nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒04‒02
thirty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Gender inequality and the gender job satisfaction paradox in Europe By Vladisavljević, Marko; Perugini, Cristiano
  2. Cohesion Policy Meets Heterogeneous Firms By Loredana Fattorini; Mahdi Ghodsi; Armando Rungi
  3. Unfairness at Work: Well-Being and Quits By D'Ambrosio, Conchita; Clark, Andrew E.; Barazzetta, Marta
  4. The length of working life in Spain: levels, recent trends, and the impact of the financial crisis By Dudel, Christian; López Gómez, María Andrée; Benavides, Fernando G.; Myrskylä, Mikko
  5. Effects of Pay-For-Performance on Prescription of Hypertension Drugs among Public and Private Primary Care Providers in Sweden By Ellegård, Lina Maria
  6. An update, a correction, and an extension, of an evaluation of an illustrative Citizen’s Basic Income scheme - addendum to EUROMOD working paper EM12/17 By Torry, Malcolm
  7. EU-wide income inequality in the era of the Great Recession By Peter Benczur; Zsombor Cseres-Gergely; Peter Harasztosi
  8. Does managed competition constrain hospitals’ contract prices? Evidence from the Netherlands By Rudy Douven; Monique Burger; Erik Schut
  9. Residential Satisfaction for a Continuum of Households: Evidence from European Countries By Riccardo, Borgoni; Alessandra, Michelangeli; Federica, Pirola;
  10. For better or worse? : How more flexibility in working time arrangements and fatherhood affect men's working hours in Germany By Wanger, Susanne; Zapf, Ines
  11. Value Added, Wages, and Labor Market Flows at the Establishment Level By Merkl, Christian; Stüber, Heiko
  12. Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany By Boris Hirsch; Steffen Müller
  13. Growing pension deficits and the expenditure decisions of UK companies By Bunn, Philip; Smietanka, Pawel; Mizen, Paul
  14. Sales impact of servicescape's emotional and rational stimuli: a survey study By Morone, Andrea; Nemore, Francesco; Schirone, Dario Antonio
  15. Digitalisation, hiring and personnel policy: evidence from a representative business survey By Warning, Anja; Weber, Enzo
  16. The Impact of the French Policy Mix on Business R&D: How Geography Matters By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  17. Distributional Effects of Welfare Reform for Young Adults: An Unconditional Quantile Regression Approach By Hernaes, Øystein
  18. The appropriate response of Spanish Gitanos: Short-run orientation beyond current socio-economic status By Jesús Martín; Pablo Brañas-Garza; Antonio M. Espín; Juan F. Gamella; Benedikt Herrmann
  19. Drivers of participation elasticities across Europe: gender or earner role within the household? By Bartels, Charlotte; Shupe, Cortnie
  20. The “Family 500+” child allowance and female labour supply in Poland By Iga Magda; Aneta Kielczewska; Nicola Brandt
  21. Specializing in growing sectors: Wage returns and gender differences By Graves, Jennifer.; Kuehn, Zoë.
  22. Human Capital Effects of Kindergarten and School Enrolment Timing By Agnes Szabo-Morvai; Daniel Horn; Anna Lovasz; Kristof De Witte
  23. Does increasing compulsory education decrease or displace adolescent crime? New evidence from administrative and victimization datail By Ylenia Brilli; Marco Tonello
  24. Pension Shocks and Wages By Pawel Adrjan; Brian Bell
  25. Tax and financial reporting aggressiveness: evidence from Europe By Alexandra Fernandes; António Cerqueira; Elísio Brandão
  26. Constraints of Spanish Insolvency Law. A Predictive Bankruptcy Model for Spanish Industrial SMEs (2007-2015) By Salvador Ortí-Camallonga
  27. Maternity leaves in Academia : Why are some UK universities more generous than others? By Epifanio, Mariaelisa; Troeger, Vera E.
  28. Economic Crisis, Mortality and Health Status. A New Perspective By Vincenzo Atella; Federico Belotti; Joanna Kopinska; Alessandro Palma; Andrea Piano Mortari
  29. Municipally owned enterprises: Nested principal-agent relations and conditions for accountability By Bergh, Andreas; Erlingsson, Gissur; Gustafsson, Anders; Wittberg, Emanuel
  30. Foreign ownership and market power: the special case of European banks By Panayotis D. Alexakis; Ioannis G. Samantas
  31. The use of hypothetical household data for policy learning – EUROMOD HHoT baseline indicators By Gasior, Katrin; Recchia, Pasquale

  1. By: Vladisavljević, Marko; Perugini, Cristiano
    Abstract: Although women are paid less than men, face worse working conditions, lower promotion opportunities, and work-place discrimination, they typically report job satisfaction higher or similar to men's. Twenty years ago Clark (Clark, 1997) suggested that the reason behind women's higher job satisfaction are their lower expectations, driven by a number of factors related to current and past positions of women on the labour market. Although this hypothesis is one of the leading explanations of the gender differences in the job satisfaction, cross-country research investigating the relationship between the gender inequality and gender job satisfaction gap are rare and only descriptive. In this paper we use the data from EU-SILC module on subjective well being from 2013 to analyse adjusted gender job satisfaction gaps in 32 European countries and relate them to the country differences in gender inequalities. Results provide extensive and robust evidence of a relationship between exposure to more gender equal settings in the early stages of life and smaller gender gaps in job satisfaction, once all other possible drivers are controlled for. This suggests that women who experienced higher gender equality have expectations increasingly aligned to those of their male counterparts. Our results also show that this alignment is further favoured by being employed in typically male occupations, whereas higher levels of education do not play a similar effect.
    Keywords: Gender inequality, Job satisfaction, Europe
    JEL: J16 J28 O52
    Date: 2018–03
  2. By: Loredana Fattorini; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Armando Rungi
    Abstract: In this paper, we empirically test the effects of the EU’s ‘cohesion policy’ on the performance of 273,500 European manufacturing firms after combining regional policy data at NUTS 2 level with firm-level data. In a framework of heterogeneous firms and different absorptive capacity of regions, we show that the financing of ‘cohesion policy’ by the European Regional Development Fund (ERDF) aimed at direct investments in R&D correlates with an improvement of firms’ productivity in a region. Conversely, funding aimed at overall Business Support correlates with negative productivity growth rates. In both cases, we registered an asymmetric impact along the firms’ productivity distribution, where a stronger impact can be detected in the first quartile, i.e. less efficient firms in a region. We finally argue that considering the heterogeneity of firms allows a better assessment of the impact of ‘cohesion policy’ measures.
    Keywords: firm performance, total factor productivity, cross-country analysis, convergence, regional policy
    JEL: D22 D24 E23 F15 L25
    Date: 2018–03
  3. By: D'Ambrosio, Conchita (University of Luxembourg); Clark, Andrew E. (Paris School of Economics); Barazzetta, Marta (University of Luxembourg)
    Abstract: We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective future job quitting. In six waves of German Socio-Economic Panel data, the extent to which own labour income is perceived to be unfair is significantly negatively correlated with subjective well-being, both in terms of cognitive evaluations (life and job satisfaction) and affect (the frequency of feeling happy, sad and angry). Perceived unfairness also translates into objective labour-market behaviour, with current unfair income predicting future job quits.
    Keywords: fair income, subjective well-being, quits, SOEP
    JEL: D63 J28 J31
    Date: 2018–02
  4. By: Dudel, Christian; López Gómez, María Andrée; Benavides, Fernando G.; Myrskylä, Mikko
    Abstract: While there has been considerable debate about extending the length of working life, relatively little is known about this issue. We use data from the Spanish Continuous Working Life Sample for 2004–2013 to calculate period working life tables, which in turn allows us to assess the impact of the financial crisis on working life expectancy in Spain. Before the recession hit, working life expectancy in Spain was around 38 years for males and 33 years for females. The recession had a tremendous impact on the Spanish labor market, but the effects differed considerably by gender and occupational category. Men working in skilled non-manual jobs were less affected, while men working in unskilled manual jobs lost close to 14 years of working life expectancy. Women were less affected than men. With working life expectancy decreasing, the average proportion of lifetime spent in unemployment and outside the labor market increased markedly, whereas the average number of years spent in retirement changed only a little. When we decompose losses in working life expectancy by age group, we find that economic fluctuations affect both older and younger workers. This result suggests that policies that focus on retirement ages only are incomplete. We also compare our findings to the results obtained by Sullivans method, which is based on prevalence rates rather than the incidence-based working life table approach. We find that the use of Sullivans approach does not accurately reflect the levels of and the trends in working life expectancy.
    Keywords: Great Recession; length of working life; multistate life table; Spain; Sullivan's method; working life epectancy
    JEL: F3 G3
    Date: 2018–01–03
  5. By: Ellegård, Lina Maria (Department of Economics, Lund University)
    Abstract: This study exploits policy reforms in Swedish primary care to examine the effect of pay-for-performance (P4P) on compliance with hypertension drug guidelines among public and private health care providers. Providers in regions with P4P are compared to providers in other regions in a difference-in-differences analysis using data from the Swedish Prescription Register for the period 2005-2013. The results indicate that P4P improved guideline compliance regarding prescription of Angiotensin Converting Enzyme (ACE) inhibitors and Angiotensin Receptor Blockers (ARB). The effect is mainly driven by private providers, suggesting that policy makers should take ownership into account when designing incentives for health care providers.
    Keywords: Pay-for-performance; Hypertension treatment; Ownership; Primary health care
    JEL: D23 H73 I11 I18 J33
    Date: 2018–03–26
  6. By: Torry, Malcolm
    Abstract: This is an addendum to EUROMOD working paper EM 12/17, which updates, corrects and extends the previous evaluation of an illustrative Citizen’s Basic Income scheme. Debate about Citizen’s Basic Income – an unconditional and nonwithdrawable income for every individual – has shifted in character. An earlier phase related to the proposal’s desirability; then followed debate about its feasibility; and now attention has turned to questions of implementation. Working paper EM 12/17 operationalised characteristics of two implementation models in terms of changes that might be required in existing UK tax and benefits systems, and it evaluated the implementation methods in relation to a wider variety of indicators than previous exercises of this kind: poverty and inequality indices, tax rate rises required for revenue neutrality, household disposable income gains and losses, households’ abilities to escape from means-testing, and marginal deduction rates. This addendum employs EUROMOD H1.0+ to update the evaluation of one of the two implementation methods, to make a correction in one of the marginal deduction rates, and to extend the evaluation by calculating the number of households able to escape from all means-tested benefits, and by calculating the gains and losses that would be experienced by households containing individuals with disabilities.
    Date: 2018–03–22
  7. By: Peter Benczur (European Commission Joint Research Centre - Finance and Economy Unit B.01); Zsombor Cseres-Gergely (European Commission Joint Research Centre - Finance and Economy Unit B.01); Peter Harasztosi (European Commission Joint Research Centre - Finance and Economy Unit B.01)
    Abstract: This paper uses microdata to look at stylised facts of EU-wide income inequality during the 2006-2013 period. Our contribution is to bring together four elements of the analysis that has appeared only in separation so far. Our analysis is EU-wide, but regionally detailed, looks at the longeset possible term with harmonized survey data, uses inequality indicators sensitive to different parts of the income distribution and shows the contribution of income components to income inequality. Using this, we are able to show how the dynamics of inequality in Europe was shaped by changes on the periphery, in hours worked, in wages and in the structure of households.
    Keywords: income inequality, European Union
    JEL: D31 E24 H31 J31
    Date: 2017–11
  8. By: Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis); Monique Burger; Erik Schut
    Abstract: In the Dutch health care system health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product is 20% higher or lower than the average contract price in the market. For about half of the products the highest and lowest contract price across hospitals differ by a factor three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system; (iii) price adjustments related to negotiated lumpsum payments, and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.
    JEL: I00 I11 L11 L51
    Date: 2018–03
  9. By: Riccardo, Borgoni; Alessandra, Michelangeli; Federica, Pirola;
    Abstract: Residential satisfaction depends on housing and neighborhood conditions in addition to housing cost affordability. To determine the relative importance of these factors, their average effect is usually estimated using sample data, eventually split in sub-samples in order to represent social classes. A concern about the division of households into groups is that, as groups are modified or group assignment change, results of quantitative analysis applied to such data can dramatically change. This paper follows a subjective well-being approach to study residential satisfaction. We propose a novel empirical strategy independent of the concept of social class, to estimate how the effect of drivers of residential satisfaction change on continuous according to households' income. We apply our methodology to investigate residential satisfaction in 23 European countries using 2012 EU-SILC module on housing conditions. Our results show that: (i) in Europe residential satisfaction is driven first by housing-specific characteristics, followed by neighborhood conditions and individual/household characteristics; (ii) the probability to be satisfied or very satisfied strongly differs across countries, anything else being equal; (iii) residents with different monetary resources attach importance to particular determinants of residential satisfaction.
    Keywords: housing, subjective well-being, Europe, EU-SILC Survey
    JEL: R11 R21
    Date: 2018–03–27
  10. By: Wanger, Susanne (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zapf, Ines (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Many fathers want to spend more time with their children and engage in household, but most of them continue to work full-time after the birth of a child. To better combine work and family, flexible working time arrangements might play a crucial role for fathers. Using data from the German Socio-Economic Panel and fixed-effects regression models, we investigate the impact of flexible working time arrangements on actual working hours of men and fathers. A change from fixed to flexible arrangements is associated with an increase in working hours, but it is smaller for fathers than for non-fathers. Becoming a parent and changing into flexitime or self-determined working hours within the same year is associated with a short-term decrease in working hours. The study shows that employee-oriented working time arrangements help fathers to better combine work and family, but the decrease in working hours is still small." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitszeitflexibilität, Arbeitszeitgestaltung, Beruf und Familie, Väter, Kinderbetreuung, Arbeitszeitentwicklung, Männer
    JEL: J22 J81
    Date: 2018–03–20
  11. By: Merkl, Christian (University of Erlangen-Nuremberg); Stüber, Heiko (University of Erlangen-Nuremberg)
    Abstract: In this paper, we analyze the connection between value added, wages, and labor market flows at the establishment level. We develop a simple model to illustrate the expected comovement of these variables. For the empirical analysis, we link the new German Administrative Wage and Labor Market Flow Panel (AWFP) dataset to the IAB Establishment Panel. We show that establishments' hires rates have a positive and separations rates a negative comovement with establishment-specific value added, whereby hires react by more than separations. In addition, we provide evidence that establishments' partial equilibrium reaction is an important driver for aggregate labor market dynamics.
    Keywords: labor market flows, value added, wages, administrative data, establishments
    JEL: E24 E32 J64
    Date: 2018–02
  12. By: Boris Hirsch; Steffen Müller
    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
  13. By: Bunn, Philip (Bank of England); Smietanka, Pawel (Bank of England); Mizen, Paul (Centre for Finance, Credit and Macroeconomics, University of Nottingham)
    Abstract: Large deficits have opened up on defined benefit pension schemes in the United Kingdom since 2007, and at the same time investment expenditure has been subdued; this is a common phenomenon in other countries too. We use privileged access to a unique new data set from The Pensions Regulator and two identification schemes to investigate the effects of deficits and deficit recovery plans on UK companies’ dividends, investment, wages and cash holdings. Identification is based on the close relationship between low long-term interest rates and pension deficits; and the external regulation of pension schemes by The Pensions Regulator. We show that firms with larger pension deficits voluntarily pay lower dividends, but they do not invest less. However, firms that are required to make deficit recovery contributions by the regulator have lower dividend and investment expenditure compared to other firms, and more so if they are financially constrained. These effects are large for some individual companies, but macroeconomically small compared to the stimulus offered by the Bank of England’s quantitative easing policy.
    Keywords: Pension deficits; investment; dividends; cash holdings; monetary policy
    JEL: E22 E52 G31 G35
    Date: 2018–02–26
  14. By: Morone, Andrea; Nemore, Francesco; Schirone, Dario Antonio
    Abstract: Environmental psychologists suggest that people feelings and emotions determine what they do and how they do it. According to the stimulus organism respons model (SOR), the environment creates a behavioral/emotional response in individuals that, in turn, induces approach or avoidance behaviors. We conducted survey in six stores, settled in six different Italian cities, of a Swedish-founded Dutch-based multinational group, that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories. Firstly, we apply the SOR model to evaluate loyalty program participation impact on consumers receipts. Subsequently, we provide empirical evidence about the effects of an emotional-sensorial stimulus (i.e. the presence of the restaurant inside the store). Through both a non-parametric and parametric testing, we found that environmental stimuli have a positive effect in terms of sales.
    Keywords: Servicescape; sensorial stimuli; functionality; loyalty; restaurant
    JEL: M21 M31
    Date: 2018–03–05
  15. By: Warning, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In this paper we examine how employment and hiring processes develop in the course of digitalisation in German establishments. To this end we use a large representative business survey - the IAB Job Vacancy Survey - that was extended in 2015 to include special questions about the state of digital development in each establishment surveyed, thereby permitting a direct link between the topics of digitalisation and employment/hiring. We distinguish between different forms of digitalisation and enquire about both the development in the past and that expected for the future. Regression analyses show that digitalisation is already having noticeable effects on both the quantitative developments of hires, separations, vacancies and abandoned search processes and on the structure of labour demand in terms of qualifications, requirements and working conditions of new hires. The duration of the recruitment process, too, is influenced by digitalisation, though the wages agreed at the time of hiring are not." (Author's abstract, IAB-Doku) ((en))
    JEL: J23 J63 M5 O3
    Date: 2018–03–26
  16. By: Benjamin Montmartin (SKEMA Business School; Université Côte d’Azur; OFCE Sciences.Po; GREDEG CNRS); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GAEL UMR 1215; Université Grenoble Alpes, France)
    Abstract: Based on a spatial extension of an R&D investment model, this paper measures the macroeconomic impact of the French R&D policy mix on business R&D using regional data. Our measure takes into account not only the direct effect of policies but also indirect effects generated by the existence of spatial interaction between regions. Using a unique database containing information on the levels of various R&D policy instruments received by firms in French NUTS3 regions over the period 2001-2011, our estimates of a spatial Durbin model with structural breaks and fixed effects reveal the existence of a negative spatial dependence among R&D investments in regions. In this context, while a-spatial estimates would conclude that all instruments have a crowding-in effect, we show that national subsidies are the only instrument that is able to generate significant crowding-in effects. On the contrary, it seems that the design, size and spatial allocation of funds from the other instruments (tax credits, local subsidies, European subsidies) lead them to act (in the French context) as beggar-thy-neighbor policies.
    Keywords: Policy mix evaluation, R&D investment, Spatial panel, French NUTS3 regions
    JEL: H25 O31 O38
    Date: 2018–03
  17. By: Hernaes, Øystein (Ragnar Frisch Centre for Economic Research)
    Abstract: The paper evaluates the distributional effects on earnings and income of requiring young welfare recipients to fulfill conditions related to work and activation. It exploits within-social insurance office variation in policy arising from a geographically staggered reform in Norway. The reform reduced welfare uptake and for women had large, positive effects in the lower part of the earnings distribution. The effect on the distribution of total income is also positive, thus gains in earnings more than offset reduced welfare benefits. Fewer welfare payments and smaller caseloads make the policy highly cost-effective.
    Keywords: social assistance, activation, conditionality, welfare reform, labor supply, quantile treatment effects
    JEL: C21 D31 H55 I38 J18 J22
    Date: 2018–02
  18. By: Jesús Martín (Universidad de Granada); Pablo Brañas-Garza (Middlesex University); Antonio M. Espín (Universidad de Granada, Middlesex University); Juan F. Gamella (Universidad de Granada); Benedikt Herrmann (University of Nottingham)
    Abstract: Humans differ greatly in their tendency to discount future events, but the reasons underlying such inter-individual differences remain poorly understood. The evolutionary framework of Life History Theory predicts that the extent to which individuals discount the future should be influenced by socio-ecological factors such as mortality risk, environmental predictability and resource scarcity. However, little empirical work has been conducted to compare the discounting behavior of human groups facing different socio-ecological conditions. In a lab-in-the-field economic experiment, we compared the delay discounting of a sample of Romani people from Southern Spain (Gitanos) with that of their non-Romani neighbors (i.e., the majority Spanish population). The Romani-Gitano population constitutes the main ethnic minority in all of Europe today and is characterized by lower socio-economic status (SES), lower life expectancy and poorer health than the majority, along with a historical experience of discrimination and persecution. According to Life History Theory, Gitanos will tend to adopt “faster” life history strategies (e.g., earlier marriage and reproduction) as an adaptation to such ecological conditions and, therefore, should discount the future more heavily than the majority. Our results support this prediction, even after controlling for the individuals’ current SES (income and education). Moreover, group-level differences explain a large share of the individual-level differences. Our data suggest that human inter-group discrimination might shape group members’ time preferences through its impact on the environmental harshness and unpredictability conditions they face.
    Date: 2018–01
  19. By: Bartels, Charlotte; Shupe, Cortnie
    Abstract: We compute participation tax rates across the EU and find that work disincentives inherent in tax-benefit systems largely depend on household composition and the individual's earner role within the household. We then estimate participation elasticities using an IV Group estimator that enables us to investigate the responsiveness of individuals to work incentives. We contribute to the literature on heterogeneous elasticities by providing estimates for different socioeconomic groups by country, gender and earner role within the household. Our results show an average elasticity of 0.08 for men and of 0.14 for women as well as a high degree of heterogeneity across countries. The commonly cited difference in elasticities between men and women stems predominantly from the earner role of the individual within the household and nearly disappears once we control for this factor.
    Date: 2018–03–20
  20. By: Iga Magda; Aneta Kielczewska; Nicola Brandt
    Abstract: In 2016 the Polish government introduced a large new child benefit, called “Family 500+”, with the aim to increase fertility from a low level and reduce child poverty. The benefit is universal for the second and every further child and means-tested for the first child. Increasing out-of-work income significantly, the transfer reduces incentives to participate in the labour market through an income effect. We study the impact of the new benefit on female labour supply, using Polish Labour Force Survey data. Based on a difference-in-differences methodology we find that the labour market participation rates of women with children decreased after the introduction of the benefit compared to childless women. The estimates suggest that by mid-2017 the labour force participation rate of mothers dropped by 2.4 pp as a result of the 500+ benefit. The effect was higher among women with lower levels of education and living in small towns.
    Keywords: child allowance, social transfers, family policy, labour market participation
    JEL: E24 H53 I38 J13 J21 J22
    Date: 2018–03
  21. By: Graves, Jennifer. (Departamento de Economía y Hacienda Pública. Universidad Autónoma de Madrid.); Kuehn, Zoë. (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: We test whether specializing in a field of study when related sectors are growing matters for future labor market outcomes. For eight high-income OECD countries we match data on individuals' specialization decisions in higher education from PIAAC (Programme for the International Assessment of Adult Competencies) with national statistics on value added of related economic sectors. We find that individuals who chose fields of studies when related sectors were growing earn higher wages later in life. We also find that men are less likely to specialize in growing sectors. However, this is entirely driven by the fact that men avoid specializing in traditionally female fields, whose related sectors have grown more over recent decades (e.g. health, education). Only for men who obtained at least a Bachelor's degree can this avoidance be explained by lower wages. Men who obtained a vocational degree in growing female fields earn similar wages later in life as those specializing in shrinking male fields. We present suggestive evidence that gendered specialization decisions, paired with growth in traditionally female sectors could have contributed to narrowing gender wage gaps in recent decades
    Keywords: higher education, specialization, sectors, labor market, gender, PIAAC
    JEL: I21 I23 J16 J24 O57
    Date: 2018–01
  22. By: Agnes Szabo-Morvai (Institute of Economics Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Daniel Horn (Institute of Economics Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Eötvös Loránd University, Hungary); Anna Lovasz (Institute of Economics Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Kristof De Witte (Leuven Economics of Education Research University of Leuven (KU Leuven), Belgium)
    Abstract: Using instrumental variables approach this paper studies the effect of kindergarten starting age jointly with that of school starting age. We show that estimating the effect of kindergarten or school enrolment timing on later human capital outcomes separately, without taking their inter-relatedness into account, may confound the two effects and produce endogenous results. The instruments originate from exogenous birthdate-related enrolment cutoffs in kindergarten and school admissions. Using a rich Hungarian database, we show that both earlier kindergarten enrolment and later school enrolment have a significant and non-negligible positive effect on standardised test scores in grade 6, 8, and 10, class marks given by the teacher, aspirations for higher education, and track choice. These effects tend to decrease over time and are heterogeneous across mother’s education, as earlier kindergarten enrolment age seems to matter only for the children of low educated mothers.
    Keywords: Kindergarten enrolment age; School enrolment age; Instrumental Variables
    JEL: I21
    Date: 2017–12
  23. By: Ylenia Brilli; Marco Tonello
    Abstract: This paper estimates the contemporaneous effect of education on adolescent crime by exploiting the implementation a reform that increases the school leaving age in Italy by one year. We find that the Reform increases the enrollment rate of all ages, but decreases the offending rate of 14-year-olds only, who are the age group explicitly targeted by the Reform. The effect mainly comes from natives males, while females and immigrants are not affected. The Reform does not induce crime displacement in times of the year or of the day when the school is not in session, but it increases violent crimes at school. By using measures of enrollment and crime, as well as data at the aggregate and individual level, this paper shows that compulsory education reforms have a crime reducing effect induced by incapacitation, but may also lead to an increase of crimes in school facilities plausibly due to a higher concentration of students.
    Keywords: adolescent crime; school enrollment; crime displacement; incapacitation
    Date: 2017
  24. By: Pawel Adrjan; Brian Bell
    Abstract: How do wages respond to firm-level idiosyncratic cost shocks? We create a unique dataset that links longitudinal data on workers' compensation to the unexpected costs that UK firms have been forced to pay to plug large deficits in their legacy defined benefit pension plans. We show that firms are able to share the burden of such costs when a significant share of their workers are current or former members of the plan. We also investigate how compensation responds to the closure of defined benefit plans to future benefit accrual. We find that firms are able to use such closures to effectively reduce total compensation of workers who are plan members. These results point to significant frictions in the labour market, which we show are a direct result of the pension arrangement that workers have. Closing schemes has an implicit cost for firms since it reduces the frictions that workers face.
    Keywords: wages, pensions, frictions
    JEL: J31 J32 G32
    Date: 2018–03
  25. By: Alexandra Fernandes (Alexandra Fernandes); António Cerqueira (António Cerqueira); Elísio Brandão (Elísio Brandão)
    Abstract: This study examines the relation between financial and tax aggressive reports on public companies from Europe-15, over the period of 2001-2015. Also, it pretends to analyse if the link between tax and financial aggressiveness gets weaker after IFRS adoption in Europe. To run empirical work, I use discretionary accruals calculated by modified-Jones model (Dechow, Sloan, and Sweeney 1995) as a proxy of financial aggressiveness (DFIN) and discretionary permanent differences as a measure of tax aggressiveness (DTAX) (used by Mary Frank, Luann Lynch and Sonja Rego, 2009), which I estimate using EGLS cross section weights for year and Fama- French 12 industries. To prove that firms with aggressive tax report tend to be financial aggressive and that the link between tax and financial aggressiveness is more significant before IFRS implementation I analyse Pearson and Spearman correlation. Additionally, I estimate relation between DTAX and DFIN when controlling for firm size, earnings management and tax planning incentives using OLS and apply the same model with period restriction for before and after IFRS adoption. Results suggest that financial aggressive firms tend to also be tax aggressive and the link between these two aggressive reports is weaker after IFRS adoption
    Keywords: Tax planning, earnings management, book tax differences, aggressive financial report, aggressive tax report.
    JEL: E62 G32 H26
    Date: 2017–11
  26. By: Salvador Ortí-Camallonga (Department of Finance, University of Valencia, Spain)
    Abstract: Why almost 90% of Spanish SMEs that declare insolvency end up in liquidation? Academic works on insolvency focus either on legal terms – normative bias, impact on business’ death rate, and contrast to internal restructuring processes, to name a few – or on financial aspects – especially bankruptcy predictive models – . This work argues that a combined approach could be elucidating. For this purpose, it configures a predictive model – inspired on Atlman’s z-score – for Spanish SMEs of industrial sectors for the period 2007-2015. This investigation argues that operative difficulties can be detected well in advance to official declaration of insolvency; and provides specific evidence of Spanish Law constrains.
    Keywords: Insolvency Proceedings, Spanish SMEs, Bankruptcy forecast, Logistic Regression, Financial Distress
    JEL: G34 G17 K10
    Date: 2018
  27. By: Epifanio, Mariaelisa (University of Liverpool,Department of Politics); Troeger, Vera E. (University of Warwick, Department of Economics)
    Abstract: Statutory parental leave provisions in the UK are amongst the least generous as compared to other EU and OECD countries. That is why most companies and other institutions, such as universities, top these legal provisions up with more generous occupational parental leave packages (OMPs). Yet, they don’t do so uniformly. Indeed, the generosity of OMPs offered by HEIs across the UK differ greatly. This paper examines both theoretically and empirically why this is the case. We find that income of HEIs doesn’t make a difference but size in terms of number of employees as well as the student-to-staff ratio do. Our results also show that more research intense universities with a higher previous share of female professors and female academics at child-bearing age provide more generous maternity pay. We offer a range of explanations for these findings.
    Date: 2018
  28. By: Vincenzo Atella (DEF and CEIS,University of Rome "Tor Vergata"); Federico Belotti (CEIS,University of Rome "Tor Vergata"); Joanna Kopinska (CEIS, University of Rome "Tor Vergata"); Alessandro Palma (CEIS, University of Rome Tor Vergata); Andrea Piano Mortari (CEIS, University of Rome "Tor Vergata")
    Abstract: Since the seminal paper by Ruhm (2000), a large body of literature agrees on the existence of pro-cyclical fluctuation between economy’s performance and mortality, and this evidence has been confirmed also during the Great Recession (GR). In this study we identify a series of important limitations that may have severely affected previous results. For the first time in this literature we use patient level data collected by GPs in Italy, reporting mortality and objectively measured health information on a large representative population sample. We find a clear positive effect of a rise in unemployment on three important morbidity outcomes. The lag-lead analysis confirms the validity of our results, with changes in prevalences following the same dynamics of the unemployment rise since the starting of the economic slowdown. Our study shows also that the effect of unemployment on the total mortality is no longer significant when controlling for the existence of poor health conditions and suggests that the impact of severe economic downturns on population mortality should be reconsidered.
    Keywords: health status, unemployment, mortality, economic crisis, Great Recession
    JEL: I10 E32 J20 Q53
    Date: 2018–02–20
  29. By: Bergh, Andreas (Lund University and the Research Institute of Industrial Economics); Erlingsson, Gissur (Linköping University); Gustafsson, Anders (Jönköping International Business School); Wittberg, Emanuel (Linköping University)
    Abstract: Market-inspired reforms have been particularly pronounced in Swedish local government. Noteably, municipally owned enterprises (MOEs) have rapidly grown in numbers. Principal-agent theory leads us to suspect that the massive introduction of MOEs may have worsened conditions for accountability. To study this, we have employed social network analysis, mapping networks for 223 MOEs in 11 strategically chosen municipalities, covering a total of 723 politicians. The analysis shows substantial overlaps between principals (representatives of the owners) and agents (the boards of the MOEs), quantified using network modularity. Corporatization of public services therefore implies worrisome entanglings between the politicians who are set to steer, govern and oversee MOEs on the one hand, and the board members of MOEs on the other. The increasing numbers of MOEs, we argue, may hence have adverse effects on accountability in important and growing parts of the local economies.
    Keywords: Social Networks; Accountability; Transparency; Corruption; Publicly Owned Enterprises; Hybrid Organizations; Local Government; New Public Management
    JEL: D73 P16
    Date: 2018–03–21
  30. By: Panayotis D. Alexakis (National and Kapodistrian University of Athens); Ioannis G. Samantas (National and Kapodistrian University of Athens)
    Abstract: The paper examines the nexus of foreign ownership and market power in 26 European banking sectors, for the period 1997-2013. The sample comprises 11,761 bank-year estimates of marginal cost and market power, which are then matched with data on the foreign ownership status and presence across all host countries. The analysis reports strong evidence over the significant effect of well-capitalised foreign-owned banks on their monopolistic conduct. There is also a weaker indication that foreign presence leads to higher margins in large-sized foreign banks in fast-growing economies and markets of stricter regulation on capital, in which foreign penetration lies above 14% of the host banking industry.
    Keywords: Market power; European banks; foreign banking; semiparametric modeling
    JEL: C14 D40 G2 L40
    Date: 2018–02
  31. By: Gasior, Katrin; Recchia, Pasquale
    Abstract: Tax-benefit microsimulation models are typically used to assess the impact of policy changes on the income distribution based on micro data representative of the population. Such analysis assesses the effects of tax-benefit policies by considering their interaction effects and the population structure, which are both important elements for an overall assessment of complex realities. However, it can be helpful to abstract from this complexity and to explain the effects of tax-benefit policies using concrete examples. Using hypothetical households visualises how single policies are linked with each other while leaving the additional complexity of the population structure aside. This paper uses the Hypothetical Household Tool (HHoT) to generate hypothetical household data that can be used in EUROMOD, the tax and benefit microsimulation model of the European Union, to analyse current tax and benefit policies as well as the effects of policy changes in a comparative manner. The paper provides a brief introduction of the use of hypothetical data in general and presents concrete examples of its application. The main part proposes a set of basic indicators that can be used to learn about European tax-benefit systems in a comparative perspective.
    Date: 2018–03–19

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