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on Microeconomic European Issues |
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Issue of 2017‒08‒27
twenty-two papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Wang, Zhiling; de Graaff, Thomas; Nijkamp, Peter |
| Abstract: | We examine the heterogeneous impacts of foreign language use at work on earnings of both native-born workers and foreign-born workers, using a longitudinal survey, viz. the European Community Household Panel (ECHP) running from 1994 to 2001. Our findings are the following. First, for native-born workers with a tertiary diploma, using a foreign language at work is found to have an unambiguously positive impact on their earnings (2% on average). Second, for foreign-born workers, returns to foreign language use at work is highly complementary to education. Foreign language users below the upper secondary educational level earn significantly less (¡8%) than those who use the local language at work. Third, with regard to language types, a linguistically distant foreign language gives native-born workers the highest wage premium, while the use of EU official languages pays off the most for foreign-born workers. Fourth, our results do not show evidence that the lack of local language knowledge of low-educated migrants causes these results, as immigrants for whom themother tongue is similar to the local language show a similar pattern. |
| Keywords: | foreign language at work,earnings,native-born,foreign-born |
| JEL: | J24 J31 J61 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:104&r=eur |
| By: | Kölling, Arnd |
| Abstract: | This paper analyzes the differences in labor demand and labor turnover between family and nonfamily firms. The majority of firms in modern economies and, therefore, also in Germany are family controlled. These firms seem to have better employment performance than non-family controlled companies. Therefore, this study applies a treatment model for panel data using family firms as a treatment indicator. Moreover, a propensity score estimation is introduced to the model to control for selectivity. The results of the estimations indicate that labor demand is possibly larger because of family members joining the firms as extra employees. Moreover, labor turnover is lower, thus supporting the assumption that family firms offer some kind of implicit contracts to their employees and are more loss averse than other establishments. However, evidence of these results for establishments with 20 or more employees is generally weaker, indicating that the differences between both types of firms decrease with firm size. |
| Keywords: | Labor Demand,Family Firms,Firm Size,Treatment Model,Panel Data |
| JEL: | J23 D22 G32 C21 C23 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imbwps:92&r=eur |
| By: | Christian Krekel |
| Abstract: | We study whether raising instructional time can crowd out student pro-social behaviour. To this end, we exploit a large educational reform in Germany that has raised weekly instructional hours for high school students by 12.5% as a quasi-natural experiment. Using a difference-in-differences design, we find that this rise has a negative and sizeable effect on volunteering, both at the intensive and at the extensive margin. It also affects political interest. There is no similar crowding out of scholastic involvement, but no substitution either. Impacts seem to be driven by a reduction in available leisure time as opposed to a rise in intensity of instruction, and to be temporary only. Robustness checks, including placebo tests and triple differencing, confirm our results. |
| Keywords: | instructional time, student pro-social behaviour, volunteering, scholastic involvement, political interest, quasi-natural experiment, “G8” reform, SOEP |
| JEL: | I21 I28 D01 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1495&r=eur |
| By: | Barbanchon, Thomas Le (Bocconi University and CEPR); Rathelot, Roland (University of Warwick and CEPR); Roulet, Alexandra (Harvard University and INSEAD) |
| Abstract: | Although the reservation wage plays a central role in job search models, empirical evidence on the determinants of reservation wages, including key policy variables such as unemployment insurance (UI), is scarce. In France, unemployed people must declare their reservation wage to the Public Employment Service when they register to claim UI benefits. We take advantage of these rich French administrative data and of a reform of UI rules to estimate the effect of the potential benefit duration (PBD) on reservation wages and on other dimensions of job selectivity, using a difference-in-difference strategy. We cannot reject that the elasticity of the reservation wage with respect to PBD is zero. Our results are precise and we can rule out elasticities larger than 0.006. Furthermore, we do not find any significant effects of PBD on the desired number of hours, duration of labor contract and commuting time/distance. The estimated elasticity of actual benefit duration with respect to PBD of 0.3 is in line with the consensus in the literature. Exploiting a regression discontinuity design as an alternative identification strategy, we find similar results.Keywords: unemployment insurance, reservation wage. JEL Classification: J64 J65 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:330&r=eur |
| By: | Silvana Tenreyro; Philippe Bracke (Bank of England) |
| Abstract: | Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing markets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:423&r=eur |
| By: | Davide Azzolini; Antonio Schizzerotto |
| Abstract: | We investigate gender, migration and social-background disparities in digital reading and navigation skills using PISA 2012 computer-based data from 16 European countries. In comparison to the extant research on information skills disparities, we provide three main improvements. First, we rely on objective measures of navigation skills taken from the log files of the digital reading computer tests. Second, we distinguish a mere quantitative measure of browsing behavior from a more qualitative one which includes individuals' evaluative skills. Third, we compare print and paper-based reading scores, this allowing to assess social disparities in digital competences net of traditional skills and thus providing conservative estimates of the digital gaps. Our results point to the key importance of traditional competences in accounting for the observed digital gaps. Yet, the interplay between digitalization and education inequality is heterogeneous. Boys and girls show markedly different approaches to online navigation: the former show more operational familiarity with technology and 'trial and error' approaches and girls being more prone to 'think and then click' approaches. Concerning the migrant/native gaps, the picture is one in which children of immigrants underperform on the digital reading test, but catch up with natives when traditional reading competences are held equal. Immigrants' children show slightly higher navigation skills that may be employed to compensate their linguistic difficulties. Finally, youths from privileged social backgrounds show higher digital skills that persist even net of traditional competences pointing out the possible existence of a cumulative effect of traditional and digital inequalities. |
| Keywords: | Digital divide, Digital reading, Education inequality, Information literacy, Log files, Navigation skills |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2017-02&r=eur |
| By: | Russell Cooper; Moritz Meyer; Immo Schott |
| Abstract: | We study the employment and output effects of the short-time work (STW) policy in Germany between 2009 and 2010. This intervention facilitated reductions in hours worked per employee with the goal of preventing layoffs. Using confidential German micro-level data we estimate a search model with heterogeneous multi-worker firms as a basis for policy analysis. Our findings suggest that STW can prevent increases in unemployment during a recession. However, the policy leads to a decrease in the allocative efficiency of the labor market, resulting in significant output losses. These effects arise from a reduction in the vacancy filling rate resulting from the policy intervention. |
| JEL: | E24 E32 E65 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23688&r=eur |
| By: | Hampf, Franziska (ifo Institute at the University of Munich); Woessmann, Ludger (University of Munich, ifo Institute, CESifo, and IZA) |
| Abstract: | It has been argued that vocational education facilitates the school-to-work transition but reduces later adaptability to changing environments. Using the recent international PIAAC data, we confirm such a trade-off over the life-cycle in a difference-in-differences model that compares employment rates across education type and age. An initial employment advantage of individuals with vocational compared to general education turns into a disadvantage later in life. Results are strongest in apprenticeship countries that provide the highest intensity of industry-based vocational education. |
| Keywords: | vocational education; apprenticeship; employment; life-cycle; PIAAC JEL Classification: J24; J64; I20 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:326&r=eur |
| By: | Drydakis, Nick; MacDonald, Peter; Bozani, Vasiliki; Chiotis, Vangelis |
| Abstract: | Addressing population ageing requires a rise in the activity rates of older workers. In this study, a field experiment for the period 2013-2015 in the UK, suggests that age discrimination persists at alarming levels. It shows that when two applicants engage in an identical job search, the older applicant would gain fewer invitations for interviews regardless of her/his experience or superiority for the appointment. The results also suggest that older applicants face higher occupational access constraints for blue-collar jobs than white-collar/pink-collar jobs, and that women face greater age discrimination than men. Worryingly, the outcomes suggest that older applicants gain poorer access to vacancies than younger applicants irrespective of written commitments to equal opportunities. The design of the study suggests that discrimination results from distaste for older applicants, which has not been eliminated by the introduction of anti-discrimination legislation. Eliminating ageism in recruitment requires organizations to adopt more inclusive HR policies at the earliest stages of the recruitment process. Social dialogue has a crucial role to play in shaping inclusive and discrimination free recruitment policies such that shared values and beliefs are not age-discriminatory but rather recognize the strengths and potential of workers from different age groups. |
| Keywords: | Access to Occupations,Wages,Ageism,Women,Discrimination |
| JEL: | C93 C9 J14 J1 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:103&r=eur |
| By: | Heinz Welsch (University of Oldenburg, Department of Economics); Jan Kuehling (University of Oldenburg, Department of Economics A) |
| Abstract: | : Immigration is a crucial issue in contemporary politics, and attitudes towards immigration are highly dispersed in many countries. We treat individuals’ immigration friendliness (IF) as a feature of their self-image or identity and hypothesize that, similar to other pro-social self-images, greater immigration friendliness is associated with greater subjective well-being (SWB). We further hypothesize that greater disparity of immigration attitudes yields social antagonism and as such is associated with less SWB. Finally, we hypothesize that greater disparity of immigration attitudes permits immigration-friendly individuals to differentiate themselves from others, thus raising the SWB benefit of holding an immigration-friendly self- image. Using 225,356 observations from 35 European countries, 2002-2015, we find evidence consistent with the hypotheses stated above. A 1-standard-deviation (SD) increase in IF is associated with an increase in 11-point life satisfaction (LS) by 0.15 to 0.32 points, whereas a 1-SD increase in attitude disparity is associated with a decrease in LS by 0.05 to 0.11 points. |
| Keywords: | immigration; attitudes; identity; antagonism; social conflict; subjective well-being |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:401&r=eur |
| By: | Cavaille, Charlotte (Georgetown University); Ferwerda, Jeremy (Dartmouth College) |
| Abstract: | To what extent does immigration drive support for anti-immigrant populist parties and candidates? Previous research has hypothesized the existence of a welfare channel, in which individuals exposed to the potential fiscal costs of immigration, in the form of higher taxes and lower benefits, will be more supportive of anti-immigration parties. But evidence in support of this argument is scant. This paper builds on existing work in two ways. Theoretically, we distinguish between the cash and the in-kind components of public transfers, and argue that the latter are especially prone to generating distributional conflicts. Empirically, we leverage an EU legal directive that resulted in an exogenous increase in the intensity of competition between immigrants and natives over public housing in Austria. Our findings indicate that support for anti-immigrant parties is highly responsive to perceived scarcity resulting from immigrant receipt of in-kind benefits. More broadly, the findings suggest that the confluence of austerity measures and free movement in the EU may explain the far-right’s recent electoral gains beyond its historic voting bloc. |
| Keywords: | JEL Classification: |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:328&r=eur |
| By: | Toulemon, L.; |
| Abstract: | This paper estimates the impact of group purchasing on medicine prices in French hospitals, taking advantage of the entry of hospitals into regional purchasing groups between 2009 and 2014. I use a new database providing the average annual prices paid for all innovative and costly medicines in public hospitals. Using a fixed effects model that controls for hospitals’ medicine-specific bargaining abilities and medicine-specific price trends, I find that group purchasing reduces prices of medicines in oligopoly markets, but has no impact on the prices of medicines with no competitors. |
| Keywords: | hospital medicine prices; purchasing groups; bargaining ability; |
| JEL: | C23 I11 J52 J58 L13 L14 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:17/21&r=eur |
| By: | Daniela Piazzalunga |
| Abstract: | The paper investigates the gender wage gap among recently graduated people, controlling for job and academic variables and for the field of study, as women lag in highly remunerative majors. The raw gender gap in hourly wages is 5.6%. Although including academic variables and the field of study, on top of job-related variables, slightly reduces the unexplained gap, the latter still accounts for most of the total difference. Using quantile decomposition, the paper shows that the unexplained gap increases along the wage distribution, indicating a glass ceiling effect. Heterogeneities arise across fields of study: the largest total gap emerges in Law, Political-Social sciences, and Economics-Statistics. In most disciplines, there is a significant unexplained gap – from 3.3% (Medicine), to 8.7% (Law), up to 9.6% (Agriculture) – which constitutes the largest share of the difference, confirming that most of the wage gap remains unexplained also by major. Finally, I use geographical differences to explore the influence of institutional and macro-economic variables, as well as of attitudes towards gender norms. Results indicate that childcare and part-time availability are correlated with lower gender wage gaps, while traditional gender norms are associated with higher gaps. |
| Keywords: | Gender wage gap, Oaxaca-Blinder decomposition, College graduates, Quantile decomposition, Field of study, Regional differences |
| JEL: | J16 J31 J71 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2017-03&r=eur |
| By: | Jesus Lago; Fjo De Ridder; Peter Vrancx; Bart De Schutter |
| Abstract: | Motivated by the increasing integration among electricity markets, in this paper we propose three different methods to incorporate market integration in electricity price forecasting and to improve the predictive performance. First, we propose a deep neural network that considers features from connected markets to improve the predictive accuracy in a local market. To measure the importance of these features, we propose a novel feature selection algorithm that, by using Bayesian optimization and functional analysis of variance, analyzes the effect of the features on the algorithm performance. In addition, using market integration, we propose a second model that, by simultaneously predicting prices from two markets, improves even further the forecasting accuracy. Finally, we present a third model to predict the probability of price spikes; then, we use it as an input in the other two forecasters to detect spikes. As a case study, we consider the electricity market in Belgium and the improvements in forecasting accuracy when using various French electricity features. In detail, we show that the three proposed models lead to improvements that are statistically significant. Particularly, due to market integration, predictive accuracy is improved from 15.7% to 12.5% sMAPE (symmetric mean absolute percentage error). In addition, we also show that the proposed feature selection algorithm is able to perform a correct assessment, i.e. to discard the irrelevant features. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1708.07061&r=eur |
| By: | Ambra, Poggi; Piergiovanna, Natale |
| Abstract: | In this paper, we highlight knowledge as specific channel through which labour mobility affects conditional within-firm wage dispersion. We present a model in which workers acquire knowledge on the job and firms pursue a policy of learning-by-hiring. The latter generates workers flows that connect directly and indirectly firms in a network. The model predicts that firms central to the network, those with the most heterogeneous workforce in terms of past employers, have the highest wage dispersion. Using 1990-2001 Veneto (a region of Italy) matched employer-employee data, we map workers flows between firms and build the network formed by all the firms. For each firm, we assess its network centrality. In our data conditional within-firm wage dispersion turns out to be increasing in network centrality, confirming the prediction of the model. |
| Keywords: | Wage dispersion; Labour mobility, Network; Knowledge transfer |
| JEL: | J31 J62 L14 |
| Date: | 2017–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:369&r=eur |
| By: | Martins, Pedro S. |
| Abstract: | In 2012, a new law allowed firms in Portugal to reduce the overtime premium paid by half. Until then, as in other countries, premiums were subject to a minimum level. We analyse matched panel data, including worker-level (base and overtime) hours and pay, to study the effects of the resulting greater flexibility in overtime pay setting. We find that half of the firms using overtime in 2011 did reduce their overtime premiums consistently with the reform, in particular firms making greater use of overtime and paying higher premiums. Using difference-in-differences matching and a long list of covariates, we also find that those firms that cut overtime premiums exhibit significant relative increases in overtime usage, employment and sales following the reform. Our results also highlight the important but not exclusive role of legal restrictions on downward nominal pay rigidity. |
| Keywords: | Working time,wage rigidity,employment resilience,labour reforms |
| JEL: | J22 J23 J38 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:102&r=eur |
| By: | Egger, Hartmut; Egger, Peter; Kreickemeier, Udo; Moser, Christoph |
| Abstract: | We set up a trade model with heterogeneous firms and a worker population that is heterogeneous in two dimensions: workers are either skilled or unskilled, and within each skill category there is a continuum of abilities. Workers with high abilities, both skilled and unskilled, are matched to firms with high productivities, and this leads to wage differentials within each skill category across firms. Self-selection of the most productive firms into exporting generates an exporter wage premium, and our framework with skilled and unskilled workers allows us to decompose this premium into its skill-specific components. We employ linked employer-employee data from Germany to structurally estimate the parameters of the model. Using these parameter estimates, we compute an average exporter wage premium of 5 percent. The decomposition by skill turns out to be quantitatively highly relevant, with exporting firms paying no wage premium at all to their unskilled workers, while the premium for skilled workers is 12 percent. |
| Keywords: | Exporter wage premium,Heterogeneous firms,Ability differences of workers,Positive assortative matching,Trade and wage inequality |
| JEL: | C31 F12 F15 J31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:1217&r=eur |
| By: | Rogge, Karoline S.; Pfluger, Benjamin; Geels, Frank |
| Abstract: | Global climate change represents one of the grand societal challenges which policy makers around the world have agreed to jointly tackle it under the Paris Agreement. Henceforth, much research and policy advice has focused on de-veloping model-based scenarios to identify pathways towards achieving corre-sponding decarbonisation targets. In this paper, we complement such model-based analysis (based on IMAGE and Enertile) with insights from socio-technical transition analysis (MLP) to develop socio-technical storylines that plausibly show how low-carbon transitions can be implemented. We take the example of the transition of the German electricity system towards renewable energies, and elaborate two transition pathways which are assumed to achieve an 80% reduction in GHG emissions by 2050, but differ in terms of lead actors, depth of change and scope of change: the first pathway captures the substitu-tion of technological components (pathway A) and assumes incumbents as lead actors and focuses on radical technological change while leaving other system elements intact; in contrast, pathway B (broader system transformation) postu-lates new entrants as lead actors, which rests on the assumption that trans-formative change occurs in the whole system, i.e. affecting the architecture of the system, technologies but also practises. For both pathways, we focus on how policy makers could govern such transition processes through transforma-tive policy mixes, and compare the requirements of such policy mixes depend-ing on the pathway pursued. We find that multi-dimensional socio-technical change going beyond technological substitution (pathway B) requires much greater emphasis on societal experimentation and a more proactive role for an-ticipatory deliberation processes from the outset. In contrast, shifting gear from a new entrant friendly past trajectory to an incumbent dominated pathway (pathway A) requires active agency from incumbents and is associated with what we have called regime stabilizing instruments which defend core principles of the old regime while simultaneously fulfilling decarbonisation as additional success criteria. |
| Keywords: | socio-technical scenarios,transformative policy mix,German Ener-giewende,MLP,energy system modelling,transition pathways |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s112017&r=eur |
| By: | Knaus, Michael C.; Lechner, Michael; Strittmatter, Anthony |
| Abstract: | We systematically investigate the effect heterogeneity of job search programmes for unemployed workers. To investigate possibly heterogeneous employment effects, we combine non-experimental causal empirical models with Lasso-type estimators. The empirical analyses are based on rich administrative data from Swiss social security records. We find considerable heterogeneities only during the first six months after the start of training. Consistent with previous results of the literature, unemployed persons with fewer employment opportunities profit more from participating in these programmes. Furthermore, we also document heterogeneous employment effects by residence status. Finally, we show the potential of easy-to-implement programme participation rules for improving average employment effects of these active labour market programmes. |
| Keywords: | Machine learning, individualized treatment effects, conditional average treatment effects, active labour market policy |
| JEL: | J68 H43 C21 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2017:11&r=eur |
| By: | Marco Pecoraro; Didier Ruedin |
| Abstract: | This paper examines the relationship between attitudes towards foreigners and the share of foreigners at the occupational level. Using a question on equal opportunities for foreigners from the Swiss House-hold Panel, ordered probit regressions with standard controls show that: (a) there is a negative association between the share of foreigners in one's occupation and positive attitudes towards foreigners; (b) there is a positive association between the share of recently arrived foreigners and positives attitudes towards foreigners. This suggests that workers are at the same time wary of competition with foreigners, and welcome their contribution to overcome labour shortages. Adding the occupational unemployment rate to the model indicates that objective competition may be as relevant as perceptions of competition. Controlling for other occupational characteristics establishes that the associations in (a) and (b) are probably caused by sorting on job quality. All results are robust to the potential endogeneity of the share of foreigners at the occupational level. |
| Keywords: | Immigration, attitudes towards foreigners, labour market, occupational classication, ethnic concentration, unemployment, instrumental variables |
| JEL: | F22 J24 J61 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:17-06&r=eur |
| By: | Peters, Jan Cornelius |
| Abstract: | This paper provides empirical evidence that individual labor productivity significantly depends on the size of the local labor market in which a worker previously acquired work experience. The analysis uses German micro data from the Institute for Employment Research (IAB) on transitions to employment within the period 2005 to 2011 and individual employment biographies from 1975 onwards. Analyzing the wages associated with the newly established employment relationships, suggests that dynamic agglomeration economies in general, and learning externalities in particular, play an important role in explaining individual labor productivity. Workers receive a significantly higher wage after acquiring experience in urban than in non-urban labor markets. Doubling local employment in all labor markets in which experience was acquired, increases the productivity of a worker with two years of work experience by more than 0.7 percent. After 10 years of experience the corresponding gain amounts to about three percent, after 30 years to about four percent. |
| Keywords: | Agglomeration economies,Human capital externalities,Learning,Regional disparities,Urban wage growth premium,Transition to employment |
| JEL: | R10 R23 J31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201706&r=eur |
| By: | Crossley, T.F.; Zilio, F.; |
| Abstract: | Each year the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment†(WFP), a labelled but unconditional cash transfer to older households. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self-reports of chest infection, measured hypertension and biomarkers of infection and inflammation. We find a robust and statistically significant six percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are not robustly statistically significant. |
| Keywords: | benefits; health; biomarkers; heating; regression discontinuity; |
| JEL: | H51 I12 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:17/23&r=eur |