nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒06‒25
34 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Eu transfers and euroscepticism: can’t buy me love? By Alessandro Borin; Elisa Macchi; Michele Mancini
  2. Are rising house prices really good for your brain? House value and cognitive functioning among older Europeans By Isabelle CHORT; Bénédicte APOUEY
  3. Does Regulation Discourage Investors? Sales Price Effects of Rent Controls in Germany By Lars Vandrei
  4. Energy efficient technology adoption and low-income households in the EU: What is the evidence? By Schleich, Joachim
  5. When is a carbon price floor desirable? By Newbery, D.; Reiner, D.; Ritz, R.
  6. Modernization of Vocational Training Curricula and Technology Adoption in Firms: A Descriptive Analysis with German Data By Christian Eggenberger; Simon Janssen; Uschi Backes-Gellner
  7. Productivity and wage effects of firm-level collective agreements: Evidence from Belgian linked panel data By Andrea Garnero; François Rycx; Isabelle Terraz
  8. Do startups provide employment opportunities for disadvantaged workers? By Fackler, Daniel; Fuchs, Michaela; Hölscher, Lisa; Schnabel, Claus
  9. Structural change and convergence across European regions By Tullio Buccellato; Giancarlo Corò
  10. Labour Market Decisions of the Self-Employed in the Netherlands at the Statutory Retirement Age By Amparo Nagore Garcia; Mariacristina Rossi; Arthur van Soest
  11. Can Public Housing Decrease Segregation? Lessons and Challenges from Non-European Immigration in France By Verdugo, Gregory; Toma, Sorana
  12. The distribution of pension wealth in Europe By OLIVERA Javier
  13. Paid Parental Leave and Families' Living Arrangements By Cygan-Rehm, Kamila; Kühnle, Daniel; Riphahn, Regina T.
  14. The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data By Grinza, Elena; Rycx, Francois
  15. Unemployment and social exclusion By Pohlan, Laura
  16. Labor Market and Distributional Effects of an Increase in the Retirement Age By Geyer, Johannes; Haan, Peter; Hammerschmid, Anna; Peters, Michael
  17. Comparing redistributive efficiency of tax-benefit systems in Europe By Mantovani, Daniela
  18. Wages and employment: The role of occupational skills By Esther Mirjam Girsberger; Miriam Rinawi; Matthias Krapf
  19. Growing up in Ethnic Enclaves: Language Proficiency and Educational Attainment of Immigrant Children By Alexander M. Danzer; Carsten Feuerbaum; Marc Piopiunik; Ludger Wößmann
  20. Radioinactive: Are nuclear power plant outages in France contagious to the German electricity price? By Rinne, Sonja
  21. Industry vs services: do enforcement institutions matter for specialization patterns? disaggregated evidence from Spain By Juan S. Mora-Sanguinetti; Rok Spruk
  22. Public R&D Support and Firms’ Performance. A Panel Data Study By Arvid Raknerud; Diana-Cristina Iancu; Øivind A. Nilsen
  23. Wages and employment adjustment in times of crisis in France: which concessions bargaining? A mixed-method approach based on the 2010-2011 REPONSE survey By Noélie Delahaie; Coralie Perez
  24. Backing the incumbent in difficult times: the electoral impact of wildfires By Roberto Ramos; Carlos Sanz
  25. Expenditure interactions between municipalities and the role of agglomeration forces: A spatial analysis for North Rhine-Westphalia By Langer, Sebastian
  26. Long-run patterns of labour market polarisation: Evidence from German micro data By Bachmann, Ronald; Cim, Merve; Green, Colin
  27. Can the composition of the family during adolescence influence their future unemployment situation? Evidence for Spain By Morales, Marina
  28. Energy consumption and activity patterns: an analysis extended to total time and energy use for French households By Simona De Lauretis; Frédéric Ghersi; Jean-Michel Cayla
  29. The ADIS study: A large-scale correspondence test on labor market discrimination in Germany - Technical Report By Veit, Susanne; Yemane, Ruta
  30. Is a positive relationship between fertility and economic development emerging at the sub-national regional level? Theoretical considerations and evidence from Europe By Fox, Jonathan; Klüsener, Sebastian; Myrskylä, Mikko
  31. Defense firms adapting to major changes in the French R&D funding system By Jean Belin; Marianne Guille; Nathalie Lazaric; Mérindol Valérie
  32. Long-run Effects of Lottery Wealth on Psychological Well-being By Lindqvist, Erik; Östling, Robert; Cecarini, David
  33. Long-run Trends in the Economic Activity of Older People in the UK By James Banks; Carl Emmerson; Gemma Tetlow
  34. Math, Girls and Socialism By Lippmann, Quentin; Senik, Claudia

  1. By: Alessandro Borin; Elisa Macchi; Michele Mancini
    Abstract: This paper investigates whether EU redistributive policies improved the public attitude toward European integration, both in terms of public opinion and in terms of political preferences. We build a new dataset combining data from the European Social Survey, different data sources for political parties’ stances and transfer records from EU institutions. We focus on the regional Cohesion Policy, within which the Convergence Objective program offers a quasi-experimental framework that allows us to single out these effects by means of a regression discontinuity approach. Results show that EU transfers have mitigated the rise of Eurosceptic attitudes and reduced the political consensus for anti- EU parties in long-time recipient regions. We estimate that increasing the regional per capita EU transfers by 1000€ over the 2000-2014 period reduces the share of Eurosceptic individuals by about 8 percentage points and voters’ support for anti-EU parties by 10 percentage points. The effects are homogeneous across different socio-economic groups, including the most disadvantaged ones. Other attitudes that are often associated with Euroscepticism (i.e. anti-trade and anti-immigration stances) are not substantially affected by EU regional transfers.
    Keywords: Euroscepticism, EU transfers, EU crisis, cohesion policy, voting, regression discontinuity, redistributive politics
    JEL: D72 F14 H11 I38
    Date: 2018–06
  2. By: Isabelle CHORT; Bénédicte APOUEY
    Abstract: This study examines how house prices in fluence cognitive functioning for individuals aged 50+ in Europe. Using data from the Survey of Health, Ageing and Retirement (SHARE) between 2004 and 2015, we compute the median house price for each region-year, using individual self-reported house values. Cognitive scores capture either fl uid intelligence (numeracy, memory) or a mix of fl uid and crystallized intelligences (verbal fluency). Compared with the previous literature, we allow housing market fl uctuations to have different effects during episodes of price increases and decreases, and we study owners with a mortgage, owners without a mortgage, and tenants separately. Findings indicate that house price booms do not systematically improve cognitive health outcomes: for outright owners and tenants, a rise in prices correlates with a decrease in fluid intelligence. For outright owners, this result is partly explained by increased alcohol consumption, and is also related to stronger feelings of guilt and irritability, consistent with aversion to advantageous inequality. Findings also show asymmetry in the effects of price booms and busts: indeed, for mortgaged owners, both price increase and decrease episodes have a positive impact on cognitive outcomes. We argue that during the crisis the beneficial impact of price busts may have been driven by the decline in interest rates, which reduced the debt burden of households with a variable rate mortgage.
    Keywords: House prices, Wealth, Cognitive functioning, Health, Older Europeans, Europe, SHARE
    JEL: D12 I1 I3 J14
    Date: 2018–06
  3. By: Lars Vandrei
    Abstract: We analyze the extent to which sales prices for residential housing react to rent-price regulation. To this end, we exploit changes in apartment prices across the regulation treatment threshold. We examine a quasi-natural design in the German federal state of Brandenburg using transaction price data provided by the committee of evaluation experts. Brandenburg introduced both a capping limit for existing rental contracts as well as a price ceiling for new contracts for municipalities with tight housing markets in 2014. Whether or not a municipality falls under this classification is based upon a municipality’s housing market characteristics, which are translated into a specific score. This allows us to employ a regression discontinuity design with a sharp cutoff point. We compare sales prices in municipalities that are located marginally above the assignment threshold with the prices in those slightly below. Our results suggest that the regulations reduced sales prices for affected apartments by 20–30 %.
    Keywords: Housing rent controls, sales prices
    JEL: D04 R31 R52
    Date: 2018
  4. By: Schleich, Joachim
    Abstract: This paper studies the adoption of high-cost, medium-cost, and low-cost ener-gy-efficient technologies (EETs) by income categories across eight European Union countries. The statistical-econometric analyses allow the effects of in-come to differ by income quartiles and across countries. They rely on demo-graphically representative household surveys carried out simultaneously among about 15,000 households in France, Germany, Italy, Poland, Romania, Spain, Sweden, and the United Kingdom in 2016. For retrofit measures, the findings suggest that homeowners falling into the lowest income quartile exhibit lower adoption propensities than those falling into the highest income quartile. These findings provide support for policies targeting "poor homeowners", particularly in lower-income countries with a high share of owner-occupiers such as Poland and Romania. Further, differences in adoption propensities across income quar-tiles also exist for medium- and low-cost EETs such as appliances and light bulbs. Finally, analyzing factors related to homeowners' receiving financial sup-port from governments or utilities for retrofit measures suggests that differences in implementation rates between the highest and lowest income quartile would likely have been higher without such support schemes in place. For the United Kingdom (but not for other countries) these schemes appeared to have had a progressive effect.
    Keywords: energy poverty,energy efficiency,adoption,poor homeowners,subsidies,econometrics
    Date: 2018
  5. By: Newbery, D.; Reiner, D.; Ritz, R.
    Abstract: The EU carbon price lies well below estimates of the social cost of carbon and “target-consistent” carbon prices needed to deliver ambitious targets such as the 40% reduction target for 2030. In light of this, the UK introduced a carbon price floor (CPF) for its electricity sector in 2013 and the new Dutch Government has recently made a similar commitment, while successive French Governments have called for an EU-wide CPF. This paper analyzes the impacts and design of a power-sector CPF, both at the EU and national level, using a political-economy approach. We find a good case for introducing such a price-based instrument into the EU ETS. We suggest that a CPF should be designed to “top up” the EUA price to €25–30/tCO2, rising annually at 3–5% above inflation, at least until 2030. We argue that the new EU Market Stability Reserve enhances the value of a CPF in terms of delivering climate benefits, and discuss the potential for a regional CPF in North-West Europe. We also review international experience with price floors (and ceilings).
    Keywords: Carbon pricing, electricity markets, market failure, policy failure, political economy, price floor, price corridor
    JEL: H23 L94 Q48 Q54
    Date: 2018–06–15
  6. By: Christian Eggenberger (University of Zurich); Simon Janssen (Institute for Employment Research IAB (Nurnberg, Germany)); Uschi Backes-Gellner (University of Zurich)
    Abstract: This paper summarizes results of a project that tries to examine how the revision of vocational training (apprenticeship) curricula affects the training behavior and investment decision of training companies. The project paid particular attention to IT-related changes in curricula and firms' investments in IT and new production technology. Unfortunately, based on the available dataset, the German Linked-Employer-Employee-Data (LIAB), the project was not able to produce conclusive evidence on the expected relationship. We find first support for a positive correlation between curricula changes and the probability to invest in IT for training firms but with the small number of cases (occupational curricula changes) and the limited number of adequate dependent variables we did not find significant effects for most single occupations. In the following, however, we provide some descriptive patterns that shed light on what we do know and what we do not know.
    Keywords: vocational education and training, curricula change, technology diffusion
    JEL: I21 O33
    Date: 2018–05
  7. By: Andrea Garnero; François Rycx; Isabelle Terraz
    Abstract: How do firm-level collective agreements affect firm performance in a multi-level bargaining system? Using detailed Belgian linked employer-employee panel data, our findings show that firm agreements increase both wage costs and productivity (with respect to sector-level agreements). Relying on a recent approach developed by Bartolucci (2014), they also indicate that firm agreements exert a stronger impact on wages than on productivity, so that profitability is hampered. However, this rent-sharing effect only holds in manufacturing. In private sector services, the raw wage premium associated to firm agreements is entirely driven by compositional effects. Furthermore, estimates show that firm agreements lead to significantly more rent-sharing among firms operating in less competitive environments. Firm agreements are thus mainly found to raise wages beyond productivity when the rents to be shared between workers and firms are relatively big. Overall, this suggests that firm-level agreements benefit to both employers and employees – through higher productivity and wages – without being very detrimental to firms’ performance.
    Keywords: Collective bargaining; productivity; labour costs; linked panel data
    JEL: C33 J24 J31
    Date: 2018–06–04
  8. By: Fackler, Daniel; Fuchs, Michaela; Hölscher, Lisa; Schnabel, Claus
    Abstract: This paper analyzes whether startups offer job opportunities to workers potentially facing labor market problems. It compares the hiring patterns of startups and incumbents in the period 2003 to 2014 using administrative linked employer-employee data for Germany that allow to take the complete employment biographies of newly hired workers into account. The results indicate that young plants are more likely than incumbents to hire older and foreign applicants as well as workers who have instable employment biographies, come from unemployment or outside the labor force, or were affected by a plant closure. However, an analysis of entry wages reveals that disadvantageous worker characteristics come along with higher wage penalties in startups than in incumbents. Therefore, even if startups provide employment opportunities for certain groups of disadvantaged workers, the quality of these jobs in terms of initial remuneration seems to be low.
    Keywords: startups,young firms,employment,wages,linked employer-employee data
    JEL: J31 J63 L26 M51
    Date: 2018
  9. By: Tullio Buccellato (Economic Research Department, Confindustria); Giancarlo Corò (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The aim of our paper is to analyze the structural diversity of the European regions assuming the complexity of production spaces approach (Hidalgo C.A., B. Klinger, A.L. Barabási, R. Hausmann 2007). This stream of economic literature is the natural companion of the evolutionary theory of economics, where development is seen as the endogenous learning process led by the initial knowledge basis, which tends to expand in its proximity (Boschma 2005). The first step of our analysis is to map the EU regions according to their economic structure. We exploit information conveyed by Eurostat data, which are available for a balanced panel of 241 regions and 86 economic branches in 2010 and 2015. In this way we are able to construct a space characterized by technological proximity of regions. The underlying assumption is that territories with similar production structures display similar production knowledge. The second step is the construction of the network space based on the correlation matrix. In order to obtain the clusters of regions based on the similarity of their economic structure, we apply a modularity algorithm to the network. Such measures define groups based on the degree of connectedness of the observations between them and allows to measure how such groups explain the network connections using as benchmark a case in which edges where assigned randomly. Our findings suggest that regions, which are more dynamic in terms of structural change, are those with manufacturing capabilities located in Eastern European countries. Such regions were able to upgrade their competences towards more complex productions and this resulted also in a fast catch-up of their GDP per capita level with respect to other mid income regions in Western Europe. Most prosperous regions are found to be urban areas with developed creative service activities and in regions with advanced manufactures (machinery, automotive, electronics, etc.); whereas backwardness is detected in regions with a cumbersome weight of tourism related activities.
    Keywords: Regional Disparities, Growth, Structural Changes, relatedness
    JEL: O10 O25 P25 R10 L16
    Date: 2018
  10. By: Amparo Nagore Garcia (Luxembourg Institute of Socio-economic Research - LISER, Luxembourg); Mariacristina Rossi (Department of Management, University of Torino, Italy); Arthur van Soest (Department of Econometrics and Operations Research, Tilburg University, The Netherlands)
    Abstract: We investigate retirement decisions of the self-employed in the Netherlands using administrative data. We focus on the time period around which individuals reach the statutory retirement age (SRA, 65 years in most cases). After the statutory retirement age, each Dutch resident receives the Old Age State Pension annuity (AOW), providing an income at the subsistence level. Both the timing and the magnitude of this state pension are well known in advance. According to a standard leisure/consumption trade-off life cycle model, receiving AOW should therefore have no impact on labour supply choices. While employees often face the demand side restriction of mandatory retirement, this does not apply to the self-employed. We investigate whether retirement and earnings of the self-employed change at the SRA and whether any such changes vary with, e.g., the level of financial wealth. We find a peak in retirement when self-employed reach the SRA. The evidence suggests that the benchmark of retiring at 65 is acting as a driver, due to behavioural features like anchoring or a social norm.
    Keywords: Life cycle model, retirement decision, reference point, social norm.
    JEL: D91 D31 J26 L26
    Date: 2018–06
  11. By: Verdugo, Gregory (Université Paris 1 Panthéon-Sorbonne); Toma, Sorana (CREST (ENSAE))
    Abstract: Recent decades have seen a rapid increase in the share of non-European immigrants in public housing in Europe, which has led to concern regarding the rise of "ghettos" in large cities. Using French census data over three decades, we examine how this increase in public housing participation has affected segregation. While segregation levels have increased moderately on average, the number of immigrant enclaves has grown. The growth of enclaves is being driven by the large increase in non-European immigrants in the census tracts where the largest housing projects are located, both in the housing projects and the surrounding non-public dwellings. As a result, contemporary differences in segregation levels across metropolitan areas are being shaped by the concentration of public housing within cities, in particular the share of non-European immigrants in large housing projects constructed before the 1980s. Nevertheless, the overall effect of public housing on segregation has been ambiguous. While large projects have increased segregation, the inflows of non-European immigrants into small projects have brought many immigrants into census tracts where they have previously been rare and, thus, diminished segregation levels.
    Keywords: immigration, social housing, public housing, segregation, Europe, France
    JEL: J15 R31
    Date: 2018–05
  12. By: OLIVERA Javier
    Abstract: The present paper estimates pension wealth inequality among elderly households for 26 EU countries by exploiting cross-sections of the EU Statistics on Income and Living Conditions survey. To assess the role of life expectancy inequalities on pension wealth, this paper estimates life tables per educational level with auxiliary data in order to capture socio-economic status (SES). This procedure also distinguishes mortality estimates by sex, birth cohort, and year. The results indicate that differential mortality due to SES increases pension wealth inequality. In most of the countries, this effect has decreased between 2006 and 2014, which means that SES inequalities in mortality are less important in explaining today?s pension wealth inequality. Gini re-centered influence function (RIF) regressions confirm the diminishing influence of tertiary education on pension wealth inequality.
    Keywords: Pension wealth; Inequality; Europe; Mortality; Education; RIF regressions
    JEL: D31 H55 J14
    Date: 2018–06
  13. By: Cygan-Rehm, Kamila (University of Erlangen-Nuremberg); Kühnle, Daniel (University of Erlangen-Nuremberg); Riphahn, Regina T. (University of Erlangen-Nuremberg)
    Abstract: We examine how a paid parental leave reform causally affected families' living arrangements. The German reform we examine replaced a means-tested benefit with a universal transfer paid out for a shorter period. Combining a regression discontinuity with a difference-in-differences design, we find that the reform increased the probability that a newborn lives with non-married cohabiting parents. This effect results from a reduced risk of single parenthood among women who gained from the reform. We reject the economic independence hypothesis and argue that the reform effects for those who benefited from the reform are consistent with hypotheses related to the improved financial situation of new mothers after the reform and increased paternal involvement in childcare.
    Keywords: parental leave, living arrangements, marriage, cohabitation, single motherhood, child well-being, early childhood
    JEL: J12 J13 J18 I30
    Date: 2018–05
  14. By: Grinza, Elena (University of Milan); Rycx, Francois (Free University of Brussels)
    Abstract: We investigate the impact of sickness absenteeism on productivity by using rich longitudinal matched employer-employee data on Belgian private firms. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of the Ackerberg et al's (2015) control function method, which explicitly removes firm fixed effects. Our main finding is that, in general, sickness absenteeism substantially dampens firm productivity. An increase of 1 percentage point in the rate of sickness absenteeism entails a productivity loss of 0.24%. Yet, we find that the impact is much diversified depending on the categories of workers who are absent and across different types of firms. Our results show that sickness absenteeism is detrimental mainly when absent workers are high-tenure or blue-collar workers. Moreover, they show that sickness absenteeism is harmful mostly to industrial firms, high capital-intensive companies, and small- and medium-sized enterprises. This overall picture is coherent with the idea that sickness absenteeism is problematic when absent workers embed high levels of firm/task-specific (tacit) knowledge, when the work of absent employees is highly interconnected with the work of other employees (e.g., along the assembly line), and when firms face more limitations in substituting temporarily absent workers.
    Keywords: sickness absenteeism, firm productivity, semiparametric methods for estimating production functions, longitudinal matched employer-employee data
    JEL: D24 M59 I15
    Date: 2018–05
  15. By: Pohlan, Laura
    Abstract: This paper analyzes the economic and social consequences of job loss which contribute to exclusion from society based on German linked survey and administrative data. To study the causal relationship between unemployment and multiple dimensions of social marginalization, I combine inverse propensity score weighting with a difference-in-differences approach. The results suggest that job loss has particularly detrimental effects on the subjective perception of social integration, life satisfaction, the access to economic resources and mental health. Moreover, this paper shows that becoming unemployed hinders the fulfillment of psychosocial needs that are typically associated with working, such as social status and higher self-efficacy. The effects of job loss are long-lasting, growing more profound the longer the duration of unemployment and persisting following reemployment. Looking at effect heterogeneity, I find that having a partner and being highly educated reduces the negative effects of job loss.
    Keywords: job loss,unemployment,social exclusion,inverse probability weighting
    JEL: I31 J64
    Date: 2018
  16. By: Geyer, Johannes (DIW); Haan, Peter (DIW); Hammerschmid, Anna (DIW); Peters, Michael (DIW)
    Abstract: We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects on the individual and on the household level and we study the distributional implications using net household income. In this respect we extend the previous literature which mainly studied employment effects on the individual level. Our results show sizable labor market effects which strongly differ by subgroups. We document larger employment effects for women who cannot rely on other income on the household level, e.g. women with a low income partner. The distributional analysis shows on average no significant effects on female or household income. This result holds as well for heterogeneous groups: Even for the most vulnerable groups, such as single women, women without higher education, or low partner income, we do not find significant reductions in income. One reason for this result is program substitution.
    Keywords: retirement age; pension reform; labor supply; early retirement; distributional effects; spillover effects; household;
    JEL: J14 J18 J22 J26 H31
    Date: 2018–06–18
  17. By: Mantovani, Daniela
    Abstract: In empirical analysis, the Kakwani index is the most frequently used indicator for comparing progressivity across countries and over time. The Kakwani is often assumed to measure to what extent a policy design is targeted to the poor. It has, however, a major drawback: it is not defined for net tax incidence—that is, the whole system of taxes and benefits. Moreover, it is defined over different intervals for different pre-tax income distributions and different average tax rates. This paper proposes an extension to Kakwani index based on the concept of relative redistributive efficiency that is not affected by these drawbacks. The Redistributive Efficiency index was compared to the Kakwani index for taxes/benefits in EU countries by using Euromod baselines. In addition, the Redistributive Efficiency index was computed on the whole tax-benefit system; that is, taxes and benefits were evaluated together. Only Ireland and the UK combine high levels of redistributive efficiency with a relevant amount of tax revenues and social expenditures. They obviously obtain very high redistribution, above 15 points. Most of the countries considered show an intermediate level of redistribution (between 7 and 12 points), but with a different mix. A group of Central and Northern European countries plus Slovenia and Hungary combine medium levels of redistributive efficiency and medium size, while some Southern European countries (Spain and Portugal) and new members compensate a rather low amount of transfer and taxes with quite high levels of efficiency. The remaining new member states and Southern EU countries show a very low level of redistribution, below 7 points. Interestingly, they vary in the level of tax burden and of resources devoted to benefits but all of them show a poor Redistributive Efficiency. This suggests that low Redistributive Efficiency plays a key role in explaining why certain countries perform a limited amount of redistribution.Â
    Date: 2018–06–19
  18. By: Esther Mirjam Girsberger (University of Lausanne); Miriam Rinawi (Swiss National Bank); Matthias Krapf (University of Basel)
    Abstract: How skills acquired in vocational education and training (VET) affect wages and employment is not clear. We develop and estimate a search and matching model for workers with a VET degree. Workers differ in interpersonal, cognitive and manual skills, while firms require and value different combinations of these skills. Assuming that match productivity exhibits worker-job complementarity, we estimate how interpersonal, cognitive and manual skills map into job offers, unemployment and wages. We find that firms value cognitive skills on average almost twice as much as interpersonal and manual skills, and they prize complementarity in cognitive and interpersonal skills. The average return to VET skills in hourly wages is 9%, similar to the returns to schooling. Furthermore, VET appears to improve labour market opportunities through higher job arrival rate and lower job destruction. Workers thus have large benefits from acquiring a VET degree.
    Keywords: Occupational training, vocational education, labor market search, sorting, multidimensional skills
    JEL: E24 J23 J24 J64
    Date: 2018–06
  19. By: Alexander M. Danzer; Carsten Feuerbaum; Marc Piopiunik; Ludger Wößmann
    Abstract: Does a high regional concentration of immigrants of the same ethnicity affect immigrant children’s acquisition of host-country language skills and educational attainment? We exploit the exogenous placement of guest workers from five ethnicities across German regions during the 1960s and 1970s in a model with region and ethnicity fixed effects. Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children’s host-country language proficiency and increases school dropout. A key mediating factor for this effect is parents’ lower speaking proficiency in the host-country language, whereas inter-ethnic contacts with natives and economic conditions do not play a role.
    Keywords: immigrant children, ethnic concentration, language, education, guest workers
    JEL: J15 I20 R23 J61
    Date: 2018
  20. By: Rinne, Sonja
    Abstract: Are nuclear power plant outages in France contagious to the German electricity price? In the case of the extensive inspections from October 2016 to February 2017 in 12 French nuclear power plants: Yes. This capacity shock increased the French electricity spot market price by 14.15 Euros per MWh. The German-Austrian electricity spot market price was affected, with an increase of 1.72 Euros per MWh through cross-border trade. Hence, the current market integration between France and Germany to balance supply and demand in times of capacity shocks is limited. These results derive from a quasi-experimental approach based on coarsened exact matching. Thereby, the exogenous nature of the capacity shock is exploited as a random treatment in order to identify causal effects.
    Keywords: electricity price,electricity trade,nuclear power,market integration
    JEL: C21 F15 L94 Q41
    Date: 2018
  21. By: Juan S. Mora-Sanguinetti (Banco de España-Eurosystem); Rok Spruk (Faculty of Economics, university of Ljubljana–Laibach)
    Abstract: We exploit historical differences in foral law to consistently estimate the contribution of the quality of enforcement institutions to economic specialization across Spanish provinces in the period 1999-2014. The distribution of economic activity in Spain as of today shows a strong pattern of geographical specialization. Regions less specialized in manufacturing (industry) and oriented to services sectors (Andalusia, Extremadura) in the south are compared with industrialized/manufacturing regions in the north such as the Basque Country, Navarre or Aragon. We construct province-level congestion rates across three different jurisdictions (civil, labor and administrative) from real judicial data measuring the performance of the Spanish judicial system over time, and estimate the effect of judicial efficacy on the share of manufacturing and services in the total output. Using a variety of estimation techniques, the evidence unveils strong and persistent effects of judicial efficacy on province-level economic specialization with notable distributional differences. The provinces with a historical experience of foral law are significantly more likely to have more efficient enforcement institutions at the present day. In turn, greater judicial efficacy facilitates specialization in high-productivity manufacturing while greater judicial inefficacy encourages service-intensive specialization. The effect of judicial efficacy on economic specialization does not depend on confounders, holds across a number of specification checks and appears to be causal. Lastly, the three jurisdictions seem relevant to explain specialization, although the administrative jurisdiction appears to have a more pronounced impact than the labor or civil jurisdictions.
    Keywords: economic specialization, institutions, justice
    JEL: O1 K4
    Date: 2018–04
  22. By: Arvid Raknerud; Diana-Cristina Iancu (Statistics Norway); Øivind A. Nilsen
    Abstract: We analyse all the major sources of direct and indirect R&D subsidies in Norway in the period 2002- 2013 and compare their effects on individual firms’ performance. Firms that received support are matched with a control group of firms that did not receive support using a combination of stratification and propensity score matching. Changes in performance indicators before and after support in the treatment group are compared with contemporaneous changes in the control group. We find that the average effects of R&D support among those who obtained grants and/or subsidies are positive and significant in terms of performance indicators related to economic growth: value added, sales revenue and number of employees. The estimated effects are larger for start-up firms than incumbent firms when the effects are measured as relative effects (in percentage points), but smaller when these effects are translated into level effects. Finally, we do not find positive effects on return to total assets or productivity for firms who received support compared with the control group.
    Keywords: Public policy; Firm performance; Treatment effects; Stratification; Propensity score matching; Productivity
    JEL: C33 C52 D24 O38
    Date: 2018–06
  23. By: Noélie Delahaie (IRES - Institut de Recherches Economiques et Sociales - IRES); Coralie Perez
    Abstract: Since 2008 in France, the establishments implemented wage, employment and working time adjustments to deal with the effects of the economic crisis. This paper aims at understanding the way social actors have negotiated wage and employment adjustments. Did personal representatives influence managerial decisions in terms of adjustment? Were they involved in concessions bargaining? From a methodological point of view, we investigate the dynamism of concessions bargaining by relying on cross referencing of the REPONSE 2010-2011 survey (provided by French Ministry of Labour) on French industrial relations between 2008 and 2010 and of case studies conducted on French establishments between 2012 and 2014. Our analysis allows underlying different kinds of concession bargaining which depend on the nature of industrial relations and of the impact of economic downturn on companies' activity. We also show that concessions may have some more or less durable effects on the employment relation. Finally, our analysis sheds light on the implications of recent reforms in collective bargaining in France, which may facilitate unbalanced concession bargaining in favour of employer.
    Abstract: Pour faire face à la forte dégradation de la conjoncture économique depuis 2008 en France, les établissements ont procédé à des ajustements de l'emploi, des salaires et du temps de travail, de nature et d'ampleur variables. Dans un contexte de tensions accrues sur les relations sociales en entreprise, nous nous intéressons à la manière dont les ajustements sur l'emploi et les salaires ont été négociés. Les représentants du personnel ont-ils pu infléchir les décisions initialement prises ? Le cas échéant, des contreparties ont-elles été échangées ? L'exploitation statistique de l'enquête RESPONSE 2010-2011 combinée à des enquêtes de terrain menées dans des établissements en France, entre 2012 et 2014, met au jour des négociations de contreparties ayant des effets plus ou moins durables sur la relation d'emploi, et qui dépendent à la fois de l'état des relations sociales et de la nature (et de l'ampleur) de la crise. Nos analyses invitent à discuter les enjeux des évolutions récentes du cadre législatif en France, en ce qu'elles peuvent faciliter des négociations de contreparties déséquilibrées (en faveur des employeurs) et durablement concédées.
    Keywords: wages,employment,industrial relations,concession bargaining,flexibility,economic crisis,emploi,salaires,relations professionnelles,négociations de concession,flexibilité,crise économique
    Date: 2018–03
  24. By: Roberto Ramos (Banco de España); Carlos Sanz (Banco de España)
    Abstract: How do voters react to large shocks that are (mostly) outside the control of politicians? We address this question by studying the electoral effects of wildfires in Spain during 1983-2011. Using a difference-in-difference strategy, we find that a large accidental fire up to nine months ahead of a local election increases the incumbent party’s vote share by almost 8 percentage points. We find that a rally-behind-the-leader effect best explains the results. A simple formalization of this mechanism yields an implication – that the effect should be larger for stronger (more voted) incumbents – that is supported by the data.
    Keywords: voting behavior, rally behind the leader, difference-in-differences
    JEL: D72 D91
    Date: 2018–03
  25. By: Langer, Sebastian
    Abstract: This paper analyzes municipal expenditures in the light of horizontal fiscal interactions. I investigate total expenditures and a set of non-earmarked expenditure subcategories in the largest German federal state, North Rhine-Westphalia (NRW). The empirical analysis is based on a Spatial Durbin Model in a panel for the years 2009-2015. Using a two-regime spatial matrix, I also examine the impact of agglomeration on the intensity of public expenditure interactions, thus testing the hypothesis that an agglomerated region can decrease the amount of public goods without losing mobile factors to the periphery. The findings indicate that significant municipal expenditure interaction effects do exist. The reaction functions also vary for different expenditure subcategories. Unlike spillover effects and fiscal competition, yardstick competition is an insignificant source of potential interactions. Expenditure interaction is fiercer if there is less agglomeration in a municipality. Urbanized and populous municipalities appear to benefit from agglomeration economies, a fact that enables them to spend less. Robustness checks confirm the findings.
    Keywords: Local Government Expenditure,Spatial Regression Analysis,Expenditure Interaction
    JEL: C31 F12 F15 J31
    Date: 2018
  26. By: Bachmann, Ronald; Cim, Merve; Green, Colin
    Abstract: The past four decades have witnessed dramatic changes in the structure of employment. In particular, the rapid increase in computational power has led to large-scale reductions in employment in jobs that can be described as intensive in routine tasks. These jobs have been shown to be concentrated in middle skill occupations. A large literature on labour market polarisation characterises and measures these processes at an aggregate level. However to date there is little information regarding the individual worker adjustment processes related to routine-biased technological change. Using an administrative panel data set for Germany, we follow workers over an extended period of time and provide evidence of both the short-term adjustment process and medium-run effects of routine task intensive job loss at an individual level. We initially demonstrate a marked, and steady, shift in employment away from routine, middle-skill, occupations. In subsequent analysis, we demonstrate how exposure to jobs with higher routine task content is associated with a reduced likelihood of being in employment in both the short term (after one year) and medium term (five years). This employment penalty to routineness of work has increased over the past four decades. More generally, we demonstrate that routine task work is associated with reduced job stability and more likelihood of experiencing periods of unemployment. However, these negative effects of routine work appear to be concentrated in increased employment to employment, and employment to unemployment transitions rather than longer periods of unemployment.
    Keywords: polarization,occupational mobility,worker flows,tasks
    JEL: J23 J24 J62 E24
    Date: 2018
  27. By: Morales, Marina
    Abstract: The aim of this paper is to analyze whether the composition of the household during adolescence may be an important determinant of their future unemployment in Spain. To address this issue, we follow the Quantity-Quality model of Becker-Lewis (Becker and Lewis, 1973), using data from the Survey of Living Conditions (2011). Results show that individuals living with both parents at home during their teenage years are less likely to be unemployed in the future.
    Keywords: Household composition, Unemployment, Labor Market, Spain
    JEL: D10 E24 I32
    Date: 2018–05–17
  28. By: Simona De Lauretis (EDF - EDF); Frédéric Ghersi (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Jean-Michel Cayla (EDF - EDF)
    Abstract: Household lifestyles, and activity patterns in particular, greatly influence household energy use. In this paper we analyse the disparities in current activity patterns and related energy consumptions and expenditures of households, for a comprehensive set of everyday activities covering 24 h. Thanks to detailed data on energy consumption by end use, we are able to allocate the total of household energy consumptions to the appropriate activities. We comment on average energy and expenditure intensities of time uses of the total population as well as of income, household-composition and housing-type subgroups. Income, an obvious driver of energy and expenditure intensities, is revealed to influence time use as well. Household composition and housing type are also associated with substantial variations in activity patterns and in the energy and expenditure intensities of activities, even within a given income group. Indeed, sometimes the variations associated with income are smaller than the variations associated with other variables. We therefore underline the importance of household disaggregation in household energy analyses, to properly account for such disparities.
    Keywords: time use,household consumption,energy consumption,household heterogeneity
    Date: 2017
  29. By: Veit, Susanne; Yemane, Ruta
    Abstract: The Arbeitsmarktdiskriminierung "ADIS" project is a large scale correspondence study that was conducted in Germany between October 2014 and April 2016 with the aim to study labor market discrimination against second generation immigrants. In particular, the experiment was designed for two purposes: First, to decompose drivers of ethnic discrimination in the labor market and to understand the role of phenotype, country of origin, and religion in order to explain ethnic hierarchies; and second, to test economic theories of taste-based and statistical discrimination models, in order to explain discriminatory hiring decisions. Previous studies on ethnic labor market discrimination have provided strong evidence of its occurrence, but provide limited insight into the mechanisms behind it and the causes of variation in rates of discrimination against different ethnic, racial, and religious groups. In this report we describe our multidimensional design that tests rates of discrimination across 35 ethnic groups, for which we vary productivity relevant information (such as grades and reference letters) as well as phenotype and religious background of the applicants. The study is based on applications to 7,557 job vacancies with male and female applicants in eight professions across Germany. In this technical report we will discuss our research design in depth and give detailed insight into the implementation of the study and the challenges during data collection, with a main focus on the choice of the individual treatments and how they were operationalized.
    Date: 2018
  30. By: Fox, Jonathan; Klüsener, Sebastian; Myrskylä, Mikko
    Abstract: Evidence for nation-states suggests that the long-standing negative relationship between fertility and economic development might turn positive at high levels of development. The robustness of the reversal continues to be debated. We add to this discussion from a novel angle by considering whether such a reversal could also occur at the sub-national level within highly developed countries. Our contributions are both theoretical and empirical. We first discuss important trends which might foster the emergence of a positive fertility–development relationship across regions of highly developed countries. These include shifts in family policies, changes in the spatial organisation of the economic sphere, and selective international and internal migration processes. In order to explore whether we observe tendencies towards a reversal, we investigate data covering 20 European countries subdivided in 256 regions between 1990 and 2012. We document a weakening of the negative relationship between fertility and economic development within many countries, and among some countries the emergence of a positive relationship. These findings do not seem to be driven by postponement effects alone. However, there is substantial variation in the fertility and the eco
    Keywords: fertility; income; economic development; sub-national regions; regional variations; Europe
    JEL: N0
    Date: 2018–05–08
  31. By: Jean Belin (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Marianne Guille (UP2 - Université Panthéon-Assas); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Mérindol Valérie (PSB - Paris School of Business)
    Abstract: The structural changes inside the French innovation system have impacted the role of defense firms since the late 1980s. Major changes have affected the defense budget and public R&D funding system in particular. The aim of this article is to understand French defense firms' repositioning within the National Innovation System (NIS) based on an analysis of their R&D behavior over a long period of time (1987 to 2010). We show that French defense firms remain major players in the NIS and faced up to these major changes by adapting the funding of their R&D and their research priorities and rolling out new innovation capabilities. Additionally, they developed new innovation models to take advantage of new collaborative partnerships developed for civil and military markets. JEL classification: G32, 032
    Keywords: Defense firms,System of innovation,R&D
    Date: 2018
  32. By: Lindqvist, Erik (Department of Economics); Östling, Robert (Institute for International Economic Studies); Cecarini, David (Department of Economics)
    Abstract: We surveyed a large sample of Swedish lottery players about their psychological well-being and analyzed the data following pre-registered procedures. Relative to matched controls, large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating with time. The estimated treatment effects on happiness and mental health are significantly smaller, suggesting that wealth has greater long-run effects on evaluative measures of well-being than on affective ones. Follow-up analyses of domain-specific aspects of life satisfaction clearly implicate financial life satisfaction as an important mediator for the long-run increase in overall life satisfaction.
    Keywords: Psychological Well-being; Subjective Well-being; Happiness
    JEL: D69 I31
    Date: 2018–06–18
  33. By: James Banks; Carl Emmerson; Gemma Tetlow
    Abstract: We document employment rates of older men and women in the UK over the last forty years. In both cases growth in employment since the mid 1990s has been stronger than for younger age groups. On average, older men are still less likely to be in work than they were in the mid 1970s although this is not true for those with low education. We highlight issues with using years of schooling as a measure of educational achievement for analysing labour market trends at older ages, not least because a large proportion of men who left school at young ages without any formal qualifications, have subsequently acquired some. Reforms – such as the abolition of the earnings test and rises in the female State Pension Age, have pushed up employment rates. But other factors – such as the shift from defined benefit to defined contribution pensions being offered by private sector employers and the growth in employment rates at younger ages among successive cohorts of women – are also important. We discuss the role of other cohort and economy-wide trends, highlighting that the proportion of older men and women employed in professional, managerial and technical occupations has been particularly strong.
    JEL: H55 J26
    Date: 2018–05
  34. By: Lippmann, Quentin (Paris School of Economics); Senik, Claudia (Paris School of Economics)
    Abstract: This paper argues that the socialist episode in East Germany, which constituted a radical experiment in gender equality in the labor market and other instances, has left persistent tracks on gender norms. We focus on one of the most resilient and pervasive gender gaps in modern societies: mathematics. Using the German division as a natural experiment, we show that the underperformance of girls in math is sharply reduced in the regions of the former GDR, in contrast with those of the former FRG. We show that this East-West difference is due to girls' attitudes, confidence and competitiveness in math, and not to other confounding factors, such as the difference in economic conditions or teaching styles across the former political border. We also provide illustrative evidence that the gender gap in math is smaller in European countries that used to be part of the Soviet bloc, as opposed to the rest of Europe. The lesson is twofold: (1) a large part of the pervasive gender gap in math is due to social stereotypes; (2) institutions can durably modify these stereotypes.
    Keywords: gender gap in math, institutions, German division, gender stereotypes
    JEL: I2 J16 J24 P36 Z13
    Date: 2018–05

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