nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒09‒10
thirty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Skills heterogeneity and immigrants-native wage gap in European countries By Tiiu Paas; Maryna Tverdostup
  2. Feeling Useless: The Effect of Unemployment on Mental Health in the Great Recession By Farre, Lidia; Fasani, Francesco; Mueller, Hannes Felix
  3. Unfairness at work: Well-being and quits By Conchita D’Ambrosio; Andrew E. Clark; Marta Barazzetta
  4. Who Benefits from Universal Child Care? Estimating Marginal Returns to Early Child Care Attendanc By Thomas Cornelissen; Christian Dustmann; Anna Christina Raute; Uta Schönberg
  5. Contribution of child maintenance on lone mothers’ income in five welfare states By Mia Hakovirta; Merita Jokela
  6. Protecting the Swiss milk market from foreign price shocks: Public border protection vs. quality differentiation By Hillen, J.
  7. Has the Economic Crisis Worsened the Work-Related Stress and Mental Health of Temporary Workers in Spain? By Bartoll, Xavier; Gil, Joan; Ramos, Raul
  8. Russian food embargo and the lost trade By Cheptea, Angela; Gaigné, Carl
  9. Underemployment in the US and Europe By David N.F. Bell; David G. Blanchflower
  10. Organised Decentralisation of Collective Bargaining: Case studies of Germany, Netherlands and Denmark By Christian Lyhne Ibsen; Maarten Keune
  11. The Politics of Aging and Retirement: Evidence from Swiss Referenda By Piera Bello; Vincenzo Galasso
  12. European Funds and Firm Dynamics: Estimating Spillovers from Increased Access By Pereira dos Santos, João; Tavares, José
  13. Measuring unfair inequality: Reconciling equality of opportunity and freedom from poverty By Paul Hufe; Ravi Kanbur; Andreas Peichl
  14. Top incomes and income dynamics from a gender perspective: Evidence from Finland 1995-2012 By Terhi Ravaska
  15. Educational Inequality and Public Policy Preferences: Evidence from Representative Survey Experiments By Philipp Lergetporer; Katharina Werner; Ludger Wößmann
  16. Redistribution through Income Taxation and Public Utility Pricing in the Presence of Energy Efficiency Considerations By Fabian Feger; Doina Radulescu
  17. Does social isolation affect medical doctor visits? New evidence among European older adults By David Cantarero-Prieto; Marta Pascual-Sáez; Carla Blázquez-Fernández
  18. History Dependence in the Housing Market By Philippe Bracke; Silvana Tenreyro
  19. How Demanding Are Activation Requirements for Jobseekers? By Immervoll, Herwig; Knotz, Carlo
  20. A simple subgroup decomposable measure of downward (and upward) income mobility By Elena Bárcena; Olga Cantó
  21. Are Renewables Profitable in 2030? A Comparison between Wind and Solar across Europe By Bertsch, Valentin; Di Cosmo, Valeria
  22. Motivated to Succeed? Attitudes to Education among Native and Immigrant Pupils in England By Burgess, Simon; Heller-Sahlgren, Gabriel
  23. Design of insolvency regimes across countries By Muge Adalet McGowan; Dan Andrews
  24. Paying for Efficiency: Incentivising same-day discharges in the English NHS By James Gaughan; Nils Gutacker; Katja Grasic; Noemi Kreif; Luigi Siciliani; Andrew Street
  25. Demand behaviour in Spain during the last three decades: What is the ideal microeconomic model to represent consumer preferences? By García, Lucia
  26. Gender Grading Bias at Stockholm University: Quasi-Experimental Evidence from an Anonymous Grading Reform By Jansson, Joakim; Tyrefors, Björn
  27. Trade-Induced Skill Polarization By Gu, Grace; Malik, Samreen; Pozzoli, Dario; Rocha, Vera
  28. Occupations, Skills and Barriers to Labor Reallocation By Georg Duernecker; Berthold Herrendorf
  29. Improving Tax Literacy and Tax Morale of Young Adults By Phillis Alexander; Merima Balavac; Suranjita Mukherjee; Andrew Lymer; David Massey
  30. Top incomes and inequality measurement: A comparative analysis of correction methods using the EU-SILC data By Vladimir Hlasny; Paolo Verme
  31. The Carbon `Carprint' of Suburbanization: New Evidence from French Cities By Blaudin de Thé, Camille; Carantino, Benjamin; Lafourcade, Miren
  32. Entrepreneurship and Job Satisfaction: The Role of Age By Michael Fritsch; Alina Sorgner; Michael Wyrwich

  1. By: Tiiu Paas (University of Tartu); Maryna Tverdostup (University of Tartu; Innsbruck University)
    Abstract: Theoretical background and aim of the study. Theoretical framework for studying immigrants-native wage gap relies on the classical human capital theory, stating that differences in individuals? education and skills transmit into wage. Due to a lack of appropriate data, previous studies mostly approximated human capital with formal education to measure wage gap and occupation-qualification match. This paper aims to extend the knowledge on how individuals? skills and, particularly their use in European labour markets, contribute to the immigrants-native wage gap. This knowledge can contribute to the policy debate on the immigrants? integration in the host labour markets by offering a novel evidence on immigrants? skill profiles and their current (under)use in the European labour markets. Data and methodology. Empirical part of the study bases on the OECD Program of International Assessment of Adult Competencies (PIAAC) data. We implement the multivariate regression analysis in the pooled and country specific samples. To precisely measure the individual human capital, we incorporate a formal education, literacy and numeracy skills, as well as the extent of cognitive skills use at work and in everyday life. Empirical results. On average, foreign-born respondents achieve substantially worse scores in literacy and numeracy skills, comparing to natives. Only highly educated immigrants reveal skill improvement over immigration tenure. There are systematic and statistically significant differences in skill application at work across immigrants and natives. Although, once immigrants attain comparable to natives? skill use frequency, their pay disadvantage turns statistically insignificant, even among low and medium educated foreign-born. To further support the robustness of the results, we present the effects of immigration tenure on skill level and replicate the immigrant wage gap analysis in country-specific samples. Conclusions and policy implications. The estimation results are stable leading us to the conclusion that potential for development and utilization of immigrants? human capital is still underused in the European labour markets. This suggest that an underuse of immigrants? skills and competencies is an important dimension of the immigrants? integration issue. The policy measures, having a potential to foster immigrants? skill use, include: development of the institutional framework improving qualified immigrants access to more challenging and highly rewarded jobs; improving the information system allowing immigrants to be better familiar with local labour markets; avoiding possible reasons for labour and housing markets? segregation; supporting socio-cultural integration of people with different ethnical background.
    Keywords: human capital, immigrants-native wage gap, PIAAC, European countries
    JEL: J21 J24 O15
    Date: 2018–07
  2. By: Farre, Lidia; Fasani, Francesco; Mueller, Hannes Felix
    Abstract: This article documents a strong connection between unemployment and mental distress using data from the Spanish National Health Survey. We exploit the collapse of the construction sector to identify the causal effect of job losses in different segments of the Spanish labour market. Our results suggest that an increase of the unemployment rate by 10 percentage points due to the breakdown in construction raised reported poor health and mental disorders in the affected population by 3 percentage points, respectively. We argue that the size of this effect responds to the fact that the construction sector was at the centre of the economic recession. As a result, workers exposed to the negative labor demand shock faced very low chances of re-entering employment. We show that this led to long unemployment spells, stress, hopelessness and feelings of uselessness. These effects point towards a potential channel for unemployment hysteresis.
    Keywords: great recession; hysteresis; mental health; unemployment
    JEL: C26 I10 J60
    Date: 2018–08
  3. By: Conchita D’Ambrosio (Université du Luxembourg); Andrew E. Clark (Paris School of Economics - CNRS); Marta Barazzetta (Université du Luxembourg)
    Abstract: We here consider the effect of the level of income that individuals consider to be fair for the job they do, which we take as measure of comparison income, on both subjective well-being and objective future job quitting. In six waves of German Socio-Economic Panel data, the extent to which own labour income is perceived to be unfair is significantly negatively correlated with subjective well-being, both in terms of cognitive evaluations (life and job satisfaction) and affect (the frequency of feeling happy, sad and angry). Perceived unfairness also translates into objective labour-market behaviour, with current unfair income predicting future job quits.
    Keywords: Fair income, subjective well-being, quits, SOEP.
    JEL: D63 J28 J31
    Date: 2018–02
  4. By: Thomas Cornelissen; Christian Dustmann; Anna Christina Raute; Uta Schönberg
    Abstract: In this paper, we examine the heterogeneous treatment effects of a universal child care (preschool) program in Germany by exploiting the exogenous variation in attendance caused by a reform that led to a large staggered expansion across municipalities. Drawing on novel administrative data from the full population of compulsory school entry examinations, we find that children with lower (observed and unobserved) gains are more likely to select into child care than children with higher gains. This pattern of reverse selection on gains is driven by unobserved family background characteristics: children from disadvantaged backgrounds are less likely to attend child care than children from advantaged backgrounds but have larger treatment effects because of their worse outcome when not enrolled in child care.
    Keywords: universal child care, child development, marginal treatment effects
    JEL: J13 J15 I28
    Date: 2018
  5. By: Mia Hakovirta; Merita Jokela
    Abstract: This study uses the Luxembourg Income Study (LIS data) from 2013 to study 1) the contribution of child maintenance to the income packages of lone mothers, 2) the proportion of lone mothers receiving child maintenance and the level of child maintenance for those receiving it, and 3) the extent to which child maintenance is helping families that may need it the most (those at the low end of the income distribution), compared with families with moderate or higher incomes. Our analysis covers data from five countries: Finland, Germany, Spain, UK and the USA. Our results show that in all countries except the UK, labour income is an important source of income for lone mothers and less than 40 percent of income comes from social transfers. Child maintenance contributes significantly to the income of lone mothers, particularly in Spain, followed by the USA and Germany. We find the highest coverage of child maintenance receipt in Finland. In the other countries, only one third of lone mother households receive child maintenance. The median amounts of maintenance are the lowest in the UK and Finland but there is great variation in the level of child maintenance within countries. The comparison of the quintile groups reveals that in the USA the lone mothers in lowest income quintile do not seem to benefit as much from child maintenance compared with the highest income quintiles, whereas in Finland, Germany and Spain more lone mothers in the low-income quintiles receive maintenance. However, amounts are quite equal across income quintiles.
    Date: 2018–08
  6. By: Hillen, J.
    Abstract: In Switzerland, a number of different border protection policies are in place for dairy products as a result from stepwise market opening. While dairy products such as butter and milk powder are still subject to tariffs and tariff rate quotas, cheese trade with the EU is fully liberalized. It is not well-understood how such different types and levels of protection affect spatial price transmission for the respective products and the underlying raw milk. Therefore, we analyze price transmission between Germany and Switzerland for several dairy products at the wholesale level, and for raw milk producer prices. We find that not the degree of public border protection and the resulting trade volumes determine the degree and speed of spatial price transmission, but rather the qualitative differentiation of the Swiss products. While prices of tariff-protected dairy products are influenced by German price developments, cheese prices are not. Also at the producer level, raw milk prices for cheese processing are less strongly linked to foreign prices than milk prices for industrial dairy production. Our results suggest that for small high-income countries such as Switzerland, promoting high-quality products and hence reducing international substitutability alleviates international price pressure more than public protectionism via tariffs.
    Keywords: Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries
    Date: 2018–07
  7. By: Bartoll, Xavier (University of Barcelona); Gil, Joan (University of Barcelona); Ramos, Raul (University of Barcelona)
    Abstract: This paper analyses the causal effects of temporary employment on work-related stress and mental health before (2006/07) and during the economic crisis (2011/12) and examines whether the economic recession worsened these two health outcomes. To control for selection bias, propensity scores (PS) are computed separately for men and women using microdata from two cross-sectional surveys, considering temporary (treatment group) versus permanent employment (control group). Next, we use difference-in-differences estimators stratifying by age, education level, and regional unemployment differences using PS as weights. Our results indicate that a male salaried worker with a temporary labour contract tends to have lower levels of work-related stress in the pre-crisis period, but not for women. The stratification analysis shows lower work-related stress levels among older male adults, workers with a high education level, and employees in regions with high unemployment rates. The economic crisis is responsible for increasing stress only among older temporary workers and male university graduates, without affecting women. We also see evidence of a positive link between temporary employment and poor mental health in both periods, although only for men. We neither find significant impacts for our sample of men or women, nor for most of our population subgroups with the exception of male workers with a university degree.
    Keywords: temporary employment, economic crisis, work-related stress, mental health, propensity score weighting
    JEL: I10 J41 J28
    Date: 2018–07
  8. By: Cheptea, Angela; Gaigné, Carl
    Abstract: We analyse the impact of the Russian food embargo on European and Russian trade patterns using a triple-difference estimation strategy. We quantify the effects on the value of trade, the trade price of products covered by the ban, and the new trade flows generated by the ban. Our results point to an average e 125 million loss in monthly EU28 exports to Russia due to the ban (with Lithuania, Poland, and Germany bearing the largest losses). However, only 45% of the drop in EU28 exports of banned products to Russia would be due to the ban. In addition, EU products banned from the Russian market were sold elsewhere at lower prices. The reorientation of EU exports to other markets translated into selling larger amounts to old trade partners, as well as in accessing new markets. EU member states were unevenly affected by the ban. Germany and Poland compensated their large losses on the Russian market by a strong increase in exports to other trade partners (mostly intra-EU), at the expense of other EU acountries, such as France and Denmark.
    Keywords: International Relations/Trade
    Date: 2018
  9. By: David N.F. Bell; David G. Blanchflower
    Abstract: Large numbers of part-time workers around the world, both those who choose to be part-time and those who are there involuntarily and would prefer a full-time job report they want more hours. Full-timers who say they want to change their hours mostly say they want to reduce them. When recession hit in most countries the number of hours of those who said they wanted more hours, rose sharply and there was a fall in the number of hours that full-timers wanted their hours reduced by. Even though the unemployment rate has returned to its pre-recession levels in many advanced countries, underemployment in most has not. We produce estimates for a new, and better, underemployment rate for twenty-five European countries. In most underemployment remains elevated. We provide evidence for the UK and the US as well as some international evidence that underemployment rather than unemployment lowers pay in the years after the Great Recession. We also find evidence for the US that falls in the home ownership rate have helped to keep wage pressure in check. Underemployment replaces unemployment as the main influence on wages in the years since the Great Recession.
    JEL: J21 J3
    Date: 2018–08
  10. By: Christian Lyhne Ibsen; Maarten Keune
    Abstract: This paper investigates different varieties of so called organised decentralisation of collective bargaining in Germany, the Netherlands and Denmark. Organised decentralisation occurs within the framework of sector agreements, which explicitly allow determination of terms and conditions at company level, and often set certain (minimum) level standards as well as procedure that have to be respected. German decentralisation is based on its dual-channel system and extensive use of opening clauses, which make workplace derogation from sector-level agreements possible. Dutch decentralisation is based on the dual-channel system and on framework agreements that allow company level bargaining as long as minimum stipulations are observed. Finally, Denmark combines a single-channel system with framework agreements setting minimum levels. Germany stands out as the least organised of the three. Opening and derogation clauses mean that terms and conditions in multi-employer agreements can be undercut. Vertical control over these derogations has suffered from the dual-channel representation in which works councils have a new role. The Netherlands exhibit some, very limited, elements of disorganisation and stable bargaining coverage. Decentralisation has mainly happened through framework agreements setting minimum levels or through the organised transfer of competencies to works councils. The Danish system leaves a lot of scope for local bargaining, the minimum levels are generally observed and bargaining coverage has not suffered. Based on these findings, we draw the conclusion that organised decentralisation requires articulation that preserves a regulatory function of multi-employer agreements. Preservation of multi-employer agreements in turn requires high bargaining coverage.
    JEL: J3 J52 J81
    Date: 2018–09–04
  11. By: Piera Bello; Vincenzo Galasso
    Abstract: Aging creates financial troubles for PAYG pension systems, since the share of retirees to workers increases. An often advocated policy response is to increase retirement age. Ironically, however, the political support for this policy may actually be hindered by population aging. Using Swiss administrative voting data at municipal level (and individual survey data) from pension reforms referenda, we show in fact that individuals close to retirement tend to oppose policies that postpone retirement, whereas young and elderly individuals are more favorable. The current process of population aging, and the associated increase in the size of the cohort of individuals close to retirement, may partially explain why a pension reform, which increased retirement age for females, was approved in two referenda in 1995 and 1998, while a reform, which proposed a similar increase in female retirement age, was defeated in a 2017 referendum.
    Keywords: social security reforms, voting behavior, retirement age
    JEL: H55 D72 J18
    Date: 2018
  12. By: Pereira dos Santos, João; Tavares, José
    Abstract: We take advantage of a quasi-natural experiment to assess the impact of European funds on firm dynamics in regions that, while not having their status changed, saw their neighbours increased access to European funds. Causality is established in a difference-in-differences intention to treat setting, using a rich dataset that considers the universe of Portuguese mainland municipalities from 2003 to 2010, and controlling for socio-economic, political and demographic variables. Our findings suggest a causal impact of between 1 and 2 percent in private sector firms´ entry and net entry rates, while we find no impact on firm exit rates. We consider time and space placebos to assure the reliability of our estimates. Our findings suggest that EU regional funds have a greater impact in times of distress, such as the world economic crisis, as far as entry rates are concerned. The analysis of the cross-section of firm demonstrates it is domestic owned micro firms in the primary and tertiary sectors that are most impacted by regional funds.
    Keywords: European funds; firm creation; municipalities.; quasi-natural experiment
    JEL: C21 R10
    Date: 2018–07
  13. By: Paul Hufe (ifo Munich and LMU Munich); Ravi Kanbur (Cornell University); Andreas Peichl (ifo Munich, LMU Munich, IZA and CESifo)
    Abstract: Rising income inequalities are widely debated in public and academic discourse. In this paper, we contribute to this debate by proposing a new family of measures of unfair inequality. To do so, we acknowledge that inequality is not bad per se, but that its underlying sources need to be taken into account. Thereby, this paper is the first to reconcile two prominent fairness principles, namely equality of opportunity and freedom from poverty, into a joint measure of unfair inequality. Two empirical applications provide important new insights on the development of unfair inequality both over time (in the US) and across countries (in Europe). First, unfair inequality shows different time trends and country rankings compared to total inequality. Second, average unfair inequality doubles when complementing the ideal of an equal opportunity society with poverty aversion. Furthermore, we show that an exclusive focus on top incomes may misguide fairness judgments.
    Keywords: Inequality, equality of opportunity, poverty, fairness, measurement.
    JEL: D31 D63 I32
    Date: 2018–06
  14. By: Terhi Ravaska (University of Tampere and Labour Institute for Economic Research, Finland)
    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 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
  15. By: Philipp Lergetporer; Katharina Werner; Ludger Wößmann
    Abstract: To study how information about educational inequality affects public concerns and policy preferences, we devise survey experiments in representative samples of the German population. Providing information about the extent of educational inequality strongly increases concerns about educational inequality but only slightly affects support for equity-oriented education policies, which is generally high. The small treatment effects are not due to respondents’ failure to connect policies with educational inequality or aversion against government interventions. Support for compulsory preschool is the one policy with a strong positive information treatment effect, which is increased further by informing about policy effectiveness.
    Keywords: inequality, education, information, survey experiment
    JEL: D30 H52 I24 H11 D63 D83 D72 P16
    Date: 2018
  16. By: Fabian Feger; Doina Radulescu
    Abstract: Many OECD countries such as the USA, the UK or Switzerland are concerned with the affordability of utility services and the distributional consequences inherent in the pricing strategy of basic goods and services, such as electricity. However, the effectiveness of the electricity tariff as a redistribution device is questionable in the presence of a progressive income tax schedule. To shed light on this controversy, we structurally estimate a model that combines public utility pricing and income taxation. We employ a large panel data set on about 105,000 households in the Swiss Canton of Bern from 2008 to 2013, including detailed energy consumption and household income and tax payment characteristics. While the theoretical model predicts that electricity prices should be subsidised in the presence of purely income redistribution concerns, we find a positive mark-up of 49%, in our data. This suggests that, in practice, the government is concerned with energy conservation as well as income redistribution.
    Keywords: redistribution, public utility pricing, energy, asymmetric information
    JEL: D12 D31 H21 H23 H24 L94 L98
    Date: 2018
  17. By: David Cantarero-Prieto; Marta Pascual-Sáez; Carla Blázquez-Fernández
    Abstract: We have used panel data (2004-2015) from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the impact of social isolation on general practitioner health care use. Socio-demographic, health and social isolation measures are analysed. Differences by welfare regimes have been also considered. Using two definitions of social isolation (Alone and Help), we have found that a sizeable proportion of those aged 50 years and older in Europe reported social isolation. Differences by welfare regimes are highlighted. Our findings provide several implications in current debates on the sustainability of welfare states.
    Keywords: Europe; aging; social isolation; health care utilization; SHARE; count data models.
    JEL: I10 I19
    Date: 2018–08
  18. By: Philippe Bracke; Silvana Tenreyro
    Abstract: Using data on the universe of housing transactions in England and Wales over a twenty-year period, we document a robust pattern of history dependence in housing markets. Sale prices and selling propensities are affected by house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence complementing our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that cognitive and financial frictions explain the history dependence in the data. Both contributed to the collapse and slow recovery of the volume of housing transactions in the post-crisis period.
    Keywords: housing market, fluctuations, down-payment effects, reference dependence, anchoring, loss aversion
    JEL: E30 R21 R31
    Date: 2018–08
  19. By: Immervoll, Herwig (OECD); Knotz, Carlo (Bremen International Graduate School of Social Sciences)
    Abstract: This paper presents new information on activity-related eligibility criteria for unemployment and related benefits in OECD and EU countries in 2017, comparing the strictness of "demanding" elements built into unemployment benefits across countries and over time. Eligibility criteria for unemployment benefits determine what claimants need to do to successfully claim benefits initially or to continue receiving them. Benefit systems feature specific rules that define the type of job offers that claimants need to accept, requirements for reporting on the outcomes of independent job-search efforts, obligations to participate in active labour market programmes, as well as sanctions for failing to meet these requirements. Such rules aim to strengthen incentives to look for, prepare for, and accept employment. They may also be used as a targeting device to reduce demands on benefit systems, and on associated employment services. While this may serve to limit support to genuine jobseekers, strict requirements can also exclude some intended recipients from financial and re-employment support, e.g., by discouraging them from applying. This paper presents detailed information on policy rules in 2017, summarises them into an overall policy indicator of eligibility strictness, and gauges recent policy trends by documenting changes in the strictness measures. A novelty is the inclusion of lower-tier unemployment or social assistance benefits in the compilation of policy rules. Results document a large number of reforms enacted after the Great Recession and suggest a slight convergence of policy rules across countries even though overall measures of the strictness of activity-related eligibility criteria have remained broadly unchanged during the recent past. In countries with multiple layers of support for the unemployed, availability requirements tend to be more demanding for lower-tier assistance benefits, while sanction rules tend to be more stringent for first-tier programmes.
    Keywords: unemployment benefits, activation, targeting, incentives, job-search
    JEL: I38 J08 J68 J65
    Date: 2018–07
  20. By: Elena Bárcena (Universidad de Málaga and EQUALITAS); Olga Cantó (Universidad de Alcalá and EQUALITAS)
    Abstract: We propose a subgroup decomposable class of income mobility measures with good axiomatic properties by adapting the concept of “individual income gap between two moments in time” to a framework that is traditionally used in the measurement of poverty and deprivation. This framework is explicit in incorporating the necessary judgements about how to aggregate individual income gaps by making use of the indices with best normative properties within the poverty literature. This strategy allows us to provide intuitive and simple measures of downward (and upward) mobility that consider incidence, intensity and inequality of income gaps and are easy to comprehend and communicate to policy makers. Moreover, these measures are consistent with a simple and intuitive graphical device. As an empirical illustration of the use of this class of measures, we present an analysis of downward income mobility for different age groups in three EU countries using the European Union Survey of Income and Living Conditions (EUSILC) longitudinal data from 2004 up to 2015.
    Keywords: directional income mobility, decomposability, European Union.
    JEL: D31 D63 I30
    Date: 2018–07
  21. By: Bertsch, Valentin; Di Cosmo, Valeria
    Abstract: The European Union has set ambitious targets for emission reduction and the penetration of renewable energy, including the electricity generation sector as one of the major emitters of CO2. After a period of subsidy-driven investments, the costs of renewables decreased strongly making investments more attractive. Since European countries differ strongly in terms of natural resources, we analyse the profitability of wind onshore and offshore and solar PV across Europe to determine where it is optimal to invest in the future and to understand which factors drive the profitability of the investments. We use a power systems model to simulate the whole European electricity market in 2030. Using the renewable revenues determined by the model, we calculate the internal rate of return to analyse how profitable each technology is in each country. We find that investments in the considered technologies are not homogeneously profitable across Europe. This suggests that cooperation between European countries can be expected to achieve the overall targets at lower costs than nationally-driven approaches. We also find that in many countries, wind onshore and solar PV are profitable by 2030 in absence of any financial support. Wind offshore does not seem to be profitable without financial support.
    Keywords: Resource /Energy Economics and Policy
    Date: 2018–08–31
  22. By: Burgess, Simon (University of Bristol); Heller-Sahlgren, Gabriel (London School of Economics)
    Abstract: We study attitudes to education among English adolescents. Using PISA data, we show there is considerable variation in these attitudes depending on background: immigrant students have substantially and significantly more positive attitudes to school than native children, a difference that amounts to around 0.2 standard deviations. There is no difference between first- and second-generation immigrants, and the attitude gap does not appear to depend on particular schools' policies. We also show that students in London have more positive attitudes to education on average, but this is entirely accounted for by the distribution of children of immigrants in that city.
    Keywords: education, human capital, motivation, immigrants
    JEL: I21 I24
    Date: 2018–07
  23. By: Muge Adalet McGowan; Dan Andrews
    Abstract: This paper explores cross-country differences in the design of insolvency regimes, based on quantitative indicators constructed from countries’ responses to a recent OECD policy questionnaire. The indicators – which are available for 36 countries for 2010 and 2016 – aim to better capture the key design features of insolvency which impact the timely initiation and resolution of personal and corporate insolvency proceedings. According to these metrics, the design of insolvency regimes varies significantly across countries, with important differences emerging with respect to the treatment of failed entrepreneurs, the availability of preventative and streamlining tools and ease of corporate restructuring. While a comparison of indicator values for 2010 and 2016 imply that recent reform efforts have improved policy design, there remains much scope to reform insolvency regimes in many OECD countries. This is particularly significant in light of complementary analysis which shows that the design of insolvency regimes is relevant for understanding three inter-related sources of contemporary labour productivity weakness: the survival of “zombie” firms, capital misallocation and stalling technological diffusion.
    Keywords: capital misallocation, firm exit, personal and corporate insolvency, productivity, zombie firms
    JEL: D24 K35 O40 O43 O47
    Date: 2018–09–11
  24. By: James Gaughan (Centre for Health Economics, University of York, York, UK); Nils Gutacker (Centre for Health Economics, University of York, York, UK); Katja Grasic (Centre for Health Economics, University of York, York, UK); Noemi Kreif (Centre for Health Economics, University of York, York, UK); Luigi Siciliani (Department of Economics and Related Studies, University of York, York, UK); Andrew Street (Department of Health Policy, The London School of Economics and Political Science, UK)
    Abstract: We study a pay-for-efficiency scheme that encourages hospitals to admit and discharge patients on the same calendar day where clinically appropriate. Since 2010, hospitals in the English NHS receive a higher price for patients treated as same-day discharge than for overnight stays, despite the former being less costly. We analyse administrative data for patients treated for 191 conditions for which same-day discharge is clinically appropriate — of which 32 are incentivised — during 2006-2014. Using interrupted time series, differences-in-differences and synthetic control methods, we find that the policy generally had a positive effect on planned conditions with a statistically significant effect in about a third of conditions. The results are more mixed for emergency conditions. The median elasticity (across all 32 conditions) is 0.09 but above one for six conditions. Condition-specific design features explain some, but not all, of the differential responses.
    Keywords: Pay for Performance, Best Practice Tariff, day surgery, same-day discharge, policy evaluation
    JEL: D22 I11
    Date: 2018–08
  25. By: García, Lucia
    Abstract: This paper analyses the recent evolution of Spanish Consumption at the household level. The main aim is to study different models to discover how best to represent consumer preferences of Spanish households. Results show that the theoretical microeconomic model that best fits is the dynamic Rotterdam model, with homogeneity and symmetry restrictions imposed. Furthermore, it is possible to show how household spending has evolved in recent years. Our work will contribute to an understanding of the evolution of consumption, which represents around 60% of Spain’s GDP. We provide empirical evidence, with OECD data for 36 years, taking as a sample the years from 1980 to 2015. Our central objective is to show the level of consumption for three decades, allowing us to understand the degree of development, wellbeing, and growth of Spain,and to analyze in detail consumer preferences by showing results for income and price elasticities. This study tracks the evolution of income elasticities and the differences between direct and crossed price elasticities, as well as Marshallian and Hicksian price elasticities.
    Keywords: Consumption, Demand Models, Spain (1980-2015)
    JEL: D12 D13
    Date: 2018–07–15
  26. By: Jansson, Joakim (Stockholm University); Tyrefors, Björn (Research Institute of Industrial Economics (IFN))
    Abstract: In this paper, we first present novel evidence of grading bias against women at the university level. This is in contrast to previous results at the secondary education level. Contrary to the gender composition at lower levels of education in Sweden, the teachers and graders at the university level are predominantly male. Thus, an in-group bias mechanism could consistently explain the evidence from both the university and secondary education level. However, we find that in-group bias can only explain approximately 20 percent of the total grading bias effect at the university level.
    Keywords: Grading bias; University; Discrimination; Education; Anonymous grading
    JEL: I23 J16
    Date: 2018–08–21
  27. By: Gu, Grace; Malik, Samreen; Pozzoli, Dario (Department of Economics, Copenhagen Business School); Rocha, Vera (Department of Innovation, Copenhagen Business School)
    Abstract: We study how the skill distribution in an economy responds to changes in wage gaps induced by trade integration. Using administrative data for Denmark (1993-2012), we conduct a two-step empirical analysis. In the first step, we predict changes in wage gaps that are triggered by exogenous trade shocks. In the second step, we estimate the impact of such changes on the skill distribution. The main results for Denmark show that both the average and the standard deviation of skills increase as a result of trade integration. We then extend our analysis to Portugal, using its administrative data (1993-2012), to shed light on the potential role the labor market and education policy may play in establishing the feedback effect of trade on the skill distribution. Finally, we provide a theoretical intuition to rationalize both sets of results.
    Keywords: skill polarization; skill upgrading; trade integration and labor market frictions
    JEL: F16 J24
    Date: 2018–07–09
  28. By: Georg Duernecker (University of Munich); Berthold Herrendorf (Arizona State University)
    Abstract: We study the role that barriers to entry into occupations play for the reallocation of labor across sectors and for hours worked in the market in the US and Germany. We document that relative to the US, Germany has stricter degree requirements in many occupations and has lower employment shares in occupations in which it has stricter education requirements. We quantify the implications of such barriers to entry into occupation for labor market outcomes in an overlapping-generations model in which individuals choose their sector and occupation. We calibrate the model to match the US structural transformation and the changes in the distribution of the employment shares of occupations. We then feed the stricter German degree requirements into the otherwise unchanged model. We find that as a result Germans in the model work considerably fewer hours than Americans in the service sector in particular and in the market in general.
    Date: 2018
  29. By: Phillis Alexander (Department of Accounting, Finance and Economics, Bournemouth University); Merima Balavac (Univerzitiet u Sarajevu); Suranjita Mukherjee (Department of Accounting, Finance and Economics, Bournemouth University); Andrew Lymer (University of Birmingham); David Massey (University of Central Lancashire)
    Abstract: This research considers socio-demographic influences and the impact enhancements to financial and tax literacy may have on young adults’ tax morale. It also considers the subjects’ perceptions of tax compliance and tax administration. The results show that gender, tax tuition, and employment experience influence tax morale. Most of the 377 students surveyed thought the UK tax system is fair, but complex with personal tax rates that are too high. The majority also believe that a significant number of taxpayers cheat by paying less than they legally owe. The research shows the positive impact of focused tax tuition on university students in raising financial and tax literacy as well as an appreciation for public finance. While the researchers were unable to conclude enhanced literacy resulted in enhanced tax morale in this study, the results nevertheless demonstrated marginal improvements in this regard, thus warranting further research into causation. The researchers make several recommendations for further initiatives and enhancements to existing programmes in taxpayer education focused on young people before they leave school and enter the job market.
    Keywords: Income Tax; Tax Morale; Tax Law; Taxability; Tax Compliance
    JEL: K34
    Date: 2018–08
  30. By: Vladimir Hlasny (Ewha Womans University); Paolo Verme (World Bank)
    Abstract: It is sometimes observed and frequently assumed that top incomes in household surveys worldwide are poorly measured and that this problem biases the measurement of income inequality. This paper tests this assumption and compares the performance of reweighting and replacing methods designed to correct inequality measures for top income biases generated by data issues such as unit or item nonresponse. Results for the European Union’s Statistics on Income and Living Conditions survey indicate that survey response probabilities are negatively associated with income and bias the measurement of inequality downward. Correcting for this bias with reweighting, the Gini coefficient for Europe is revised upwards by 3.7 percentage points. Similar results are reached with replacing of top incomes using values from the Pareto distribution when the cut point for the analysis is below the 95th percentile. For higher cut points, results with replacing are inconsistent suggesting that popular parametric distributions do not mimic real data well at the very top of the income distribution.
    Keywords: Top incomes, inequality measures, survey nonresponse, Pareto distribution, parametric estimation, EU SILC.
    JEL: D31 D63 N35
    Date: 2018–04
  31. By: Blaudin de Thé, Camille; Carantino, Benjamin; Lafourcade, Miren
    Abstract: This paper investigates the impact of urban form on households' fuel consumption and car emissions in France. We analyze more particularly three features of cities commonly referred to as the `three D's' (Cervero and Kockelman, 1997): Density, Design and an innovative measure of Diversity. Individual data allow us to circumvent selection issues, as some households may live in a location consonant to their socioeconomic characteristics or travel predispositions, while instrumental variables help control for other endogeneity issues. The results suggest that, by choosing to live at the fringe of a metropolitan area instead of its city-center, our mean-sample household would bear an extra-consumption of approximatively six fuel tanks per year. More generally, doubling residential Density would result in an annual saving of approximatively two tanks per household, a gain that would be much larger if compaction were coupled with better Design (stronger jobs centralization, improved rail-routes or buses transiting to job centers and reduced pressure for road construction), and more Diversity (continuous morphology of the built-up environment). Another important finding is that the relationship between metropolitan population and car emissions is not linear but bell-shaped in France, contrary to the US, which suggests that small cities do compensate lack of Density by either a better Design or more Diversity.
    Keywords: car emissions; carbon footprint; public transport; Smart Cities; Sprawl
    JEL: Q4 R1 R2 R4
    Date: 2018–07
  32. By: Michael Fritsch (FSU Jena); Alina Sorgner (John Cabot University Rome); Michael Wyrwich (University of Groningen)
    Abstract: This paper investigates the relationship between job satisfaction and age for self-employed persons as compared to paid employees. While, on average, there are higher levels of job satisfaction in self-employment as compared to paid employment, we find that an individual's age is an important moderator in this relationship. Specifically, the probability of the self-employed to experience high levels of job satisfaction is quite similar across all age cohorts, but the job satisfaction of paid employees varies significantly with age. The degree to which self-employed people are more satisfied with their work than paid employees, therefore, is affected by the age of the individuals involved. We find that only those paid employees at the final stage of their working life have the same probability of experiencing a high level of job satisfaction as a self-employed person with comparable individual characteristics.
    Keywords: Entrepreneurship, well-being, job satisfaction, age
    JEL: L26 I31 J10 D91
    Date: 2018–09–05

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