nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒01‒15
28 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Schooling and adult health: Can education overcome bad early-life conditions? By Pedro Albarran Pérez; Marisa Hidalgo Hidalgo; Iñigo Iturbe-Ormaetxe Kortajarene
  2. Linguistic Distance, Networks and Migrants' Regional Location Choice By Bredtmann, Julia; Nowotny, Klaus; Otten, Sebastian
  3. Governance, Brain Drain, and Brain Gain in Elite Academic Institutions in Economics : the Case of Spain By Ruiz-Castillo Ucelay, Javier; Carrasco Perea, Raquel
  4. Ethnic Diversity and Political Participation: The Role of Individual Income By Giorgio Bellettini; Carlotta Berti Ceroni; Chiara Monfardini
  5. The Effects of Supply Shocks in the Market for Apprenticeships: Evidence from a German High School Reform By Samuel Muehlemann; Gerard Pfann; Harald Pfeifer; Hans Dietrich
  6. Credit constraints, energy management practices, and investments in energy saving technologies: German manufacturing in close-up By Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
  7. Comparing Micro-Evidence on Rent Sharing from Two Different Econometric Models By Dobbelaere, Sabien; Mairesse, Jacques
  8. Social capital, resilience and regional diversification in Italy By Roberto Antonietti; Ron Boschma
  9. More Education, Less Volatility? The Effect of Education on Earnings Volatility over the Life Cycle By Judith M. Delaney; Paul J. Devereux
  10. The Impact of Intermittent Renewable Production and Market Coupling on the Convergence of French and German Electricity Prices By Jan Horst Keppler; Sébastien Phan; Yannick Le Pen; Charlotte Boureau
  11. Intergenerational mobility, school inequality and social segregation By ARENAS Andreu; HINDRIKS Jean
  12. Employment and Substitution Effects of Raising the Statutory Eligibility Age in France By Simon Rabaté; Julie Rochut
  13. Norms in Bargaining: Evidence from Government Formation in Spain By Thomas Fujiwara; Carlos Sanz
  14. Economic Consequences of Political Persecution By Bohacek, Radim; Myck, Michal
  15. Perceptions of Discrimination: What Do They Measure and Why Do They Matter? By Claudia Diehl; Elisabeth Liebau
  16. Disability Discrimination in the Italian Rental Housing Market: A Field Experiment with Blind Tenants By Luca Fumarco
  17. Parenthood, Family Friendly Firms, and the Gender Gaps in Early Work Careers By V. Joseph Hotz; Per Johansson; Arizo Karimi
  18. Socio-Economic Gaps in University Enrollment: The Role of Perceived Pecuniary and Non-Pecuniary Returns By Teodora Boneva; Christopher Rauh
  19. The European Trust Crisis and the Rise of Populism By Algan, Yann; Guriev, Sergei; Papaioannou, Elias; Passari, Evgenia
  20. The parental home as labor market insurance for young Greeks during the crisis By Rebekka Christopoulou; Maria Pantalidou
  21. How Does Firm Survival Differ between Business Takeovers and New Venture Start-ups? By Xi, Guoqian; Block, Jörn; Lasch, Frank; Robert, Frank; Thurik, Roy
  22. Student Work, Educational Achievement, and Later Employment: A Dynamic Approach By Baert, Stijn; Neyt, Brecht; Omey, Eddy; Verhaest, Dieter
  23. Drivers of energy efficiency in German manufacturing: A firm-level stochastic frontier analysis By Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
  24. Tax Simplicity and Heterogeneous Learning By Aghion, Philippe; Akcigit, Ufuk; Lequien, Matthieu; Stantcheva, Stefanie
  25. Tax evasion by domestic and foreign-owned Portuguese firms: a bunching analysis By PAVIA Risa
  26. Real Wages and Hours in the Great Recession: Evidence from Firms and their Entry-Level Jobs By Daniel Schaefer; Carl Singleton
  27. Public finances under plurality and proportional electoral systems. Evidence from Hungarian municipalities By GREGOR Andras
  28. Firm Size and the Intensive Margin of Import Demand By J. Blaum; c. Lelarge; M. Peters

  1. By: Pedro Albarran Pérez (Dpto. Fundamentos del Análisis Económico); Marisa Hidalgo Hidalgo (Universidad de Alicante); Iñigo Iturbe-Ormaetxe Kortajarene (Universidad de Alicante)
    Abstract: We provide new evidence on the causal effect of schooling on self-reported health and focus on its possible heterogeneous impact. We use data from the 2005 and 2011 cross sections of EU-SILC, exploiting quasi-experimental evidence from schooling reforms in 16 European countries that extend the period of compulsory schooling. Our estimation strategy uses the number of years of compulsory education as an instrument for education levels. We find that reforms affect positively the schooling level only for those individuals from low-educated families. The education level is a strong determinant of adult self-perceived health: one additional year of schooling raises the probability of reporting good health by about seven percentage points. However, this effect is not homogeneous. On the contrary, the effect concentrates on individuals who were raised in relatively well-off families. Our interpretation is that we identify the effect of an exogenous variation in education that occurs in the adolescent years, when it may be too late to have a significant impact on individuals with a poor family background.
    Keywords: Schooling reforms, compulsory education, health outcomes, EU-SILC
    JEL: I1 I2 I3 J6
    Date: 2017–12
  2. By: Bredtmann, Julia (RWI); Nowotny, Klaus (University of Salzburg); Otten, Sebastian (RWI)
    Abstract: This paper analyzes the interaction between migrant networks and linguistic distance in the location choice of migrants to the EU at the regional level. We test the hypothesis that networks and the ability to communicate in the host country language, proxied by linguistic distance, are substitutes in the location decision. Based on individual level data from a special evaluation of the European Labour Force Survey (EU-LFS) and a random utility maximization framework, we find that networks have a positive effect on the location decisions while the effect of linguistic distance is negative. We also find a strong positive interaction effect between the two factors: networks are more important the larger the linguistic distance between the home country and the host region, and the negative effect of linguistic distance is smaller the larger the network size. In several extensions and robustness checks, we show that this substitutable relationship is extremely robust.
    Keywords: location choice, ethnic networks, linguistic distance, EU migration, multilateral resistance
    JEL: F22 J61 R23
    Date: 2017–11
  3. By: Ruiz-Castillo Ucelay, Javier; Carrasco Perea, Raquel
    Abstract: Since the late 1970s and, above all, since 1990, a sizable contingent of Spanish economists coming back home after attending graduate school abroad, mostly in the U.S. and the UK, managed to introduce drastic changes in governance in a number of economics departments and research centers, including meritocratic hiring and promotion practices. These initiatives were also favored by the availability of resources to finance certain research needs, including the organization of international Ph.D. programs. Using a dataset of 3,540 economists working in 2007 in 125 academic centers in 22 countries, this paper presents some evidence on the role of this institutional revolution on the patterns of brain gain, brain drain, and net gain in Spain and other countries. Conditional on some personal, department, and country characteristics, the net marginal effect of a given country is defined as the difference between the marginal effect of working in 2007 in that country on the probability of brain gain and the marginal effect of being born in that country on the probability of brain drain. The main result is that the net marginal effect of Spain is greater than the net marginal effect of comparable large, continental European countries, i.e. Germany, France, and Italy, where economists have similar opportunities of publishing their research in English, the lingua franca of science, or in their own languages. On the other hand, the average estimated probability of net gain in Spain is only below that of the U.S., but it is greater than the average probability of net gain in Germany, France or Italy.
    Keywords: brain gain; brain circulation; brain drain; economics institutions; governance
    JEL: J61
    Date: 2017–12–01
  4. By: Giorgio Bellettini; Carlotta Berti Ceroni; Chiara Monfardini
    Abstract: We exploit a unique dataset merging data on individual socio-economic characteristics and political participation in an Italian municipality to investigate the relationship between ethnic diversity in residential neighborhoods and individuals’ propensity to vote. We document a sizable negative impact of diversity on overall electoral turnout which reflects differential effects at the individual level, depending on household equivalent income. Specifically, we show that ethnic heterogeneity in the neighborhood reduces the political participation of the poor, while it fosters that of the more affluent. These results highlight a potential democratic deficit stemming from reduced and unequal electoral turnout in increasingly ethnically heterogeneous neighborhoods.
    Keywords: ethnic heterogeneity, electoral turnout, income
    JEL: D72
    Date: 2017
  5. By: Samuel Muehlemann (LMU Munich, IZA Bonn); Gerard Pfann (Maastricht University, IZA Bonn); Harald Pfeifer (BIBB, ROA Maastricht); Hans Dietrich (IAB Nuremberg)
    Abstract: This paper studies the effects of the G8 high school reform in Germany. The reform reduced minimum duration to obtain a high school degree (Abitur) from 9 to 8 years. First, we present a simple model based on a CES technology with heterogeneous inputs to conjecture possible effects of a supply shock of high education apprenticeships. Implementation of the reform across states (Laender) has been realized in different years. A difference-in-differences estimation strategy is used to identify the effects of one-time supply shock in market for high-educated apprentices. Training firms almost fully and immediately absorbed the additional supply of high school graduates in the apprenticeship market. No evidence is found for substitution effects between low and high education apprenticeships. The model explains that these effects may be due to sticky and too low collectively bargained wages for high education apprenticeships relative to their productivity. This renders the market for apprenticeships inefficient.
    Keywords: Apprenticeship market, labor supply shock, G8 reform
    JEL: I21 J20
    Date: 2018–01
  6. By: Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
    Abstract: We analyze the drivers and barriers that influence investments increasing the energy efficiency of firms' production processes or buildings in the German manufacturing sector based on microdata. In particular, we shed light on the relationship between financial barriers (e. g. credit constraints), information and knowledge (e. g. energy management practices), salience of energy-related topics, and the investments in energy saving technologies. A better understanding of firms' investment behavior regarding energy saving technologies is crucial to design efficient policy measures, which are necessary to achieve the imposed ambitious climate and energy policy targets. We use data from 701 structured telephone interviews in combination with commercial and confidential firm-level data. Our results suggest that energy management practices have a statistically significant positive relationship with investment decisions on energy saving technologies for production processes and buildings. Credit constraints are a barrier to investments in the energy efficiency of firms' production processes. Furthermore, high energy cost shares of heating or cooling, high energy intensity, energy self-generation and structured internal decision making processes influence the investments in energy efficiency positively.
    Keywords: Energy efficiency,Credit constraints,Energy management,Manufacturing,industry,Investment behavior
    JEL: D22 H23 Q41 Q48 Q58
    Date: 2017
  7. By: Dobbelaere, Sabien (Vrije Universiteit Amsterdam); Mairesse, Jacques (CREST-INSEE)
    Abstract: Researchers contributing to the empirical rent-sharing literature have typically resorted to estimating the responsiveness of workers' wages on firms' ability to pay in order to assess the extent to which employers share rents with their employees. This paper compares rent-sharing estimates using such a wage determination regression with estimates based on a productivity regression that relies on standard firm-level input and output data. We view these two regressions as reduced-form equations stemming from, or at least compatible with, a variety of underlying theoretical structural models. Using a large matched firm-worker panel data sample for French manufacturing, we find that the industry distributions of the rent-sharing estimates based on them are significantly different on average, even if they slightly overlap and are correlated. Precisely, if we only rely on the firm-level information, we find that the median of the relative and absolute extent of rent-sharing parameters amount roughly to 0.40 and 0.30 for the productivity regression and to 0.20 and 0.16 for the wage determination regression. When we also take advantage of the worker-level information to control for unobserved worker ability in the model of wage determination, we find that these parameters further reduce as expected and have a median value of only about 0.10.
    Keywords: rent sharing, wage equation, production function, matched employer-employee data
    JEL: C23 D21 J31 J51
    Date: 2017–11
  8. By: Roberto Antonietti; Ron Boschma
    Abstract: There is increasing interest in the question how institutions affect regional diversification, especially in times of economic crisis. This paper investigates the role of social capital for the entry of new industries and the exits of existing industries in Italian provinces during the 2004-2010 period. Our results show that bridging social capital in a region positively contributes to the entry of new industries, especially when they are unrelated to existing specializations in the region. Diversification in regions (especially more unrelated diversification) tends to rely on bridging, not on bonding social capital. We also find that bridging social capital loses its impact on regional diversification during the crisis. Bonding, not bridging social capital, appears to make regions resilient in times of crisis, by reducing the probability of exit, especially in industries unrelated to existing specializations in regions. While bridging social capital has a negative effect on exit in times of prosperity, it shows no such effect anymore during the crisis period. Our findings suggest that bridging social capital loses its supportive role in times of crisis.
    Keywords: bonding social capital, bridging social capital, regional diversification, resilience, economic crisis, Italy
    JEL: R11 O14 D02
    Date: 2018–01
  9. By: Judith M. Delaney; Paul J. Devereux
    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: Returns to education; Earnings volatility
    JEL: J01
    Date: 2017–10
  10. By: Jan Horst Keppler (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Sébastien Phan (Autre - non renseigné); Yannick Le Pen (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Charlotte Boureau (Autre - non renseigné)
    Abstract: Interconnecting two adjacent areas of electricity production generates benefits in combined consumer surplus and welfare by allowing electricity to flow from the low cost area to the high cost area. It will lower prices in the high cost area, raise them in the low cost area and will thus have prices in the two areas converge. With unconstrained interconnection capacity, price convergence is, of course, complete and the two areas are merged into a single area. With constrained interconnection capacity, the challenge for transport system operators (TSOs) and market operators is using the available capacity in an optimal manner. This was the logic behind the “market coupling” mechanism installed by European power market operators in November 2009 in the Central Western Europe (CWE) electricity market, of which France and Germany constitute by far the two largest members. Market coupling aims at optimising welfare by ensuring that buyers and sellers exchange electricity at the best possible price taking into account the combined order books all power exchanges involved as well as the available transfer capacities between different bidding zones. By doing so, interconnection capacity is allocated to those who value it most.
    Keywords: Electricity market
    Date: 2017–10–02
  11. By: ARENAS Andreu (Université catholique de Louvain, CORE, Belgium); HINDRIKS Jean (Université catholique de Louvain, CORE, Belgium)
    Abstract: We study the role of school inequality and social segregation for human capital accu-mulation, inequality and intergenerational mobility. We augment the Becker-Tomes-Solon model of intergenerational mobility, introducing a regime switch model of social segregation at school. Depending on the social background of their parents, children have di erent probability of access to di erent school quality. Abstracting from genetic transmission of ability, we focus on the e ect of social segregation and school inequality on parental in-vestments, education and income levels and inequality, and on intergenerational mobility. We obtain that segregation and school inequality have ambiguous e ects on parental in-vestment. However, we also find that segregation and school inequality raise the average level of educational attainment and income. This is due to the complementarity between parental investment and school quality. Lastly, we show that the e ect of segregation and school inequality on the intergenerational mobility is ambiguous and depends on the distribution of parental income.
    Keywords: Intergenerational mobility; education, school system; equality of opportu-nity; segregation
    JEL: I22 J62
    Date: 2017–06–30
  12. By: Simon Rabaté (PSE - Paris School of Economics, ENS Paris - École normale supérieure - Paris); Julie Rochut (CNAV - CNAV - CNAV, RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11)
    Abstract: Increasing the minimum retirement age is a widespread option chosen by policy makers to reduce spending in financially constrained public pension systems. Yet the effectiveness of such a reform strongly depends on the ability of the impacted individuals to postpone their withdrawal from the labor force. In this paper, we evaluate the effects of the 2010 French pension reform that increased the statutory eligibility age of retirement from 60 to 62. To do so, we use a differences-in-differences methodology, comparing the trajectories from work to retirement for succeeding generations facing a different statutory age. Using a detailed social security administrative database, we provide a global assessment of the effects of the reform, accounting for the potential substitution effects from old-age insurance towards unemployment, sickness or disability insurance schemes. Our findings suggest that despite a sizable effect on the employment rate, the reform also strongly in- creased unemployment and disability rates. These substitution effects largely reduce the impact of the reform: our estimates suggest that around one fifth in the decrease in public spending is offset by increasing expenses in other public insurance schemes.
    Keywords: Retirement age, Policy reform, Labor supply, Disability,Unemployment
    Date: 2017–10
  13. By: Thomas Fujiwara; Carlos Sanz
    Abstract: Theories of multilateral bargaining and coalition formation applied to legislatures predict that parties’ seat shares determine their bargaining power. We present findings that are difficult to reconcile with this prediction. We use data from 2,898 municipal Spanish elections in which two parties tie in the number of seats. The party with slightly more general election votes is substantially more likely to appoint the mayor (form the government). Since tied parties should, on average, have equal bargaining power, this identifies the effect of being the most voted due to a norm prescribing that “the most voted should form government.” The effect of being most voted is comparable in size to the effect of obtaining an additional seat. This norm binds behavior even when the second and third most voted parties can form a winning coalition that prefers the most voted not to appoint the mayor. Voters punish, in future elections, second most voted parties that appoint mayors, suggesting that they enforce the norm. We document a similar second-versus-third most voted effect and provide suggestive evidence of similar norms from 28 national European parliaments. A model where elections play a dual role (aggregating information and disciplining incumbents) and different equilibria (norms) can occur is consistent with our results and yields additional predictions.
    JEL: C7 C78 D72
    Date: 2017–12
  14. By: Bohacek, Radim (CERGE-EI); Myck, Michal (Centre for Economic Analysis, CenEA)
    Abstract: We analyze the effects of persecution and labor market discrimination during the communist regime in the former Czechoslovakia using a representative life history sample from the Survey of Health, Ageing and Retirement in Europe. We find strong effects of persecution and dispossession on subsequent earnings, with most severe implications of job loss due to persecution on earnings in subsequent jobs and on career degradation. Accumulated long-term effects in the form of initial retirement pensions paid during the communist regime are even greater. These pension penalties disappear by 2006 largely as a result of compensation schemes implemented by democratic governments after 1989. We use unique administrative data on political rehabilitation and prosecution to instrument for the endogenous variables. Finally, we survey transitional justice theory and document reparations programs in other countries.
    Keywords: life histories, wage differentials, persecution, labor discrimination, economic history, treatment effect models
    JEL: N34 J70 J31 C21
    Date: 2017–11
  15. By: Claudia Diehl; Elisabeth Liebau
    Abstract: This study addresses the difficulty in linking ethnic discrimination and integration outcomes of immigrants in empirical research. Many of the existing studies look at the relationship between perceived discrimination and integration, but most are based on cross-sectional data. We argue that perceived discrimination should not be taken as an accurate indicator of actual experiences of discrimination, but rather as a partly subjective interpretation of often ambiguous situations. Reported perceptions may thus not only affect but also reflect integration outcomes. This analysis is one of the few that is based on longitudinal survey data (from the German Socio-Economic Panel) and looks into both the determinants and the consequences of perceived discrimination. Results suggest that PD does in fact reflect both exposure to discrimination and attributional processes. Perceived discrimination is generally and substantially lower in more integrated individuals. More detailed analyses reveal that this link is correlational in nature and to some extent group specific. For groups facing salient ethnic boundaries, integration does not come along with less perceived discrimination. In line with previous studies, our results show further that minorities’ structural integration into the labor market is unrelated to perceived discrimination but reflects, above all, individual resources, including language skills and social ties to majority members. There is some evidence that perceived discrimination reduces levels of identification with the receiving society.
    Date: 2017
  16. By: Luca Fumarco
    Abstract: I test discrimination against blind tenants assisted by guide dogs in the Italian rental housing market by using fake application letters. I compare three fictitious household tenants: married couples, married couples where the wife is blind and owns a guide dog, and married couples where the normal-sighted wife owns a normal dog. I find that the households with a blind wife are invited less often to visit apartments they applied for, because of the presence of their guide dog; using the language of Italian and E.U. laws, this behavior is called indirect discrimination against disabled people. This result is robust.
    Date: 2017
  17. By: V. Joseph Hotz; Per Johansson; Arizo Karimi
    Abstract: We consider the role that firm attributes play in accounting for the divergence in the careers of women and men, with the onset of parenthood. We exploit a matched employer-employee data set from Sweden that provides a rich set of firm and worker attributes. We index firms by their “family friendliness” and analyze the effect of firm family friendliness on the career gap between mothers and fathers. We find that women disproportionately sort into family friendly firms after first birth and that the wage penalty to motherhood is diminished by being assigned to a more family friendly firm or job. We also find that working in a more family friendly firm or job diminishes the parenthood penalty to labor earnings and makes it easier for mothers to work more hours. At the same time, the smaller wage and income penalties to parents from working in family friendly firms and jobs come at the expense of their occupational progression, especially among mothers, impeding their ability to climb career ladders. Finally, we find that family friendly jobs are more easily substitutable for one another. This latter finding suggests that family friendly firms are able to accommodate the family responsibilities of their workers while still managing to keep their costs low. Our findings also suggest that paid parental leave with job protection – which are features of the Swedish context – may not be sufficient to achieve the balancing of career and family responsibilities, but that the way firms and jobs are structured can play a crucial role in facilitating this balance.
    JEL: J13 J16 J24 J31 J62
    Date: 2017–12
  18. By: Teodora Boneva; Christopher Rauh
    Abstract: To understand the socio-economic enrollment gap in university attendance, we elicit students’ beliefs about the benefits of university education in a sample of 2,540 secondary school students. Our choice model estimates reveal that perceived non-pecuniary benefits explain a large share of the variation in intentions to enroll. Expected job satisfaction, parental approval, and perceptions about social life during the 3-4 years after finishing secondary school are most important. Students with low socio-economic status perceive pecuniary and non-pecuniary returns to be lower. Beliefs explain 48% of the socio-economic gap in intentions to enroll, while perceived non-pecuniary returns alone account for 37%.
    Keywords: higher education, beliefs, socio-economic inequality, intergenerational mobility
    JEL: I24 J13 J24 J62
    Date: 2017
  19. By: Algan, Yann; Guriev, Sergei; Papaioannou, Elias; Passari, Evgenia
    Abstract: We study the implications of the Great Recession for voting for anti-establishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for non-mainstream, especially populist parties. Moreover, increases in unemployment go in tandem with a decline in trust in national and European political institutions, while we find much attenuated effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes towards immigrants is muted, especially for their cultural impact. To advance on causality, we extract the component of increases in unemployment explained by the pre-crisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to build-up and the burst of the crisis. Our results imply that crisis-driven economic insecurity is a substantial driver of populism and political distrust.
    Keywords: crisis; Europe; Immigration; industrial structure; populism; Trust; voting
    JEL: A13 E02 F02 F22 F33 J15 O43
    Date: 2017–11
  20. By: Rebekka Christopoulou (Department of Economics, University of Macedonia); Maria Pantalidou (Athens University of Economics and Business)
    Abstract: Labor market conditions in Greece have severely deteriorated during the crisis, af- fecting youths the most. Using the Greek crisis as a case-study, this paper examines the role of the family as a social safety net for its young members. Specically, we test the relationship between youth labor outcomes and parental co-residence, whether this rela- tionship has become stronger during the crisis, and the degree to which the relationship is causal. Our results conrm that the parental home is a refuge both for jobless youth and for those in poorly paid, insecure jobs, and this role has intensied during the crisis. We nd no reverse causality between co-residence and employment status for young men, and signicant reverse causality for women. This nding implies that all youths live in the parental home when they are in need themselves, but it is young women not men who live with parents when parents are in need or for cultural reasons.
    Keywords: Living arrangements, parental coresidence, youth employment, great recession, Greece.
    JEL: J12 J21
    Date: 2017–10
  21. By: Xi, Guoqian (University of Trier); Block, Jörn (University of Trier); Lasch, Frank (Montpellier Business School); Robert, Frank (Montpellier Business School); Thurik, Roy (Erasmus University Rotterdam)
    Abstract: Focusing on entrepreneurship entry modes, we investigate two research questions regarding firm survival: how does the survival probability differ between business takeovers and new venture start-ups? And how do the determinants of survival differ between the two entry modes? Using a large French dataset, we find that business takeovers have a higher survival chance than new venture start-ups. Yet, the differences between two entry modes partially disappear when controlling for differences in founder and firm characteristics. Moreover, we identify differences in the determinants of survival between the two groups, highlighting the distinction between the two forms of entrepreneurship.
    Keywords: new venture start-up, business takeover, firm survival
    JEL: L26 M13
    Date: 2017–11
  22. By: Baert, Stijn (Ghent University); Neyt, Brecht (Ghent University); Omey, Eddy (Ghent University); Verhaest, Dieter (KU Leuven)
    Abstract: This study examines the direct and indirect impact (via educational achievement) of student work during secondary education on later employment outcomes. To this end, we jointly model student work and later schooling and employment outcomes as a chain of discrete choices. To tackle their endogeneity, we correct for these outcomes' unobserved determinants. Using unique longitudinal Belgian data, we find that pupils who work during the summer holidays of secondary education are 15.3% more likely to have a job three months after leaving school. This premium to student work experience is higher when pupils also work during the academic year and diminishes for later employment outcomes. When decomposing this total effect, it turns out that the direct returns to student work overcompensate its non-positive indirect effect via tertiary education enrolment.
    Keywords: education, transitions in youth, student employment, labour, dynamic treatment
    JEL: I21 J24 C35
    Date: 2017–11
  23. By: Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
    Abstract: Increasing energy efficiency is one of the main goals in current German energy and climate policies. We study the determinants of energy efficiency in the German manufacturing sector based on official firm-level production census data. By means of a stochastic frontier analysis, we estimate the cost-minimizing energy demand function at the two-digit industry level using firm-level heterogeneity. Apart from the identification of the determinants of the energy demand function, we also analyze potential drivers of energy efficiency. Our results suggest that there is still potential to increase energy efficiency in most industries of the German manufacturing sector. Furthermore, we find that in most industries exporting and innovating firms as well as those investing in environmental protection measures are more energy efficient than their counterparts. In contrast, firms which are regulated by the European Union Emissions Trading System are mostly less energy efficient than non-regulated firms.
    Keywords: Stochastic Frontier Analysis,Stochastic Demand Frontier,Energy Efficiency,Climate Policy,Manufacturing
    JEL: D22 D24 L60 Q41
    Date: 2017
  24. By: Aghion, Philippe; Akcigit, Ufuk; Lequien, Matthieu; Stantcheva, Stefanie
    Abstract: We study how strongly individuals respond to tax simplicity and how they learn about the complexities of the tax system. We focus on the self-employed, who can more easily adjust to tax incentives and whose responses directly stem from their own understanding of the tax system. We use new French tax returns data from 1994 to 2012. France serves as a good quasi-laboratory: it has three fiscal regimes -- or modes of taxation-- for the self-employed, which differ in their monetary tax incentives and in their tax simplicity. Two key features are that, first, these regimes are subject to eligibility thresholds; we find large excess masses (bunching) right below the latter. Second, the regimes impact different agents heterogeneously and have changed extensively over time. Taken together, these two key elements give us measures of tax responses (the bunching) as well as the variation needed to jointly estimate a value of tax simplicity and taxable income elasticities. They also give us an opportunity to study how individuals learn about and respond over time to changing policy parameters. We estimate a large value for tax simplicity of up to 650 euros per year per individual depending on the regime and activity. We also find sizable costs of tax complexity; agents are not immediately able to understand what the right regime choice is, leave significant money on the table, and learn over time. The cost of complexity is ``regressive'' in that it affects mostly the uneducated, low income, and low skill agents. Agents who can be viewed as more informed and knowledgable (e.g., the more educated or high-skilled) are more likely to make the correct regime choice and to learn faster.
    Keywords: Complexity; entrepreneurship; learning; Self-employment; taxation
    JEL: H21
    Date: 2017–11
  25. By: PAVIA Risa (Université catholique de Louvain, CORE, Belgium)
    Abstract: In this paper I examine whether firms report zero profits as a tax evasion strategy by testing the e ects on bunching at zero of an exogenous shock to the cost of evasion in Portugal. I develop a unique identification strategy by exploiting the targeting of
    Keywords: ITaxation, Firms, Bunching, Portugal
    JEL: H25 H26
    Date: 2017–07–28
  26. By: Daniel Schaefer; Carl Singleton
    Abstract: Using employer-employee panel data, we provide novel facts on how real wages and working hours within jobs responded to the UK’s Great Recession. In contrast to previous studies, our data enables us to address the cyclical composition of jobs. We show that firms were able to respond to the Great Recession with substantial real wage cuts and by recruiting more part-time workers. A one percentage point increase in the unemployment rate led to an average decline in real hourly wages of 2.8 per cent for new hires and 2.6 per cent for job stayers. Hours of new hires in entry-level jobs were also substantially procyclical, while job-stayer hours were nearly constant. Our findings suggest that models assuming rigid labour costs of new hires are not helpful for understanding the behaviour of unemployment over the business cycle.
    Keywords: wage rigidity, Great Recession, hours worked, job-level analysis
    JEL: E24 E32 J31
    Date: 2017
  27. By: GREGOR Andras (CORE, Université catholique de Louvain)
    Abstract: In this paper I provide evidence on e ects of plurality and proportional electoral systems on fiscal outcomes. In Hungary di erent voting regimes are applied to elect the members of local councils: in places where more than 10,000 people live a variant of
    Keywords: public finances, plurality vs. proportional system
    JEL: H72 H77 D72 D78
    Date: 2017–11–06
  28. By: J. Blaum; c. Lelarge; M. Peters
    Abstract: We use French microdata to test an ubiquitous property of firm-based models of importing. When firm efficiency is factor neutral and input prices and qualities are common across firms, firm size should have no effect on expenditure shares on the different products and varieties sourced, holding the extensive margin constant. We show that this property is not supported by the data. Holding the sourcing strategy fixed, we find that larger firms (i) have lower import shares, (ii) concentrate their import spending on their top varieties and (iii) pay higher prices for their imported inputs. Our findings imply that input trade, through the intensive margin, is less beneficial for larger firms. Our results are consistent with a complementarity between firm productivity and input quality.
    Keywords: Trade in Intermediate Inputs; Firm heterogeneity, Firm size, Non-homotheticities.
    JEL: F11 F12 F14 D21 D22 D24
    Date: 2017

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