nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒10‒01
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Abuse of Dominance and Antitrust Enforcement in the German Electricity Market By Tomaso Duso; Florian Szücs; Veit Böckers
  2. The Effects of Youth Labor Market Reforms: Evidence from Italian Apprenticeships By ALBANESE Andrea; CAPPELLARI Lorenzo; LEONARDI Marco
  3. ICT use at home for school-related tasks: what is the effect on a student’s achievement? Empirical evidence from OECD PISA data By Agasisti, Tommaso; Gil-Izquierdo, María; Han, Seong Won
  4. Educational Attainment and Neighbourhood Outcomes: Differences between Highly-Educated Natives and Non-Western Ethnic Minorities in the Netherlands By de Vuijst, Elise; van Ham, Maarten
  5. One size does not fit all: quantile regression estimates of cross-country risk of poverty and social exclusion in Europe By Bruno, Bosco
  6. The Effect of House Prices on Household Borrowing: A New Approach By James Cloyne; Kilian Huber; Ethan Ilzetzki; Henrik Kleven
  7. Does slow and steady win the race? An Italian case By Anna Bussu; Claudio Detotto; Laura Serra
  8. Temporary Employment Boom in Poland: A Job Quality vs. Quantity Trade-off? By Lewandowski, Piotr; Góra, Marek; Lis, Maciej
  9. Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France. By Youssef Benzarti; Dorian Carloni
  10. Maternal Employment and Child Outcomes: Evidence from the Irish Marriage Bar By Vincent Aidan O'Sullivan; Robert Wright; Irene Mosca
  11. What Goes Up May Not Come Down: Asymmetric Incidence of Value-Added Taxes By Youssef Benzarti; Dorian Carloni; Jarkko Harju; Tuomas Kosonen
  12. The visible hand of cluster policy makers: An analysis of Aerospace Valley (2006-2015) using a place-based network methodology By Delio Lucena Piquero; Jerome Vicente
  13. How French managers picture their careers: a gendered perspective By Christine Naschberger; Krista Finstad-Milion
  14. German Robots - The Impact of Industrial Robots on Workers By Dauth, Wolfgang; Findeisen, Sebastian; Südekum, Jens; Woessner, Nicole
  15. Labour Supply and Informal Care Supply: The Impacts of Financial Support for Long-Term Elderly Care By Hollingsworth, Bruce; Ohinata, Asako; Picchio, Matteo; Walker, Ian
  16. The Returns to Entrepreneurship: Evidence from Matched Person-Firm Data By van Praag, Mirjam C.; Raknerud, Arvid
  17. The Short- and Long-Term Effects of Student Absence: Evidence from Sweden By Cattan, Sarah; Kamhöfer, Daniel A.; Karlsson, Martin; Nilsson, Therese
  18. Business performance and angels presence: a fresh look from France 2008–2011 By Nadine Levratto; Luc Tessier; Cécile Fonrouge
  19. The local economic impacts of regeneration projects: Evidence from UK's Single Regeneration Budget By Gibbons, Steve; Overman, Henry G; Sarvimäki, Matti
  20. Who Benefits from Fairtrade? Evidence from the Swedish Coffee Market By Durevall, Dick
  21. Inefficient Short-Time Work By Cahuc, Pierre; Nevoux, Sandra
  22. Multinational enterprises, service outsourcing and regional structural change By Andrea Ascani Author-X-Name-First: Andrea; Simona Iammarino
  23. Evidence-based threat-of-audit letters: do taxpayers respond strategically in a complex environment? By Carlo, Fiorio; Alessandro, Santoro
  24. Analyzing the impact of R&D policy on regional diversification By Tom Broekel; Lars Mewes
  25. Activation against Absenteeism: Evidence from a Sickness Insurance Reform in Norway By Hernaes, Øystein
  26. Exploring the Nexus between Certainty in Injury Compensation and Treatment Selection By Paola Bertoli; Veronica Grembi
  27. A Walk on the Wild Side: `Predatory' Journals and Information Asymmetries in Scientific Evaluations By Bagues, Manuel; Sylos-Labini, Mauro; Zinovyeva, Natalia
  28. The Rise of On-Demand 'Instant Deliveries' in European Cities By Laetitia Dablanc; Eléonora Morganti; Niklas Arvidsson; Johan Woxenius; Michael Browne; Neila Saidi
  29. Does Reminding of Behavioural Biases Increase Returns from Financial Trading? A Field Experiment By De Paola, Maria; Gioia, Francesca; Piluso, Fabio

  1. By: Tomaso Duso; Florian Szücs; Veit Böckers
    Abstract: In 2008, the European Commission investigated E.ON, a large and vertically integrated electricity company, for the alleged abuse of a joint dominant position by strategically withholding generation capacity. The case was settled after E.ON agreed to divest 5,000 MW generation capacity as well as its extra-high voltage network. We analyze the effect of these divestitures on German wholesale electricity prices. Our identification strategy is based on the observation that energy suppliers have more market power during peak periods when demand is high. Therefore, a decrease in market power should lead to convergence between peak and off-peak prices. Using daily electricity prices for the 2006 - 2012 period and controlling for cost and demand drivers, we find economically and statistically significant convergence effects after the implementation of the Commission’s decision. Furthermore, the price reductions appear to be mostly due to the divestiture of gas and coal plants, which is consistent with merit-order considerations. Placebo regressions support a causal interpretation of our results.
    Keywords: Electricity, wholesale prices, EU Commission, abuse of dominance, ex post evaluation, E.ON
    JEL: K21 L41 L94
    Date: 2017
  2. By: ALBANESE Andrea; CAPPELLARI Lorenzo; LEONARDI Marco
    Abstract: This paper estimates the causal effects of the 2003 reform of the Italian apprenticeship contract which aimed at introducing the ?dual system? in Italy by allowing on-the-job training. The reform also increased the age eligibility of the apprenticeship contract and introduced a minimum floor to apprentices? wages. Using administrative data and balancing techniques we find that five years after hiring, the new contract improves the chances of moving to a permanent job in the same firm, yet this happens mostly in large firms. There are also sizeable long-run wage effects of the reform, well beyond the legal duration of apprenticeships, compatible with increased human capital accumulation probably due to the training provisions of the reform.
    Keywords: Apprenticeship; Permanent Work; Youth Employment; Covariate Balancing Propensity Score
    JEL: C21 J24 J41
    Date: 2017–09
  3. By: Agasisti, Tommaso; Gil-Izquierdo, María; Han, Seong Won
    Abstract: In this paper, we have employed data from the OECD’s Programme for International Student Assessment (PISA, 2012 edition) on the EU-15 countries in order to investigate the relationship between (i) the way in which students use ICT at home for school-related purposes and (ii) their test scores in reading, mathematics and science. By employing two different econometric techniques – namely, propensity score matching and instrumental variables – we can provide evidence that in most countries there is an association between using computers intensely for homework and achieving lower test scores across all subjects. No clear pattern emerges for differences between students with higher socio-economic status (SES) and their low-SES counterparts, although some models suggest that the negative effect of using ICT at home is slightly greater for high-SES students. These findings suggest that a more cautious approach should be taken with regards to the wide-spread use of digital innovation as a means to support students’ out-of-school work. Such an indication can potentially suggest that teachers should be trained to integrate this practice effectively into their strategies for assigning homework.
    Keywords: Digital learning, educational production function (EPF), OECD-PISA, propensity score matching, instrumental variables
    JEL: I21
    Date: 2017
  4. By: de Vuijst, Elise (Delft University of Technology); van Ham, Maarten (Delft University of Technology)
    Abstract: In the Netherlands, obtaining a higher education increases the chance to move to a better neighbourhood for native Dutch adults who grew up in a deprived parental neighbourhood. For non-Western minorities, education does not have this positive effect on socio-spatial mobility. In this study we investigate potential explanations for these ethnic differences in the relationship between educational attainment and neighbourhood outcomes over time. We use longitudinal register data from the Netherlands to study a complete cohort of parental home leavers who attained a higher education by the end of the measurement period (1999 to 2012). We supplemented this data with information gathered in the WoON-survey. We examined differences in income trajectories for highly-educated native Dutch and non-Western ethnic minorities; investigated the strength of intergenerational transmission of income for both groups; and assessed individual neighbourhood experiences and contentment. We find that the highly-educated native Dutch in our subpopulation have a substantially higher average income over time, and a weaker association to the income of their parents compared to the non-Western ethnic minorities. Additionally, for ethnic minorities, our results show that the level of contentment with their neighbourhood is highest in deprived neighbourhoods compared to more affluent residential environments, and they more often reside in close proximity to their parents compared to the native Dutch, both suggesting an element of choice in neighbourhood selection.
    Keywords: neighbourhood histories, intergenerational transmission, income, education, ethnicity, longitudinal data
    JEL: I30 J60 P46 R23
    Date: 2017–09
  5. By: Bruno, Bosco
    Abstract: Using a macro panel of 31 European countries, this paper shows that the application of a QR procedure to the estimation of poverty risk offers a picture of poverty determinants and cross-country poverty differences more reliable than that emerging from conditional mean estimations. The extent and significance of interquartile differences of estimated coefficients suggest that economic growth, income distribution, public expenditure, and investment, as well as education and the labour share of social product — a proxy for class struggle — have strong but differentiated effects on poverty reduction. However, technical development does not have a similar effect. Low institutional quality exemplified by high public sector corruption has a significant concomitant adverse effect and interacts with economic cofactors in determining interquartile differences of estimated coefficients. Hence, definition and implementation of any European policy against poverty should consider cross-country interquartile differences and avoid a one size fits all uniform philosophy.
    Keywords: Poverty, Income, Institutional Quality, Panel Quantile Regression, Europe
    JEL: C21 D63 D73 D78
    Date: 2017–09–26
  6. By: James Cloyne; Kilian Huber; Ethan Ilzetzki; Henrik Kleven
    Abstract: We investigate the effect of house prices on household borrowing using administrative mortgage data from the UK and a new empirical approach. The data contain household-level information on house prices and borrowing in a panel of homeowners, who refinance at regular and quasi-exogenous intervals. The data and setting allow us to develop an empirical approach that exploits house price variation coming from idiosyncratic and exogenous timing of refinance events around the Great Recession. We present two main results. First, there is a clear and robust effect of house prices on borrowing, but the responsiveness is smaller than recent US estimates. Second, the effect of house prices on borrowing can be explained largely by collateral effects. We study the collateral channel in two ways: through a multivariate and non-parametric heterogeneity analysis of proxies for collateral and wealth effects, and through a test that exploits interest rate notches that depend on housing collateral.
    JEL: D14 E21 E32 E43 E51 G21
    Date: 2017–09
  7. By: Anna Bussu (Faculty of Health & Social Care, University of Edge Hill, Ormskirk, UK); Claudio Detotto (Laboratoire Lieux, Identités, eSpaces et Activités (LISA)); Laura Serra (Department of Experimental and Health Sciences, Pompeu Fabra University, Barcelona, Spain)
    Abstract: This paper presents an empirical study focusing on students’ drop-out and irregular careers at the University of Sassari (Sardinia, Italy). The analysis is based on 1167 students registered in a full-time undergraduate program (three years according to the Italian system), which have both not changed and not abandoned the degree course. Using a Probit model, our findings document the individual, background and environmental factors that play the main role in explaining the likelihood of irregular careers’ occurrence. We observe that residential students perform worse than the commuter students. Furthermore, other factors seem to explain the success in attending an academic institution, here measured as the probability to finish the undergraduate programme in the nominal duration, namely individual characteristics (like gender and age), students’ background (family income, secondary schools and final marks obtained), institutions’ environment (department’s teaching and research quality) and students well-being (students’ satisfaction). Finally, some policy implications are discussed.
    Keywords: probit; regular careers; commuter students; residential students; undergraduate
    Date: 2017–09
  8. By: Lewandowski, Piotr (Institute for Structural Research (IBS)); Góra, Marek (Warsaw School of Economics); Lis, Maciej (Institute for Structural Research (IBS))
    Abstract: Between 2002 and 2015, temporary employment in Poland more than doubled. Poland became the country with the highest share of temporary jobs in the EU. In this paper, we study how this process affected job quality and job quantity. We analyse the gaps between temporary and permanent workers in six dimensions of jobs quality, adopting measures proposed by the OECD and Eurofound. Of these gaps, the differences in earnings quality, job security, and work scheduling quality were the most pronounced. Job quality has improved for both groups of workers, but the gaps have not closed completely. Firms in Poland prefer to employ temporary rather than permanent workers because of the lower firing costs, tax wedges, and wages associated with temporary contracts. We use a stylised labour demand model to quantify the upper bound of a potential job creation effect due to lower labour costs incurred through the use of temporary contracts. We find that this effect did not exceed 4% of dependent employment in 2015. We cannot rule out the possibility that the net employment effect was zero. Our findings show that even if the availability of less-costly temporary contracts caused some additional jobs to be created, temporary workers suffered from lower job quality in several dimensions.
    Keywords: job quality, temporary employment, segmentation
    JEL: J41 J28 J81
    Date: 2017–09
  9. By: Youssef Benzarti; Dorian Carloni
    Abstract: In this paper we evaluate the incidence of a large cut in value-added taxes (VAT) for French sit-down restaurants. In contrast to previous studies that focus on prices only, we estimate its effect on four groups: workers, firm owners, consumers and suppliers of material goods. Using a difference-in-differences strategy on firm-level data we find that: (1) the effect on consumers was limited, (2) employees and sellers of material goods shared 25 and 16 percent of the total benefit, and (3) the reform mostly benefited owners of sit-down restaurants, who pocketed 41 percent of the tax cut.
    JEL: H20 H22 H23
    Date: 2017–09
  10. By: Vincent Aidan O'Sullivan; Robert Wright; Irene Mosca
    Abstract: This paper empirically investigates the relationship between maternal employment and child outcomes using micro-data collected in the third wave of The Irish Longitudinal Study on Ageing. A novel source of exogenous variation in the employment decisions of women is used to investigate this relationship. Between the 1920s and the 1970s, women working in certain sectors or in certain jobs were required to leave paid employment upon getting married in Ireland. The majority of women affected by this “Marriage Bar†then became mothers and never returned to work, or returned only after several years. Regression analysis is used to compare the educational attainment of the children of mothers who were required to leave employment on marriage because of the Marriage Bar to the educational attainment of the children of mothers who were not required to do so. It is found that the children of mothers affected by the Marriage Bar have a much higher probability of completing university education than the children of mothers who were not. The difference is around seven percentage points. This is a sizeable effect when compared to the observation that about 40% of the children in the sample completed university education. This effect is found to be robust to alternative specifications that include variables aimed at controlling for differences in maternal occupation and personality traits and differences in paternal education.
    Keywords: marriage, mother, employment, child, education
    JEL: J12 J16 J20
    Date: 2017
  11. By: Youssef Benzarti; Dorian Carloni; Jarkko Harju; Tuomas Kosonen
    Abstract: This paper shows that prices respond more to increases than to decreases in Value-Added Taxes (VATs). First, using all VAT reforms from 1996 to 2015 across all European countries we show that prices respond 3 to 4 times more to VAT increases than decreases. Second, using a plausibly exogenous VAT reform, we show that the asymmetry persists over several years. Third, we document several empirical features of this asymmetry that are inconsistent with the standard incidence model. We provide evidence consistent with firm behavior driving the asymmetry.
    JEL: H20 H22 H23
    Date: 2017–09
  12. By: Delio Lucena Piquero; Jerome Vicente
    Abstract: The paper focuses on cluster policies with particular attention to the role of R&D collaborative incentives in the structuring of knowledge networks in clusters. We disentangle the main network failures in regional innovation systems, and discuss the selection procedures designed by policy makers to enhance the production of innovation outputs. We draw evidence from the French Aerospace Valley cluster from 2006 to 2015. The empirical analysis relies on a dataset of 248 granted research consortia, from which we build 4-cohorts knowledge networks enable us evidencing the evolving structural properties of the cluster over time. We suggest avoiding the bias and limitations of 1 and 2-mode network analysis by developing an original place- based network methodology that emphasizes on structural equivalence and groups behaviors. We discuss the results focusing on the convergence degree between the network statistical findings and the policy makersÕ objectives. Finally, the methodology allows us identifying who are the agents of the structural and technological changes observed during the period.
    Keywords: Cluster policy; Networks; Collaborative incentives; Groups behaviors; Aerospace Valley
    JEL: D85 O25 O30 R10
    Date: 2017–09
  13. By: Christine Naschberger (Audencia Recherche - Audencia Business School); Krista Finstad-Milion (ICN Business School)
    Abstract: The purpose of this paper is to investigate how French managers picture their careers, specifically female careers. The sample was composed of 93 women and 5 men attending a professional women’s networking event in France. Participants answered a questionnaire, including images to choose from to best describe how they perceived their own career development. The results indicate that a female career is closely associated with work-life balance by both women and men. Also, women acknowledge three times more than men, the existence of a glass ceiling in their organisation. Women and men choose both traditional and contemporary images of career. As the sample was taken from a women’s network event, the male sample size is small. Despite the small sample of men, giving voice to male participants leads to rich insights which challenge gendered and non-gendered career models. On an individual level, reflection on one’s career path fosters awareness and ownership of career choices. Further, working with career images enhances discussion and experience sharing about personal career choices, and offers opportunities to organisations concerned with developing female talent. The study contributes to the career literature by providing insights into how female and male managers perceive female careers. The study’s originality lies in the methodology, based on using images of careers to better understand how managers picture their own careers.
    Keywords: Images, France,Gender, Managers, Career development, Careers
    Date: 2017–06–19
  14. By: Dauth, Wolfgang; Findeisen, Sebastian; Südekum, Jens; Woessner, Nicole
    Abstract: We study the impact of rising robot exposure on the careers of individual manufacturing workers, and the equilibrium impact across industries and local labor markets in Germany. We find no evidence that robots cause total job losses, but they do affect the composition of aggregate employment. Every robot destroys two manufacturing jobs. This accounts for almost 23% of the overall decline of manufacturing employment in Germany over the period 1994 - 2014, roughly 275,000 jobs. But this loss was fully offset by additional jobs in the service sector. Moreover, robots have not raised the displacement risk for incumbent manufacturing workers. Quite in contrast, more robot exposed workers are even more likely to remain employed in their original workplace, though not necessarily performing the same tasks, and the aggregate manufacturing decline is solely driven by fewer new jobs for young labor market entrants. This enhanced job stability for insiders comes at the cost of lower wages. The negative impact of robots on individual earnings arises mainly for medium-skilled workers in machine-operating occupations, while high-skilled managers gain. In the aggregate, robots raise labor productivity but not wages. Thereby they contribute to the decline of the labor income share.
    Keywords: Germany; labor market effects; robots; skill-biased technological change
    JEL: F16 J24 O33 R11
    Date: 2017–09
  15. By: Hollingsworth, Bruce (Lancaster University); Ohinata, Asako (University of Leicester); Picchio, Matteo (Università Politecnica delle Marche, Ancona); Walker, Ian (Lancaster University)
    Abstract: We investigate the impact of a policy reform, which introduced free formal personal care for all those aged 65 and above, on caregiving behaviour. Using a difference-in-differences estimator, we estimate that the free formal care reduced the probability of co-residential informal caregiving by 12.9%. Conditional on giving co-residential care, the mean reduction in the number of informal care hours is estimated to be 1.2 hours per week. The effect is particularly strong among older and less educated caregivers. In contrast to co-residential informal care, we find no change in extraresidential caregiving behaviour. We also observe that the average labour market participation and the number of hours worked increased in response to the policy introduction.
    Keywords: long-term elderly care, ageing, financial support, informal caregiving, difference-in-differences
    JEL: C21 D14 I18 J14
    Date: 2017–09
  16. By: van Praag, Mirjam C. (Copenhagen Business School); Raknerud, Arvid (Statistics Norway)
    Abstract: Empirical studies show low pecuniary returns of switching from wage employment to entrepreneurship. We reconsider the pecuniary gains of this switching by employing a two-stage procedure, where the randomness in the timing of inheritance transfers is used as an exclusion restriction to identify causal effects. The model is estimated on data covering the whole Norwegian population of individuals matched to the entire population of firms established in the period 2002-2011. The results indicate that the average returns to entrepreneurship are significantly negative for individuals entering entrepreneurship through self-employment and modest, but significantly positive, for incorporated startups.
    Keywords: returns to entrepreneurship, earnings distribution, matched person-firm data, self-employment, random effects probit model
    JEL: L26 C23 J31 G32
    Date: 2017–09
  17. By: Cattan, Sarah (Institute for Fiscal Studies, London); Kamhöfer, Daniel A. (University of Paderborn); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Lund University)
    Abstract: Instructional time is seen as an important determinant of school performance, but little is known about the effects of student absence. Combining historical records and administrative data for Swedish individuals born in the 1930s, we examine the impacts of absence in elementary school on short-term academic performance and long-term socio-economic outcomes. Our siblings and individual fixed effects estimates suggest absence has a moderate adverse effect on academic performance. The detrimental effect fades out over time. While absence negatively correlates with final education, income and longevity, we only find robust evidence that it lowers the probability of employment at age 25–30.
    Keywords: absence in school, educational performance, long-term effects, register data
    JEL: C23 I14 I21
    Date: 2017–09
  18. By: Nadine Levratto (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Luc Tessier (UPEM - Université Paris-Est Marne-la-Vallée); Cécile Fonrouge (UPEM - Université Paris-Est Marne-la-Vallée)
    Abstract: Abstract Business angels enjoy a strong reputation for being more efficient than other investors among policy makers, practitioners, and scholars. However, due to the limited availability of specific financial data, previous research has barely assessed the impact of angels on companies’ performance. This paper seeks to bridge this gap by providing evidence from a unique dataset made up of 432 angel-backed French companies which are compared to two control groups, one randomly selected and another one consisting of similar enterprises. This double comparison process enables us to purge our analysis of structural effect and to demonstrate the importance of the methodology in generating the sample. Indeed, the results we obtain significantly differ depending on the control group. Our results show that the positive influence of angels depends on the condition of the comparison. The set of BA-backed companies is more likely to exhibit superior performance when it is compared to a random sample whereas the companies’ performance is either identical or worse when it is compared to a sample composed of k-nearest neighbors. In addition, using a quantile regression technique makes it possible to differentiate the effect of business angels based on the distribution of the value of the growth rate.
    Keywords: business angels
    Date: 2017–01–25
  19. By: Gibbons, Steve; Overman, Henry G; Sarvimäki, Matti
    Abstract: We study the local economic impacts of a major regeneration programme aimed at enhancing the quality of life of local people in deprived neighbourhoods in the UK. The analysis is based on a panel of firm and area level data available at small spatial scales. Our identification strategies involve: a) exploiting the fine spatial scale of our data to study how effects vary with distance to the intervention area; and b) comparing places close to treatment in early rounds of the programme with places close to treatment in future rounds. We consider the long run impact of schemes funded between 1995 and 1997 on outcomes up to 2009. Our estimates suggest that the programme increased workplace employment in the intervention area but this had no impact on the employment rates of local residents.
    Keywords: employment; neighbourhoods; regeneration; Single Regeneration Budget; urban policy
    JEL: H50 J08 R11
    Date: 2017–09
  20. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper analyses how the premium customers pay for Fairtrade-labelled coffee is distributed in the Swedish market, using information on costs of production and scanner data on almost all roasted and ground coffee products sold by retailers. A key finding is that roasters and retailers get 43–70%, while producer countries, in this paper comprising coffee farmers, cooperatives, middlemen, exporters and Fairtrade International, get 24–51%. Fairtrade Sweden gets 5–8%. These values are upper and lower bounds that reflect assumptions made about the additional costs of producing roasted and ground Fairtrade coffee, given the cost of beans and the Fairtrade license, and whether conventional coffee is compared with organic or non-organic Fairtrade coffees. Since roasters’ and retailers’ margins are higher for Fairtrade than conventional coffee, there is evidence that Fairtrade retail prices are higher than the level attributable to costs. However, producer countries receive a significantly larger share of the premium paid than reported in earlier studies, which are either dated or analyse very small samples of coffees.
    Keywords: coffee supply chain; ethic labels; Fair Trade; extra price; Fairtrade; market power; organic coffee
    JEL: D43 O19 P46
    Date: 2017–09
  21. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Nevoux, Sandra (CREST (ENSAE))
    Abstract: This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers' contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.
    Keywords: short-time work, unemployment insurance, experience rating
    JEL: J63 J65
    Date: 2017–09
  22. By: Andrea Ascani Author-X-Name-First: Andrea; Simona Iammarino
    Abstract: This paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades: the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy. The aim of the study is to examine the structural transformation of regional economic systems within the UK by focusing on the role played by foreign multinational enterprises (MNEs) in manufacturing in facilitating the development of services. From a conceptual perspective, this research relies on different strands of literature on the impact of foreign direct investment (FDI) on recipient economies, on outsourcing and regional structural transformation, and on the identification of local multipliers. The empirical analysis focuses on a specific demand-side channel for structural change: the forward linkage established by foreign manufacturing MNEs with local service providers through outsourcing. Descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts. On this basic premise, we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets. In order to produce reliable estimates of a local multiplier, the methodology adopts an instrumental variable approach. Our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages. Length:
    Keywords: multinational enterprises, service outsourcing, regional structural change, local labour markets, multiplier
    JEL: R1 O3
    Date: 2017–09
  23. By: Carlo, Fiorio; Alessandro, Santoro
    Abstract: Evidence-based threat-of-audit letters: do taxpayers respond strategically in a complex environment?
    Keywords: Tax Compliance by Businesses, Threat-of-audit letters
    JEL: H26
    Date: 2017–09–26
  24. By: Tom Broekel; Lars Mewes
    Abstract: Existing studies on regional diversification highlight the importance of local path dependencies and related competences. However, little attention has been paid to other factors potentially contributing to diversification processes. Foremost, this concerns the role of R&D policy. This study investigates the relation between R&D policy and regional technological diversification in German labor market regions from 1996 to 2010. We find no evidence for proactive R&D policies, as subsidized R&D projects do not promote regional technological diversification. In contrast, R&D subsidies? allocation is rather risk-averse with subsidies being more likely allocated to already established technologies and those related to region?s technology portfolio.
    Keywords: regional diversification, innovation, policy, R&D subsidies, relatedness
    JEL: R11 O31 O33 O38
    Date: 2017–09
  25. By: Hernaes, Øystein (Institute for Social Research, Oslo)
    Abstract: I evaluate a program aimed at strictly enforcing a requirement that people on long-term sick leave be partly back at work unless explicitly defined as an exception. Employing the synthetic control method, I find that the reform reduced work-hours lost due to absenteeism by 12 % in the reform region compared to a comparison unit created by a weighted average of similar regions. The effect is driven by both increased part-time presence of temporary disabled workers and accelerated recovery. Musculoskeletal disorders was the diagnosis group declining the most. The findings imply large savings in social security expenditures.
    Keywords: absenteeism, disability, activation, forkfare
    JEL: I18 I38 J48
    Date: 2017–09
  26. By: Paola Bertoli; Veronica Grembi
    Abstract: We study how legal and financial incentives affect medical decisions. Using patient-level data, we identify the effect of a change in medical liability pressure exploiting the geographical distribution of hospitals across court districts, where some districts improve the certainty of expected damages per injury while others do not. As certainty increases, unnecessary c-sections increase by 20%. This increase is higher for hospitals with lower quality, farther from consumers associations, facing lower expected damages, and paid more per c-section. Combining the difference-in- difference with a regression discontinuity design, we show that the effect is already detectable in the short-run.
    Keywords: scheduled damages; Cesarean sections; difference in difference
    JEL: K13 K32 I13
    Date: 2017–08
  27. By: Bagues, Manuel; Sylos-Labini, Mauro; Zinovyeva, Natalia
    Abstract: In recent years the academic world has experienced a mushrooming of journals that falsely pretend to be legitimate academic outlets. We study this phenomenon using information from 46,000 researchers seeking promotion in Italian academia. About 5% of them have published in journals included in the blacklist of `potential, possible, or probable predatory journals' elaborated by the scholarly librarian Jeffrey Beall. Data from a survey that we conducted among these researchers confirms that at least one third of these journals do not provide peer review or they engage in some other type of irregular editorial practice. We identify two factors that may have spurred publications in dubious journals. First, some of these journals have managed to be included in citation indexes such as Scopus that many institutions consider as a guarantee of quality. Second, we show that authors who publish in these journals are more likely to receive a positive evaluation when (randomly selected) scientific evaluators lack research expertise. Overall, our analysis suggests that the proliferation of `predatory' journals may reflect the existence of severe information asymmetries in scientific evaluations.
    Keywords: academic evaluations; Scientific misconduct
    JEL: I23
    Date: 2017–09
  28. By: Laetitia Dablanc (IFSTTAR/AME/SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - Communauté Université Paris-Est); Eléonora Morganti (University of Leeds); Niklas Arvidsson (RISE Research Institutes of Sweden); Johan Woxenius (GU - University of Gothenburg); Michael Browne (GU - University of Gothenburg); Neila Saidi (École d'architecture de la ville et des territoires de Marne-la-Vallée)
    Abstract: This exploratory paper contributes to a new body of research that investigates the potential of digital market places to disrupt transport and mobility services. We are specifically looking at the urban freight sector, where numerous app-based services have emerged in recent years. The paper specifically looks at 'instant deliveries,' i.e. services providing on-demand delivery within two hours - by either private individuals, independent contractors, or employees - by connecting consignors, couriers and consignees via a digital platform. The paper provides an overview of the main issues concerning instant deliveries, supported by data (including a survey of 96 courier delivery providers) and examples. After presenting a typology of companies (digital platforms) involved in 'instant deliveries,' we question in what way they transform the urban freight current patterns. We highlight four issues, discussing their potential to impact urban freight services and related policies in European cities: 1) Freight trips and data; 2) Business models; 3) Labor legislation and work conditions; and 4) Local public policies. We conclude by saying that predicting the medium-term consequences of these changes is difficult, but it is essential that city planning and policies take account of these developments and consider how planning and possibly regulation needs to be adapted to these new ways of doing things.
    Date: 2017
  29. By: De Paola, Maria (University of Calabria); Gioia, Francesca (University of Edinburgh); Piluso, Fabio (University of Calabria)
    Abstract: We ran a field experiment to investigate whether nudge policies, consisting in behavioural insight messaging, help to improve performance in financial trading. Our experiment involved students enrolled in a financial trading course in an Italian University who were invited to trade on Borsa Italiana's virtual platform. Students were randomly assigned to a control group and a treatment group. Treated students received a message reminding them of the existence of behavioural biases in financial trading. We find that treated students significantly improve the performance of their portfolio. Several behaviours may explain the increase in performance. We find evidence pointing to a reduction in the home and status quo biases for risk averse nudged participants.
    Keywords: financial trading, behavioural biases, reminders, nudges, home bias, status quo bias, risk aversion
    JEL: D14 E21 E22 O16
    Date: 2017–09

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