nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒03‒05
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Immigrant background and expected early school leaving in Europe: evidence from PISA By Ralph Hippe; Maciej Jakubowski
  2. Internet Use and the U-shaped relationship between Age and Well-being By Fulvio Castellacci; Henrik Schwabe
  3. Quantile Treatment Effects of Riester Participation on Wealth By Dorothee Ihle
  4. Earnings Inequality in Germany: A Decomposition-Analysis By Ulrike Stein
  5. The Determinants of Islamophobia – An Empirical Analysis of the Swiss Minaret Referendum By Olga Orlanski; Günther G. Schulze
  6. Teacher Turnover: Does it Matter for Pupil Achievement? By Stephen Gibbons; Vincenzo Scrutinio; Shqiponja Telhaj
  7. Cohesion Policy Incentives for Collaborative Industrial Research. The Evaluation of a Smart Specialisation Forerunner Programme By Riccardo Crescenzi; Mara Giua; Guido de Blasio
  8. Evaluation of the Finnish Income Disregard Reform By Palviainen Heikki
  9. Credit constraints, firms investment and growth evidence from survey data By Miguel García-Posada Gómez
  10. The Distributional Effects of Early School Stratification - Non-Parametric Evidence from Germany By Marcus Roller; Daniel Steinberg
  11. Redistribution in a joint income-wealth perspective: a cross-country comparison By Kuypers, Sarah; Figari, Francesco; Verbist, Gerlinde
  12. Inter-Firm Networks and Firm Performance: The Case of Italy By Chiara Burlina
  13. Weaker jobs, weaker innovation. Exploring the temporary employment-product innovation nexus By Armanda Cetrulo; Valeria Cirillo; Dario Guarascio
  14. Where Does Multinational Investment Go with Territorial Taxation? Evidence from the UK By Li Liu
  15. Heterogeneous Effects of Credit Constraints on SMEs’ Employment: Evidence from the Great Recession By Cornille, David; Rycx, François; Tojerow, Ilan
  16. Baseline results from the EU28 EUROMOD: 2014-2017 By Tammik, Miko
  17. Exchange rate movements,firm-level exports and heterogeneity By Antoine Berthou; Emannuel Dhyne
  18. The Smoking Epidemic across Generations, Gender and Educational Groups: A Matter of Diffusion of Innovations By Cinzi Di Novi; Anna Marenzi
  19. Gender differentiation in intergenerational care-giving and migration choices By Stark, Oded; Curkowska-Torzewska, Ewa
  20. Social Assistance and Mental Health: Evidence from Longitudinal Data on Pharmaceutical Consumption By Dackehag, Margareta; Ellegård, Lina Maria; Gerdtham, Ulf-G; Nilsson, Therese
  21. Labour contracts and stepping-stone effect in Italy: A multinomial analysis By Bosco, Maria Giovanna; Valeriani, Elisa
  22. Smoking Inequality across Genders and Socio-economic Classes. Evidence from Longitudinal Italian Data By Cinzi Di Novi; Rowena Jacobs; Matteo Migheli
  23. A fuzzy approach to measuring violence against women and its severity By Bettio, Francesca; Ticci, Elisa; Betti, Gianni
  24. Incentive regulation: Evidence from German electricity networks By Hellwig, Michael; Schober, Dominik; Cabral, Luís M. B.
  25. Opening Hours Decision and Competition in the Motor Vehicle Inspection Market By Habte, Osmis
  26. Polarization, employment, participation and minimum wage : Evidence from European local labor markets By Paul Maarek; Elliot Moiteaux
  27. Housing prices and mortgage credit in Luxembourg By Sara Ferreira Filipe
  28. Do Dutch dentists extract monopoly rents? By Ketel, Nadine; Leuven, Edwin; Oosterbeek, Hessel; van der Klaauw, Bas
  29. The impact of the announcement of temporary building sites for refugees on house prices in Gothenburg By Kjellander, Josef; Nilsson, Viktor; van Vuuren, Aico

  1. By: Ralph Hippe (European Commission - JRC); Maciej Jakubowski (University of Warsaw and Evidence Institute)
    Abstract: This technical brief analyses the relationship between immigrant status and educational expectations in PISA. Immigrants have become a very policy-relevant issue during the last recent years, in particular with the occurrence of the refugee crisis. Moreover, the freedom of movement in the EU has led to relevant migration flows across EU Member States. At the same time, the EU has set itself the Europe 2020 headline target of reducing the share of early school leavers to 10 % within the EU. Early school leavers are generally disadvantaged socially and economically in later stages in life, so that it is important to better understand their motivations and provide adequate policy solutions. The European Commission (2016, p. 3) indicates that early school leavers are more likely to come from immigrant student groups, as their “early school leaving rates are nearly twice as high as for the native population†. Yet it also emphasises that there is still a lack of evidence pointing to the underlying reasons. In consequence, this study considers jointly these two groups, immigrant students and early school leavers. More specifically, we analyse the factors that are most strongly related to disparities in the probability to leave school early, putting special attention to immigrant status (by differentiating among first and second generation immigrants and, where possible, among EU and non-EU immigrants). To this end, we use OECD’s PISA data, which are the most widely employed data on international student assessment. However, early school leavers cannot directly be considered with these data, but it is possible to analyse educational expectations, including the expectation to dropout early from school. As the related literature emphasises, these expectations are very closely linked to actually realised educational career patterns. Therefore, we can use these expectations to gain insights on the factors influencing early school leaving. In addition, we also employ data from Eurostat to complement the picture on early school leavers and immigrants. We analyse the issues at stake in various ways. First, we provide a range of descriptive data on immigrants and expected early school leavers. Second, we run a number of two-level logit regression models, including a range of student- and school-level variables. In particular, we consider all (available) EU Member States together, before providing results for each MS individually. Finally, we also distinguish more specifically between EU and non-EU immigrants in our regression models. The results show that immigrant students do mostly not structurally differ in their expected early dropout probability to natives across Europe. In other words, the reasons why students expect to leave school early are the same for both immigrant students and natives. This finding implies that it is more important to focus on the specific factors that lead to expected early school leaving common to all students, than to concentrate only on specific immigrant-related factors to decrease the occurrence of expected early school leaving among immigrant students. In particular, our results suggest that the factors most strongly increasing the probability of early school leaving at the student level are the socio-economic background of students, epistemological beliefs and grade repetition, while we find that the most consistent factor is to be found at the school level, being the school’s expected early school leavers probability. The school-environment thus appears to play a key role in shaping educational expectations. Among the student-related factors, grade repetition is the most amenable by policy, so that grade repetition practices may be reconsidered by national policy makers.
    Keywords: Regions, Europe, PISA, education, skills, multilevel analysis
    Date: 2018–02
  2. By: Fulvio Castellacci (TIK Centre for Technology, Innovation and Culture, University of Oslo); Henrik Schwabe (TIK Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: Extant research shows that the relationship between age and well-being is U-shaped. This paper investigates the effects of Internet use on subjective well-being over the life cycle. We argue that Internet use moderates the U-shaped relationship, affecting its turning point and slopes. We use the Eurobarometer annual surveys for the years 2010 to 2013, which provide rich information for close to 100,000 individuals in all European countries. The econometric analysis exploits exogenous variation in broadband Internet take-up across European countries, and presents 2SLS estimations for a recursive bivariate ordered probit model. The results provide support for our main hypothesis. Active Internet users have a different well-being pattern over the life cycle compared to other individuals. Specifically, we find that Internet users experience: (1) a more stable level and less pronounced decrease in life satisfaction in their younger adult life; and (2) an earlier and stronger recovery after the turning point of the U-shape.
    Date: 2018–02
  3. By: Dorothee Ihle
    Abstract: In numerous industrialized countries the demographic change erodes the financial basis of traditional pay-as-you-go pension systems. To compensate for decreasing statutory pensions, many governments incentivize private saving by meansof subsidized retirement plans. In this context, Germany introduced the so-called Riester pension plans. To assess its effectiveness, this paper analyzes the effects of participation in Riester plans on wealth at different points of the distribution. We employ an instrumental quantile regression approach using Riester eligibility as instrument for Riester participation. The analysis is based on microeconomic survey data from the German Socio-Economic Panel of waves 2002 and 2012. Results suggest substantial heterogeneity in the effect of Riester participation on wealth. While Riester participation increases total net wealth in the lower tail of the conditional distribution, it does not have a significant effect on households in the middle part of the distribution. In the upper tail of the conditional asset distribution, we find negative treatment effects providing weak evidence in favor of a mere reallocation of households’ asset portfolios.
    Keywords: Saving incentives, retirement, wealth distribution, instrumental quantile regression
    JEL: D31 D91 I38 J32
    Date: 2017
  4. By: Ulrike Stein
    Abstract: Several studies have shown that income inequality has risen in Germany until 2005. Less focus was put on the rise of earnings inequality which continued to rise until 2010. We distinguish different groups in the labour market with respect to working-time, gender and region by exploiting data from the German Socio-Economic panel (SOEP) for the years 1995 till 2014. Using the decomposition of the Theil1-index we demonstrate that the increase in earnings inequality is primarily the result of diverging average earnings of the various groups in the labour market (between-group inequality) and to some extent due to increasing earnings heterogeneity within groups (within-group inequality). The former effect is larger than the latter. Without the inequality reducing effect on earnings inequality due to the continuous decrease in the share of full-time working employees and the increase in the female labour participation rate (compositional effect) earnings inequality would have actually further increased after 2010. Independent of the policy target, policy measures to reduce inequality need always to be designed in such a way that they take the whole work force into account in order to achieve measurable effects.
    Keywords: Earnings inequality, Theil decomposition, part-time employment, female participation rate, German Socio-Economic Panel (SOEP)
    JEL: D31 J21 J39
    Date: 2017
  5. By: Olga Orlanski (CESifo); Günther G. Schulze (Department of International Economic Policy, University of Freiburg)
    Abstract: We analyze the determinants of Islamophobia using the only nation-wide anti-Islam referendum ever, which was held in Switzerland in 2009 and led to the prohibition of minarets. We find economic, environmental, and cultural factors as well as the presence of Muslims to determine voting behavior. Approval rates for the bill rise with unemployment and decrease with education, income, and the attractiveness of the location. Approval is higher in rural areas, in municipalities with a higher share of men, and in the Italian and German speaking parts of Switzerland. It is higher in municipalities with a higher share of Muslims, which strongly supports the ’religious threat’ hypothesis. We compare the voting behavior in the minaret referendum with the referendum “for democratic naturalizations”, held in 2008, in order to disentangle determinants of Islamophobia from those of xenophobia. We show that our results are robust to the estimation with ecological inference.
    Keywords: Referendum, Minaret referendum, Islamophobia, Xenophobia, Ecological Fallacy
    JEL: D72 D78 J15
    Date: 2018–01
  6. By: Stephen Gibbons; Vincenzo Scrutinio; Shqiponja Telhaj
    Abstract: Recent research has established that teachers matter for student achievements, albeit because of dimensions of 'teacher quality' that are largely unexplained. A less closely investigated issue is whether teacher turnover directly harms student academic achievement. In this paper, we examine whether teacher turnover affects academic achievement of 16 year old state secondary school students using a unique data set of linked students and teachers in England. Identification comes from either: a school fixed effects design which exploits year-on-year variation in turnover in different subject groups, within schools; or student fixed effect design that where the variation comes from the cross sectional variation in turnover in different subjects, in the same school, experienced by a student. Both methods give similar results, suggesting that a higher teacher entry rate reduces students' test scores, albeit by small amounts.
    Keywords: teachers, turnover, student attainment, schools
    JEL: H4 I2 J24
    Date: 2018–02
  7. By: Riccardo Crescenzi; Mara Giua; Guido de Blasio
    Abstract: This paper evaluates a program of subsidies for Collaborative Industrial Research (co-) funded by the EU Cohesion Policy in Italy mobilizing over 1 billion euros. This program anticipated in the 2007-2013 funding cycle some of the key features of Smart Specialization Strategy (S3) programmes, offering evidence-based insights on potential challenges to the practical application of the S3 approach. The programme was not successful in boosting investments, value added or employment of beneficiary firms. The collaborative dimension of the projects added limited value and a more generous level funding would have not improved effectiveness. However, positive impacts emerged in low tech sectors.
    Keywords: Cohesion Policy, Smart Specialisation, Policy Evaluation, Innovation, European Union
    JEL: O18 R11 R58
    Date: 2018–02
  8. By: Palviainen Heikki (Faculty of Management, University of Tampere)
    Abstract: In 2002, the Finnish government introduced an earnings disregard reform aimed at improving the incentives of low-income individuals who receive last-resort social assistance. The aim of the reform was to decrease unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the reform using a quasi-experimental design. After a behavioral adjustment period, there are positive results for females, single-person households and individuals with earnings. No effects on the extensive margin imply that a behavioural response requires some attachment to the labour market. No transition from social assistance to longer-term employment is observed.
    Keywords: Difference-in-differences matching, making work pay, earnings disregard, welfare
    JEL: C93 H53 I38 J68
    Date: 2018–02
  9. By: Miguel García-Posada Gómez (European Central Bank and Banco de España)
    Abstract: We assess the impact of credit constraints on investment, inventories and other working capital and firm growth with a large panel of small and medium-sized enterprises from 12 European countries for the period 2014-2016. The data come from the Survey on the access to finance of enterprises (SAFE), a survey that is especially designed to analyse the problems in the access to external finance of European SMEs. The key identification challenge is a potential reverse-causality bias, as firms with poor investment and growth opportunities may have a higher probability of being credit constrained. We implement several strategies to overcome this obstacle: proxies for investment opportunities, lagged regressors, random effects and instrumental variables. Our findings suggest that credit constraints, both in bank financing and other financing (e.g. trade credit), have strong negative effects on investment in fixed assets, while the impact on firm growth and working capital is less robust.
    Keywords: investment, firm growth, working capital, ordered probit, instrumental variables
    JEL: G30 G31 G32
    Date: 2018–02
  10. By: Marcus Roller; Daniel Steinberg (University of Basel)
    Abstract: The effects of early school stratification on scholastic performance have been subject to controversial debates in educational policy and science. We exploit a unique variation in Lower Saxony, Germany, where performance based tracking was preponed from grade 7 to grade 5 in 2004. We measure the long-run effects of early school stratification on in- dividual PISA test scores along the entire skill distriubution using the changes-in-changes estimator. Our results indicate that preponed school tracking increased test scores at the upper tail and lowered test scores at the lower tail of the skill distribution, compensating each other on average.
    Keywords: Analysis of Education, Education and Inequality, Tracking, Government Policy
    JEL: I21 I24 I28
    Date: 2017
  11. By: Kuypers, Sarah; Figari, Francesco; Verbist, Gerlinde
    Abstract: Redistribution is usually understood in terms of income; as a way to rank individuals as well as to determine taxable capacity or benefit eligibility. Yet, it is increasingly argued that more prominence should be given to the joint distribution of income and wealth and interest into the taxation of wealth for redistributive purposes has largely increased. By including the HFCS data into the microsimulation model EUROMOD we add two novel aspects to the literature. First, we include the analysis of taxes on wealth and wealth transfers. Second, we evaluate redistributive effects of tax-benefit systems against the joint income-wealth distribution instead of income only. We show that expressing living standards in terms of both income and wealth results in considerable reranking of individuals, which in turn leads to a lower redistributive impact of tax-benefit systems than is traditionally considered.
    Date: 2018–02–17
  12. By: Chiara Burlina
    Abstract: This study investigates a particular type of network, the inter-firm network (IFN), and its impact on performances of Italian firms between 2010-2015. After revising the literature on alliances and networks for what concerns the geographical and industrial dimension, I focus my attention on networks’ performance and innovation propensity. The empirical analysis, based on a sample of about 4,000 firms, is divided in two parts: firstly, applying a “differencein- difference” technique, is tested the impact of being in an IFN; secondly, focusing on year 2013, are measured the different effects of IFN characteristics. Results demonstrate that belonging to an IFN has a positive impact on firms’ growth. Moreover, industry heterogeneity of members and internationalisation scope (rather than innovation) turn out to be the main factors increasing firm’s profitability and economic growth.
    Keywords: Inter-firm network, Alliances, Performance, Difference-in-Difference, Innovation.
    JEL: C3 L25 P25 R12
    Date: 2018–01
  13. By: Armanda Cetrulo; Valeria Cirillo; Dario Guarascio
    Abstract: This work explores the relationship between temporary employment and product innovation focusing on five major European economies (France, Germany, Italy, Spain and the Netherlands) observed between 1998 and 2012. Building on the conceptual framework proposed by Kleinknecht et al. (2014), the analysis distinguishes sectors according to their technological characteristics and regimes finding that industries using temporary employment tend to have a weaker product innovation propensity. The negative correlation between temporary employment and innovation is stronger in medium and hightech sectors, identified using both the "Cumulativeness" proxy stemming from Peneder's classification (Peneder, 2010) as well as distinguishing between different Schumpeterian regimes - Schumpeter Mark I vs II - of knowledge accumulation.
    Keywords: product innovation, labor market flexibility, temporary employment
    Date: 2018–02–22
  14. By: Li Liu
    Abstract: In 2009, the United Kingdom changed from a worldwide to a territorial tax system, abolishing dividend taxes on foreign repatriation from many low-tax countries. This paper assesses the causal effect of territorial taxation on real investments, using a unique dataset for multinational affiliates in 27 European countries and employing the difference-in-difference approach. It finds that the territorial reform has increased the investment rate of UK multinationals by 15.7 percentage points in low-tax countries. In the absence of any significant investment reduction elsewhere, the findings represent a likely increase in total outbound investment by UK multinationals.
    Keywords: Europe;Foreign direct investment;United Kingdom;corporate tax policy, multinational firms, Business Taxes and Subsidies, General
    Date: 2018–01–12
  15. By: Cornille, David; Rycx, François; Tojerow, Ilan
    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
  16. By: Tammik, Miko
    Abstract: This paper presents baseline results from the latest version of EUROMOD (version H1.0+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD distributional indicators across all EU 28 countries and over time between 2014 and 2017. Finally, we provide estimates of marginal effective tax rates (METR) for all 28 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. Throughout the paper, we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work reported in Makovec and Tammik (2017).
    Date: 2018–02–19
  17. By: Antoine Berthou (Banque de France, 31 rue Croix des Petits Champs, 75001 Paris); Emannuel Dhyne (Economics and Research Department, NBB)
    Abstract: This paper provides an estimation of the reaction of the firm-level exports consecutive to real exchange rate movements – the exchange rate elasticity of exports. Following recent theoretical works emphasizing the role played by firm heterogeneity, we test in particular how the exchange rate elasticity may be affected by firm-level productivity, and how the heterogeneous reaction of different firms may contribute to shape the aggregate reaction of countries’ exports. The analysis relies on a unique cross-country micro-based dataset of exporters available for 11 European countries (2001-2011), which details in particular information about ??rms’ productivity and export performance. Our results show that while the average exchange rate elasticity across firms is quite weak, it is also highly heterogeneous. The least productive firms within each country and sector tend to react more to real exchange rate movements than the most productive firms. This weak reaction of highly productive and large exporters tends to reduce the macroeconomic exchange rate elasticity in all countries. Cross-country differences in the shape of the productivity distribution among exporters have a strong influence on the macroeconomic exchange rate elasticity: countries populated with a higher density of low productive firms tend to respond more to exchange rate movements in terms of aggregate exports than countries populated with highly productive exporters.
    Keywords: Firm-level exports, heterogeneity, exchange rates movements.
    JEL: F12 F14 F31
    Date: 2018–01
  18. By: Cinzi Di Novi (Department of Economics and Management, University of Pavia); Anna Marenzi (Department of Economics, Ca’ Foscari University of Venice)
    Abstract: This study examines whether the temporal variations in smoking habits across generations and gender and among groups with differing levels of education fit the pattern proposed by the theory of the diffusion of innovations (TDI) (Rogers, 2003). We focus on the Italian case and employ a pseudo-panel derived from repeated cross-sections of the annual household survey, “Aspects of Daily Life,” that is part of the Multipurpose Survey carried out by the Italian National Statistical Office (ISTAT) for the period 1997 to 2012. The results confirm Rogers’ TDI and show that smoking prevalence has declined over time and across age cohorts: younger men of all educational levels and women with higher education are less likely to smoke than are those in other cohorts. On the other side, less-educated women, who entered the smoking-diffusion process later that others are more likely to smoke. Hence, socio-economic differences in smoking continue to persist, especially for women. According to Rogers’ TDI, smoking prevalence is expected to decline further, particularly among little-educated women.
    Keywords: Smoking habit, theory of diffusion, generations.
    JEL: J1 I1
    Date: 2018–02
  19. By: Stark, Oded; Curkowska-Torzewska, Ewa
    Abstract: We weave together care-giving, gender, and migration. We hypothesize that daughters who are mothers have a stronger incentive than sons who are fathers to demonstrate to their children the appropriate way of caring for one's parents. The reason underlying this hypothesis is that women on average live longer than men, they tend to marry men who are older than they are and, thus, they are more likely than men to spend their last years without a spouse. Because it is more effective and less costly to care for parents if they live nearby, daughters with children do not move as far away from the parental home as sons with children or childless offspring. Data on the distance between the children's location and the parents' location extracted from the Survey of Health, Ageing and Retirement in Europe (SHARE), in conjunction with data on selected demographic characteristics and institutional indicators taken from Eurostat, the OECD, and the World Bank, lend support to our hypothesis: compared to childless daughters, childless sons, and sons who are fathers, daughters who are mothers choose to live closer to their parents' home.
    Keywords: Demonstration of care-giving across generations,Gender differentiation,Migration distance from the parental home
    JEL: D10 D64 J13 J14 J16
    Date: 2018
  20. By: Dackehag, Margareta (Department of Economics, Lund University); Ellegård, Lina Maria (Department of Economics, Lund University); Gerdtham, Ulf-G (Department of Economics, Lund University); Nilsson, Therese (Department of Economics, Lund University)
    Abstract: This paper examines the short-term effect between take-up of Social Assistance Benefit (SAB) and mental health. Using a panel dataset including rich yearly register data on e.g. income, income sources, unemployment and types of pharmaceutical consumption for over 140,000 Swedes 2006-2012, we quantify the importance of the psychosocial dimensions (e.g. shame and guilt) of the socioeconomic status – mental health nexus. Our main independent variable is an indicator for SAB, which is the means-tested last-resort option for individuals with no other means to cover necessary living expenses, received by six per cent of all Swedish households annually. Mental ill-health is measured by data on prescribed antidepressants, anxiolytics, or hypnotics. While SAB strongly associates with psychopharmaca consumption in a cross-section of observations, the association largely disappear once we introduce individual fixed effects. These results indicate that other mechanisms than shame or guilt related to the SAB experience are more important for mental health in the short term.
    Keywords: mental health; socio-economic status; social assistance; shame; guilt; individual fixed effect
    JEL: I12 I14 I18
    Date: 2018–02–15
  21. By: Bosco, Maria Giovanna; Valeriani, Elisa
    Abstract: Do short-term contracts facilitate the transition to permanent contracts? The authors use a rich administrative database for Italy to run a stepping stone analysis and evaluate which contractual agreements have more chances to lead to a permanent working position. They find that individual specific characteristics make it more likely for a worker to be employed with a specific contractual agreement and that the contribution toward more working stability varies with the previous contract. The authors conclude that fixed term positions act more as stumbling blocks than building blocks for open-ended contracts.
    Keywords: dependent labour,labour market institutions,careers analysis
    JEL: J20 J21 J41
    Date: 2018
  22. By: Cinzi Di Novi (Department of Economics and Management, University of Pavia); Rowena Jacobs (Centre for Health Economics, University of York); Matteo Migheli (University of Turin, Collegio Carlo Alberto)
    Abstract: There has been a dearth of literature on smoking inequalities, in spite of its contribution to health inequalities. We exploit longitudinal Italian individual-level data to identify the main socio-demographic characteristics that determine smoking inequalities. We use the Erreygers Concentration Index to identify in which groups smoking is relatively more prevalent. We find that, among men, pro-poor prevalence is driven by members of the lower socio-economic classes, while we observe the opposite for women. We encourage policymakers to address the issue of smoking inequalities, which the current policies have largely disregarded.
    Keywords: smoking inequality, Italy, gender, social classes
    JEL: I14 I18 J16
    Date: 2018–02
  23. By: Bettio, Francesca; Ticci, Elisa; Betti, Gianni
    Abstract: We develop a scale of severity of violence against women based on fuzzy set theory. The scale can be used to derive fuzzy indexes of violence which account for the prevalence, frequency and severity of violence. Using the results of the survey conducted by the European Agency for Human Rights (FRA) we find strong congruence of ranking between the proposed scale and three widely used alternatives – the Conflict Tactic Scale, The Severity of Violence Against Women Scale and the Index of Spouse Abuse. Unlike existing alternatives, however, the scale that we propose is based on objective information rather than subjective assessment; it is parsimonious in terms of the amount of information that it requires; and it is less vulnerable to risks of cultural bias. As an example of the uses to which fuzzy measurement of violence can be put, we compute fuzzy indexes of intimate partner violence for European countries and find a clear, inverse correlation across countries with the degree of gender equality.
    Keywords: violence against women,fuzzy set theory,severity of violence scales,Europe,gender
    JEL: C49 D63 J16
    Date: 2018
  24. By: Hellwig, Michael; Schober, Dominik; Cabral, Luís M. B.
    Abstract: We propose a difference-in-differences (DiD) approach to estimate the impact of incentives on cost reduction. We show theoretically, and estimate empirically, that German electricity distribution system operators (DSOs) incur higher costs when subject to a lower-powered regulation mechanism. The difference is particularly significant (about 7%) for firms in the upper quartile of the efficiency distribution, a pattern which is consistent with the pooling of types under the threat of ratcheting.
    Keywords: regulation,ratchet effect,electricity utilities,difference-in-differences,efficiency analysis
    JEL: K23 L51 L94 L98 D24 D82
    Date: 2018
  25. By: Habte, Osmis (Department of Economics, Lund University)
    Abstract: This paper examines the effect of competition on a firm's choice of opening hours in the motor vehicle inspection market. Competition affects the incentive inspection firms face when choosing opening hours, which influences the probability that consumers find service time that best matches their preferred time. We use 2SLS analyses to resolve the potential endogeneity of market entry decisions. Using a detailed monthly firm-level panel data for all inspection firms in Sweden, we find that increased competition, measured using both the number of firms in a geographic market and average distance to nearby competitors, leads to expanded opening hours. The probability that inspection firms offer services on weekends also increases with local competition.
    Keywords: opening hours; competition; non-price competition; entry; motor vehicle inspection market
    JEL: D22 L11 L84
    Date: 2017–12–22
  26. By: Paul Maarek; Elliot Moiteaux (Université de Cergy-Pontoise, THEMA)
    Abstract: Since 1980, labor markets became increasingly polarized: occupations in the middle of the wage distribution (routine occupations) tend to disappear, and are replaced by low-wage occupations (man- ual occupations) and high-wage occupations (abstract occupations). In the US exible labor market, the decrease of routine occupations has been compensated by massive creation of low-paying occupa- tions, and polarization only had a very limited impact on employment levels. This is not necessarily the case in rigid wage European countries in which the creation of such low-paying jobs is more dif- cult, given the institutional environment. We study the e ect of the reduction of the proportion of routine jobs on the employment rate and the participation rate, conditionally on the value of the min- imum wage, using local labor markets from the European Union Labor Force Survey on 8 countries which have a national minimum wage. Our OLS and IV estimates indicate that the disappearance of routine jobs has a negative impact on labor market outcomes in high-minimum wage countries due to an insucient creation of low-paid occupations. Impact on participation is positive for low minimum wage countries, as labor supply may increase in order to compensate the deterioration of labor market opportunities.
    Keywords: Polarization, employment, participation, minimum wage, ICT, routine occupations.
    JEL: J23 J24 J38
    Date: 2018
  27. By: Sara Ferreira Filipe
    Abstract: This paper investigates the interaction between residential housing prices and mortgage credit in Luxembourg over the period 1980Q1-2017Q1. We use a vector error correction framework to model this interaction and allow for feedback effects between the two variables. In the long-run, higher housing prices lead to a mortgage credit expansion, which in turn puts upward pressure on prices. The growing demand for mortgage credit is also sustained by positive net migration to Luxembourg. Construction activity is another important determinant of housing prices, in line with existing supply-side limitations on dwelling availability. These dynamics lead to a structural imbalance between housing supply and demand, with the latter being fueled by demographic factors, tax incentives and fiscal subsidies, as well as the low interest rate environment. While price dynamics are partially explained by these structural factors, our results suggest that over the last few years residential housing prices have been characterized by a moderate, but persistent, overvaluation with respect to market fundamentals. Between 2012Q1 and 2017Q1, the average overvaluation is estimated at 6.85% but its trend is decreasing in the last quarters. Results also show that housing prices have a slow rate of adjustment to deviations from fundamentals (only 2.2% of the misalignment is corrected each quarter) and they do not directly adjust to disequilibria in the mortgage market. These _ndings are supported by impulse response analysis, which suggests that shocks to the endogenous variables lead to permanent increases in housing prices.
    Keywords: Residential real estate, housing market, VECM, property price valuation
    JEL: C58 G12 G18 R31
    Date: 2018–02
  28. By: Ketel, Nadine (Department of Economics, School of Business, Economics and Law, Göteborg University); Leuven, Edwin (Department of Economics, University of Oslo); Oosterbeek, Hessel (University of Amsterdam, School of Economics); van der Klaauw, Bas (Department of Economics, VU University, Amsterdam)
    Abstract: We exploit admission lotteries to estimate the payoffs to the dentistry study in the Netherlands. Using data from up to 22 years after the lottery, we find that in most years after graduation dentists earn around 50,000 Euros more than they would earn in their next-best profession. The payoff is larger for men than for women but does not vary with high school GPA. The large payoffs cannot be attributed to longer working hours, larger human capital investments or sacrifices in family outcomes. The natural explanation is that Dutch dentists extract a monopoly rent, which we attribute to the limited supply of dentists in the Netherlands. We discuss policies to curtail this rent.
    Keywords: Dentists; returns to education; monopoly rents; random assignment
    JEL: C36 I18 I23 J44
    Date: 2018–02
  29. By: Kjellander, Josef (Department of Economics, School of Business, Economics and Law, Göteborg University); Nilsson, Viktor (Department of Economics, School of Business, Economics and Law, Göteborg University); van Vuuren, Aico (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We evaluate the price development of apartments in neighborhoods surrounding temporary housing for refugees using the unpredicted announcement of three building sites, targeting refugees, in Gothenburg. More in particular, we look at the price development in the year after the announcement. We use a causal outcome model that takes account of time and postal-code fixed effects and we define an area to be affected by the announcement based on walking distance. We find support for a small price effect.
    Keywords: House prices; migration
    JEL: O15 O18 R31
    Date: 2018–02

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