nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒06‒11
forty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Heterogeneous effects of investment grants - Evidence from a new measurement approach By Dettmann, Eva; Weyh, Antje; Titze, Mirko
  2. The high importance of de-industrialization and job polarization for regional diversification By Jacob Rubæk Holm; Christian Richter Østergaard
  3. Railway line capacity utilisation and its impact on maintenance costs By Odolinski, Kristofer; Boysen, Hans E.
  4. The kids are alright - labour market effects of unexpected parental hospitalisations in the Netherlands By Sara Rellstab; Pieter Bakx; Pilar (P.) Garcia-Gomez; Eddy (E.K.A.) van Doorslaer
  5. One way to the top : How services boost the demand for goods By Andrea Ariu; Florian Mayneris; Mathieu Parenti
  6. The Impact of Immigration on Firm-Level Offshoring By Olney, William W.; Pozzoli, Dario
  7. Marriage, Labor Supply, and Home Production By Marion Goussé; Nicolas Jacquemet; Jean-Marc Robin
  8. How large are road traffic externalities in the city? The highway tunneling in Maastricht, the Netherlands By Joep Tijm; Thomas Michielsen; Peter Zwaneveld; Raoul van Maarseveen
  9. The Origins of Common Identity: Division, Homogenization Policies and Identity Formation in Alsace-Lorraine By Sirus Dehdari; Kai Gehring
  10. Top incomes and income dynamics from a gender perspective : Evidence from Finland 1995-2012 By Ravaska Terhi
  11. Discriminate Me – if You Can! The Disappearance of the Gender Pay Gap among Public-Contest Selected Employees By Carolina Castegnetti; Luisa Rosti; Marina Töpfer
  12. The Impact of Language on Socioeconomic Integration of Immigrants By Zorlu, Aslan; Hartog, Joop
  13. Health effects of caring for and about parents and spouses By Judith Bom; Pieter Bakx; Erik Schut; Eddy (E.K.A.) van Doorslaer
  14. Spatial competition and quality: Evidence from the English family doctor market By Gravelle, Hugh S; Liu, Dan; Propper, Carol; Santos, Rita
  15. Fiscal Transfers in the Spatial Economy By Marcel Henkel; Tobias Seidel; Jens Suedekum
  16. Innovation and business performance for Spanish SMEs: new evidence from a multi-dimensional approach. By Alfonso Expósito; Juan A. Sanchis-Llopis
  17. Inequalities in Labour Market Consequences of Common Mental Disorders By Jarl, Johan; Linder, Anna; Busch, Hillevi; Nyberg , Anja; Gerdtham, Ulf-G.
  18. Understanding Society Innovation Panel Wave 10: results from methodological experiments By Al Baghal, Tarek; Bryson, Caroline; Fisher, Hayley; Hanson, Tim; Jessop, Curtis; Low, Hamish; Lynn, Peter; Martin, Nicole; McKay, Stephen; Sloan, Luke; Sobolewska, Maria
  19. Working time flexibility and parental ‘quality time’ spent with children By Iga Magda; Roma Keister
  20. Who pays for the consumption of young and old? By Hippolyte D'Albis; Carole Bonnet; Xavier Chojnicki; Najat El Mekkaouide Freitas; Angela Greulich; Jérôme Hubert; Julien Navaux
  21. Industrial Relatedness and Regional Resilience in the European Union By Giulio Cainelli; Roberto Ganau; Marco Modica
  22. Inter-ethnic relations of teenagers in England’s schools: the role of school and neighbourhood ethnic composition By Simon Burgess; Lucinda Platt
  23. Unbundling the Incumbent and Entry into Fiber: Evidence from France By Marc Bourreau; Lukasz Grzybowski; Maude Hasbi
  24. Revisiting Heat Energy Consumption Modeling: Household Production Theory Applied to Field Experimental Data By Heesen, Florian; Madlener, Reinhard
  25. Tax Incentives and the Choice of Organisational Form of Small Businesses. Identification Through a Differentiated Payroll Tax Schedule By Papini, Andrea
  26. Counteracting Unemployment in Crises: Non-Linear Effects of Short-Time Work Policy By Gehrke, Britta; Hochmuth, Brigitte
  27. Do House Prices Sink or Ride the Wave of Immigration? By Larkin, Matthew P.; Askarov, Zohid; Doucouliagos, Chris; Dubelaar, Chris; Klona, Maria; Newton, Joshua; Stanley, T. D.; Vocino, Andrea
  28. Immigration and self-reported well-being in the UK By Howley, P.;; Moro, M.;; Waqas, M.;; Delaney, L.;; Heron, T.;
  29. Relocation of the Rich: Migration in Response to Top Tax Rate Changes from Spanish Reforms By David R. Agrawal; Dirk Foremny
  30. The Impact of Exports on Innovation: Theory and Evidence By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz
  31. A nudge to quit? The effect of a change in pension information on annuitization, labor supply and retirement choices among older workers By Hagen, Johannes; Hallberg, Daniel; Sjögren Lindquist, Gabriella
  32. What underlies the observed hospital volume-outcome relationship? By Marius Huguet; Xavier Joutard; Isabelle Ray-Coquart; Lionel Perrier
  33. News Media and Crime Perceptions: Evidence from a Natural Experiment By Mastrorocco, Nicola; Minale, Luigi
  34. The Relationship between Carbon Performance and Corporate Financial Performance: Some UK Evidence By Khaled Alsaifi
  35. Are Schools Different? Wellbeing and Commitment among Staff in Schools and Elsewhere By Bryson, Alex; Stokes, Lucy; Wilkinson, David
  36. Why the initial regulation of financial innovations is decisive: Regulatory arbitrage and off-balance-sheet leasing in Germany By Friedrich, Jan; Thiemann, Matthias
  37. What drives the rise of antidepressant consumption? Evidence from Switzerland By Giuliano Masiero; Fabrizio Mazzonna; Olaf Verbeek
  38. R&D Expenditure in the EU: Convergence or Divergence? By Francisco A. Blanco; Francisco J. Delgado; Maria J. Presno
  39. The role of driving range in consumers’ purchasing decision for electric cars in Italy By Giansoldati, Marco; Danielis, Romeo; Rotaris, Lucia; Scorrano, Mariangela
  40. Basel methodological heterogeneity and banking system stability: The case of the Netherlands By Laurence Deborgies Sanches; Marno Verbeek

  1. By: Dettmann, Eva; Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Titze, Mirko
    Abstract: "This paper estimates establishment-level employment effects of investment grants in one of the German Federal States receiving the most support. We analyze general treatment effects, as well as the influence of heterogeneity in the characteristics and economic environment of the establishment on its employment development. Modifying the standard matching and difference-in-differences approach, we develop a new procedure that is particularly useful for evaluating funding programs with individual treatment phases within the period of observation. Our data basis combines treatment-related, establishment-specific and regional information from different sources. The results suggest that investment grants have a positive influence on the development of employment in establishment in both absolute and standardized figures (i. e. in relation to the amount of subsidy received) - with considerable effect heterogeneity." (Author's abstract, IAB-Doku) ((en))
    JEL: Z0 A11 D61 H20
    Date: 2018–05–16
  2. By: Jacob Rubæk Holm; Christian Richter Østergaard
    Abstract: The process of regional diversification has received a growing interest in recent years with a focus on the role of relatedness between economic activities. The main argument is that regions diversify into economic activities closely related to their current activities. However, there are also processes working against this rather path dependent process, such as de-industrialization, job polarization, skill-biased technological change, and urbanization. The purpose of this paper is to analyse the importance of relatedness and these major processes in regional diversification with specific emphasis on the role of job polarization and de-industrialisation. The paper draws on linked employer-employee census data from Denmark 2008-2013. Results show that, while relatedness does matter for regional diversification, job polarization and deindustrialisation entail that the most related industries tend to contract. Hence, the results show that regional diversification is affected by relatedness, but its effect is overshadowed by job polarisation and de-industrialization. This effect is consistent across regions. The results show a role for policy and entrepreneurship in introducing unrelated diversification.
    Keywords: diversification, relatedness, polarization
    Date: 2018–05
  3. By: Odolinski, Kristofer (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Boysen, Hans E. (CTS - Centre for Transport Studies Stockholm (KTH and VTI))
    Abstract: In this paper, we analyse how railway maintenance costs are affected by different levels of railway line capacity utilisation. Previous studies have focused on the wear and tear of the infrastructure, while this paper shows that it is important to also acknowledge the heterogeneity of the maintenance production environment. Specifically, we estimate marginal costs for traffic using econometric methods on a panel dataset from Sweden and show that these costs increase with line capacity utilisation. The results are significant considering that current EU regulation (2015/909) states that track access charges can be based on marginal costs, with the aim of creating an effective use of available infrastructure capacity.
    Keywords: maintenance; marginal cost; rail infrastructure; capacity; track access charges
    JEL: L92 R48
    Date: 2018–05–30
  4. By: Sara Rellstab (Erasmus University Rotterdam); Pieter Bakx (Erasmus University Rotterdam); Pilar (P.) Garcia-Gomez (Erasmus University Rotterdam); Eddy (E.K.A.) van Doorslaer (Erasmus University Rotterdam)
    Abstract: Unexpected negative health shocks may have serious consequences for labour force participation, not only for those who incur the shock but also for their family members. In particular, adult children may spend substantial time providing informal care and may incur stress-induced mental health problems following a parental health shock, which may in turn lead to reductions in labour supply. We link administrative data on labour market outcomes, hospitalisations and family relations for the full Dutch population for the years 1999-2008 to evaluate the effect of an unexpected parental hospitalisation on the probability of employment and on conditional earnings for the working age population. Using a difference-in-differences model combined with coarsened exact matching and individual fixed effects, we find no effect of an unexpected parental hospitalisation on either the probability of employment or conditional earnings for Dutch men and women, and neither for the full population nor for subpopulations most likely to become a caregiver. These findings suggest that the extensive public coverage of formal long-term care in the Netherlands provides sufficient opportunities to deal with adverse health events of family members without having to compromise one’s labour supply.
    Keywords: Labour supply; parental health shocks; informal care
    JEL: J22 J14 J10 I10
    Date: 2018–05–18
  5. By: Andrea Ariu (LMU Munich, IFO and CESifo, Germany; CRENOS, Italy.); Florian Mayneris (Université du Québec à Montréal and Université Catholique de Louvain.); Mathieu Parenti (Université Libre de Bruxelles: ECARES and CEPR Belgium.)
    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: van Zeeland, Kemmerer, Federal Reserve System, financial crisis, banking reform
    JEL: F10 F14 L80
    Date: 2018–03
  6. By: Olney, William W. (Williams College); Pozzoli, Dario (Copenhagen Business School)
    Abstract: This paper studies the relationship between immigration and offshoring by examining whether an influx of foreign workers reduces the need for firms to relocate jobs abroad. We exploit a Danish quasi-natural experiment in which immigrants were randomly allocated to municipalities using a refugee dispersal policy and we use the Danish employer-employee matched data set covering the universe of workers and firms over the period 1995-2011. Our findings show that an exogenous influx of immigrants into a municipality reduces firm-level offshoring at both the extensive and intensive margins. The fact that immigration and offshoring are substitutes has important policy implications, since restrictions on one may encourage the other. While the multilateral relationship is negative, a subsequent bilateral analysis shows that immigrants have connections in their country of origin that increase the likelihood that firms offshore to that particular foreign country.
    Keywords: immigration, offshoring
    JEL: F22 F16 J61 F23
    Date: 2018–04
  7. By: Marion Goussé (Département d'Economique, Université Laval - Université Laval); Nicolas Jacquemet (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Jean-Marc Robin (Sciences Po Paris, Department of Economics)
    Abstract: We develop a search model of marriage where men and women draw utility from private consumption and leisure, and from a non-market good that is produced in the home using time resources. We condition individual decisions on wages, education, and an index of family attitudes. A match-specific, stochastic bliss shock induces variation in matching given wages, education, and family values, and triggers renegotiation and divorce. Using BHPS (1991–2008) data, we take as given changes in wages, education, and family values by gender, and study their impact on marriage decisions and intra-household resource allocation. The model allows to evaluate how much of the observed gender differences in labor supply results from wages, education, and family attitudes. We find that family attitudes are a strong determinant of comparative advantages in home production of men and women, whereas education complementarities induce assortative mating through preferences.
    Keywords: structural estimation,Search-matching,bargaining,assortative mating,collective models,time uses,social norms,gender identity
    Date: 2017
  8. By: Joep Tijm (CPB Netherlands Bureau for Economic Policy Analysis); Thomas Michielsen (CPB Netherlands Bureau for Economic Policy Analysis); Peter Zwaneveld (CPB Netherlands Bureau for Economic Policy Analysis); Raoul van Maarseveen
    Abstract: Infrastructure projects are increasingly aiming to improve liveability, in particular in urban areas. We analyse a specifi c case in which an existing highway in an urban area was moved underground in order to improve intercity traffic flows and to reduce traffic externalities. As travel times within the city hardly changed, this allows for a clean identifi cation of the value of traffic externalities. We find that the liveability bene fits of such integrated infrastructure are substantial relative to the construction costs. Each halving of distance to the tunneled segment is associated with 3.5% more appreciation in house prices since the start of the project.
    JEL: R12 J24 J31
    Date: 2018–05
  9. By: Sirus Dehdari; Kai Gehring
    Abstract: We exploit the quasi-exogenous division of the French regions Alsace and Lorraine after the Franco-Prussian War in 1870 due to disagreements in the German leadership to provide evidence of group identity formation within historically homogeneous regions. People in the treated area, which was exposed to repressive homogenization policies aimed to suppress group identity, express a stronger regional identity and support more regional autonomy today. Using a regression discontinuity design at the municipal level, we find that support for two crucial referenda, which would have increased regional autonomy, subscription rates to regional newspapers, and regionalist party votes are significantly higher in the treated area. The results are robust across different specifications and bandwidths, and not driven by language differences, large agglomerations or distance to foreign countries. The differences in regional identity are strongest for the first two age cohorts after World War II and become weaker for later generations.
    Keywords: group identity, regional identity, identity formation, persistence of preferences, homogenization policies, assimilation, Alsace-Lorraine
    JEL: D91 H70 H80 N40 Z19
    Date: 2018
  10. By: Ravaska Terhi (Faculty of Management, University of Tampere)
    Abstract: In this paper I study Finnish top incomes from a gender perspective using the Finnish register-based panel data over the period of 1995-2012. I find that that the under-representation of women at the top has been quite persistent in the overall top but the proportion of women in the top 1% has increased over 18 years. Women’s wage share at the top has increased while the self-employment income has decreased. The top income females more often have an entrepreneurial background and are more often sharing a household with a high-income spouse. The gender-specific income distributions show that female incomes are less dispersed. In this study I also test whether top incomes can be assumed sumed to be Pareto distributed. While the joint and men’s top income distributions can be approximated with Pareto distribution throughout the observation period, the Pareto assumption gets more support for women after the year 2000. The female top income receivers have caught up with top earning men over time but I also show that females are more likely to move downwards from the top than men.
    Keywords: income distribution, gender inequality, top incomes, income mobility
    JEL: D31 J16 D63 D30
    Date: 2018–05
  11. By: Carolina Castegnetti (Department of Economics and Management, University of Pavia); Luisa Rosti (Department of Economics and Management, University of Pavia); Marina Töpfer (Institute of Economics, University of Hohenheim)
    Abstract: This paper analyzes the effect of public-contest recruitment on earnings for men and women using Italian microdata over a time period of ten years. We find that the gender pay gap vanishes, and even reverses among the young, when employees are selected through public contests. The results suggest that selection mechanisms such as public contests may offer a way for merit-based and gender-fair wage setting. However, since public contests and the public sector are highly correlated, we analyze the gender pay gap taking the interconnection between the public and private sector as well as the open contest issue into account. By decomposing our results by sector we find that public contests represent a necessary but not sufficient condition for merit-based and gender-fair recruitment. Similarly, the institutional environment of the public sector is a necessary but not sufficient condition for making public contests merit-based and gender-fair screening devices. These two factors taken together, cause the disappearance of the gender pay gap.
    Keywords: Gender Pay Gap, Public-Contest Recruitment, Double Sample Selection.
    JEL: J7 J13 J31
    Date: 2018–05
  12. By: Zorlu, Aslan (University of Amsterdam); Hartog, Joop (University of Amsterdam)
    Abstract: This study examines the causal effects of Dutch language proficiency of immigrants from four main source countries on their labour market and social integration outcomes. Language proficiency appears ranked according to linguistic distance to The Netherlands, a ranking that even holds for the gender gap in proficiency. We assess the effect of language proficiency on two objective indicators of integration (employment and income) and two subjective measures (feeling Dutch and feeling integrated). The analysis shows that endogeneity of language skills masks a substantial part of language effects. Once accounted for endogeneity, effects of Dutch language proficiency on social and economic integration of immigrants are more than double the estimates ignoring endogeneity.
    Keywords: language skills, immigrants, integration, treatment effects
    JEL: J15
    Date: 2018–04
  13. By: Judith Bom (Erasmus University Rotterdam); Pieter Bakx (Erasmus University Rotterdam); Erik Schut (Erasmus University Rotterdam); Eddy (E.K.A.) van Doorslaer (Erasmus University Rotterdam)
    Abstract: Informal caregiving is a potentially attractive alternative to formal care but may entail health costs for the caregiver. We examine the mental and physical health impact of providing informal care and disentangle the caregiving effect – the effect of caring for someone in need – from the family effect – the effect of caring about someone in need. We account for potential endogeneity in the caregiving decision and control for previous health status using Arellano-Bond difference GMM models. We use four waves (2010-2013) of panel data from the Dutch Study on Transitions in Employment, Ability and Motivation (STREAM). We find that caregiving harms the mental health of caregivers; this effect is mainly present for spousal caregivers. A negative health shock of a family member also has a direct negative effect on mental health, providing evidence of a family effect. These findings imply that most studies may have overestimated the negative health effects of caregiving by not accounting adequately for the family effect. As the caregiving effect differs strongly between various types of caregivers, policies to counteract this effect should specifically target subgroups of caregivers that carry the largest burden of informal caregiving.
    Keywords: long-term care; informal care; caregiver effect; family effect; mental health
    JEL: J14 I10 J18
    Date: 2018–05–18
  14. By: Gravelle, Hugh S; Liu, Dan; Propper, Carol; Santos, Rita
    Abstract: We examine whether family doctor firms in England respond to local competition by increasing their quality. We measure quality in terms of clinical performance and patient-reported satisfaction to capture its multi-dimensional nature. We use a panel covering 8 years for over 8000 English general practices, allowing us to control for unobserved local area effects. We measure competition by the number of rival doctors within a small distance. We find that increases in local competition are associated with increases in clinical quality and patient satisfaction, particularly for firms with lower quality. However, the magnitude of the effect is small.
    Keywords: Quality; healthcare; choice; competition; family physicians
    JEL: I11 I18
    Date: 2018–05
  15. By: Marcel Henkel; Tobias Seidel; Jens Suedekum
    Abstract: Many countries operate pronounced fiscal equalization schemes that shift tax revenue across jurisdictions. We use a general equilibrium model with multiple asymmetric regions, costly trade and labor mobility to carve out the aggregate implications of this policy. Calibrating the model for Germany, we find that it indeed delivers smaller spatial economic disparities across regions. This comes at the cost of lower national output, however, because activity is diverted away from core cities and towards remote areas with low productivity. But despite this output loss, fiscal transfers may still raise national welfare, because they effectively countervail over-congestion in large cities.
    Keywords: fiscal equalization, regional transfers, migration, spatial economics
    JEL: F15 R12 R13 R23
    Date: 2018
  16. By: Alfonso Expósito (Department of Economic Analysis and Political Economy, University of Seville, Calle San Fernando 4, 41004 Sevilla (Spain).); Juan A. Sanchis-Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This paper examines the impacts of product, process, and organisational innovations on two alternative dimensions of business performance: finance and operations. Two indicators capture financial performance: sales increase and production cost reduction. Operational firm performance is captured by two alternative indicators: productive capacity augmentation and quality improvement of product/service provided by the firm. Using a wide-ranging sample of Spanish SMEs, our findings highlight the existence of significant impacts of innovation on both these dimensions of business performance, although these impacts differ regarding the type of innovation and the performance indicator considered. Furthermore, our results indicate that the relationship between innovation choices in SMEs and business performance should be analysed from a multidimensional approach. These findings reveal significant implications for innovation policies and innovation strategies for SMEs.
    Keywords: innovation, business performance, multi-dimensional analysis, SME, Spain
    JEL: O32 L25 C25
    Date: 2018–05
  17. By: Jarl, Johan (Department of Clinical Sciences, Lund University); Linder, Anna (Department of Clinical Sciences, Lund University); Busch, Hillevi (The Public Health Agency of Sweden); Nyberg , Anja (Department of Healthcare Management, Region Skåne); Gerdtham, Ulf-G. (Department of Economics, Lund University)
    Abstract: The burden of mental disorders continues to grow and is now a leading cause of disability worldwide. The prevalence of mental disorders is unequal between population subgroups, and these disorders are associated with unfavourable consequences in social and economic conditions, health and survival. However, how the negative effects of mental disorders are distributed among population subgroups is less studied. Our aim is to investigate how labour market consequences of Common Mental Disorders (CMD) differ over gender, age, education, and country of birth. We use a population sample from southern Sweden of patients diagnosed with CMD 2009-2012 and a matched general population control group with linked register information on employment, long-term sick leave, and disability pension. Logistic regression with interaction effects between CMD and sociodemographic indicators are used to estimate labour market consequences of CMD in the different population subgroups. CMD have a negative impact on all labour market outcomes studied, reducing employment while increasing the risk of long term sick leave and disability pension. However, the associated effect is found to be stronger for men than women, except for disability pension where consequences are similar. Surprisingly, high educated individuals suffer worse labour market consequences than low educated. Consequences of CMD in labour market outcomes are not consistent across different age-groups and country of birth. Inequalities in the labour market consequences of common mental disorders sometimes contributes to, and sometimes mitigates, societal inequalities in employment, long term sick leave and disability pension. When developing new strategies to tackle mental ill health in the population, it may therefore be motivated to consider not only inequalities in the prevalence of mental disorders, but also inequalities in the consequences of these disorders.
    Keywords: Mental health; Inequality; Employment; Labour market
    JEL: I10 I14 J01
    Date: 2018–06–01
  18. By: Al Baghal, Tarek; Bryson, Caroline; Fisher, Hayley; Hanson, Tim; Jessop, Curtis; Low, Hamish; Lynn, Peter; Martin, Nicole; McKay, Stephen; Sloan, Luke; Sobolewska, Maria
    Abstract: This paper presents some preliminary findings from Wave 10 of the Innovation Panel (IP10) of Understanding Society: The UK Household Longitudinal Study. Understanding Society is a major panel survey in the UK. In May 2017, the tenth wave of the Innovation Panel went into the field. IP10 used a mixed-mode design, using on-line interviews and face-to-face interviews. This paper describes the design of IP10, the experiments carried and the preliminary findings from early analysis of the data.
    Date: 2018–05–22
  19. By: Iga Magda; Roma Keister
    Abstract: The aim of our paper is to analyse the relationship between working time flexibility and parental time devoted to children. Using data from a large panel survey of Polish households carried out in 2013 and 2014 (Determinants of Educational Decisions Household Panel Survey, UDE) we investigate whether and how various dimensions of working time flexibility affect the amount of time parents spend with their children reading, playing or teaching them new things. We account for employment status of parents, their socio-economic status and social and cultural norms they share. Our results show that employment status of parents and their working time arrangements are not statistically significant for the amount of parental ‘quality time’ devoted to children. We show that these are parental human and cultural capital and their values that are primary factors determining the amount of parental time investments.
    Keywords: working time flexibility, parental time investments, child care, ‘quality time with children’
    JEL: J13 J22 J81
    Date: 2018–05
  20. By: Hippolyte D'Albis (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Carole Bonnet (INED - Institut national d'études démographiques); Xavier Chojnicki (LEM - Lille - Economie et Management - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Najat El Mekkaouide Freitas (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, INED - Institut national d'études démographiques); Jérôme Hubert (LEM - Lille - Economie et Management - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Julien Navaux (University of Ottawa [Ottawa])
    Abstract: This article provides a comprehensive overview of how the funding of consumption at different ages is shared between the State, the individual and the family. By applying the National Transfer Accounts method for France, we developed a unique database to analyze how the funding of consumption is secured at each age, how its structure has changed over time, and how the consumption is financed in France compared to that of a set of other developed countries. We find that the elderly in France finance themselves increasingly by their own means, even though public funding of this age group remains significant in France in comparison to other countries. Conversely, the young rely more and more on the State to finance their consumption. Within our sample, France is the country where the young benefited most from public transfers.
    Keywords: Generational Economy,National Transfer Accounts,Inter- Generational Equity,Private and Public Consumption
    Date: 2018–05
  21. By: Giulio Cainelli; Roberto Ganau; Marco Modica
    Abstract: The 2008 Great Recession prompted interest in the concept of regional resilience. This paper discusses and empirically investigates the relationship between industrial relatedness and economic resilience across European Union regions over the 2008-2012 crisis period. The analysis focuses on two types of industrial relatedness: technological and vertical (i.e. market-based). The empirical analysis is performed on a sample of 209 NUTS-2 regions in 16 countries. Our results highlight a positive effect of technological relatedness on the probability of resilience in the very short run (i.e. the 2008-2009 period), while the negative effect of vertical relatedness seems to persist for longer.
    Keywords: Technological Relatedness; Vertical Relatedness; Regional Resilience; European Union
    JEL: B52 C25 O52 R11
    Date: 2018–05
  22. By: Simon Burgess (University of Bristol); Lucinda Platt (London School of Economics)
    Abstract: The paper presents an empirical analysis of inter-ethnic relations among adolescents in England’s schools, the first national study of schools throughout England to relate inter-ethnic attitudes to both school and area ethnic composition. We combine survey data on ‘warmth’ of feeling for specific ethnic groups, friendships and attitudes with administrative data on the shares of those groups at school and area level. We confirm that the pupils have warmer feelings for their own ethnic group than for others. Second, we show that in schools with more pupils from another ethnic group the gap between a pupil’s views of those from her own group and from another ethnic group is smaller. This is true for attitudes of the majority and of minority ethnic groups. Third, we show that school composition (interpreted as contact) mitigates area composition (interpreted as exposure).
    Date: 2018–05
  23. By: Marc Bourreau; Lukasz Grzybowski; Maude Hasbi
    Abstract: We use panel data on 36,104 municipalities in metropolitan France over the period 2010-2014 to estimate two models of entry into local markets by: (i) alternative operators using wholesale access to the legacy copper network via local loop unbundling (LLU), and (ii) the incumbent and two alternative operators using the fiber technology. We find that a higher number of LLU competitors, and hence a less concentrated local market, has a positive impact on entry by fiber operators. Moreover, the presence of upgraded cable network in the local municipality stimulates fiber deployment. However, firms may choose to upgrade copper lines instead of investing in fiber networks. We use the estimates to calculate entry thresholds into local markets, which are substantially lower for broadband provision via LLU than via fiber and decrease over time. Fiber deployment becomes cheaper over time, but according to our estimates it will remain unprofitable for the vast majority of municipalities in France within the next years.
    Keywords: fiber broadband, local loop unbundling, market entry
    JEL: K23 L13 L51 L96
    Date: 2018
  24. By: Heesen, Florian (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This paper offers new insights on utility-driven heat energy consumption. The research question addressed is whether economic aspects affect short-term, less conscious behavior in the same way as long-term, more conscious behavior. The model proposed is based on Becker’s household production theory and integrates economic, engineering and behavioral elements. Comparative statics enables an interdisciplinary integration of price- and income functions to cover economic influences, the production function to cover technical influences, and the utility-based choice architecture. Based on a functional representation of the theories, a panel data model of heat energy consumption is estimated. The empirical analysis is based on data from 60 adjacent apartments in South-West Germany. We find empirical evidence that the price elasticity of demand is only statistically significant when using yearly aggregated data. This result provides evidence that occupants apparently do not act upon energy price signals when following their daily home heating routine. In less frequent considerations, as e.g. according to their yearly billing cycles, occupants adjust their heat energy consumption with respect to the fuel price influence. Furthermore, in relation to the other influences on heat energy consumption, we find that the price impact is less pronounced than the impact of comfort conditions.
    Keywords: Heat energy consumption; household production theory; price elasticity of demand
    JEL: D13 Q41 R20
    Date: 2018–04
  25. By: Papini, Andrea
    Abstract: The Norwegian dual income tax system gave incentives for busi- ness owners to incorporate and take advantage of the lower tax on capital income. The tax reform of 2006, which was designed to elim- inate these incentives, is used to discuss e ects of taxation on the choice of organisational form. The interplay between the tax reform and the pre-existing system of geographically di erentiated payroll tax rates generates heterogeneity in the tax treatment, which is ex- ploited in a di erence-in-di erences empirical strategy. Estimation results based on a large administrative dataset suggest that organi- sational choice is in uenced by taxes: a 1 percentage point reduction in the payroll tax results in 1 percent increase in incorporation rate.
    Date: 2018–05–31
  26. By: Gehrke, Britta (University of Erlangen-Nuremberg); Hochmuth, Brigitte (University of Erlangen-Nuremberg)
    Abstract: Short-time work is a labor market policy that subsidizes working time reductions among firms in financial difficulty to prevent layoffs. Many OECD countries have used this policy in the Great Recession. This paper shows that the effects of short-time work are strongly time dependent and non-linear over the business cycle. It may save up to 0.8 jobs per short-time worker in deep economic crises. The policy becomes more efficient as the recession deepens. In expansions, the effects are smaller and may turn negative. We disentangle discretionary short-time work from automatic stabilization in German data using smooth transition VARs.
    Keywords: short-time work, fiscal policy, labor market, non-linearity, smooth transition VARs, business cycle
    JEL: C32 E24 E32 E62
    Date: 2018–04
  27. By: Larkin, Matthew P. (Deakin University); Askarov, Zohid (Deakin University); Doucouliagos, Chris (Deakin University); Dubelaar, Chris (Deakin University); Klona, Maria (Deakin University); Newton, Joshua (Deakin University); Stanley, T. D. (Deakin University); Vocino, Andrea (Deakin University)
    Abstract: The sharp rise in international migration is a pressing social and economic issue, as seen in the recent global trend towards nationalism. One major concern is the impact of immigration on housing. We assemble a comprehensive database of 474 estimates of immigration's impact on house prices in 14 destination countries and find that immigration increases house prices, on average. However, attitudes to immigrants moderate this effect. In countries less welcoming to immigrants, house price increases are more limited.
    Keywords: immigration, house prices, attitudes, meta-regression
    JEL: F22 R31
    Date: 2018–04
  28. By: Howley, P.;; Moro, M.;; Waqas, M.;; Delaney, L.;; Heron, T.;
    Abstract: Medical liability systems have been accused of increasing health expenditure insofar as they induce the practice of defensive medicine. Despite the large evidence on the role of medical malpractice liability, the identification of its causal effect on physicians’ treatment decisions is a difficult task. In this paper we study for the first time in a controlled laboratory setting the effect of introducing the risk of being sued for medical malpractice on the provision of physicians’ medical services. In our experimental sessions both medical and non-medical students choose how many medical services to provide for heterogeneous patients. We implement exogenous variations in the presence of medical malpractice liability and expected probability of being sued, and thus we exploit the within-subject variation in the provision of medical services to infer the causal effect of malpractice liability. Furthermore, we analyze the impact of malpractice liability under different physicians’ payment methods, which allows us to discuss the interplay between medical liability and payment systems. Our behavioral data show that introducing malpractice liability pressure does lead physicians to choose a higher amount of medical services, regardless of the physicians’ payment system. However, we also find that the payment system in which malpractice liability is implemented makes the difference under the societal perspective, with relevant implications for health policy.
    Keywords: immigration; subjective well-being; UK; Brexit;
    JEL: J61 I31
    Date: 2018–05
  29. By: David R. Agrawal; Dirk Foremny
    Abstract: A recent Spanish tax reform granted regions the authority to set income tax rates, resulting in substantial tax differentials. We use individual-level information from Social Security records over a period of one decade. Conditional on moving, taxes have a significant effect on location choice. A one percent increase in the net of tax rate for a region relative to others increases the probability of moving to that region by 1.7 percentage points. Focusing on the stock of top-taxpayers, we estimate an elasticity of the number of top taxpayers with respect to net-of-tax rates of 0.85. Using this elasticity, a theoretical model implies that the mechanical increase in tax revenue due to higher tax rates is larger than the loss in tax revenue from the out-ow of migration.
    Keywords: migration, taxes, mobility, rich, fiscal decentralization
    JEL: H24 H31 H73 J61 R23
    Date: 2018
  30. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz
    Abstract: This paper investigates the effect of export shocks on innovation. On the one hand a positive shock increases market size and therefore innovation incentives for all firms. On the other hand it increases competition as more firms enter the export market. This in turn reduces profits and therefore innovation incentives particularly for firms with low productivity. Overall the positive impact of the export shock on innovation is magnified for high productivity firms, whereas it may negatively affect innovation in low productivity firms. We test this prediction with patent, customs and production data covering all French manufacturing firms. To address potential endogeneity issues, we construct firm-level export proxies which respond to aggregate conditions in a firm's export destinations but are exogenous to firm-level decisions. We show that patenting robustly increases more with export demand for initially more productive firms. This effect is reversed for the least productive firms as the negative competition effect dominates.
    JEL: D12 F13 F14 F41 O30 O47
    Date: 2018–05
  31. By: Hagen, Johannes; Hallberg, Daniel; Sjögren Lindquist, Gabriella
    Abstract: Nudge is about affecting behavior in a certain way through small changes to the choice architecture. However, a nudge may also affect behaviors that the architect did not intend. We show that such spillover effects exist in a highly policy relevant context where the use of nudge is widespread; retirement. Specifically, we find that an exogenous application form change in the Swedish pension system that highlighted a five-year payout on the expense of a life annuity not only increased the demand for the nudged payout (as expected), but also induced individuals to retire earlier. We attribute the effects to decision-framing.
    Keywords: annuity,pension,nudge,decision framing
    JEL: D91 J26 J32
    Date: 2018
  32. By: Marius Huguet (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Xavier Joutard (Aix Marseille Univ, CNRS, LEST, Aix-en-Provence; OFCE, sciences Po, Paris); Isabelle Ray-Coquart (Univ Lyon, Université Claude Bernard Lyon 1, Centre Léon Bérard, EA7425 HESPER, F-69008 Lyon, France); Lionel Perrier (Univ Lyon, Université Lumière Lyon 2, Centre Léon Bérard, GATE UMR 5824, F-69008 Lyon, France)
    Abstract: Studies of the hospital volume-outcome relationship have highlighted that a greater volume activity improves patient outcomes. While this finding has been known for years in health services research, most studies to date have failed to delve into what underlies this relationship. This study aimed to shed light on the basis of the hospital volume effect by comparing treatment modalities for epithelial ovarian carcinoma patients. Hospital volume activity was instrumented by the distance from patients’ homes to their hospital, the population density, and the median net income of patient municipalities. We found that higher volume hospitals appear to more often make the right decisions in regard to how to treat patients, which contributes to the positive impact of hospital volume activities on patient outcomes. Based on our parameter estimates, we found that the rate of complete tumor resection would increase by 10% with centralized care, and by 6% if treatment decisions were coordinated by high volume centers compared to the ongoing organization of care. In both scenarios, the use of neoadjuvant chemotherapy would increase by 10%. As volume alone is an imperfect correlate of quality, policy makers need to know what volume is a proxy for in order to devise volume-based policies.
    Keywords: Volume outcome relationship, France, Epithelial Ovarian Cancer, Instrumental variable, Organization of care, Care pathway, Learning effect, Centralization of care
    JEL: C31 C36 I11 I18 L11
    Date: 2018
  33. By: Mastrorocco, Nicola (Trinity College Dublin); Minale, Luigi (Universidad Carlos III de Madrid)
    Abstract: In democracies voters rely on media outlets to learn about politically salient issues. This raises an important question: how strongly can media affect public perceptions? This paper uses a natural experiment – the staggered introduction of the Digital TV signal in Italy – to measure the effect of media persuasion on the perceptions individuals hold. We focus on crime perceptions and, combining channel-specific viewership and content data, we show that the reduced exposure to channels characterized by high levels of crime reporting decreases individual concerns about crime. The effect is driven by individuals aged 50 and over, who turn out to be more exposed to television while using other sources of information less frequently. Finally, we provide some evidence about the effect of the digital introduction on public policies closely related to crime perceptions and on voting behavior.
    Keywords: information, news media, persuasion, crime perceptions
    JEL: D72 D83 K42 L82
    Date: 2018–04
  34. By: Khaled Alsaifi (Newcastle University Business School,)
    Abstract: The environmental impact of economic activity has raised the profile of corporate carbon performance (CP) to a high level in recent times. This study examines the impact of the variation in CP on financial performance (FP). Using UK data comprising FTSE 350 firms from the period of 2007 to 2015. We also document a significant negative relationship between environmental regulations and FP. Our overall findings are consistent with the resource based view (RBV) of the firm and support the voluntary disclosure strategy by showing that firms with greater intangible resources are generating reputational assets through their enhanced carbon disclosures which in turn leads to a competitive advantage which converts into improved FP as evidenced in the present study.
    Keywords: Carbon Disclosure Project; Carbon performance; Resource-based view; Climate Change Score; Financial performance
    Date: 2018–04
  35. By: Bryson, Alex (University College London); Stokes, Lucy (National Institute of Economic and Social Research (NIESR)); Wilkinson, David (University College London)
    Abstract: Using nationally representative linked employer-employee data for Britain in 2004 and 2011 we find school staff are more satisfied and more contented with their jobs than "like" employees in other workplaces. The differentials are largely accounted for by the occupations school employees undertake and perceptions of job quality. School employees are also more committed to their organization than non-school employees, a difference that remains large and statistically significant having conditioned on job quality, human resource management practices (HRM), managerial style and other features of employees' working environment. Using panel data for workplaces and their employees observed in 2004 and 2011 we find increases in organizational commitment are linked to improvements in workplace performance in schools, but not in other workplaces.
    Keywords: schools, teachers, job satisfaction, job contentment, organizational commitment, school performance, human resource management, managerial style
    JEL: I21
    Date: 2018–04
  36. By: Friedrich, Jan; Thiemann, Matthias
    Abstract: This policy letter provides evidence for the crucial importance of the initial regulatory treatment for the further development of financial innovations by exploring the emergence and initial legal framing of off-balance-sheet leasing in Germany. Due to a missing legal framework, lease contracts occurred as an innovative social practice of off-balance-sheet financing. However, this lacking legal framing impeded the development of this financial innovation as it also created legal uncertainties. This was about to change after the initial legal framing of leasing in the 1970's which eliminated those legal uncertainties and off-balance-sheet leasing entered into a stunning period of growth while laying the foundation of a regulatory resiliency against efforts that seek to abandon the off-balance-sheet treatment of leases. As the initial legal framing is crucial for the further development of a financial innovation, we propose the French approach for the initial vindication of new financial products in which the principles-based rules are aligned with the capabilities of regulators to intervene, even when a financial innovation complies with the letter of the law. In this way, regulators could regulate the frontier of financial innovations and weed out those which are entirely or mainly driven by regulatory arbitrage considerations while maintaining the beneficial elements of those products.
    Keywords: financial innovations,regulation,regulatory arbitrage,leasing
    Date: 2018
  37. By: Giuliano Masiero (Department of Engineering, University of Bergamo, Italy; Institute of Economics (IdEP), Università della Svizzera italiana, Switzerland); Fabrizio Mazzonna (Institute of Economics (IdEP), Università della Svizzera italiana, Switzerland; Munich Center for the Economics of Aging (MEA), Germany); Olaf Verbeek (Institute of Economics (IdEP), Università della Svizzera italiana, Switzerland)
    Abstract: Antidepressant (AD) consumption has been steadily increasing in the last decade in most countries. The explanations suggested by researchers for this increment are still under scrutiny. This study attempts to identify the determinants of AD consumption by exploiting small area variations from Switzerland between 2003 and 2014. We observe that two specific drugs - Citalopram and Escitalopram - within the Selective Serotonin Re-uptake Inhibitors (SSRI) category are mainly responsible for the increasing trend in AD consumption. Socio-economic, demographic, cultural, and geographical characteristics of the area are included in multiple regression models with random and fixed effects of AD consumption per capita. While most of these factors contribute to explain cross-area variations in AD use, they provide little explanation for the temporal trend in overall AD consumption. Conversely, we find that the time trend in AD consumption is explained at least partially by the density of prescribing physicians. More precisely, generic AD turn out to be positively associated with adverse local economic conditions, while branded AD are negatively associated with adverse economic conditions and positively related to the presence of neurologists and psychiatrists in the area. This may suggest that generic AD drugs are more likely prescribed in accordance to need, whereas branded AD are more likely to respond to preferences and financial incentives affecting suppliers.
    Keywords: Antidepressant Consumption, Healthcare Demand, Socio-economic Determinants
    JEL: C13 I11 I18
    Date: 2018–06–04
  38. By: Francisco A. Blanco; Francisco J. Delgado; Maria J. Presno
    Abstract: This article examines the convergence of the R&D expenditure in the EU28 for 2004–2015. We initially run a sigma convergence analysis and conclude with a club convergence approach. The overall results show convergence in the total expenditure, due to the behaviour of the business and higher education sectors, despite government sector divergence. However, noticeable differences between the EU15 and 13 EU countries are apparent. The business enterprise sector is the principle driver of EU15 R&D convergence, whereas for the EU13 this role is played by the government expenditure. The club convergence approach allows us to explore these insights through individualized analysis and clusterization. Results for the EU28 show two clubs for the total expenditure, but the analysis of its components reveals a larger grouping. Results evidence the necessity of revising the EU R&D policies towards greater coordination due to the impact of this expenditure on growth, development and integration.
    Keywords: convergence, R&D, expenditure, European Union
    JEL: H5 O3 O4
    Date: 2018–06
  39. By: Giansoldati, Marco; Danielis, Romeo; Rotaris, Lucia; Scorrano, Mariangela
    Abstract: The paper reports the results of a stated preference study, carried out in Italy in 2017, on consumers’ preferences between an electric car (EC) and a petrol car. The focus is on the role of driving range. We find that the linear specification leads to lower willingness to pay (WTP) estimate for the driving range than the logarithmic, quadratic and EC-specific ones. The estimation of a mixed logit model leads to a coefficient of the EC-specific range attribute six times larger than the coefficient of the non-EC one. The jointly statistically significant covariates explaining the heterogeneity of the coefficient of the EC-specific driving range attribute are gender, number of cars owned by the family, and knowledge of cars. The implied WTP varies from 37 to 106 €/km, depending on the socio-economic characteristics of the respondent. Simulative analysis shows that very relevant increases in the probability of buying an electric car (ranging from 28% to 68%) over a petrol one require jointly improvements in the fast charging network, driving range and financial incentives.
    Date: 2018
  40. By: Laurence Deborgies Sanches; Marno Verbeek
    Abstract: The paper investigates how the mix of credit risk measurement methodologies under Basel capital adequacy rules influenced banking stability in the Netherlands during 2008-2015. It presents a first descriptive analysis that helps to examine the micro-regulation of individual banks and the macro-regulation of the banking system in one unified framework. Its goal is to draw regulators' and researchers' attention to interesting issues based on the comparison of the literature highlighting the weak points of the regulatory framework with what is observed in the dataset. Its purpose is to stimulate discussions on certain methodological and policy options.
    Keywords: macro-regulation; banks; credit rating; Basel methodology
    JEL: G21 G24 G28
    Date: 2018–05

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