nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒02‒05
35 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. System Transition and Structural Change Processes in the Energy Efficiency of Residential Sector: Evidence from EU Countries By Valeria Costantini; Francesco Crespi; Elena Paglialunga; Giorgia Sforna
  2. Modelling German electricity wholesale spot prices with a parsimonious fundamental model – Validation and application By Philip Beran; Christian Pape; Christoph Weber
  3. The Short-Run Employment Effects of the German Minimum Wage Reform By Marco Caliendo; Alexandra Fedorets; Malte Preuss; Carsten Schröder; Linda Wittbrodt
  4. Socioeconomic determinants and health care utilization among elderly people living in Europe: Evidence from the Survey of Health, Ageing and Retirement. By David Cantarero-Prieto; Marta Pascual-Sáez; Javier Lera Torres
  5. Looking for the Missing Rich: Tracing the Top Tail of the Wealth Distribution By Stefan Bach; Andreas Thiemann; Aline Zucco
  6. Maternal employment and child outcomes: evidence from the Irish marriage bar By Irene Mosca; Vincent O'Sullivan; Robert E Wright
  7. Price Discrimination in the Italian Medical Device Industry: An Empirical Analysis By Alberto Cavaliere; Giovanni Crea; Angelo Cozzi
  8. The Effects of Supply Shocks in the Market for Apprenticeships: Evidence from a German High School Reform By Mühlemann, Samuel; Pfann, Gerard A.; Pfeifer, Harald; Dietrich, Hans
  9. Does Sick Pay Affect Workplace Absence? By Bryson, Alex; Dale-Olsen, Harald
  10. Past Income Scarcity and Current Perception of Financial Fragility By Massimo Baldini; Giovanni Gallo; Costanza Torricelli
  11. Does Class Size Matter for School Tracking Outcomes after Elementary School? Quasi-Experimental Evidence Using Administrative Panel Data from Germany By Argaw, Bethlehem A.; Puhani, Patrick A.
  12. When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving By Rey-Biel, Pedro; Sheremeta, Roman; Uler, Neslihan
  13. Housing allowance and rents: evidence from a Stepwise Subsidy Scheme By Eerola, Essi; Lyytikainen, Teemu
  14. How voters use grade scales in evaluative voting By Antoinette Baujard; Frédéric Gavrel; Herrade Igersheim; Jean-François Laslier; Isabelle Lebon
  15. Calculation of pension entitlements in the sample of integrated labour market biographies (SIAB) By Pfister, Mona; Lorenz, Svenja; Zwick, Thomas
  16. Sources of productivity differentials in manufacturing in post-transition urban South-East Europe By Katarina Bacic; Ivana Rasic Bakaric; Suncana Slijepcevic
  17. An Overwiew of Economic Impacts of Shale Gas on EU Energy Security By Janda, Karel; Kondratenko, Ivan
  18. Resolving a Non-Performing Loan crisis: The ongoing case of the Irish mortgage market By McCann, Fergal
  19. Reasons for unmet needs for health care: the role of social capital and social support in some Western EU countries By Fiorillo, Damiano
  20. Financial work incentives and the longterm unemployed: the case of Belgium By Collado, Diego
  21. Innovation, job creation and productivity: implications for public policy By Ugur, Mehmet
  22. Occupational Licensing in the European Union: Coverage and Wage Effects By Koumenta, Maria; Pagliero, Mario
  23. Academic breeding grounds: Home department conditions and early career performance of academic researchers By Broström, Anders
  24. “How do unemployed workers behave prior to retirement? A multi-state multiple-spell approach” By Ewa Galecka-Burdziak; Marek Góra
  25. Ecosystem complexity, firm learning and survival: UK evidence on intra-industry age and size diversity as exit hazards By Trushin, Eshref; Ugur, Mehmet
  26. The influence of parental divorce, parental temporary separation and parental relationship quality on children’s school readiness By Garriga, Anna; Pennoni, Fulvia
  27. The Impact of International Patent Systems: Evidence from Accession to the European Patent Convention By Bronwyn Hall; Christian Helmers
  28. The Effectiveness of Hiring Credits By Cahuc, Pierre; Carcillo, St�phane; Le Barbanchon, Thomas
  29. Firm wage premia, industrial relations,and rent sharing in Germany By Boris Hirsch; Steffen Mueller
  30. Why Do French Engineers Find Stable Jobs Faster than PhDs? By Margolis, David N.; Miotti, Luis
  31. Communication Costs and the Internal Organization of Multi-Plant Businesses: Evidence from the Impact of the French High-Speed Rail By Charnoz, Pauline; Lelarge, Claire; Trevien, Corentin
  32. Countercyclical school attainment and intergenerational mobility By ARENAS, Andreu,; MALGOUYRES, Clément,
  33. Identifying Age Penalty in Women's Wages: New Method and Evidence from Germany 1984-2014 By Joanna Tyrowicz; Lucas van der Velde; Irene van Staveren
  34. The long-term economic implications of BREXIT for Scotland: an interregional analysis By Gioele Figus; Katerina Lisenkova; Peter G McGregor; Graeme Roy; J Kim Swales
  35. Heterogeneous Effects of Credit Constraints on SMEs' Employment: Evidence from the Great Recession By Cornille, David; Rycx, Francois; Tojerow, Ilan

  1. By: Valeria Costantini (Roma Tre University, Rome, Italy); Francesco Crespi (Roma Tre University, Rome, Italy); Elena Paglialunga (Roma Tre University, Rome, Italy); Giorgia Sforna (Roma Tre University, Rome, Italy)
    Abstract: This paper aims to analyse the evolution of energy efficiency systems for the residential sector of EU countries over the past twenty years and the associated process of structural change occurred in EU economies. To this purpose, we develop a set of indicators to measure some significant characteristics of the energy efficiency systems and map European countries in terms of four dimensions: energy system, innovation system, policy mix design and export competitiveness. Building on these indicators we develop a cluster analysis identifying non-arbitrary homogeneous country groups according to several characteristics in order to investigate the co-evolution of technological trajectories, energy use performance and structural change in this specific domain. Results suggest the distinction of EU countries into four groups, that are individually and comparatively scrutinized shedding light on how the four dimensions here considered dynamically evolved and interacted within and across countries. Empirical findings reveal that the design of the domestic policy mix may play a key role in shaping technological trajectories and structural change processes that in turns allow an increase in external competitiveness performance. Such positive impact appears to be closely related to the quality and quantity of international relationships with main economic partners.
    Keywords: eco-innovation; policy mix; international competitiveness; structural change; energy efficiency; residential sector
    JEL: O31 O38 Q48 Q55 Q58
    Date: 2018–01
  2. By: Philip Beran; Christian Pape; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen))
    Abstract: Increasing shares of fluctuating renewable energy, the integration of European electricity grids and markets as well as new technologies induce continuous change in the European energy system. Due to these changes, fundamental electricity system and market models that have been developed and applied in the past are dealing with an increasing number of details inducing correspondingly huge data needs. The complexity of these called parameter-rich models (cf. Weron, 2014) leads to limited transparency, also on the impact of data on results, and makes model backtesting rather cumbersome. At the same time, the validity of future scenarios based on non-validated models is dubious. To complement these highly complicated models, more reduced models may be helpful both for transparency and for backtesting. In this paper, we apply a parsimonious fundamental modelling approach to determine hourly German day-ahead power market prices and production volumes. The methodology approximates the supply stack by a piecewise linear function and considers fundamental information, e.g. power plant capacities and availabilities, fuel prices, must-run production and cross-border exchange. We reduce complexity by considering technology classes, uncoupled time periods and only one market area. Between 2011 and 2015, German day-ahead prices declined by 38% and various reasons have been identified in literature, namely a drop in emission certificate prices, the expansion of renewable energies (RES) or lower fuel prices. However, the decision of the German government to shut down nuclear power plants after the Fukushima nuclear disaster happened at the same time and received too little attention as it rather by itself could have led to an increase in prices. The parsimonious model is able to reproduce the hourly historical prices (2011-2015) with a MAE of 5.6 €/MWh and accurately reproduces the electricity production volumes for most thermal production units. In a case study, we investigate a counterfactual scenario without accelerated nuclear phase-out in Germany after the Fukushima nuclear disaster in 2011. The results indicate that German day-ahead power prices would have fallen by additional 3 €/MWh if the nuclear phase-out would have not occurred. Since coal- and gas-fired production as well as additional imports have substituted production from nuclear power plants, their usage would have dropped in the counterfactual scenario.
    Keywords: electricity markets, fundamental modelling, nuclear phase-out, german spot prices
    JEL: Q41 Q48
    Date: 2018–01
  3. By: Marco Caliendo; Alexandra Fedorets; Malte Preuss; Carsten Schröder; Linda Wittbrodt
    Abstract: We assess the short-term employment effects of the introduction of a national statutory minimum wage in Germany in 2015. For this purpose, we exploit variation in the regional treatment intensity, assuming that the stronger a minimum wage 'bites' into the regional wage distribution, the stronger the regional labour market will be affected. In contrast to previous studies, we draw upon detailed individual wage data from the Structure of Earnings Survey (SES) 2014 and combine it with administrative information on regional employment. Moreover, using the Socio-Economic Panel (SOEP), we are able to afirm the absence of anticipation effects and verify the assumption of a common trend in wages before the reform. Based on hourly wages, we compute two regional bite indicators ̶̶̶ the share of affected employees and the Kaitz index ̶̶̶ for 141 regional labour markets. In order to get a broader picture, we construct and compare a variety of these measures, including a bite based on full-time workers only. All of these display a considerably strong correlation. Overall, we do not find a pronounced significant effect on regular (full- and part-time) employment in most specifications, although some estimations yield a small significant reduction amounting to 78,000 (roughly 0.3% of all regular jobs). The results concerning marginal employment are more pronounced. We find evidence that mini-jobs dropped substantially from 2014 to 2015, making for a reduction of about 180,000 jobs (about 2.4% of all mini-jobs). This result is robust to a variety of sensitivity tests.
    Keywords: Minimum Wage, Regional Bite, Employment Effects
    JEL: J23 J31 J38
    Date: 2017
  4. By: David Cantarero-Prieto; Marta Pascual-Sáez; Javier Lera Torres
    Abstract: This paper examines health care utilization among elderly people in sixteen European countries using the last wave of the Survey of Health, Ageing and Retirement in Europe (SHARE). Negative Binominal regression is conducted to study the main driving factors behind health care utilization (visits to the General Practitioners, GP; Hospital Stays, HS). The empirical results suggest that age, gender, education level, self-assessed health, health limitations and status and other socioeconomic variables are the main driving factors. We also show that socioeconomic variables do not play the same role in every country. From a policy economic approach, we propose important information to the current debates both in the health economics and social welfare literature. Our findings are relevant and have several implications for policy purposes to enhance efficiency, equity and quality of health care that it can be provided.
    Keywords: Aging; Discrete choice methods; Count Data Methods; Health; Health Care Utilization; SHARE; Europe.
    JEL: I10 I18
    Date: 2018–01
  5. By: Stefan Bach; Andreas Thiemann; Aline Zucco
    Abstract: We analyze the top tail of the wealth distribution in Germany, France, and Spain based on the first and second wave of the Household Finance and Consumption Survey (HFCS). Since top wealth is likely to be underrepresented in household surveys, we integrate big fortunes from rich lists, estimate a Pareto distribution, and impute the missing rich. In addition to the Forbes list, we rely on national rich lists since they represent a broader base for the big fortunes in those countries. As a result, the top percentile share of household wealth in Germany jumps up from 24 percent to 31 percent in the first and from 24 to 33 percent in the second wave after top wealth imputation. For France and Spain, we find only a small effect of the imputation since rich households are better captured in the survey.
    Keywords: Wealth distribution, missing rich, Pareto distribution, HFCS
    JEL: D31 C46 C81
    Date: 2018
  6. By: Irene Mosca (TILDA, Trinity College Dublin); Vincent O'Sullivan (Department of Economics, Lancaster University); Robert E Wright (Department of Economics, University of Strathclyde)
    Abstract: This paper 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 in Ireland, women working in certain sectors and jobs were required to leave their jobs once they married. 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 were about seven percentage points more likely to complete university education than the children of mothers who were not. 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, personality traits, and differences in paternal education.
    Keywords: marriage, mother, employment, child, university education
    JEL: J12 J16 J20
    Date: 2017–10
  7. By: Alberto Cavaliere (Department of Economics and Management, University of Pavia); Giovanni Crea (Department of Economics and Management, University of Pavia); Angelo Cozzi (Department of Economics and Management, University of Pavia)
    Abstract: In this paper we carry out an empirical analysis to show that the significant price dispersion in the Italian market for medical devices may also be due to price discrimination strategies. We find that ASL (Aziende Sanitarie Locali) incur higher costs than AO (Aziende Ospedaliere) that purchase larger quantities. Centralized purchasing agencies pay lower prices than single purchasers. Therefore second-degree price discrimination seems to be one cause of price differences. Product age has a negative effect on prices due to the impact of innovation on suppliers’ costs. Concerning geographical price discrimination, public procurers located in the south pay significantly higher prices than those located in Northern or Central Italy. However we show that this result may be due to the higher probability that southern public procurers purchase from independent retailers rather than from producers of medical devices, implying a potential double marginalization effect due to the market power of retailers at a local level.
    Keywords: Price Dispersion, Bayesian Networks, Double Marginalization.
    JEL: I11 H51 L11
    Date: 2018–01
  8. By: Mühlemann, Samuel (University of Munich); Pfann, Gerard A. (Maastricht University); Pfeifer, Harald (BIBB); Dietrich, Hans (Institute for Employment Research (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 (Länder) 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
  9. By: Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo)
    Abstract: Higher replacement rates often imply higher levels of absenteeism, yet even in generous welfare economies, private sick pay is provided in addition to the public sick pay. Why? Using comparative workplace data for the UK and Norway we show that the higher level of absenteeism in Norway compared to UK is related to the threshold in the Norwegian public sick pay legislation. This threshold's importance is confirmed in a Regression Kinked Design (RKD) analysis on the Norwegian micro-data. Private sick pay is provided as an employer-provided non-wage benefit and when training costs are high.
    Keywords: absenteeism, public sick pay, private sick pay, comparative
    JEL: H31 J22 J28 J32
    Date: 2017–12
  10. By: Massimo Baldini; Giovanni Gallo; Costanza Torricelli
    Abstract: The aim of this paper is to test whether a temporary experience of income scarcity in the recent past affects the individual’s assessment of financial fragility over time. Using EU-SILC (European Union Statistics on Income and Living Condition) longitudinal data in 2010-2013 period, our results highlight that individuals who transited out of a short spell of scarcity tend to record a lower subjective ability to make ends meet than those who never experienced it during the reference period, even after two years and controlling for the current level of household income. When a more objective measure of household financial health is taken, the effect is weaker and disappears when current income is accounted for. Our results, which are robust to various robustness checks, have implications for public policies since they question the idea that helping people to leave an objective condition of income scarcity is enough to address poverty and social exclusion.
    Keywords: Scarcity; Financial fragility; Perception; Coarsened ExactMatching
    JEL: C25 D60 I32
    Date: 2017–12
  11. By: Argaw, Bethlehem A. (Leibniz University of Hannover); Puhani, Patrick A. (Leibniz University of Hannover)
    Abstract: We use administrative panel data on about a quarter of a million students in the German state of Hesse to estimate the causal effect of class size on school tracking outcomes after elementary school. Our identification strategy relies on the quasi-random assignment of students to different class sizes based on maximum class size rules. In Germany, students are tracked into more or less academic middle school types at about age ten based, to a large extent, on academic achievement in elementary school. We mostly find no or small effects of class size in elementary school on receiving a recommendation or on the actual choice to attend the more academic middle school type. For male students, we find that an increase in class size by 10 students would reduce their chance of attending the higher school track – which more than 40 percent of students attend – by 3 percentage points.
    Keywords: class size, panel, administrative data, education production
    JEL: I21 I28
    Date: 2017–12
  12. By: Rey-Biel, Pedro; Sheremeta, Roman; Uler, Neslihan
    Abstract: We study how giving depends on income and luck, and how culture and information about the determinants of others’ income affect this relationship. Our data come from an experiment conducted in two countries, the US and Spain – each of which have different beliefs about how income inequality arises. We find that when individuals are informed about the determinants of income, there are no cross-cultural differences in giving. When uninformed, however, Americans give less than the Spanish. This difference persists even after controlling for beliefs, personal characteristics, and values.
    Keywords: individual giving; information; culture; beliefs; laboratory experiment
    JEL: C91 D64 D83
    Date: 2018–01–15
  13. By: Eerola, Essi; Lyytikainen, Teemu
    Abstract: This paper studies the effect of housing demand subsidies on rents using discontinuities in the Finnish housing allowance system as a quasi-experimental setting. The stepwise dependence of housing allowance on the floor area of the dwelling and the year of construction of the building causes economically and statistically significant discontinuities in the amount of housing allowances. However, our results show that there are no discontinuities in rents of the recipient households at these cut-offs. Instead, differences in the amount of the housing allowance are translated roughly one-to-one into differences in the rent net of housing allowance
    Keywords: housing demand subsidies; housing allowance; incidence; rents
    JEL: H22
    Date: 2017–08–01
  14. By: Antoinette Baujard (GATE - CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique); Frédéric Gavrel (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique); Herrade Igersheim (CEPERC - Centre d'EPistémologie et d'ERgologie Comparatives - UMR 7304 - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique); Jean-François Laslier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Isabelle Lebon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: During the first round of the 2012 French presidential election, participants in an in situ experiment were invited to vote according to " evaluative voting " , which involves rating the candidates using a numerical scale. Various scales were used: (0,1), (-1,0,1), (0,1,2), and (0,1,...,20). The paper studies scale calibration effects, i.e., how individual voters adapt to the scale, leading to possibly different election outcomes. The data show that scales are not linearly equivalent, even if individual ordinal preferences are not inconsistent. Scale matters, notably because of the symbolic power of negative grades, which does not affect all candidates uniformly.
    Keywords: Range voting,Evaluative Voting, In Situ Experiment, Approval voting, Calibration
    Date: 2017
  15. By: Pfister, Mona; Lorenz, Svenja; Zwick, Thomas
    Abstract: "We describe a method to calculate individual pension entitlements (earning points, Entgeltpunkte) based on information available in conventional employment history data. Pension entitlements can be seen as an important driver of retirement decisions and of the labour market attachment of older people. Therefore, the calculation of pension entitlements using labour market history datasets improves the usability of these datasets for a broad range of topics around the decision to retire. In the first part of this report, we use a high-quality administrative biographical dataset with linked information on pension entitlements, covering a sample of almost all employees in Germany (Biographical Data of Selected Social Insurance Agencies in Germany, BASiD). Based on the BASiD, we explain which information is needed for the calculation of earning points and outline potential sources of error in this calculation. In a next step, we implement our method to calculate earning points in a larger administrative dataset with only conventional employment history information (Sample of Integrated Labour Market Biographies, SIAB). We describe our calculations and assess possible sources of error by mimicking the SIAB data structure in the BASiD. The average deviation for annual earning points is only around 1%, and the error for the sum of the earning points is around 7%. Most of these errors can be explained by large observation gaps in individual pension contributions during phases of reduced employment such as parental leave, marginal employment or unemployment. There might be additional small errors for the implementation of public compensation payments during these periods as a result of specific legal rules for certain socio-economic groups and minor rounding errors during all periods. Finally, we calculate the earning points using the SIAB and show descriptive statistics for annual and total pension entitlements for the entire sample and selected subgroups. We conclude that our approach to calculating pension entitlements using conventional employment history data opens various new and important research options at least for employees without large employment gaps." (Author's abstract, IAB-Doku) ((en))
    Keywords: Rentenanspruch, Datengewinnung, Methodenliteratur, Integrierte Arbeitsmarktbiografien, IAB-Biografiedaten
    Date: 2018–01–19
  16. By: Katarina Bacic (Knowledge Network Ltd.); Ivana Rasic Bakaric (The Institute of Economics, Zagreb); Suncana Slijepcevic (The Institute of Economics, Zagreb)
    Abstract: The paper analyses the effects of urbanization and localisation economies on manufacturing firms’ productivity across urban landscapes in post-transition South-East European (SEE) countries. Fixed-effects panel data estimations on a large sample of firms show that the factors accounting for productivity advantages of manufacturing firms in urban post-transition SEE are related to the firms and to the environment in which these firms operate. Firms located in diversified cities benefit from a productivity premium generated in this type of agglomeration, while no evidence was found that the relative specialization across industries has any effect on firm productivity levels.
    Keywords: city, manufacturing, total factor productivity, post-transition South-East Europe
    JEL: D24 R00 R12
    Date: 2017–11
  17. By: Janda, Karel; Kondratenko, Ivan
    Abstract: This paper analyzes the possible shale gas development in the EU in context with raising problem of energy security. Based on the experience of shale revolution in the USA the transfer of US model to the EU is discussed. The results show that shale production affects the price negatively and that US model is successful due to multiple reasons, primarily presence of experienced companies, geological structure and strong regulation rules. This paper shows the unsuitability of the US model for the EU market. After the first enthusiasm for shale plays research in late 2000s the multiple barriers for drilling have risen up; the most significant are the environmental worries; both on governmental and public levels. US companies have lost interest in the EU and moved to other parts of the world. The shale gas development is not able to affect the energy security of the EU on European, international level.
    Keywords: shale gas, European Union, energy security, shale revolution, energy market
    JEL: F15 F52 Q43
    Date: 2018–01–16
  18. By: McCann, Fergal (Central Bank of Ireland)
    Abstract: The Irish banking system has in recent years experienced a large build-up in Non-Performing Loans (NPLs) during the crisis followed by a sharp reduction in the 2013-2017 period. In this article I present a recent history of the ongoing resolution of the mortgage arrears crisis in Ireland. Using a large and close to exhaustive panel data set of Irish mortgages from 2008 to 2016, I present a number of new findings on loan transitions between delinquency states, the importance of legacy effects of the crisis in explaining recent entry to arrears, the role of mortgage modification in the reduction in arrears balances, the extent of borrower-lender engagement and the financial vulnerability that remains in pockets of the Irish mortgage market.
    Keywords: Mortgages; Non-Performing Loans, Mortgage Modification; Borrower Engagement; Loan Transitions
    Date: 2017–12
  19. By: Fiorillo, Damiano
    Abstract: The paper focus on the patient-side factors that determine access to health care and analyzes the issues of unmet needs and reasons for unmet needs for health care in Western EU countries. The paper has two main objectives: first, to study the determinants of unmet health care needs (UN) with a particular hub on social capital and social support; second, to analyze whether social capital and social support are predictors of the reasons for unmet needs (RUN). A probit model is estimated from the whole population sample accounting for the possibility of individual selection in unmet needs for health care (UN) (selection equation). Then expanded probit models (including inverse Mills ratio) are used on the reasons for unmet needs (RUN) with social capital and social support as determinants and using the European Union Statistics on Income and Living Conditions (EU-SILC) dataset carried out in 2006. In UN equation, results indicate higher unmet health care needs for younger, people with tertiary education, low economic situation, unemployed and in poor health status. Moreover, the frequency of visiting relatives and friends and the ability to ask for help are correlated with a lower likelihood of declaring unmet needs, instead volunteering and participation in formal organizations present a higher probability of not visiting a doctor when needed. In RUN equations, findings show that female, large households, people with low economic situation and financial constraints, unemployed and in poor health status have a higher probability of declaring unmet needs due to economic costs. Additionally, people with tertiary education, high income and employed have a higher probability of not visiting a doctor when needed due to time availability. Furthermore, the frequency of contact with friends and the ability to ask for help are related with a lower probability of unmet needs due to economic costs, while the frequency of contact with relatives is related with a lower probability of unmet needs due to time availability and distance. However, the ability to ask for help is also correlated with a higher probability of not having medical care due to time availability and wait and see.
    Keywords: Unmet needs for healthcare, reasons for unmet needs, social capital, social support, EU Western countries, EU-SILC data, Heckman selection model
    JEL: C35 I12 I18 Z1
    Date: 2017–11
  20. By: Collado, Diego
    Abstract: There is an abundant body of research studying the effect of financial work incentives on employment. Most studies exploit variation within groups over time or across employed and unemployed people, while little research has studied individual changes over time and focused on the long-term unemployed (LTU). In Belgium the long-term unemployment rate is high and the household incomes of many LTU are below the at-risk-of-poverty threshold. Policy proposals aiming to improve this situation might benefit from knowing whether changes in work incentives affect the likelihood of taking up work. Thus, we study whether changes in work incentives, measured by the participation tax rate (PTR), affected the likelihood of going from long-term unemployment to more than half a year of employment. We examine the seven two-year episodes that took place between 2005 and 2012 in Belgium. During these years there were policy changes that affected work incentives and thus contribute to the identification of behavioural effects. We also study whether changes in effective marginal tax rates (EMTRs) affected the hours worked by people already in the labour market working part-time. Increasing out-of-work incomes while maintaining how much work pays would require increasing in-work compensations. As this would probably raise EMTRs, studying the intensive margin is also warranted. We calculate work incentives using the tax-benefit microsimulation model EUROMOD, adapting it to utilise longitudinal data. Results from regression analysis show that a 10 percentage point increase in the PTR (i.e. if work paid less) had a negative average marginal of around 4 percentage points on the probability of taking up work. This effect is sizable considering that the baseline probability of transitioning to more than half a year of employment was 9 per cent. Changes in EMTRs did not have a statistically significant effect on hours worked by part-timers. This might leave some room to compensate increases in out-of-work transfers with changes in in-work transfers.
    Date: 2018–01–21
  21. By: Ugur, Mehmet
    Abstract: Direct and indirect public support (subsidies and tax relief) for business R&D in the UK is higher than most other OECD countries. Nevertheless, total business R&D expenditure as percentage of GDP in the UK (1.7%) is relatively low compared to OECD countries (2.43%). This policy brief summarizes the findings from an ESRC-funded research project on productivity and employment effects of R&D investment; and on whether direct public support has had additionality effects in terms of increasing the funded firms’ R&D investment. The findings suggest that the bot the effects of R&D on productivity and employment and the effect of subsidies on private R&D effort are heterogeneous and non-linear. Therefore, we call for well-targeted R&D subsidies, new conditionality clauses taking account of past performance, and industry-specific targets for R&D investment.
    Keywords: Innovation; R&D; Employment; Productivity; Public Policy
    JEL: D24 J23 O30 O32 O38
    Date: 2018–01–25
  22. By: Koumenta, Maria; Pagliero, Mario
    Abstract: We present the first EU-wide study on the prevalence and labour market impact of occupational regulation in the EU. Drawing on a new EU Survey of Regulated Occupations, we find that licensing affects about 22 percent of workers in the EU, although there is significant variability across member states and occupations. On average, licensing is associated with a 4 percent higher hourly wages. Using decomposition techniques we show that rent capture accounts for one third of this effect and the remaining is attributed to signalling. We find considerable heterogeneity in the wage gains by occupation and level of educational attainment. Finally, occupational licensing increases wage inequality. After accounting for composition effects, licensing increases the standard deviation of wages by about 0.02 log points.
    Keywords: licensing; occupational regulation
    JEL: J31 J44
    Date: 2018–01
  23. By: Broström, Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This study investigates how research group characteristics relate to the early career success of PhD candidates who are trained in the group. In particular, we study how the citation impact of early-career PhDs is related to the staff composition and the funding of the group. Using data on a cohort of Swedish doctoral graduates in science, engineering, mathematics and medicine, two sets of findings are obtained. First, students who were trained in groups with a lower number of PhD students perform better in terms of academic productivity. From the perspective of research policy, this finding suggests a decreasing return to funding additional PhD student positions allocated to professors already maintaining larger research groups. Second, PhD students trained in groups whose funding for PhD research is conditioned by funder influence over the topic of thesis research are more likely to stay in academia. Controlling for career destination, however, PhDs from such groups have lower than average scientific productivity and citation impact. These results suggest that funders of PhD studies face a trade-off between the two different funding objectives of “getting what they want” in terms of research content and fostering successful scholars.
    Keywords: academic careers; PhD studies; research funding; research group; research performance
    JEL: I23
    Date: 2018–01–31
  24. By: Ewa Galecka-Burdziak (Warsaw School of Economics); Marek Góra (Warsaw School of Economics and IZA Bonn)
    Abstract: We examine the behaviour of unemployed older workers up to five years prior to the point at which they can transition out of unemployment because they become eligible to receive pension benefits. We use a unique dataset covering the unemployment histories (longitudinal data) of individuals born between 1940 and 1965 who were registered with any of the public employment offices in Poland. Thus, we study a whole population of individuals who experienced this type of transition over the time period 1996-2015. We examine the transition from unemployment to retirement as a multi-year process. We analyse multiple unemployment spells, identify transition pathways, and look for patterns in these transitions. Moreover, we estimate a conditional risk set model (a stratified Cox model). Our research proves that being close to the point at which they are eligible to receive pension benefits leads individuals ‘wait’ to fulfil these eligibility criteria.
    Date: 2018–01
  25. By: Trushin, Eshref; Ugur, Mehmet
    Abstract: Firm age or size diversity in an industry is taken for granted but its implications for industry evolution and firm survival have remained below the radars of empirical research. We address this knowledge gap by drawing on an interdisciplinary theoretical framework informed by theoretical biology, organizational ecology and industrial organisation. We hypothesize that firms in more diverse industries are more likely to exit as a result of rugged fitness distributions where a global fitness optimum is less likely to emerge. We also hypothesize that investment in research and development (R&D) may counterbalance the adverse effect of diversity on survival by enabling the firm to engage in active learning about its market and technology niches. Evidence from discrete-time hazard estimators and an unbalanced panel dataset of 35,136 R&D-active UK firms lend support to these hypotheses. The findings remain robust to: (i) a battery of sensitivity checks, including step-wise estimations, different diversity measures and various firm cohorts; (ii) control for frailty and for a wide range of firm, industry, and macroeconomic factors considered in the survival literature; and (iii) taking account of direct effects of age, size and R&D intensity.
    Keywords: Diversity; complexity; firm survival; R&D; ecosystem
    JEL: C4 L2 O32 O33
    Date: 2018–01–25
  26. By: Garriga, Anna; Pennoni, Fulvia
    Abstract: We use the first three waves of the Millennium Cohort Study (MCS), a longitudinal and representative UK survey, to explore the interrelationship between parental divorce, parental temporary separation and parental relationship quality on cognitive abilities and psychological dimensions of the children at age five. By using an appropriate imputation method, we apply the augmented inverse propensity weighted estimator to test the hypothesis that parental divorce may be a positive experience for children with parents in high-distress unions, while the dissolution of low-distress unions may have a negative effect. Overcoming some of the limitations of previous research, we find that that the dissolution of high-quality parental unions has the most harmful effects on children, especially concerning conduct problems. We also find that children who experienced parental temporary separation - which has been absent in most previous research - have more conduct and hyperactivity problems than children from stable or divorced families.
    Keywords: children's school readiness, parental divorce, parental temporary separation, missing values, parental relationship quality, robust estimator.
    JEL: J13
    Date: 2017–09–08
  27. By: Bronwyn Hall; Christian Helmers
    Abstract: We analyze the impact of accession to the regional patent system established by the European Patent Convention (EPC) on 14 countries that acceded between 2000 and 2008. We look at changes in patenting behavior by domestic and foreign applicants at the national patent offices and the European Patent Office (EPO). Our findings suggest a strong change in patent filing behavior among foreigners seeking patent protection in the accession states, substituting EPO patents for domestic patents immediately. However, there is little evidence that accession increased FDI by patenting foreign companies in accession countries. Moreover, there is no discernible reaction among domestic entities in terms of domestic filings, although we do find some evidence that applicants in accession states increased their propensity to file patents with the EPO post-accession. Inventor-level information suggests that the underlying inventions originate in the accession states
    JEL: F53 F55 O34
    Date: 2018–01
  28. By: Cahuc, Pierre; Carcillo, St�phane; Le Barbanchon, Thomas
    Abstract: This paper analyzes the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labor cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was non-anticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher.
    Keywords: Hiring credit; labor demand; search and matching model
    JEL: C31 C93 J6
    Date: 2017–12
  29. By: Boris Hirsch (Leuphana University Lueneburg, Germany); Steffen Mueller (Halle Institute for Economic Research (IWH) and University of Magdeburg, Germany)
    Abstract: This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionization is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.
    Keywords: firm wage premium, industrial relations, trade unions, works councils, bargaining power, rent sharing, wage inequality, Germany
    JEL: J31 J52 J53
    Date: 2018–02
  30. By: Margolis, David N. (Paris School of Economics); Miotti, Luis (University of Paris 13)
    Abstract: This paper studies why PhDs in France take longer to find stable jobs than engineers. Using data from CEREQ's "Génération 2004" survey, we show that job finding rates of PhDs are lower than those of engineers and document the differences in their observable characteristics and fields of study. We show that this phenomenon is due to multiple factors: heterogeneity in student characteristics along observable (but not unobservable) dimensions and fields of study, directed search toward public sector positions (especially professors) among PhDs and reservation wages of PhDs for private sector jobs that are "too high" relative to their value of marginal product.
    Keywords: school-to-work transition, STEM, directed search, wage subsidies
    JEL: J24 I23 J64
    Date: 2017–12
  31. By: Charnoz, Pauline; Lelarge, Claire; Trevien, Corentin
    Abstract: We take advantage of the expansion of the French High Speed Rail to study the impact of reductions in travel times between headquarters and the affiliated plants of corporate groups on their employment structure and profit margin. We rely on comprehensive administrative data allowing us to provide a large scale, cross-industry test of alternatives theories of firm organization, with a rich set of empirical indicators. We obtain that decreases in communication costs in the form of lower travel times foster the functional specialization of remote affiliates on their production activities. Support activities shrink because of the transfer of the high-skilled managers to headquarters. These organizational rationalizations have a significant but relatively small impact on overall groups' profit. These results hold across all industries but are strongest in the service industries, where the information to be transmitted across sites is arguably softer.
    Keywords: Communication costs; firm organization; headquarters; high-speed rail; Public Infrastructure
    JEL: L22 R30 R40
    Date: 2018–01
  32. By: ARENAS, Andreu, (CORE, Université catholique de Louvain); MALGOUYRES, Clément, (Banque de France)
    Abstract: We study how economic conditions at the time of choosing post-compulsory education affect intergenerational mobility. Exploiting local variation in birthplace unemployment rate at age 16 across 23 cohorts in France, we find that cohorts deciding on post-compulsory education in bad economic times are more educationally mobile - their level of education is less related to having a white-collar father. These cohorts are also more occupationally mobile; and a large fraction of this effect is explaiend by business cycle-induced differences in educational attainment. Accounting for differential spatial mobility between birth and age 16 by parental background confirms the results.
    Keywords: intergenerational mobility, business cycle, human capital, occupational choice
    JEL: J24 I21 E24
    Date: 2017–12–22
  33. By: Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU); Institute of Labor Economics (IZA)); Lucas van der Velde (Group for Research in Applied Economics (GRAPE); Warsaw School Economics); Irene van Staveren (Institute of Social Studies (ISS))
    Abstract: Given theoretical premises, gender wage gap adjusted for individual characteristics is likely to vary over age. We adapt DiNardo, Fortin and Lemieux (1996) semi-parametric technique to disentangle year, cohort and age effects in adjusted gender wage gaps. We rely on a long panel of data from the German Socio-Economic Panel covering the 1984-2015 period. Our results indicate that the gender wage gap increases over the lifetime, for some birth cohorts also in the post-reproductive age.
    Keywords: gender wage gap, age, cohort, decomposition, non-parametric estimates, Germany
    JEL: J31 J71
    Date: 2017
  34. By: Gioele Figus (Centre for Energy Policy, University of Strathclyde); Katerina Lisenkova (Department of Economics, University of Strathclyde); Peter G McGregor (Department of Economics, University of Strathclyde); Graeme Roy (Department of Economics, University of Strathclyde); J Kim Swales (Department of Economics, University of Strathclyde)
    Abstract: The analysis of this paper offers a cautionary tale about the economic cost of European disintegration. Scotland offers an interesting twist on that story as somewhere that voted to remain part of the EU but is now negatively affected, even though it is less directly exposed to EU trade than the UK, and even if it were to achieve a softer Brexit such as EEA or even full EU membership (as it has aspirations to do). The analysis includes potentially important lessons for the many nations and regions in which there exists pressures to move away from trade liberalisation and towards protectionism.
    Keywords: Scotland, BREXIT, CGE modelling, trade
    JEL: R13 C18 F15
    Date: 2017–11
  35. By: Cornille, David (National Bank of Belgium); Rycx, Francois (Free University of Brussels); Tojerow, Ilan (Free University of Brussels)
    Abstract: This paper takes advantage of access to detailed matched bank-firm data to investigate whether and how employment decisions of SMEs have been affected by credit constraints in the wake of the Great Recession. Variability in banks' financial health following the 2008 crisis is used as an exogenous determinant of firms' access to credit. Findings, relative to the Belgian economy, clearly highlight that credit matters. They show that SMEs borrowing money from pre-crisis financially less healthy banks were significantly more likely to be affected by a credit constraint and, in turn, to adjust their labour input downwards than pre-crisis clients of more healthy banks. These results are robust across types of loan applications that were denied credit, i.e. applications to finance working capital, debt or new investments. Yet, estimates also show that credit constraints have been essentially detrimental for employment among SMEs experiencing a negative demand shock or facing strong product market competition. In terms of human resources management, credit constraints are not only found to foster employment adjustment at the extensive margin but also to increase the use of temporary layoff allowances for economic reasons. This outcome supports the hypothesis that short-time compensation programmes contribute to save jobs during recessions.
    Keywords: SMEs, banks' financial health, credit constraints, employment, short-time compensation programmes, Great Recession, matched bank-firm data
    JEL: C35 C36 D22 G01 G21 J21 J23
    Date: 2018–01

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