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on Microeconomic European Issues |
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Issue of 2018‒05‒28
24 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Nikolova, Milena; Nikolaev, Boris N. |
| Abstract: | We are the first to examine how parental unemployment experienced during early-, mid- and late-childhood affects adult life satisfaction. Using German household panel data, we find that parental unemployment induced by plant closures and experienced during early (0-5 years) and late (11-15 years) childhood leads to lower life satisfaction at ages 18-31. Nevertheless, parental unemployment can also have a positive effect depending on the age and gender of the child. Our results are robust even after controlling for local unemployment, individual and family characteristics, parental job loss expectations, financial resources, and parents’ working time when growing up. These findings imply that the adverse effects associated with parental unemployment experienced at a young age tend to last well into young adulthood and are more nuanced than previously thought. |
| Keywords: | life satisfaction,parental unemployment,company closures,life-cycle analysis,German Socio-Economic Panel |
| JEL: | I31 J01 J65 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:212&r=eur |
| By: | Michele Loberto (Bank of Italy); Andrea Luciani (Bank of Italy); Marco Pangallo (University of Oxford) |
| Abstract: | We present a new dataset of housing sales advertisements (ads) taken from Immobiliare.it, a popular online portal for real estate services in Italy. This dataset fills a big gap in Italian housing market statistics, namely the absence of detailed physical characteristics for houses sold. The granularity of online data also makes possible timely analyses at a very detailed geographical level. We first address the main problem of the dataset, i.e. the mismatch between ads and actual housing units - agencies have incentives for posting multiple ads for the same unit. We correct this distortion by using machine learning tools and provide evidence about its quantitative relevance. We then show that the information from this dataset is consistent with existing official statistical sources. Finally, we present some unique applications for these data. For example, we provide first evidence at the Italian level that online interest in a particular area is a leading indicator of prices. Our work is a concrete example of the potential of large user-generated online databases for institutional applications. |
| Keywords: | big data, machine learning, housing market |
| JEL: | C44 C81 R31 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1171_18&r=eur |
| By: | Kieron J. Barclay (Max Planck Institute for Demographic Research, Rostock, Germany); Torkild Lyngstad; Dalton Conley |
| Abstract: | There has long been interest in the extent to which effects of social stratification extend and persist across generations. We take a novel approach to this question by asking whether birth order and sibling group size in the parental generation influences the educational attainment of their children. To address this question we use Swedish population data on cohorts born 1960-1982. To study the effects of parental birth order and family size we apply a cousin fixed effects design and exploit information on twin births in the parents generation. Relative to having a first-born mother, having a second-born or fifth-born mother is associated with educational attainment at age 30 being 4% and 8% of a standard deviation lower, respectively. After adjusting for attained parental education and social class, the parental birth order effect is heavily attenuated. Nevertheless, we do find that children who share the same birth order and gender as their parents attain slightly more education, and this is particularly pronounced when the parents have higher levels of education themselves. We do not find clear or consistent evidence for parental sibling group size effects. Overall our results suggest that birth order and family size effects operate through a Markovian process of transmission. |
| Keywords: | Sweden, birth order, education, family size, population registers |
| JEL: | J1 Z0 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2018-002&r=eur |
| By: | Thomas Coisnon; Damien Rousselie`re; Samira Rousselie`re |
| Abstract: | The identification of individual and institutional drivers regarding ecological transition of individual behaviors has been widely studied in the literature. However, few studies report the specific case of private gardening practices, even though it is particularly relevant when discussing lifestyle habits and ecological transition, due to the wide range of positive and negative environmental externalities private gardens may generate. Using a European database (Eurobarometer 83.4), we estimate individual and institutional drivers of sustainable gardening practices. Our econometric approach takes the specificities of our data into account, by using a two-step approach combining a generalized Heckman model and a meta-regression, and allows us to highlight the importance of the accessibility to biodiversity-related information in the adoption of environmentally friendly behaviors. Differentiated trends between European countries are tested using indicators on economic development, social capital and environmental performances. In conclusion, we provide some recommendations in terms of public policies. |
| Keywords: | Eurobarometer, generalized Heckman model, private gardens, meta-regression, sustainable practices |
| JEL: | C3 Q57 Z |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201802&r=eur |
| By: | Victor Ginsburgh (ECARES, Université Libre de Bruxelles, Belgium and CORE, Université catholique de Louvain, Belgium); Juan D. Moreno-Ternero (Department of Economics, Universidad Pablo de Olavide;) |
| Abstract: | We discuss compensation schemes that should give incentives to EU countries and citizens to acquire a lingua franca. We consider three possible candidate languages: English, French and German, which are already the most widely spoken languages. In our model, countries can claim compensations linked to the number of (young) citizens who do not speak a given candidate language, and the distance between the official language in the country and the suggested lingua franca. We study two sharing schemes that are rooted in ancient sources: the Aristotelian proportional rule and the Talmud rule. The former prevents coalitional manipulations among countries, whereas the latter guarantees meaningful lower bounds in the sharing process for all countries. |
| Keywords: | European Union, lingua franca, compensation schemes |
| JEL: | D63 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:18.05&r=eur |
| By: | Catalina Amuedo-Dorantes (Department of Economics, San Diego State University); Cristina Borra (University of Seville) |
| Abstract: | The Spanish welfare state was practically inexistent in the 1980s. It expanded throughout the 1990s and became fully in place by the 2000s. At the same time, internal migration rates dropped to less than 0.3 percent –among the lowest in the world. In a country with large labor market imbalances, internal mobility can prove crucial to economic growth. We look at the role that non-contributory pensions might have played on inter-provincial mobility over the past two decades. We find that the expansion of the welfare state has curtailed the mobility of young working-age individuals, especially less educated women. The effects are unique to non-contributory pensions, and are not restricted to cohabitating family members or tied to the care for disabled relatives, signaling the need for policy measures that facilitate the mobility of the young from lower income households. |
| Keywords: | internal migration, labor mobility, welfare benefits |
| JEL: | I38 J61 R23 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1806&r=eur |
| By: | Mery Patricia Tamayo; Estefanía Gómez; Elena Huergo |
| Abstract: | The goal of this research is to empirically study the relationship between obstacles perceived by companies to carrying out their innovation activities and their decisions about external sourcing of knowledge through the outsourcing of R&D or technological cooperation. Using information on German and Spanish companies from the year 2010, we obtain that in both countries this association is positive, and that companies that assign greater importance to factors that impede their innovation activities are also more likely to engage in external sourcing of knowledge. This relationship seems to be especially strong in companies that do not engage in internal R&D activities or do so sporadically, while it is much weaker in companies that perform internal R&D continuously. Nonetheless, the importance that companies assign to the market power of established companies as a barrier to innovation is positively associated with technological cooperation especially in continuous R&D performers. |
| Keywords: | Obstacles to innovation, outsourcing, technological cooperation |
| JEL: | L2 O3 O57 |
| Date: | 2018–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:016257&r=eur |
| By: | Steinhauer, Andreas |
| Abstract: | In this paper I provide empirical evidence that the strength of beliefs regarding the harm children suffer when their mothers work plays an important role in explaining gender gaps in labor market outcomes and fertility trends. I exploit a unique setting in Switzerland and compare outcomes of one cohort of Swiss women born in the 1950s either into the French or German ethno-linguistic group. This allows me to compare outcomes of women exposed to different norms regarding working mothers while holding constant typical confounding factors such as composition, labor market opportunities, and work-family policies. Consistent with the strong belief that children suffer with working mothers in the German region, I find that German-born women are 15-25% less likely to work as mothers and 20-20% more likely to remain childless compared to their French-born peers. Only the extensive margins show marked differences and especially among the highly educated. I argue that an identity framework along the lines of Akerlof and Kranton (2000) can rationalize these patterns in a tractable way. |
| JEL: | J13 J16 J22 Z10 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12929&r=eur |
| By: | Jon Kristian Pareliussen; Hyunjeong Hwang |
| Abstract: | The combination of different working-age benefits, childcare costs and income taxation creates complexity, reduces work incentives and holds back employment. Major disincentives in Finland are related to tapering rules for unemployment benefits, social assistance and the housing benefit, the extended unemployment benefit for older workers, the childcare fee structure and the homecare allowance. Improved benefit design combined with efficient activation policies can reduce complexity and remove the strongest disincentives while minimising adverse fiscal and social impacts. Replacing current benefits with a basic income would improve incentives for many, but with a drastic redistribution of income and likely increasing poverty as a result. Merging working-age benefits with similar aims and coordinating their tapering against earnings would on the other hand consistently improve work incentives and transparency, while preserving social protection. Once the new income registry comes online, linking benefit payments to real-time incomes, combined with strengthened work incentives, would make for a truly efficient and inclusive benefit system, fit for the future of work. This Working Paper relates to the 2018 OECD Economic Survey of Finland (www.oecd.org/eco/surveys/economic-surve y-finland.htm). |
| Keywords: | basic income, Finland, inequality, universal credit, welfare reform, work incentives |
| JEL: | D3 H53 H55 J38 |
| Date: | 2018–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1467-en&r=eur |
| By: | Djula Borozan (Faculty of Economics in Osijek, Josip Juraj Strossmayer University of Osijek) |
| Abstract: | Evolution of total final energy consumption in the European Union (EU) exhibits a mild decreasing tendency over the last two decades. Though, it has recently become more volatile due to the economic recession that adversely and unevenly hit energy consumption in most EU countries and their energy end-use sectors. Eurostat?s data unveils the considerable differences that exist in finale energy consumption across the ?old? and post-transition EU countries as well as the major energy end-user sectors. Using random effects panel model, this paper aims to estimate the effect of the Great Recession and the membership status (?old? vs. post-transition groups) on final energy consumption in the major energy end-user sectors for the period 1998 ? 2015. The empirical evidence indicates statistically significant impact of both predictors on final energy consumption of households/services and industry. However, the impact is not uniform which raises several important questions regarding their behavior and reaction to the recession. Since the recession reduced the wealth and income of the European households, it seems that they are not prone to invest in more energy-efficient appliances, technologies and innovations in tough economic times. In contrast, such behavior is a precondition for survival and future growth of industry. |
| Keywords: | Great Recession, final energy consumption, energy end-user sectors, random effects panel analysis |
| JEL: | C33 E32 Q43 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7508719&r=eur |
| By: | Engström, Emma (Folksam Research); Algers, Staffan (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Beser Hugosson, Muriel (CTS - Centre for Transport Studies Stockholm (KTH and VTI)) |
| Abstract: | Dedicated to show climate leadership, Sweden has committed to cut 70% of greenhouse gas emissions in the domestic transport sector by 2030 as compared to levels in 2010 (except flights). The aim of this study was to quantify car type choice among private buyers and individuals with cars provided as a fringe benefit, and to investigate the impacts of retrospective policy scenarios using Sweden as a case study. Models were developed using revealed preferences data relating to car attributes and buyer socioeconomics. The company car type choice model reflected both company policy restrictions and employee preferences. The results indicated that range and safety were crucial factors for the widespread introduction of electric cars and plug-in hybrids. Company car owners were more inclined to choose cars with climate friendly fuels than private buyers. Average CO2 emissions per car were however similar in the two groups, which might relate to a stronger preference for heavier and larger cars among company car holders, in combination with the weights-based ‘Clean car’ definition in Sweden. A ‘Clean car’ restriction was company policy for 7.5% of employees, among whom the share of diesel cars was 88%. Policy scenario modeling results further indicated that the impact of recent climate and transport policies has been small: the most notable effect was a policy of reduced fringe benefits taxation on alternative fuels, worth up to €1,100 annually, which resulted in 0.7 % lower average CO2/km per car. For private buyers, a ‘Super Clean Car’ premium, worth ca € 2,000 – € 4,000, had a 0.4 % effect on the average emissions per car, according to models. This effect was twice as high as that for a five year tax-exemption for ‘Clean cars’, worth ca €200 annually for private buyers. Apparently, in order to substantially change the fleet of new cars in Sweden there is a need for tougher transport policies related to climate change mitigation. |
| Keywords: | Public transport; bus; demand model; fares; frequencies; supply; optimization; urban; welfare |
| JEL: | R41 R42 R48 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2018_009&r=eur |
| By: | Hana Florianová (Masaryk University); Karel Urbanovský (Masaryk University) |
| Abstract: | The aim of this paper is to find the basic characteristics of an average Czech investor ? consumer in a capital market. According to the Directive 2005/29/EC of the European Parliament and of the Council the average consumer is a person who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors, as interpreted by the Court of Justice, but also contains provisions aimed at preventing the exploitation of consumers whose characteristics make them particularly vulnerable to unfair commercial practices. This definition is based on indefinite terms which national law usually does not specify. At the same time, there is a need for understanding, who exactly the average consumer (investor) is, especially when judging disputes on investment or other matters on capital markets. The aim of our research is therefore to find the answer for the question ?Who is the average consumer on a capital market?? |
| Keywords: | capital market, average consumer, investments, investing, investor |
| JEL: | G11 G23 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7508801&r=eur |
| By: | Tamara ?maguc (Faculty of Organization and Informatics, University of Zagreb); Ksenija Vukovi? (Faculty of Organization and Informatics, University of Zagreb) |
| Abstract: | The promise of entrepreneurial zones development in Northern Croatia has been huge. In the last decade 282,2 million kuna has been invested on the area of Vara?din and Me?imurje county in the Republic of Croatia and the result has been activation of 52 zones financed from public sources and generation of 14,4 thousand working vacancies (Republic of Croatia, Ministry of Entrepreneurship and Crafts, 2015). Despite certain employment capacity there is still a large number of non-active or half-filled entrepreneurial zones that are a reason for suspicion in cost effectiveness of these investments. In this paper investment efficiency of local self-government units (municipalities and towns) on the area of Vara?din and Me?imurje county in the Republic of Croatia has been assessed by using data envelopment analysis. The analysis has been conducted by using CCR and BCC model oriented on outputs. Concretely, the results of the conducted analysis are valuable due to the fact that political management of towns and municipalities ? that has been non-efficient investor in entrepreneurial zones ? is given information on necessary changes and their extent and also on good practice examples from neighbour towns and municipalities. |
| Keywords: | entrepreneurial zones, relative efficiency assessment, data envelopment analysis, Vara?din county, Me?imurje county |
| JEL: | L26 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7508474&r=eur |
| By: | Massimo Baldini; Giulia Mancini; Giovanni Vecchi |
| Abstract: | The paper explores the changing risk of poverty for older and younger generations of Italians throughout the republican period, 1948 to the present day. We show that poverty rates have decreased steadily for all age groups, but that youth has been left behind. The risk of poverty for children aged 0-17, relative to adults over 65, has increased steadily over time: in 1977, children faced a risk of poverty 30 percent lower than the elderly, but by 2016 they are 5 times likelier to be poor than someone in the age range of their grandparents. This intergenerational reversal of fortune is unprecedented in Italy’s post-WW2 history. We also assess the impact of the Great Recession on living standards by age, finding that the young have been hit hardest, particularly in Southern regions. What explains the extra poverty risk associated with young age? Our analysis points to the welfare state, which offers better protection for the elderly than it does for the young and their families. We find that the impact of cash transfers on the incidence of child poverty is considerably lower in Italy than in most comparable countries. Overall, in the last seven decades, Italy has become no country for young people. |
| Keywords: | age, cash transfers, Great Recession, living conditions, poverty, wellbeing |
| JEL: | C42 D31 I32 N30 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hbu:wpaper:9&r=eur |
| By: | Carolina V. Zuccotti |
| Abstract: | Gender role views have long been a matter of great interest to researchers. In part, this is connected to the negative part that traditional gender role views can play in the social and economic integration of women. In Western Europe, this topic has gained additional attention with the arrival of migrants from countries where gender inequality is greater and where individuals hold more traditional views on the social roles of men and women. Research shows that, though gender role views become less traditional over time and through the generations, differences with respect to the majoritarian white population remain. This study explores one of the possible mechanisms behind the persistence of traditional gender role views among migrants and their children in the UK (i.e. ethnic minority groups): neighbourhood ethnic concentration. Neighbourhoods are spaces of interaction, as well as of transmission of beliefs and ways of doing, and this can affect individuals more or less coercively. This study employs data from Wave 2 of Understanding Society, in combination with aggregated Census data. Using this data I explore the extent to which ethnic minority groups residing in areas with a higher concentration of members of the same group have a higher probability of holding more traditional gender role views. The article finds some evidence of this for Indians and Bangladeshis, but not for Pakistanis. Problems of self-selection and endogeneity are discussed. |
| Keywords: | Ethnicity, England and Wales, Gender role views, Neighbourhood effects, Neighbourhood ethnic concentration |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2018/11&r=eur |
| By: | Petr Musil (University of Economics in Prague); Michaela Jirková (University of Economics in Prague) |
| Abstract: | The economic and financial situation of persons depends on the size and structure of their household. The level of the economies of scale of living together is reflected in an equivalence scale. This scale of consumption units assigns to each individual household member the specific weight according to defined rules. In this time the scales for all European country are applied. OECD uses the OECD scale while Eurostat uses the OECD-modified equivalence scale. It allows the international comparison of income and consumption level of households across all states. However, this commonly used scales may not be suitable for all countries, because they do not reflect any country specific economic conditions. Economies of scales are highly dependent on the structure of household consumption and expenditures which varies significantly across countries. Therefore, the need of national equivalence scales appropriate for each country is observed.The aim of this contribution is to compare the international scales with the equivalence scales estimated within our research. These scales are suitable for the Czech Republic as they take into account the economies of scale realized by Czech households. Two alternative approaches have been applied: an expenditure equation and utility function. The first one uses household budget survey data (HBS), the second approach is based on survey on income and living conditions (SILC). It has been proved that estimated equivalence scales differ to international ones. Subsequently, the impact in income and poverty indicators has been assessed. Overall effect on poverty indicators is not big, however a significant impact on specific group of people is observed. Mainly influenced groups are children and pensioners.The national scales affect the countries differently, especially in comparison of specific groups of by their social status. The second approach allows also international comparison as SILC is harmonized in Europe. The different impact of equivalence scales across European states is provided. |
| Keywords: | consumption units, equivalence scale, household expenditures, utility function, economies of scale |
| JEL: | D12 D31 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7508411&r=eur |
| By: | Daniele Guariso (Department of Economics, University of Sussex, Brighton, UK) |
| Abstract: | We study the effects of exogenous shocks on the rhetoric of British politicians on social media. In particular, we focus on the impact of terrorist attacks on the issue of immigration. For this purpose, we collect all the immigration-related Tweets from the active Twitter accounts of MPs using Web Scraping and Machine Learning techniques. Looking at the Manchester bombing of 2017 as our main Event Study, we detect a counterintuitive finding: a substantial decrease in the expected number of immigration-related Tweets occurred after the incident. We hypothesize that this “muting effect” results from risk-averse strategic behaviour of politicians during the election campaign. However, the MPs' response shows remarkable heterogeneity according to the socio-economic characteristics of their constituencies. |
| Keywords: | political behaviour; machine learning; social media; immigration; terrorism |
| JEL: | C81 D72 Z13 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:1218&r=eur |
| By: | Harbrecht, Alexander; McKenna, Russell; Fischer, David; Fichtner, Wolf |
| Abstract: | This paper presents a stochastic bottom-up model to assess electric vehicles' (EV) impact on load profiles at different parking locations as well as their load management potential assuming different charging strategies. The central innovation lies in the consideration of socio-economic, technical and spatial factors, all of which influence charging behavior and location. Based on a detailed statistical analysis of a large dataset on German mobility, the most statistically significant influencing factors on residential charging behavior could be identified. Whilst household type and economic status are the most important factors for the number of cars per household, the driver's occupation has the strongest influence on the first departure time and parking time whilst at work. An inhomogeneous Markov-chain is used to sample a sequence of destinations of each car trip, depending (amongst other factors) on the occupation of the driver, the weekday and the time of the day. Probability distributions for the driven kilometres, driving durations and parking durations are used to derive times and electricity demand. The probability distributions are retrieved from a national mobility dataset of 70,000 car trips and filtered for a set of socio-economic and demographic factors. Individual charging behaviour is included in the model using a logistic function accounting for the sensitivity of the driver towards (low) battery SOC. The presented model is validated with this mobility dataset and shown to have a deviation in key household mobility characteristics of just a few percentage points. The model is then employed to analyse the impact of uncontrolled charging of BEV on the residential load profile. It is found that the absolute load peaks will increase by up to factor 8.5 depending on the loading infrastructure, the load in high load hours will increase by approx. a factor of 3 and annual electricity demand will approximately double. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitiip:29&r=eur |
| By: | Stefan Seifert; Marica Valente |
| Abstract: | In the 2011 post-Arab Spring migration wave, over 64,000 migrants landed on the southern Italian coast, with many of them potentially working illegally on farms through caporalato, a widespread system of illegal recruitment of underpaid farm labor run by Italian agrimafias. To test this hypothesis, this paper evaluates the causal effects of the 2011 migration wave on reported labor productivity focusing on vineyards in southern Italy. Based on a dynamic panel data model, labor productivity is estimated to increase by about 11% on average for 2011 and 2012. We show that this corresponds to a total of around 10 million unreported work hours, or 21,000 full-time employees, in each year. We interpret this as an increase in employment of illegal workforce due to the migration wave. Magnitude, direction, and statistical significance of the effect are confirmed under various model specifications and using synthetic control and post-lasso approaches. |
| Keywords: | Migration wave, agrimafias, illegal employment, vineyard productivity |
| JEL: | F22 J61 J43 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1735&r=eur |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Immigrants from low‐income source countries tend to be underrepresented in employment and overrepresented in social insurance programs. Based on administrative data from Norway, we examine how these gaps reflect systematic differences in the impacts of social insurance benefits on work incentives. Drawing on a benefit formula reform of the temporary disability insurance program, we identify behavioral employment and earnings responses to changes in benefits, and find that responses are significantly larger for immigrants. Among female immigrant program participants, earnings of the male spouse also drop in response to more generous benefits. We uncover stronger behavioral responses among natives with characteristics similar to those of immigrants. |
| Keywords: | immigrants, labor supply, social insurance |
| JEL: | H53 J15 J22 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11482&r=eur |
| By: | Ariu, Andrea; Mayneris, Florian; Parenti, Mathieu |
| Abstract: | In this paper, we take advantage of a uniquely detailed dataset on firm-level exports of both goods and services to show that demand complementarities between services and goods enable firms to boost their manufacturing exports by also providing services. The positive causal effect of services accounts for up to 25% of the manufacturing exports of bi-exporters (i.e. the firms that export both goods and services), and 12% of overall goods exports from Belgium. We find that by associating services with their goods, bi-exporters increase both the quantities and the prices of their goods. To rationalize these findings, we develop a new model of oligopolistic competition featuring one-way complementarity between goods and services, product differentiation, and love for variety. By supplying services with their goods, firms increase their market share, and hence their market power and markup. The model then shows that exporting services acts as a demand shifter for firms, increasing the perceived quality of their products. Going back to the data, we find strong confirmation for this mechanism. |
| Keywords: | Demand complementarities; Goods & services; Firm-level exports; Quality |
| JEL: | F10 F14 L80 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12918&r=eur |
| By: | Gareth Anderson (Centre for Macroeconomics (CFM); University of Oxford); Saleem Bahaj (Bank of England; Centre for Macroeconomics (CFM)); Matthieu Chavaz (Bank of England); Angus Foulis (Bank of England; Centre for Macroeconomics (CFM)); Gabor Pinter (Bank of England; Centre for Macroeconomics (CFM)) |
| Abstract: | This paper shows that lending relationships insulate corporate investment from shocks to collateral values. We construct a novel database covering the banking relationships of UK firms, as well as those of their board members and executives. We find that the sensitivity of corporate investment to shocks to real estate collateral value is halved when the length of the bank-firm relationship increases from the 25th to the 75th percentile. This effect is substantially reduced for firms whose executives have a personal mortgage relationship with their firm’s bank. Our findings provide support for theories where collateral and private information are substitutes in mitigating credit frictions over the cycle. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1813&r=eur |
| By: | Albrecht, James (Department of Economics, Georgetown University); Bronson, Mary Ann (Department of Economics, Georgetown University); Skogman Thoursie, Peter (Department of Economics, Stockholm University); Vroman, Susan (Department of Economics, Georgetown University) |
| Abstract: | In this paper, we use matched worker-firm register data from Sweden to examine the career dynamics of high-skill women and men. Specifically, we track wages for up to 20 years among women and men born in the years 1960 - 70 who completed a university degree in business or economics. These women and men have similar wages and earnings at the start of their careers, but their career paths diverge substantially as they age. These men and women also have substantial differences in wage paths associated with becoming a parent. We look at whether firm effects account for the differences we observe between women's and men's wage profiles. We document differences between the firms where men work and those where women work. However, a wage decomposition suggests that these differences in firm characteristics play only a small role in explaining the gender log wage gap among these workers. We then examine whether gender differences in firm-to-firm mobility help explain the patterns in wages that we see. Men and women both exhibit greater mobility early in their careers, but there is little gender difference in this firm-to-firm mobility. We find that the main driver of the gender difference in log wage profiles are that men experience higher wage gains than women do both as "switchers" and as "stayers". |
| Keywords: | Wages; Earnings; Gender gaps; Firms |
| JEL: | J16 J31 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2018_009&r=eur |
| By: | Bernardo Fanfani (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy) |
| Abstract: | We study a model where wage differences between men and women arise from taste-based discrimination and monopsonistic mechanisms. We show how preferences against women affect heterogeneity in firms' pay policies in the context of an imperfect labour market, deriving a rigorous test for the presence of taste-based discrimination and of other firm-level mechanisms driving the gender wage gap, in particular compensating wage differentials. These results inform an analysis of sex pay differences in the Italian manufacturing sector showing that taste-based discrimination and preferences for workplaces providing more flexible schedules are two significant determinants of the gender wage gap. |
| Keywords: | Gender Wage Gap; Taste-Based Discrimination; Monopsonistic Discrimination; Compensating Wage Differentials; Firm Wage Policy; Matched Employer-Employee Data. |
| JEL: | J00 J16 J31 J71 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:tur:wpapnw:054&r=eur |