nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒08‒06
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Is there a case for intergenerational transmission of female labour force participation and educational attainment? Evidence from Greece during the crisis By Evangelia Papapetrou; Pinelopi Tsalaporta
  2. An Investigation Into the Stability of the Big-Five in Germany By Schäfer, Konrad C.
  3. The Relationship Between Greek Exports and Foreign Regional Income By Konstantinos Chisiridis; Theodore Panagiotidis
  4. Does EU Cohesion Policy Work? Theory and Evidence By Davide Fiaschi; Andrea Mario Lavezzi; Angela Parenti
  5. Consolidations in the German interurban bus industry: Effects on prices and quantities By Samuel de Haas; Jan Thomas Schaefer
  6. Income or Leisure? On the Hidden Benefits of (Un-) Employment By Adrian Chadi; Clemens Hetschko
  7. Why is it so hard to reach the EU’s ‘poverty’ target? By Zsolt Darvas
  8. Exporting and performance: evidence from Greek firms By Heather D Gibson; Georgia Pavlou
  9. Opening the Retail Electricity Markets: Puzzles, Drawbacks and Policy Options By Anna Airoldi; Michele Polo
  10. Identifying asymmetric effects of labor market reforms By Gehrke, Britta; Weber, Enzo
  11. How neutral is the choice of the allocation mechanism in cap-and-trade schemes? Evidence from the EU-ETS By Nicola De Vivo; Giovanni Marin
  12. Innovation and location in German knowledge intensive business service firms By Brunow, Stephan; Hammer, Andrea; Mc Cann, Philip
  13. Great Recession and Disability Insurance in Spain By Sergi Jiménez-Martín; Arnau Juanmarti Mestres; Judit Vall Castelló
  14. Performance of Hungarian firms: are apprentices an asset or a liability? Evidence from a unique matched employer-employee dataset By Sofie Cabus; Eszter Nagy
  15. What drives social contagion in the adoption of solar photovoltaic technology By Andrea Baranzini, Stefano Carattini, Martin Peclat
  16. More Giving or More Givers? The Effects of Tax Incentives on Charitable Donations in the UK By Almunia, Miguel; Lockwood, Ben; Scharf, Kimberley
  17. The effect of increased general education in vocational schools - Evidence from a Hungarian vocational school reform By Joris Ghysels; Zoltán Hermann; Iryna Rud; Melline Somers
  18. Wage Frontiers in Pre & Post-Crisis Spain: Implications for Welfare and Inequality By Rodríguez-Álvarez, Ana; Blashford-Fernández, Joanna M.
  19. Choosing the future: economic preferences for higher education using discrete choice experiment method By Mikołaj Czajkowski; Tomasz Gajderowicz; Marek Giergiczny; Gabriela Grotkowska; Urszula Sztandar-Sztanderska
  20. Additional Career Assistance and Educational Outcomes for Students in Lower Track Secondary Schools By Fitzenberger, Bernd; Licklederer, Stefanie
  21. The Long-Lasting Effects of Family and Childhood on Adult Wellbeing: Evidence from British Cohort Data By Andrew E. Clark; Sarah Flèche; Warn N. Lekfuangfu
  22. For Whom the Bell Tolls: Road Safety Effects of Tolls on Uncongested SCUT Highways in Portugal By Alfredo Marvão Pereira; Rui Marvão Pereira; João Pereira dos Santos
  23. Do friends follow each other? FDI network effects in Central Europe By Gabor Bekes; Marta Bisztray

  1. By: Evangelia Papapetrou (Bank of Greece); Pinelopi Tsalaporta (Bank of Greece)
    Abstract: Using logit regressions techniques for binary response models, fit by maximum likelihood with robust standard errors, the analysis investigates the intergenerational transmission of female labour force participation and the intergenerational transmission of educational outcomes in Greece. To conduct this study, we pioneer in the utilization of a unique dataset, the European Union Statistics on Income and Living Conditions (EU-SILC) for Greece. Data refer to 2011 when the first elements of the economic adjustment programme were being put into place. Most importantly, the EU-SILC 2011 wave is the latest one to include an ad hoc module on the intergenerational transmission of disadvantages. Results show that a wife’s labour force participation decision is related to her husband’s mother’s and mother’s participation, and even more strongly related to her own level of educational achievement along with the number of children in the household. The labour force participation of the mother of the husband is more important than that of the woman’s own mother, indicating a strong transmission of the husband’s cultural model. Concerning educational attainment, parental educational background, and especially maternal, is identified as a key determinant of women’s high level of educational achievement.
    Keywords: female labour supply; educational attainment; intergenerational mobility; preferences; Greece
    JEL: J22 J62 I21 D10 J21
    Date: 2017–04
  2. By: Schäfer, Konrad C.
    Abstract: This paper investigates the stability of the Big-Five personality traits based on the German Socio-Economic Panel (SOEP) from 2005, 2009, and 2013. The results indicate that the population means only show little variance over the eight year time frame. There is no link between age and mean-levels, and only minor changes of the mean-levels of the Big-Five over time for the working age population (25-64 years of age) in Germany. However, there are intra-individual changes which can partly be explained by adverse life events. They impact the Big-Five traits and thereby contradict the general finding of stability of the traits in the literature. Exploratory fixed effects wage estimations that exploit the intra-individual changes in the Big-Five find no significant effects for men but positive effects of agreeableness and conscientiousness on women's wages.
    Keywords: Non-cognitive skills; Big-Five; personality traits, wages
    JEL: C18 J3
    Date: 2017–07
  3. By: Konstantinos Chisiridis; Theodore Panagiotidis
    Abstract: This paper assesses the effect of foreign economic activity on Greek exports based on both static and dynamic analysis. We employ data from 1990:I to 2016:IV and quantify the long-run foreign income elasticity of Greek exports. We establish a cointegration relationship and find that the aggregate foreign income elasticity of Greek exports is 1.72 and the price elasticity is negative. We reveal that economic growth in Germany, Italy and Turkey has the greatest impact on Greek exports and the corresponding elasticities are found to be 0.75, 0.72 and 0.65. The rest of the European countries are also found to be significant for the growth of the Greek exports. Finally, the dynamic analysis shows a positive interaction between real income growth in Germany, Italy, the rest of Europe and Greek export growth in the short-run horizon.
    Date: 2017–07
  4. By: Davide Fiaschi; Andrea Mario Lavezzi; Angela Parenti
    Abstract: This paper evaluates the effectiveness of European Cohesion Policy in the regions of 12 EU countries in the period 1991-2008, on the basis of a spatial growth model which allows for the identification of both direct and indirect effects of EU funds on GDP per worker growth. We find that âObjective 1â funds are characterized by strong spatial externalities and a positive and concave effect on the growth of GDP per worker, which reaches a peak at the ratio funds/GDP of approximately 3% and becomes non-significant after 4%. âObjective 2â and âCohesionâ funds have non-significant effects, while all the other funds exert a positive and significant effect, but their size is very limited. EU Cohesion Policy, moreover, appears to have increased its effectiveness over time. In the period 2000-2006 Objective 1 funds are estimated to have a median multiplier equal to 1.52, and to have added 0.37% to the GDP per worker growth. Overall, in the period 1991- 2008 funds are estimated to have added 1.4% to the median annual growth, and to have reduced regional disparities of 8 basis points in terms of the Gini index.
    Keywords: European regional disparities, European regional policy, spatial spillovers, Structural and Cohesion Funds, spatial panel model
    JEL: C21 E60 O52 R11 R12
    Date: 2017–01–01
  5. By: Samuel de Haas (Justus-Liebig-University Giessen); Jan Thomas Schaefer (Justus-Liebig-University Giessen)
    Abstract: We study effects on prices and quantities of a takeover in the rather concentrated German interurban bus industry. We empirically asses the effect of the takeover of Postbus by Flixbus on industry key features, using a route-level price data set containing prices for more than 6,000 routes in Germany for a period between September and December 2016. We find that average prices significantly increase and quantities decrease in the post-takeover phase. However, these results are mainly driven by the fact that Postbus was a low-cost supplier. The remaining providers do not seem to have increased their prices significantly in the post-takeover phase. This absence of a price increase despite the removal of a close competitor could be an indication of a strong impact of intermodal competition. This suggestion is confirmed by our empirical findings.
    Keywords: Competition, Takeover, Interurban Bus Services, Germany
    JEL: L11 L41 L92 K21 K23
    Date: 2017
  6. By: Adrian Chadi (Institute for Labour Law and Industrial Relations in the European Union); Clemens Hetschko (Freie Universität Berlin, School of Business and Economics)
    Abstract: We study the usually assumed trade-off between income and leisure in labor supply decisions using comprehensive German panel data. We compare non-employed individuals after plant closures with employed people regarding both income and time use as well as their subjective perceptions of these two factors. We find that the gain of non-working time translates intohigher satisfaction with free time, while time spent on hobbiesincreases to a lesser extent than home production. Additionally, satisfaction with family life increases, which may be a hidden benefit of being unemployed. In contrast, satisfaction with income strongly declines when becoming jobless. Identity utility from earning a living may play the role of a hidden benefit of employment. Finally, we examine subjective assessments of income and leisure as potential predictors for job take-up. Non-employed people are particularly likely to take up a job soon when they are dissatisfied with their income.
    Keywords: labor supply, plant closure, leisure, work-family conflict, life satisfaction, income satisfaction, free time satisfaction, family satisfaction
    JEL: D01 D13 I31 J22 J64 J65
    Date: 2017–06
  7. By: Zsolt Darvas (Bruegel and Corvinus University of Budapest and Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: The European Union’s Lisbon strategy goal of tackling poverty was a notable failure, while the Europe 2020 strategy’s poverty target is out of reach. Both strategies were based on variants of the ‘at risk of poverty’ indicator, which has an inappropriate and misleading name. We demonstrate theoretically and empirically by cross-section, time series and panel cointegration evidence, that the ‘at risk of poverty’ indicator essentially measures income inequality, not poverty. Our calculations show that even after taking into account the positive impact that expected economic growth should have on material deprivation and low work intensity, the Gini coefficient of income inequality would have to fall by 3.5 points in each EU country if the Europe 2020 poverty target is to be reached, which is implausible. Huge differences between national poverty thresholds make the EU-wide poverty aggregate pointless. We approximate the EU-wide distribution of income and use it calculate EU-wide poverty indicators. The political agreement between EU member states expressed the goal of reducing poverty, not inequality. There are good reasons to aim for lower income inequality, but a political agreement would be needed to set an inequality goal and corresponding policies.
    Keywords: Europe 2020, EU-wide distribution of income, income inequality, poverty measurement
    JEL: D31 E37 I32
    Date: 2017–06
  8. By: Heather D Gibson (Bank of Greece); Georgia Pavlou (Bank of Greece)
    Abstract: This paper explores differences in performance between firms that export and those that do not. With only a few exceptions, exporters have characteristics which suggest “better” performance than non-exporters, controlling for observed and unobserved heterogeneity. This paper aims to provide evidence on the differences between exporters and non-exporters in terms of labour productivity and profitability across time, different sectors of economic activity and different size groups, using data from exporting and non-exporting firms incorporated in Greece for the period 2006-2014. The results suggest that the exporter productivity premium is around 14% for the whole sample, pointing to a significant productivity advantage for exporting firms which is even stronger in certain sectors of economic activity. There is also evidence in favour of higher productivity growth for always-exporting firms and starters, while there is a negative, though insignificant, effect for stoppers.
    Keywords: export premia; labour productivity; Greece; firm performance
    JEL: F14
    Date: 2017–06
  9. By: Anna Airoldi; Michele Polo
    Abstract: The Italian electricity retail market is fully liberalized since 2007, allowing all households to choose between a regulated tariff and those offered in the free market. However, as of 2015, almost 70% of households remain with the regulated contract and only 4.5% moves every year to the free market. Moreover, contracts more costly than the regulated default one are offered and subscribed. In this paper we first analyze the best and worst offers on the free market, identifying significant potential gains but also losses when switching from the regulated tariff to the free market. Then we build up a sequential search model that extends Janssen et al. (2005) to explain this evidence. Consumers have zero (shoppers) and positive (non-shoppers) search costs. These latter receive upward (pessimistic) or downward (optimistic) biased signals of their current regulated price. We obtain a rich set of mixed strategy equilibria with continuous support and, in some cases, an atom, different level of participation of non-shoppers of either type and some contracts more costly than the regulated one. Equilibria with a larger participation of non-shoppers are associated with higher expected and minimum prices. Search costs and perception bias are key parameters in comparative statics, with policy implications to improve market performance. Finally, by mid 2019 the Government has planned to lift the regulated tariff. We use the model to predict possible outcomes including an initial increase in prices.
    Keywords: Search costs, liberalized retail markets, price dispersion, gains and losses from switching.
    JEL: L13 L15 L94
    Date: 2017
  10. By: Gehrke, Britta (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])
    Abstract: "This paper investigates whether the effects of structural labor market reforms depend on the business cycle. Based on search and matching theory, we propose an unobserved components approach with Markov switching to distinguish the effects of structural reforms that increase the flexibility of the labor market in recession and expansion. Our results for Germany and Spain show that reforms have substantially weaker expansionary effects in the short-run when implemented in recessions. In consequence, reforms are unlikely to mitigate the impact of crisis in the short-run. From a policy perspective, these results highlight the costs of introducing reforms in recessions." (Author's abstract, IAB-Doku) ((en))
    JEL: C32 E02 E32 J08
    Date: 2017–07–31
  11. By: Nicola De Vivo (IMT Institute for Advanced Studies Lucca (Italy)); Giovanni Marin (Department of Economics, Society and Politics, University of Urbino 'Carlo Bo')
    Abstract: The European Emission Trading Scheme (EU ETS) is the central EU policy instrument aimed at mitigating climate change and to comply with the target agreed in the Kyoto protocol. The EU ETS could result in an harmful impact for the competitiveness of the European firms, as it was unilaterally introduced by the EU, and so firms could be induced to relocate their carbon-intensive production activities in countries with less stringent regulations for mitigating climate change (carbon leakage effect). For this reason, European Union decided to grant most of permits for free in its first phases and to exempt leakage-exposed sectors from auctioning in its third phase. According to Coase (1960), the level of emissions for each firm in equilibrium does not depend on the assignment of property rights over the emissions but this could not be the case in a real world system, with a lot of possible frictions, as transaction costs and behavioural anomalies. The aim of the paper is to exploit the asymmetry in the allocation mechanisms introduced from the third phase of the EU ETS to evaluate whether different allocation mechanisms are neutral in terms of emission abatement decisions. Results suggest a non-neutral role of the allocation mechanisms, with establishments that received allowances for free having greater emissions than plants that were forced to buy allowances through auctions.
    Keywords: EU ETS, grandfathering, auctioning, carbon leakage
    JEL: Q54 Q58
    Date: 2017–08
  12. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hammer, Andrea; Mc Cann, Philip
    Abstract: "Knowledge Intensive Business Services (KIBS) are widely perceived as being important drivers of technological progress and innovation. KIBS are generally understood as depending, driving and thriving on knowledge exchanges and therefore, geographical proximity to markets, customers and suppliers would be expected to be a critical factor in their performance. This paper investigates how the innovation performance and processes of KIBS firms are related to their distance from the nearest city and also to the size of the nearest city. For this purpose we make use of detailed firm level data and consider Germany as a research field. While most current evidence on this topic emerges from Canada, we complements and add to this existing literature on the geography of KIBS by examining these issues in the German spatial setting which largely conforms to a textbook type of spatial urban hierarchy. Our probit results indeed find that there are very strong distance decay and city size effects, and these also vary according to the innovation type." (Author's abstract, IAB-Doku) ((en))
    Keywords: Innovation, unternehmensbezogene Dienstleistungen, Wissensarbeit, regionale Faktoren, Stadt-Umland-Beziehungen
    JEL: D22 L84 O31 R12
    Date: 2017–07–24
  13. By: Sergi Jiménez-Martín; Arnau Juanmarti Mestres; Judit Vall Castelló
    Abstract: In this paper, we exploit the strong incidence of the Great Recession in Spain to estimate the effect of economic conditions on participation in Disability Insurance (DI). Using individual panel data, we show that increases in the local unemployment rate are associated with a reduction in the individual probability to enter the DI program during the Great Recession in Spain. Using aggregate data on applications, we show that this procyclical behavior of DI awards comes from an increase in the proportion of applications that are denied. Thus, contrary to the previous literature that has extensively reported a countercyclical behavior of DI participation, our results provide new evidence that, in periods of extremely recessionary conditions, DI participation may turn procyclical.
    Date: 2017–06
  14. By: Sofie Cabus (Maastricht University); Eszter Nagy (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTE University)
    Abstract: Hungarian legislation provides firms with financial incentives to train apprentices from vocational training schools. In line with these incentives, it is observed that firms increasingly train apprentices over the period 2003-2011, in particular, in the sectors manufacturing, construction, wholesale and retail and hotels and restaurants. However, at the same time, it is observed that firms decreasingly retain the trained apprentices in these four sectors. This finding leads to the hypothesis that apprentices are not profitable in the long run. The formulated hypothesis is known in the previous literature as the ‘substitution strategy’. This recruiting strategy is particularly observed among firms that replace their low-skilled labour with apprentices in order to reduce the cost of wages. For these firms it is not beneficial to hire an apprentice after accomplishing his training, because then he becomes a low-skilled worker paid at higher wages. This paper investigates the effect of the share of days worked by apprentices on productivity and gross profits of Hungarian firms by using a unique matched employer-employee dataset. Different approaches that allow us to estimate the effect are discussed among which fixed effects first-difference models and system GMM. The results indicate that apprentices decrease productivity and gross profits of Hungarian firms. These negative effects on firm performance were more prominent and robust before (2003-2007) than after the financial crisis (2008-2011).
    Keywords: apprenticeship training, firm performance, panel data
    JEL: I21 J24 L25
    Date: 2017–06
  15. By: Andrea Baranzini, Stefano Carattini, Martin Peclat
    Abstract: Increasing the use of renewable energy is central to address climate change. Recent research has suggested the existence of social contagion in the adoption of solar panels, which may contribute to accelerate the transition to a low-carbon economy. While the existing literature has focused on residential adoption only, we extend the analysis to private firms and farms, and include solar panels with different characteristics. We exploit a unique large dataset providing detailed information on about 60,000 solar installations in Switzerland, including their specific location at the street level and details on the timing of the technological adoption, and couple it with rich socioeconomic data at the municipality level. Our detailed data allow us to adopt an empirical strategy addressing the main threats to identification associated with social contagion, including homophily and reflection. We find that households’ decisions to adopt the solar technology are dependent on pre-existing adoption, and in particular on spatially close and recent installations. Firms and farms solar PV adoptions react to neighboring PV panels, although in a lesser extent than households. Furthermore, companies are more influenced by panels installed by other companies, compared to panels installed by households. By distinguishing between building-integrated and building-attached PV systems and including capacity categories, we provide evidence that both learning and imitation are important components of social contagion. As a result, our findings provide new insights on the mechanisms of social contagion and how they could be leveraged with targeted interventions.
    Date: 2017–07
  16. By: Almunia, Miguel; Lockwood, Ben; Scharf, Kimberley
    Abstract: This paper estimates the tax-price elasticity of giving using UK administrative tax return data, exploiting variation from a large tax reform. We estimate both the in- tensive and extensive-margin elasticity, using a novel instrumental variables strategy. Then, we derive new conditions to evaluate the welfare consequences of changes in the generosity of the subsidy to donations. We find a small intensive-margin elasticity of -0.2 and a substantial extensive-margin elasticity of -0.8, yielding a total elasticity of about -1. These estimates mask considerable heterogeneity: high-income individ- uals respond more on the intensive margin, while the extensive-margin response is stronger among low-income taxpayers.
    Keywords: Donations; Tax policy; Tax Subsidies for Giving
    JEL: D64 H24 H31
    Date: 2017–07
  17. By: Joris Ghysels (Top Institute for Evidence Based Education Research, TIER-Maastricht University); Zoltán Hermann (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTE University); Iryna Rud (Top Institute for Evidence Based Education Research, TIER-Maastricht University); Melline Somers (Top Institute for Evidence Based Education Research, TIER-Maastricht University)
    Abstract: This paper aims at the evaluation of the reform of vocational education introduced in 1998 in Hungary. The reform extended the duration of education by one year, and increased teaching time spent on non-vocational subjects. The reform affected two of the three tracks in upper-secondary education in Hungary, vocational secondary school and vocational school. We estimate the effect of the reform on educational attainment, employment and wages in a comparative interrupted time series (CITS) framework, using the academic track and secondary school drop-outs as control groups. The results suggest that the reform has had heterogeneous effects. First, we detect no effect for the vocational secondary track, while the reform has improved labour market outcomes of vocational school students. Second, in the vocational school group the reform has increased men’s wages, while not affected their employment. For women we found a positive employment effect, while wages have increased only for the younger cohorts.
    Keywords: vocational education, reform, employment, wages, skills
    JEL: J08 J01 D00
    Date: 2017–06
  18. By: Rodríguez-Álvarez, Ana; Blashford-Fernández, Joanna M.
    Abstract: This paper explores the evolution of wages in Spain using a stochastic frontier approach (SFA) to estimate the wage frontiers of workers in Spain as a function of their human capital (education, experience and occupation), year and region. Once the wage frontier has been estimated an analysis is made of determinants (type of contract, economic cycle, gender and region), which may contribute to the workers having difficulties in achieving their maximum attainable potential salary. Given our specific interest in comparing wages before and after the crisis, we monitor the effect on hourly wage of changes in the level of Spanish Gross Domestic Product for the period 2004-2015. For this purpose, a panel data model (Greene, 2005) is used to estimate the stochastic frontier. The data is obtained from the Spanish Living Conditions Survey. Coinciding with three waves (2004-2007, 2008-2011 and 2012-2015) of the SCLS, our database conveniently encompasses differing economic cycles for estimation. Results show that the difficulty of workers in achieving their potential wage is greater at the end of the post-crisis period than the pre-crisis period. Whilst serving to throw some light on the potential and real wages available to Spanish workers before and after the onset of the economic crisis, the paper also offers a brief glimpse of the effect on individual welfare and evidence of an increasing trend in inequality in the post-crisis period.
    Date: 2017
  19. By: Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Tomasz Gajderowicz (Faculty of Economic Sciences, University of Warsaw); Marek Giergiczny (Faculty of Economic Sciences, University of Warsaw); Gabriela Grotkowska (Faculty of Economic Sciences, University of Warsaw); Urszula Sztandar-Sztanderska (Faculty of Economic Sciences, University of Warsaw)
    Abstract: This study illustrates how respondents’ stated choices (the discrete choice experiment method) combined with the random utility framework can be used to model preferences for higher education. The flexibility offered by stated preference data circumvents limitations of other approaches, and allows quantifying young people’ preferences for selected attributes of higher education programs that are typically highly correlated in revealed preference data. The empirical study presented here is based on a survey of 20,000 Polish respondents aged 18-30, who stated their preferences for higher education programs in carefully prepared hypothetical choice situations. The attributes we considered include tuition fee, expected salary after graduation, quality of institution, interest in the field of study, distance from home, and mode of study. Using random parameters and latent class mixed multinomial logit models, we can formally describe young peoples’ preferences, and identify the financial trade-offs they are willing to make, that is, estimate their willingness to pay for specific attribute levels in terms of increased tuition fees or expected salary after graduation. Accounting for respondents’ observed and unobserved preference heterogeneity, we address a few research questions related to, for example, distinct preferences of students whose neither parent attained tertiary education, students from lower socio-economic groups, or students of a particular gender. Overall, we demonstrate how stated preference methods can be a useful tool for exploring economic preferences, better understanding the determinants of choices, forecasting, and designing the services offered by higher education institutions in an optimal way.
    Keywords: higher education institution choice, random utility model, stated preferences, discrete choice experiment
    JEL: I23 D12 H52
    Date: 2017
  20. By: Fitzenberger, Bernd (Humboldt University Berlin and ZEW Mannheim); Licklederer, Stefanie (University of Freiburg)
    Abstract: Based on local policy variation, this paper estimates the causal effect of additional career assistance on educational outcomes for students in Lower Track Secondary Schools in Germany. We find mostly insignificant effects of the treatment on average outcomes, which mask quite heterogeneous effects. For those students, who are taking extra coursework to continue education, the grade point average is unaffected and the likelihood of completing a Middle Track Secondary School degree falls. In contrast, educational outcomes improve for students who do not take extra coursework. Hence, the treatment causes a reversal of educational plans after graduation.
    Keywords: lower track secondary schools; career guidance; educational upgrading;
    JEL: I20 J24
    Date: 2017–07–27
  21. By: Andrew E. Clark; Sarah Flèche; Warn N. Lekfuangfu
    Abstract: To what extent do childhood experiences continue to affect adult wellbeing over the life course? Previous work on this link has been carried out either at one particular adult age or for some average of adulthood. We here use two British birth-cohort datasets (the 1958 NCDS and the 1970 BCS) to map out the time profile of the effect of childhood on adult outcomes, including life satisfaction. We find that the effect of many aspects of childhood do not fade away over time, but are rather remarkably stable. In both birth cohorts child non-cognitive skills are the strongest predictors of adult life satisfaction at all ages. Of these, emotional health is the strongest. Childhood cognitive performance is more important than good conduct in explaining adult life satisfaction in the earlier cohort, whereas this ranking is inverted in the more recent BCS.
    Keywords: life satisfaction, cohort data, childhood, adult outcomes
    JEL: A12 D60 I31
    Date: 2017–07
  22. By: Alfredo Marvão Pereira (Department of Economics, The College of William and Mary, Williamsburg VA 23187); Rui Marvão Pereira (Department of Economics, The College of William and Mary, Williamsburg VA 23187); João Pereira dos Santos (Nova School of Business and Economics, Faculdade de Economia – Universidade Nova de Lisboa)
    Abstract: We present a difference-in-differences analysis of the road safety effects of introducing tolls on SCUT highways in Portugal, a policy motivated purely by financial considerations, as congestion was never an issue. Using negative binomial count models and a comprehensive dataset on all mainland municipalities covering 2008 to 2014, we find that introducing tolls led to an increase in the total numbers of accidents and of road injuries in municipalities where SCUT highways are located. Additionally, we register a change in the composition thereof, with fewer occurrences on highways (including on SCUT highways) and an increase on national and other roads. Finally, we find that most effects pertain to light injuries. No statistically significant effects were identified for fatal or serious injuries. Furthermore, as a result of introducing tolls on SCUT highways, we estimate that around 20% of the toll revenue collected is lost on the costs linked to road accidents. This questions the rationale of introducing such tolls, even on a revenue-raising standpoint.
    Keywords: Road safety, Accident, Injury, Toll, Difference-in-differences, SCUT, Portugal
    JEL: R10 R41
    Date: 2017–07
  23. By: Gabor Bekes (Institute of Economics Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Central European University and CEPR); Marta Bisztray (Institute of Economics Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: A great deal of multinationals receive a bundle of hidden or cash subsidizes upon investing in a foreign country. Policymakers often argue that a subsidy today will help locate friends of the investor later on. Using extensive data on FDI investments, we analyze such patterns. In particular, we investigate if co-location is more frequent among connected firms such as members of business groups as well as firms sharing similar background. Focusing on investments into Central and Eastern European countries we find evidence of co-location pattern of connected firms.
    Keywords: Foreign direct investment, agglomeration, location choice, network effects, business groups
    JEL: F23 R3
    Date: 2017–06

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