self-assessed health may be partially responsible for this result. Finally, we find that the detailed decomposition results for some of the explanatory factors are sensitive to the decomposition sequence, which shows that interaction effects merit further investigation.
    Keywords: health inequality; decomposition; EU-SILC; socio-economic factors; cross-country
    JEL: J00 N34
    Date: 2017–02
  10. By: Zelinsky, Tomas; Mysikova, Martina; Vecernik, Jiri
    Abstract: Empirical literature offers a number of studies suggesting that living conditions in childhood can significantly influence achievements and living conditions in adulthood. The aim of this paper is to answer the question: To what extent is the intergenerational transmission of poverty associated with social mobility (in terms of educational and occupational intergenerational mobility) in the European Union (and Iceland, Switzerland and Norway)? Our analyses are based on EU-SILC 2011, ‘Intergenerational transmission of disadvantages’ module microdata. Interpretations of the findings are based on the ordered logit models estimated at European and country levels. The results suggest that both educational and occupational mobility are in a statistically significant positive relationship with the intergenerational transmission of poverty (prox-ied by a change in the perceived financial stress of the household).
    Keywords: Intergenerational transmission of poverty, social mobility, Europe, EU-SILC.
    JEL: I31 I32 Z13
    Date: 2016
  11. By: Wohlschlegel, Ansgar; Feess, Eberhard; Mueller, Helge
    Abstract: We use a unique dataset from a German health insurer to study how the effects of the introduction of a high powered incentive scheme for hospitals on cost effectiveness and quality of medical treatment depend on case and hospital characteristics. As hospitals had a transition period of several years to complete the switch from a fee-for-service to a prospective-payment system, we can adopt a difference-in-differences approach. All hospitals had to switch eventually, which limits the potential for selection bias. Furthermore, we can follow a patient even when readmitted to a different hospital. We find that the readmission rate increases for more severe cases, and that the length of stay of older people decreases more under the new system. The average length of stay did not change significantly but the readmission rate increased. However, this latter effect is absent in privately owned or university hospitals.
    JEL: I11 D22 I18
    Date: 2016
  12. By: Stefano Bianchini (BETA, University of Strasbourg); Gabriele Pellegrino (École Polytechnique Fédérale de Lausanne & IEB)
    Abstract: This paper examines the effect of persistence in product and process innovations on the employment dynamics of a representative sample of Spanish manufacturing firms observed over more than 20 years. We build on a conceptual framework that links innovation persistence, employment growth and the persistence of this growth in the long-run. Using dynamic panel GMM and survival analysis techniques, we find that persistence in product innovation affects both employment growth and the sustainability of job creation over time significantly, whilst persistence in process innovation does not play any relevant role. The evidence we provide supports the notion that product innovation is more effective in spurring sustained employment growth when carried out systematically.
    Keywords: Firm growth, job creation, innovation, persistence in innovation, path-dependence
    JEL: D22 O31 O32 O33
    Date: 2017
  13. By: Y. DUBOIS (Insee); M. KOUBI (Insee)
    Abstract: We examine the consequences on older workers activity of the 2010 French pension reform that increased the legal age of retirement from 60 to 62 years. Globally, the activity rate of workers affected by the reform is by 19 to 22 percentage points higher than that of workers of the same age but belonging to generations not affected by the reform. This result is consistent with an ex-ante evaluation using the microsimulation model Destinie managed by the Insee. Moreover, microsimulation allows to first quantify and then sweep out possible interactions between the reform on ages and the other ongoing reforms: the increase in the qualifying period for full pension on the one hand and the so-called long careers reform on the other hand, which allows people with sufficient years of service to retire earlier than the legal age with full pension. The declining number of pensioners at ages affected by the reform results in a higher employment rate for older workers, but also raises unemployment and, to a lesser extent, inactivity (other than retirement).
    Keywords: Retirement age ; Policy reform; Labor supply; Older workers
    JEL: J14 J21 J26 H55
    Date: 2016
  14. By: T. BLANCHET (Ensae-PSE); Y. DUBOIS (Insee); A. MARINO (Insee); M. ROGER (CES Université Paris 1 Panthéon Sorbonne,Banque de France)
    Abstract: This document relies on the 2009-2010 French wealth survey (enquête Patrimoine) and the dynamic microsimulation model Destinie to reevaluate substitution effects between pension entitlements and private savings for French Households. Savings behavior is modeled after Gale (1998). Our results highlight the existence of a substitution effect between household savings and their pension. The magnitude of these effects is sensitive to the discount rate of agents. An increase in public pensions leads to a decrease in complementary pension products and real estate investment. It is this latter effect that dominates.
    Keywords: Wealth, Social Security, Pensions, Life Cycle
    JEL: D31 D91 H55
    Date: 2016
  15. By: Ritzen, Jo (IZA and Maastricht University); Kahanec, Martin (Central European University); Haas, Jasmina (Maastricht University)
    Abstract: The free movement of people and of workers (intra EU mobility) is one of the corner-stones of the EU. It has overwhelmingly benefitted the citizens of the EU member states both in the countries of work and in the countries of origin. Earlier apprehensions on crowding out of less educated workers in the countries of destination and on welfare migration turned out to be by and large refuted. At the same time, EU mobility policies still need a significant deepening and upgrading, to deal with special cases of crowding out in subsectors and with fraudulent contracts. Full integration of some groups of mobile EU workers is difficult because of linguistic and cultural barriers. There is a new challenge for EU policy: integration of circular mobile migrants. EU countries should be guided by the EU to cut red tape and harmonize administration.
    Keywords: EU enlargement, free movement of workers, labor mobility, migration policy, European Single Market, labor adjustment, stabilization, vibrant Europe
    JEL: J15 J61 J68
    Date: 2017–02
  16. By: Molitor, Ramona; Anne , Ardila Brenøe
    Abstract: Research has shown a strong negative correlation between birth order and educational outcomes. We ask whether birth order differences in health are present at birth using matched administrative data for more than 1,000,000 children born in Denmark between 1981 and 2010. Using family fixed effects models, we find a positive and robust birth order effect; lower parity children are less healthy at birth. Looking at the potential mechanisms, we find that during earlier pregnancies women have higher labor market attachment, behave more risky in terms of smoking, receive more prenatal care, and are diagnosed with more medical pregnancy complications. Yet, none of these factors explain the birth order differences at birth. The positive birth order effect at birth stands in stark contrast to a negative birth order effect in educational performance. Once we control for health at birth, the negative birth order effect in educational performance further increases.
    JEL: I10 J12 J13
    Date: 2016
  17. By: Armand, Alex; Mendi, Pedro
    Abstract: Fluctuations in aggregate demand can influence the decision to invest in innovation. This paper focuses on this choice when fluctuations are heterogeneous across productive strata of the economy. To guide the empirical analysis, we model firms’ decision to invest in innovation. In our framework, firms are heterogeneous and demand shocks are exogenous. We show that drops in aggregate expenditure reduce the proportion of firms investing in innovation. We then study investment behaviour in a panel of Spanish innovative manufacturing firms. These firms are all investing in internal R&D in 2004 and are yearly surveyed until 2013. During the Great Recession, firms experienced large contractions in aggregate consumption. The reduction reached 10% of its pre-crisis trend. We proxy heterogeneous fluctuations in demand with entry and exit rates in the productive stratum of each firm. Rates incorporate all firms, including non-innovative firms. Higher exit rates are associated with reductions of 2 to 3% in the share of firms investing in innovation. The drop is larger for smaller firms, which also experience larger decreases in sales. These results are in line with our theoretical predictions. Our estimates are robust to the inclusion of indicators of time-varying credit constraints. For these constraints, we observe a marginal role among innovative firms.
    Keywords: R&D, Innovation, Firm entry, Firm exit, Great Recession.
    JEL: L22 O31 O32
    Date: 2017–02–16
  18. By: di Mauro, Filippo; Mion, Giordano; Stöhlker, Daniel
    Abstract: This paper aims to derive a methodology to decompose aggregate revenue TFP changes over time into four different components – namely physical TFP, mark-ups, quality and production scale. The new methodology is applied to a panel of EU countries and manufacturing industries over the period 2006-2012. In summary, patterns of measured revenue productivity have been broadly similar across EU countries, most notably when we group them into stressed (Italy, Spain and Slovenia) and non-stressed countries (Belgium, Finland, France and Germany). In particular, measured revenue productivity drops for both groups by about 6 percent during the recent crisis. More specifically, for both stressed and non-stressed countries the drop in revenue productivity was accompanied by a substantial dip in the proxy we use for TFP in quantity terms, as well as by a strong reduction in mark-ups. Demand also suffered a conspicuous decline. Our results suggest that non-stressed countries seem to enjoy a stronger recovery in terms of fundamentals like quantity TFP, demand and mark-ups than stressed countries. Yet, their overall performance in terms of revenue TFP recovery does not necessarily align with the above analysis which is due to some possible deterioration in the resource reallocation, signalled in our framework from the lower covariance between the two components we split revenue TFP. JEL Classification: E32, O47, D24
    Keywords: decomposition: production function estimation, demand, markups, productivity
    Date: 2017–02
  19. By: Fitzenberger, Bernd (Humboldt University Berlin); Furdas, Marina (Humboldt University Berlin); Sajons, Christoph (University of Freiburg)
    Abstract: This study re-estimates the employment effects of training programs for the unemployed using exogenous variation in participation caused by budget rules in Germany in the 1980s and early 1990s, resulting in the infamous "end-of-year spending". In addition to estimating complier effects with 2SLS, we implement a flexible control-function approach to obtain the average treatment effect on the treated (ATT). Our findings are: Participants who are only selected for budgetary reasons do not benefit from training programs. However, the ATT estimates suggest modest positive effects in the long run. Longer programs are more effective than shorter and more practice-oriented programs.
    Keywords: training for the unemployed, budgetary conditions, administrative data, Germany
    JEL: J64 J68 H43
    Date: 2016–12
  20. By: Ferrante, Francesco; Federici, Daniela; Parisi, Valentino
    Abstract: Start-ups founded by university students and graduates play a substantial role in bringing new knowledge to the market and in employment creation; a role that appears to be even more important than the one played by the typical technology transfer activities carried out by universities, i.e. patenting and licensing activities, or spin-offs founded by academic staff. Indeed, robust empirical evidence suggests that entrepreneurs’ education is a good predictor of firms’ performance. Unfortunately, data show that the share of Italian entrepreneurs with tertiary educations is quite small, and this is especially the case of the younger generation. In this paper, we use a population-based approach to explore entrepreneurship among 61,115 graduates, alumni of the 64 Italian universities that belong to the AlmaLaurea consortium, in the second half of 2014, at the time when they completed their academic experience. We detect various levels of engagement and intentions to be involved in entrepreneurship, and we assess which factors appear to weigh more in a positive or negative manner. The bad news is that also our analysis finds that the share of Italian graduates who have started a business after their enrolment at university (1.3%) or who have taken concrete actions to start a business (4.5%) is quite small. The good news is that the number of intentional, i.e. potential highly educated, entrepreneurs among university students is much larger (at least 23%). On the basis of our results, we argue that the provision by universities of entrepreneurial education and training, internships, and ICT skills can be effective tools with which to cultivate entrepreneurial attitudes and skills, thereby fostering entrepreneurship and entrepreneurship among university graduates and enhancing their employability.
    Keywords: Entrepreneurship, university, start up, students, education
    JEL: I23 J21 J24 L26
    Date: 2017–02–20
  21. By: Mattheus Wassenaar (VU Amsterdam, The Netherlands); Raymond Gradus (VU Amsterdam, The Netherlands); Toon Molleman (Custodial Institutions Agency, The Netherlands)
    Abstract: Outsourcing of detention is a complex public task, due to quality risks from incomplete contracts, the public responsibility for sentencing and execution, and related social opinions. In the Netherlands, the debate about the outsourcing of prison services to the private profit sector has recently restarted. At the same time, in the Netherlands there is extensive experience of outsourcing prison services – in particular for juvenile detention and internal forensic psychiatric care – to nonprofit organizations. In the Dutch experience, we have not found differences between public and nonprofit execution, with respect to the type of contract with the prisons, costs and quality. The Dutch experience shows that outsourcing to nonprofit entrepreneurs in civil society can be an alternative to outsourcing to the private market.
    Keywords: nonprofit organizations; contracting out; prison services
    JEL: H40 L31
    Date: 2017–02–20
  22. By: Romina R. Giuliano; Stephan Kampelmann; Benoît Mahy; François Rycx
    Abstract: This paper is one of the first to examine how the use of fixed-term employment contracts (FTCs) affects firm competitiveness (i.e. productivity, wages and profits) while controlling for key econometric issues such as time-invariant unobserved workplace characteristics, endogeneity and state dependence. We apply dynamic panel data estimation techniques to detailed Belgian linked employer-employee data covering all years from 1999 to 2010. Results show that the effects of FTCs on firm competitiveness vary across sectors: while temporary employment is found to enhance productivity and profits in (labour-intensive) services, this is not the case in manufacturing and construction.
    Keywords: Fixed-term contracts; productivity; wages; profits; linked panel data; sectors
    JEL: D24 J24 J31 M12
    Date: 2017–02–23
  23. By: Schlegel, Jonas; Watzka, Sebastian
    Abstract: This paper takes a close look at one of the possible causes of Spain’s severe crisis and studies the extent to which the increase in Spanish unemployment is due to the effects of household balance sheet effects. By estimating proxies for housing net worth shocks as well as household sector debt to disposable income ratios for 52 Spanish provinces together with detailed data on sectoral provincial unemployment data, we find that household balance sheet effects contribute a significant portion to the increase in unemployment between 2008 and 2010. Our outcomes confirm the results for the US from Mian and Sufi (2014). In contrast, for the time period between 2007 and 2014, we do not find any explanation power. Mostly interesting, we find contrary results for the episode between 2010 and 2014: Provinces, which cut back demand between 2007 and 2010 significantly strongly, did so significantly less than other provinces subsequently.
    JEL: G01 J23 E21
    Date: 2016
  24. By: Metzing, Maria; Bartels, Charlotte
    Abstract: Household survey data provide a rich information set on income, household context and demographic variables, but tend to under-report incomes at the very top of the distribution. Tax record data offer more precise information on top incomes at the expense of household context details and incomes of non-fillers at the bottom of the distribution. We combine the benefits of the two data sources to improve survey-based Gini coefficients in two ways. First, we incorporate top income share estimates based on tax records with survey-based Ginis for the rest of the population following Atkinson (2007) and Alvaredo (2011). Second, we impute top fractile's income in EU-SILC survey data with the Pareto distribution coefficients obtained from tax records and then calculate the Gini coefficient. We find that both approaches produce rather similar results. The gap between unadjusted and top-corrected Ginis is highest in countries that rely exclusively on survey data as compared to purely register or partly register countries.
    JEL: D31 C81 C46
    Date: 2016
  25. By: Glogowsky, Ulrich
    Abstract: Increasing inequality in recent decades has triggered a heated debate on whether wealth transfer taxation is an appropriate countermeasure to the perpetuation of inequality. A major factor in making progress in this discussion is understanding how taxpayers respond to incentives generated by wealth transfer taxes. Using administrative tax records from Germany, this paper investigates behavioral responses to a very large transfer tax kink in the inheritance and inter vivos gift tax schedule. We find sharp bunching of taxable inheritances and even larger bunching of taxable inter vivos gifts. However, because the kink is large, the underlying taxable inheritance and gift elasticities are moderate and amount up to 0.11. In line with the notion of accidental bequest models, further evidence suggests that the amount of wealth bequeathed is uncertain. This may explain the small size of the inheritance elasticities. Based on the results, the present paper lends strong support to the hypothesis that wealth transfers are relatively inelastic along the intensive margin in the short term.
    JEL: H20 H21 H30
    Date: 2016
  26. By: Marta Curto‐Grau (University of Heidelberg & IEB); Albert Solé‐Ollé (Universitat de Barcelona & IEB); Pilar Sorribas‐Navarro (Universitat de Barcelona & IEB)
    Abstract: We study whether incumbents facing uncontested elections channel public spending towards co‐partisan officials more than is the case of incumbents that are worried about their chances of re‐election. To do so, we draw on data detailing capital transfers allocated by Spanish regions to local governments during the period 1995‐2007. Using a regression discontinuity design, we document strong and robust effects. We find that, on average, a mayor belonging to the same party as that of the regional president obtains nearly twice the amount in grants as is received by a mayor belonging to an opposition party. This effect is much greater for regional incumbents that won the previous election by a large margin, but it disappears in the case of highly competitive elections. The effects estimated by difference‐in‐differences are not so great but they point in the same direction. Overall, the results are consistent with predictions that regional incumbents focus on obtaining the most votes possible when elections are strongly contested, while they seek to increase the number of aligned mayors when their position at the ballot box is not vulnerable.
    Keywords: Political parties, intergovernmental transfers, distributive politics, regression discontinuity
    JEL: C2 D72
    Date: 2017
  27. By: Ammann, Manuel; Ehmann, Christian
    Abstract: This study investigates the relationship between governance, investment performance and asset allocation of pension funds in Switzerland. Our sample includes survey data from 139 Swiss occupational pension plans for which we develop a governance metric comprising attributes of organisational design, management incentives, target setting, investment strategy, investment processes, risk management, monitoring, and transparency. We find empirical evidence that pension fund governance is positively related to excess returns, benchmark outperformance and Sharpe ratios. Pension funds in the top governance quartile outperform those in the bottom quartile by approximately 1% in terms of average excess returns and benchmark deviation. Furthermore, our study results indicate that asset allocation decisions are not related to governance, but rather to institutional factors.
    Keywords: Pension Fund Governance, Investment Performance, Swiss Occupational Pension Plans
    JEL: G11 G19 G23 J32
    Date: 2016–09
  28. By: Määttänen, Niku; Salminen, Tomi
    Abstract: We consider the private economic incentives and the fiscal consequences related to informal long-term care by e.g. family members and formal care in institutions. We focus on the case where providing informal care implies less market work. In such cases, informal care reduces both private wage income and government tax revenue compared to formal care. On the other hand, the cost of formal care may be borne largely by the state. We provide a detailed quantitative analysis of the Finnish case. We describe how the private economic incentives and fiscal consequences relate to the wage level of the potential informal care provider and the income of the care receiver. We find that they vary greatly across individuals. It seems likely, however, that in most cases the fiscal cost of informal care is smaller than that of formal care. The private monetary incentives, on the other hand, tend favor formal care over informal care.
    Keywords: Long-term care, informal care, public finances
    Date: 2017–02–21
  29. By: Pamela Lenton (Department of Economics, University of Sheffield)
    Abstract: The number of individuals registered as self-employed in the UK has grown considerablyover the past decade. The economics literature generally agrees that the self-employedwork longer hours than their counterparts who are in paid employment and earn less.However, most of the literature considers the self-employed as a homogeneous group ofindividuals, whereas in reality, the term now encompasses a variety of very differententrepreneurs, such as businesses or partnerships, sole traders, freelance workers andsub-contractors. Using UK panel data, this paper examines the differences in thecharacteristics of self-employed individuals by self-employment type to highlight thedifference between these groups and their employed counterparts. Random effect probitestimations that model the determinants of being in different self-employment groupshighlight the heterogeneous nature of self-employment and their different determinants.Wage estimations reveal different returns to separate classifications of self-employment.
    Keywords: Self-employment, Autonomy, Entrepreneurship
    JEL: J20 J21 J24 L26
    Date: 2017–01
  30. By: E. Avisoa
    Abstract: This paper analyses the technical efficiency of European co-operative banks compared to European commercial banks from 2006 to 2014. For this we use the B-convexity method, an innovative approach in frontier efficient models estimation, to measure banks’ technical efficiency; we also analyse the influence of certain variables on the level of efficiency. Our findings show that: a) a principal component analysis indicates that cooperative banks’ balance sheet are oriented towards lending activities while commercial banks are more oriented towards securities and derivatives activities; b) on average, the technical efficiency of the banks in our sample significantly decreased between 2007 and 2009, before recovering markedly between 2010 and 2012 and stabilizing over the period 2013-2014; c) there is no significant difference in technical efficiency between European cooperative banks and commercial banks, although we observe a slight superiority of commercial banks; d) French cooperative banks have higher levels of technical efficiency than their European peers; and (e) technical efficiency is positively impacted by the banks’ size, suggesting that large banks tend to have higher technical efficiency than smaller banks. This is in line with a trend towards concentration to improve technical efficiency in the European banking sector.
    Keywords: European banking; cooperative banks; technical efficiency; B-convexity; non-parametric frontier approach.
    JEL: C14 C67 G21 G30
    Date: 2016
  31. By: Di Liberto, Adriana (University of Cagliari); Casula, Laura (University of Cagliari)
    Abstract: We study if Italian teachers do apply gender discrimination when judging students. To this aim, we use a difference-in-differences approach that exploits the availability of both teachers (non-blind) and standardized test (blind) scores in math and language that Italian students receive during the school year. Using data for all sixth graders, descriptives show that in both scores girls are better than boys in the language scores, while in math boys perform better than girls in the blind test. Moreover, our analysis suggest that boys are always discriminated by teachers in both subjects. This result holds also when we control for class fixed effects, students noncognitive skills, gender specific-attitude towards cheating and possible cultural differences towards gender attitudes in math or language.
    Keywords: schooling outcomes, discrimination, gender stereotypes
    JEL: L2 I2 M1 O32
    Date: 2016–12
  32. By: Osier, Guillaume
    Abstract: The Household Finance and Consumption Survey (HFCS) is a recent initiative from the Eurosystem to collect comparable micro-data on household wealth and indebtedness in the euro area countries. The Household Finance and Consumption Network (HFCN), which comprises the European Central Bank (ECB), national central banks (NCBs), and national statistical institutes (NSIs), is in charge of the development and implementation of the HFCS. The first round of the survey was successfully conducted between 2008 and 2011, and the results were published in April 2013. The second round is now under way and will cover all the euro area countries. This paper is a joint effort by several members of the HFCN to further investigate the issue of unit non-response in the HFCS, better describe and understand its patterns, measure its effects on the overall quality of the survey and, ultimately, propose strategies to mitigate them. The paper is divided into sections, the first section being the introduction. The second section draws up a list of the main possible sources of auxiliary information that can be relied on in order to analyse non-response patterns in the HFCS. It also presents summary indicators that can be used to quantify unit non-response. In the third section, based on the experience from the first wave of the HFCS, the report elaborates on good survey practices (e.g. interviewer training and compensation, use of incentives, persuasive contact strategies, etc.) to prevent unit non-response from occurring. The fourth section compares several reweighting strategies for coping with unit non-response a posteriori, in particular simple and generalised calibration methods. These methods are assessed with respect to their impact on the main HFCS-based estimates. Finally, based on the outcome of this empirical analysis, recommendations are made with regard to post-survey weighting adjustment in the HFCS. JEL Classification: C83
    Keywords: calibration, response propensity, sampling weights, unit non-response
    Date: 2016–07

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