nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2017‒11‒26
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Public childcare and maternal labour supply: New evidence for Germany By Boll, Christina; Lagemann, Andreas
  2. Does Segregation Reduce Socio-Spatial Mobility? Evidence from Four European Countries with Different Inequality and Segregation Contexts By Nieuwenhuis, Jaap; Tammaru, Tiit; van Ham, Maarten; Hedman, Lina; Manley, David
  3. Wealth Transfers and Tax Planning: Evidence for the German Bequest Tax By Sommer, Eric
  4. Transfer taxes and household mobility: distortion on the housing or labor market? By Hilber, Christian A. L.; Lyytikainen, Teemu
  5. Cultural Determinants of Household Saving Behavior By Paolo Masella; Hannah Paule-Paludkiewicz; Nicola Fuchs-Schündeln
  6. Cultural capital: arts graduates, spatial inequality, and London's impact on cultural labour market By Oakley, Kate; Laurison, Daniel; O'Brien, Dave; Friedman, Sam
  7. Evaluating market consolidation in mobile communications By Genakos, Christos; Valletti, Tommaso; Verboven, Frank
  8. The distance factor in Swedish bus contracts: how far are operators willing to go? By Vigren , Andreas
  9. The Internal and External Effects of Offshoring on Job Security By El-Sahli, Zouheir; Gullstrand, Joakim; Olofsdotter, Karin
  10. The great divergence(s) By Berlingieri, Giuseppe; Blanchenay, Patrick; Criscuolo, Chiara
  11. Taxation of Temporary Jobs: Good Intentions With Bad Outcomes ? By Franck Malherbet; Helene Benghalem
  12. New road infrastructure: the effects on firms By Gibbons, Stephen; Lyytikainen, Teemu; Overman, Henry G.; Sanchis-Guarner, Rosa
  13. How many want to drive the bus? analyzing the number of bids for public transport bus contracts By Vigren, Andreas
  14. Modelling regional accessibility towards airports using discrete choice models: an application to the Apulian airport system By Bergantino, Angela Stefania; Capurso, Mauro; Hess, Stephane
  15. Labor Market Frictions and Lowest Low Fertility By Virginia Sanchez Marcos; Ezgi Kaya; Nezih Guner
  16. The causal effect of multitasking on work-related mental health - the more you do, the worse you feel By Pikos, Anna Katharina
  17. The effects of skill-biased technical change on productivity flattening and hours worked By Hutter, Christian; Weber, Enzo
  18. Collective Bargaining through the Magnifying Glass: A Comparison between the Netherlands and Portugal By Hijzen, Alexander; Martins, Pedro S.; Parlevliet, Jante
  19. More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle By Delaney, Judith; Devereux, Paul J.
  20. Markups and markdowns By Mauro Caselli; Stefano Schiavo; Lionel Nesta
  21. Wage Differences Between Immigrants and Natives in Austria: The Role of Literacy Skills By Christl, Michael; Köppl-Turyna, Monika; Gnan, Phillipp
  22. The impact of inheritance on the distribution of wealth: evidence from Great Britain By Karagiannaki, Eleni
  23. Union Density, Productivity and Wages By Barth, Erling; Bryson, Alex; Dale-Olsen, Harald

  1. By: Boll, Christina; Lagemann, Andreas
    Abstract: This study explores the linkage between nine policy indicators of public childcare provision and maternal employment in terms of employment propensity and (conditional) working hours. We apply different identification strategies with a two-way fixed effects specification with individual and macro-level confounders as well as year and state fixed effects as our most ambitious specification. Based on German microcensus data for waves 2006-2014, our findings show that identification, particularly in terms of state fixed effects, is crucial for the estimated effects. For three indicators however, we are left with significant associations even in the most complex model: For 1-2 year old children cared for by a childminder (3-5 year old children in daycare centres), an increase in the share of children taken care for less than 25 weekly hours on all same-age children attending public care by 10 percentage points is associated with a decrease of maternal employment propensity by 2 (4) percentage points. Thirdly, the existence of a legal claim on childcare from the age of one is associated with an increase in weekly working hours by 4.3 %, compared to a situation without such an entitlement. Compared to medium-level educated mothers, associations with respect to employment propensity are stronger (weaker) for mothers with a high (low) educational level whereas hours associations are weaker for highly skilled mothers. Compared to mothers in couples, single mothers respond less sensitively concerning both the extensive and the intensive margin of employment.
    Date: 2017
  2. By: Nieuwenhuis, Jaap (Delft University of Technology); Tammaru, Tiit (University of Tartu); van Ham, Maarten (Delft University of Technology); Hedman, Lina (Uppsala University); Manley, David (University of Bristol)
    Abstract: The neighbourhoods in which people live reflects their social class and preferences, so studying socio-spatial mobility between neighbourhoods gives insight in the openness of spatial class structures of societies and in the ability of people to leave disadvantaged neighbourhoods. We study the extent to which people move between different types of neighbourhoods by socio-economic status in different inequality and segregation contexts in four European countries: Sweden, the Netherlands, the United Kingdom, and Estonia. The study is based on population registers and census data for the 2001–2011 period. For the UK, which has long had high levels of social inequalities and high levels of socio-economic segregation, we find that levels of mobility between neighbourhood types are low and opportunities to move to more socio-economically advantaged neighbourhoods are modest. In Estonia, which used to be one or the most equal and least segregated countries in Europe and now is one of the most liberal and market oriented countries, we find high levels of mobility, but these reproduce segregation patterns and it is difficult to move to better neighbourhoods for those in the most deprived neighbourhoods. In the Netherlands and Sweden, where social inequalities are the smallest, it is easiest to move from the most deprived to less deprived neighbourhoods. To conclusion, the combination of high levels of social inequalities and high levels of spatial segregation tend to lead to a vicious circle of segregation for low income groups, where it is difficult to undertake both upward social mobility and upward spatial mobility.
    Keywords: social mobility, spatial mobility, disadvantaged neighbourhoods, segregation, inequality, international comparison
    JEL: I32 J61 J62 R23
    Date: 2017–10
  3. By: Sommer, Eric (IZA)
    Abstract: The rising importance of bequests as a source of personal income lead to renewed interest in the taxation of wealth transfers. Empirical evidence on distortionary effects of bequest taxation is relatively scarce. On the basis of administrative data for Germany, this paper assesses the extent to which taxable bequests are targeted to the tax code. I investigate bunching at discrete jumps in the marginal tax rate. While there is evidence for tax planning in case of inter-vivo gifts, inheritances do not exhibit bunching. Further heterogeneity analyses demonstrate that tax planning is highest for gifts between close relatives. While the overall tax base responsiveness is rather low, the findings suggest that bequest tax planning almost exclusively occurs for donors rather than recipients of wealth transfers. Beyond, tax planning is more prevalent for close relatives and large estates.
    Keywords: bequest tax, tax planning, bunching, administrative data
    JEL: D91 H26 H31
    Date: 2017–10
  4. By: Hilber, Christian A. L.; Lyytikainen, Teemu
    Abstract: We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. Overall, our results suggest that transfer taxes may mainly distort housing rather than labor markets.
    Keywords: transfer taxes; stamp duty; transaction costs; homeownership; household mobility
    JEL: F3 G3
    Date: 2017–06
  5. By: Paolo Masella (University of Bologna); Hannah Paule-Paludkiewicz (Goethe University Frankfurt); Nicola Fuchs-Schündeln (Goethe University Frankfurt)
    Abstract: Relying on the epidemiological approach, we show that culture is a significant driver of household saving behavior. Second-generation immigrants from countries that put strong emphasis on thrift or wealth accumulation tend to save more in Germany. We confirm these results in data from the UK. By linking parents to their children, we show that these two cultural components affect the saving behavior of both first-generation immigrants and their children, and also provide suggestive evidence that long-term orientation is related to saving behavior through the intergenerational transmission of language.
    Date: 2017
  6. By: Oakley, Kate; Laurison, Daniel; O'Brien, Dave; Friedman, Sam
    Abstract: This paper looks at the degree to which spatial inequalities reinforce other forms of social inequality in cultural labour markets. It does so using the example of London, an acknowledged hub for the creative and cultural industries (CCIs). Using pooled data from 2013 - 2015 quarters of the UK Labour Force Survey we consider the social make-up of London’s cultural labour force, and reveal the extent to which, rather than acting as an ‘engine room’ of social mobility, London’s dominance in fact re-enforces social class disparities in cultural employment.
    Keywords: cultural labour; inequality; arts education; London
    JEL: R14 J01
    Date: 2017–06–11
  7. By: Genakos, Christos; Valletti, Tommaso; Verboven, Frank
    Abstract: We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators’ prices and accounting information across 33 OECD countries between 2002 and 2014, we document that more concentrated markets lead to higher end user prices. Furthermore, they also lead to higher investment per mobile operator, though the impact on total investment is not conclusive. Our findings are not only relevant for the current consolidation wave in the telecommunications industry. More generally, they stress that competition and regulatory authorities should take seriously the potential trade-off between market power effects and efficiency gains stemming from agreements between firms.
    Keywords: mobile telecommunications; market structure; prices; investments; mergers
    JEL: F3 G3
    Date: 2017–06
  8. By: Vigren , Andreas (VTI)
    Abstract: One of the factors differentiating operators the most in bus services is, arguably, the respective distances from their workplaces to the area of a procured contract. More dead running kilometers implies higher costs, and the same should affect operators’ probability to participate in tenders. As previous studies have discussed, this is a relevant competitive factor, but the transport literature lacks studies aiming to assess the size of this distance factor. This paper examines what impact operators’ distance to tendered bus contracts has on their probability to participate in the tender, and how this probability differs across operator types. To address this, an econometric analysis was undertaken using probit regressions with data on tendered Swedish bus contracts over the period 2007–2015 along with operator workplace data. The results show that operators’ distance from a contract has a significantly negative effect on their probability of placing a bid for the contract. While being located near the contract gives, on average, an over 90 percent probability of participating, being 10 kilometers away results in a 30 percent probability. The rival’s distance to the contract also has an effect, but only to a limited extent. Large operators are found to be less affected by their distance to a contract, and they are also more inclined to bid if the procuring authority offers a depot to use.
    Keywords: Competitive tendering; Distance; Dead running kilometers; Bus; Entry; Competition; Participation
    JEL: C35 H57 L11 L16 L91
    Date: 2017–11–14
  9. By: El-Sahli, Zouheir (Leiden University, Department of Economics); Gullstrand, Joakim (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University)
    Abstract: In this paper, we investigate the effects of offshoring on workers' job security using matched employer-employee data from Sweden. For our observed period (1997-2011), while the share of firms engaged in offshoring fell during the period from around 25% to 22%, offshoring per worker within offshoring firms almost doubled. We make use of this variation to contribute to the literature on several fronts by examining both the internal (i.e., firms' own offshoring activities) and the external (i.e., neighboring firms’ offshoring activities) effects of offshoring on workers' employment spells. To deal with potential endogeneity, we use instruments based on world supply shocks for both the internal and external measures of offshoring. Our results suggest that external offshoring has a greater impact on job security than internal offshoring. In addition, having a university degree, being young, and being new to the job all reduce the risk of a job exit due to increased external offshoring. This result is indicative of a Schumpeterian job restructuring effect of offshoring, where old jobs are replaced by newer ones. Finally, the increased risk of a job exit from external offshoring is limited to workers in small firms that do not offshore themselves, suggesting a higher vulnerability of these firms to local shocks.
    Keywords: offshoring; heterogeneous firms; job security; globalization
    JEL: F16 J64
    Date: 2017–11–13
  10. By: Berlingieri, Giuseppe; Blanchenay, Patrick; Criscuolo, Chiara
    Abstract: This report provides new evidence on the increasing dispersion in wages and productivity using novel micro-aggregated firm-level data from 16 countries. First, the report documents an increase in wage and productivity dispersions, for both manufacturing and market services (excluding the financial sector). Second, it shows that these trends are driven by differences within rather than across sectors, and that the increase in dispersion is mainly driven by the bottom of the distribution, while divergence at the top occurs only in the service sector, and only after 2005. Third, it suggests that between-firm wage dispersion is linked to increasing differences between high and low productivity firms. Fourth, it suggests that both globalisation and digitalisation imply higher wage divergence, but strengthen the link between productivity and wage dispersion. Finally, it offers preliminary analysis of the impact of minimum wage, employment protection legislation, trade union density, and coordination in wage setting on wage dispersion and its link to productivity dispersion.
    Keywords: dispersion; productivity; sorting; wages
    JEL: R14 J01
    Date: 2017–06
  11. By: Franck Malherbet (CREST and Ecole Polytechnique); Helene Benghalem (CREST)
    Abstract: This paper analyzes the consequences of the taxation of temporary jobs recently introduced in several European countries to induce fi rms to create more open-ended contracts and to increase the duration of jobs. The estimation of a job search and matching model on French data shows that the taxation of temporary jobs does not reach its objectives: it reduces the mean duration of jobs and decreases job creation, employment and welfare of unemployed workers. We find that a reform introducing an open-ended contract without layoff costs for separations occurring at short tenure would have opposite effects.
    Date: 2017
  12. By: Gibbons, Stephen; Lyytikainen, Teemu; Overman, Henry G.; Sanchis-Guarner, Rosa
    Abstract: This paper estimates the impact of new road infrastructure on employment and labour productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured through changes in accessibility, calculated at a detailed geographical scale from changes in minimum journey times along the road network. These changes are induced by the construction of new road link schemes. We deal with the potential endogeneity of scheme location by identifying the effects of changes in accessibility from variation across small-scale geographical areas close to the scheme. We find substantial positive effects on area level employment and number of plants. In contrast, for existing firms we find negative effects on employment coupled with increases in output per worker and wages. A plausible interpretation is that new transport infrastructure attracts transport intensive firms to an area, but with some cost to employment in existing businesses.
    Keywords: productivity; employment; accessibility; transport
    JEL: R14 J01
    Date: 2017–05
  13. By: Vigren, Andreas (VTI)
    Abstract: This paper examines how different factors relating to contract characteristics, and the operational and tender environment affect the number of unique bidders placing bids in tenders for bus contracts. A generalized Poisson model is used with a comprehensive data set containing most of the recently tendered bus contracts in Sweden, spanning the period 2007-2015. The main finding from the analysis is that most contract characteristics change participation in tenders by around 0.1-0.5 bidders. Operator-restricting measures, such as special requirements on buses, have a similar limited effect. Further, the number of tenders that are open at the same time as a specific tender was shown to reduce participation by almost 2 bidders. Finally, there is evidence that the local competitive environment is of importance, and the public transport authorities therefore need to be concerned with entry barriers in their tenders.
    Keywords: Tendering; Bidding; Bus; Public transport; Contract design; Count data
    JEL: C31 H57 L11 L16 L91
    Date: 2017–11–14
  14. By: Bergantino, Angela Stefania; Capurso, Mauro; Hess, Stephane
    Abstract: At the Regional level, accessibility is one of the key factors in airports' provision. An efficient public transport network can represent an alternative to maintaining costly and inefficient airports in the same catchment area, notwithstanding residents’ pressures to have a “local” airport. At the same time, airports can better exploit economies of scale aggregating demand. In this paper, we analyse residents' decisions regarding airport access mode in the Apulia region, in Italy, which is characterised by the presence of a system of “local” airports, of which two not fully operating. Both revealed and stated preferences data are collected and are used to estimate probabilistic models (multinomial, nested logit, and mixed logit) in order to calculate the relevant elasticities of dedicated public transit services. Moreover, we measure the effectiveness of specific policies/actions aimed at generating a modal shift from private modes (car and taxi) to public transport, rationalising mobility towards the existing airports.
    Date: 2017
  15. By: Virginia Sanchez Marcos (Universidad de Cantabria); Ezgi Kaya (Cardiff Business School); Nezih Guner (CEMFI)
    Abstract: How does the dual labor market structure, i.e. the presence of jobs with temporary and permanent contracts, affect the fertility behavior of women in Spain? Using data from the Spanish Social Security Records, we first show that having a temporary contract has a significant and negative effect on the probability that a woman has her first birth. A highly-educated women with permanent contract is twice more likely to have a birth compared to a similar woman with a temporary contract. Second., we show that having a child lowers the probability of being promoted from a temporary to permanent contract and the effect is strongest for highly-educated women. We next build a life-cycle model in which married women decide whether to work or not as well as how many children to have and when to have them. In the model economy, all agents start their labor careers with temporary jobs and children affect the probability of being promoted to a permanent jobs negatively. Given the cost of having children, both in terms of time and money as well as in terms of labor market implications, women make their fertility choices. We use this model to quantify how the dual labor market structure affects fertility decisions as well as potential effects of labor market reforms on fertility.
    Date: 2017
  16. By: Pikos, Anna Katharina
    Abstract: This paper analyses whether there is a causal relationship between work-related mental health problems and multitasking, the number of tasks performed at work. The data comes from two cross sectional surveys on the German working population. The empirical strategies uses technological change as an instrument for multitasking. In the first stage, the introduction of new production and information technologies is associated with increases in multitasking. Production technology adoption has larger associations to manual multitasking and informational technology adoption to cognitive multitasking. There is evidence for a causal effect of multitasking on emotional strain, emotional exhaustion and burnout.
    Keywords: work-related mental health; multitasking; job satisfaction
    JEL: I10 J28
    Date: 2017–11
  17. By: Hutter, Christian (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: "In a structural macroeconometric analysis based on comprehensive micro data, we examine the role of skill-biased technical change for the flattening of productivity growth and effects on hours worked. The results show that more than 60 percent of the slowdown in productivity growth in Germany since the early 2000s can be explained by the SBTC development. Furthermore, skill-biased technology shocks reduce hours worked, while skill-neutral technology shocks have a positive effect in the long run." (Author's abstract, IAB-Doku) ((en))
    JEL: C32 E24 J24
    Date: 2017–11–16
  18. By: Hijzen, Alexander (OECD); Martins, Pedro S. (Queen Mary, University of London); Parlevliet, Jante (De Nederlandsche Bank)
    Abstract: This paper contributes to a deeper understanding of sector-level bargaining systems and their role for labour market performance. We compare two countries with seemingly similar collective bargaining systems, the Netherlands and Portugal, and document a number of features that may affect labour market outcomes, including: i) the scope for flexibility at the firm or worker level within sector-level agreements; ii) the emphasis on representativeness as a criterion for extensions; iii) the effectiveness of coordination across bargaining units; and iv) pro-active government policies to enhance trust and cooperation between the social partners.
    Keywords: industrial relations, social dialogue, employment
    JEL: J5 P52
    Date: 2017–10
  19. By: Delaney, Judith (Economic and Social Research Institute, Dublin); Devereux, Paul J. (University College Dublin)
    Abstract: Much evidence suggests that having more education leads to higher earnings in the labor market. However, there is little evidence about whether having more education causes employees to experience lower earnings volatility or shelters them from the adverse effects of recessions. We use a large British administrative panel data set to study the impact of the 1972 increase in compulsory schooling on earnings volatility over the life cycle. Our estimates suggest that men exposed to the law change subsequently had lower earnings variability and less pro-cyclical earnings. However, there is little evidence that education affects earnings volatility of older men.
    Keywords: return to education, earnings volatility
    JEL: J01
    Date: 2017–10
  20. By: Mauro Caselli (School of international studies, University of Tento, Italy); Stefano Schiavo (School of international studies, University of Tento, Italy,OFCE Sciences Po Paris, France); Lionel Nesta (OFCE Sciences Po Paris, France & GREDEG CNRS and SKEMA Business school, France)
    Abstract: This paper studies the high yet undocumented incidence of firms displaying markups lower than unity, i.e., prices lower than marginal costs, for protracted periods of time. Using a large sample of French manufacturing firms for the period 1990-2007, the paper estimates markups at the firm level and documents the extent to which firms exhibit negative price cost margins. The paper is able to provide an explanation for this phenomenon using the option value approach to investment decisions. The results suggest that firms facing higher investment irreversibility tend to continue operating even when prices fall below marginal costs as they wait for market conditions to improve. This effect is magnified in the presence of uncertainty.
    Keywords: Markups, irreversibility, uncertainty, negative price-cost margins, French manufacturing data
    JEL: D22 D24 D81 E22 L11
    Date: 2017–04
  21. By: Christl, Michael; Köppl-Turyna, Monika; Gnan, Phillipp
    Abstract: This paper analyzes wage differences between natives and immigrants in Austria. First, we show that for both groups, literacy skills are an important determinant of the hourly wage. In the second step, we show that differences in proficiency with respect to literacy can explain more than three log points of the total wage gap of 9.7 log points between natives and immigrants. When adding literacy skills to the wage decomposition, the discriminatory part vanishes completely, suggesting that the wage difference between immigrants and natives in Austria can be to a large extent explained. Furthermore, we account for a possible sample selection bias. After controlling for literacy skills, the unexplained part of the gap becomes statistically insignificant. The importance of literacy skills in explaining wage differences between natives and immigrants is robust across several sensitivity tests.
    Keywords: wage,decomposition,gap,immigrants,natives,Austria
    JEL: J71 J15
    Date: 2017
  22. By: Karagiannaki, Eleni
    Abstract: Using the British Household Panel Survey, we investigate the role of inheritance in shaping the distribution of household wealth in Great Britain during 1995-2005 – a period characterised by a substantial increase in wealth and an equally important decrease in wealth inequality. Abstracting from behavioural effects, we find that inheritances received during this period accounted for 30 per cent of the increase in wealth of inheritors. Regression estimates of the effect of inheritance on wealth accumulation suggest that households spend 30 per cent of their inheritances on average, and that there is substantial heterogeneity in household responses. Households that accumulated more wealth saved a larger share of their inheritances, as did middle aged households and those with lower initial wealth. Although inheritances are highly unequal they had a small impact on overall wealth inequality. This mainly reflected the fact that their size relative to other sources of wealth was very small.
    Keywords: inheritance; wealth; intergenerational transfers; inequality
    JEL: D10 D31
    Date: 2017–06–01
  23. By: Barth, Erling (Institute for Social Research, Oslo); Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo)
    Abstract: We exploit tax-induced exogenous variance in the price of union membership to identify the effects of changes in firm union density on firm productivity and wages in the population of Norwegian firms over the period 2001 to 2012. Increases in union density lead to substantial increases in firm productivity and wages having accounted for the potential endogeneity of unionization. The wage effect is larger in more productive firms, consistent with rent-sharing models.
    Keywords: trade unions, union density, productivity, wages
    JEL: J01 J08 J50 J51
    Date: 2017–10

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