nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒10‒15
thirty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Self-employed Immigrants and Their Employees: Evidence from Swedish Employer-Employee Data By Hammarstedt, Mats; Miao, Chizheng
  2. Transitioning towards more equality? Wealth gender differences and the changing role of explanatory factors over time By Sierminska, Eva; Piazzalunga, Daniela; Grabka, Markus M.
  4. Does Regulation Trade-Off Quality against Inequality? The Case of German Architects and Construction Engineers By Rostam-Afschar, Davud; Strohmaier, Kristina
  5. Working for 200 euro? The effects of traineeship reform on labor market outcomes in Croatia By Iva Tomic; Ivan Zilic
  6. How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe By Katalin Bodnár; Ludmila Fadejeva; Stefania Iordache; Liina Malk; Desislava Paskaleva; Jurga Pesliakaitė; Nataša Todorović Jemec; Peter Tóth; Robert Wyszyński
  7. Parental Leave Policies and Socio-Economic Gaps in Child Development: Evidence from a Substantial Benefit Reform Using Administrative Data By Huebener, Mathias; Kühnle, Daniel; Spieß, C. Katharina
  8. Skill of the Immigrants and Vote of the Natives: Immigration and Nationalism in European Elections 2007-2016 By Simone Moriconi; Giovanni Peri; Riccardo Turati
  9. How does the type of remuneration affect physician behaviour? Fixed salary versus fee-for-service By Kurt R. Brekke; Tor Helge Holmäs; Karin Monstad; Odd Rune Straume
  10. How Do Firms Respond To Place-Based Tax Incentives? By Hyejin Ku; Uta Schönberg; Ragnhild C. Schreiner
  11. Permanent contracts and job satisfaction in academia: Evidence from European countries By Fulvio Castellacci; Clara Viñas-Bardolet
  12. “Has the economic crisis worsened the work-related stress and mental health of temporary workers in Spain?” By Xavier Bartoll; Joan Gil; Raul Ramos
  14. Does Immigration Decrease Far-Fight Popularity? Evidence from Finnish Municipalities By Jakub Lonsky
  15. Does the Internet Increase the Job Finding Rate? Evidence from a Period of Internet Expansion By Denzer, Manuel; Schank, Thorsten; Upward, Richard
  16. Naturalization and Labor Market Performance of Immigrants in Germany By Riphahn, Regina T.; Saif, Salwan
  17. Trends in Assortative Mating and Offspring Outcomes By Bratsberg, Bernt; Markussen, Simen; Raaum, Oddbjørn; Røed, Knut; Røgeberg, Ole J.
  18. Economic impact of STEM immigrant workers By Baum, Christopher F; Lööf, Hans; Stephan, Andreas
  19. Mergers and Birth Outcomes: Evidence from Maternity Ward Closures By Avdic, Daniel; Lundborg, Petter; Vikström, Johan
  20. Spatial effects on local government efficiency By Raffaella Santolini
  21. Education systems, education reforms, and adult skills in the Survey of Adult Skills (PIAAC) By Huacong Liu
  22. Organised Crime, Captured Politicians and the Allocation of Public Resources By Nicola Mastrorocco
  23. The Great Recession and Mental Health: the Effect of Income Loss on the Psychological Health of Young Mothers By Fiona Kiernan
  24. Why do young people make atypical gender-related study choices? An analysis of French master’s graduates By Magali Jaoul-Grammare
  25. UK Political Cycle and the Effect on National House Prices: An Exploratory Study By Bismark Aha; David.M Higgins; Timothy Lee
  26. Who Feels the Nudge? Knowledge, Self-Awareness and Retirement Savings Decisions By Anders Anderson; David T. Robinson
  27. “The Impact of Immigration on Native Employment: Evidence from Italy” By Stefano Fusaro; Enrique López-Bazo
  28. What drives UK defined benefit pension funds' investment behaviour? By Douglas, Graeme; Roberts-Sklar, Matt
  29. Distributional Effects of Public Transport Subsidies By Börjesson, Maria; Eliasson, Jonas; Rubensson, Isak
  30. Do minimum wages increase search effort? By Laws, A.
  31. Assessing e-commerce productivity for French micro firms using propensity score matching By Ouaida, Fadila; El Hajjar, Samer

  1. By: Hammarstedt, Mats (Linnaeus University Centre for Discrimination and Integration Studies); Miao, Chizheng (Linnaeus University Centre for Discrimination and Integration Studies)
    Abstract: We present a study of immigrant self-employment in Sweden using the recent matched employer-employee data from 2014. We find large variations in self-employment rates among immigrant groups as well as between immigrants with different points for their time immigration to Sweden. High self-employment rates are found for male immigrants from the Middle East. Immigrants are less likely than natives to have employees in their firms but after controlling for firm characteristics we find that self-employed immigrants are more likely than self-employed natives to have employees. Especially non-European immigrants are more likely than natives to employ other immigrants, and even non-European and recently arrived immigrants, in their firms. Immigrants are more likely than natives to hire their spouses as employees. We conclude that self-employed immigrants play a role in the labour market integration of other immigrants. We also conclude that the family plays a central role for self-employment activities among immigrants and that more knowledge regarding the explanations behind the results is needed.
    Keywords: Self-employment; Immigrants; Employment; Employees; Sweden
    JEL: F22 J21 J61 L26
    Date: 2018–09–25
  2. By: Sierminska, Eva; Piazzalunga, Daniela; Grabka, Markus M.
    Abstract: We investigate the explanatory factors that have contributed to changing wealth levels and the gender wealth gap in Germany over the period 2002-2012. In particular, we analyze the role of changes in labor supply, permanent income, portfolio composition, and marital status on wealth accumulation. Using individual level micro data from the German Socio-Economic Panel results show that real mean wealth levels for the working age population have been decreasing for both women and men since 2002 and that the wealth gap has decreased by 13.5% to 30.700€. We show that the increased participation of women in the labor market and their occupational structure had an increasing positive role on women’s wealth accumulation. Making use of the panel dimension in the data and of Oaxaca-Blinder and Firpo, Fortin, Lemieux decompositions, in comparison to previous analyses, a diminishing role of permanent income is observed, due both to a reduction in the gender difference in permanent income and in gender differences in its returns. Overall, the evidence points to more equal wealth accumulation both in terms of characteristics and returns.
    Keywords: Wealth differences,Gender,SOEP,decomposition,labor supply,occupations
    JEL: D31 D13
    Date: 2018
  3. By: Marco Alberto De Benedetto; Maria De Paola (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: We study the effect of term limits on voter turnout in local Italian elections. Since 2014 the Italian law allows mayors in municipalities with a population size lower than 3,000 inhabitants to re-run for a third term, whereas mayors in cities with a number of residents above the cutoff still face a two-term limit. The introduction of the reform permits us to implement a difference-in-discontinuities design exploiting the before/after with the discontinuous policy change. We find that voters negatively react to the introduction of the reform and in particular electoral participation decreases by about 5 percentage points in municipalities eligible to the treatment compared to municipalities in the control group. This negative effect is essentially driven by a decrease in the political competition. We also find that relaxing term limits does not improve the quality of politicians running for election.
    Keywords: Diff-in-discontinuities, Voter Turnout, Political Competition
    JEL: C21 D72 H70
    Date: 2018–10
  4. By: Rostam-Afschar, Davud; Strohmaier, Kristina
    Abstract: We exploit an exogenous price increase by about 10% for architectural services to answer the question how rice regulation affects income inequality and service quality. Using individual-level data from the German microcensus for the years 2006 to 2012, we find a significant reform effect of 8% on personal net income for self-employed architects and construction engineers. This group moved from the second lowest to the highest quintile of the net income distribution. This increase in inequality is associated with a deterioration of service quality. The reform reduced average scores of a peer ranking for architects by 18%.
    Keywords: Regulation,Inequality,Wages,Service Quality,Entrepreneurship,Natural Experiment
    JEL: L5 L11 L74 J44 L26
    Date: 2018
  5. By: Iva Tomic (The Institute of Economics, Zagreb); Ivan Zilic (The Institute of Economics, Zagreb)
    Abstract: In this paper we evaluate the effects of active labor market policy (ALMP) reform, the so-called SOR measure (vocational training for work without commencing employment), on labor market outcomes in Croatia. In 2012 SOR was redesigned to ease the first labor market entry and promote on-the-job training, enabling a young person without relevant work experience to get a one-year contract and a net monthly remuneration of 210 euro. The measure soon became popular, especially among university graduates, accounting for around third of their unemployment exits, and absorbing two thirds of funds allocated to ALMPs. Pooling Croatian Labor Force Surveys from 2007-2016 and using difference-in-difference strategy, we estimate the causal intent-to-treat effect of the reform on labor market outcomes of the potentially eligible group: 18-29-year-olds. Results indicate that the reform has had, at best, neutral effects on employment and unemployment; moreover, we find some evidence that a portion of young individuals were propelled into inactivity. However, we do find an adverse effect on wages-driven mostly by wages received by females and university graduates-both at the mean and higher percentiles of the wage distribution. This research provides insights on effectiveness of ALMPs in ameliorating youth unemployment in Europe, and opens questions on the appropriateness of the use of European Union funds in new EU member states.
    Keywords: ALMP, evaluation, labor market outcomes, traineeship reform, youth unemployment
    JEL: J08 J31 J41
    Date: 2018–08
  6. By: Katalin Bodnár (Magyar Nemzeti Bank and European Central Bank); Ludmila Fadejeva (Latvijas Banka); Stefania Iordache (Banca Naţională a României); Liina Malk (Eesti Pank); Desislava Paskaleva (Българска народна банка); Jurga Pesliakaitė (Lietuvos Bankas); Nataša Todorović Jemec (Institute of Macroeconomic Analysis and Development of the Republic of Slovenia); Peter Tóth (Národná banka Slovenska); Robert Wyszyński (Narodowy Bank Polski)
    Abstract: We study the transmission channels for rises in the minimum wage using a unique firm-level dataset from eight Central and Eastern European countries. Representative samples of firms in each country were asked to evaluate the relevance of a wide range of adjustment channels following specific instances of rises in the minimum wage during the recent post-crisis period. The paper adds to the rest of literature by presenting the reactions of firms as a combination of strategies, and evaluates the relative importance of those strategies. Our findings suggest that the most popular adjustment channels are cuts in non-labour costs, rises in product prices, and improvements in productivity. Cuts in employment are less popular and occurs mostly through reduced hiring rather than direct layoffs. Our study also provides evidence of potential spillover effects that rises in the minimum wage can have on firms without minimum wage workers.
    Keywords: minimum wage, adjustment channels, firm survey.
    JEL: D22 E23 J31
    Date: 2018
  7. By: Huebener, Mathias (DIW Berlin); Kühnle, Daniel (University of Erlangen-Nuremberg); Spieß, C. Katharina (DIW Berlin)
    Abstract: This paper examines the effects of substantial changes in paid parental leave on child development and socio-economic development gaps. We exploit a German reform from 2007 that both expanded paid leave in the first year and removed paid leave in the second year following childbirth. Higher-income households benefited relatively more from the reform than low-income households. We use administrative data from mandatory school entrance examinations containing detailed child development assessments at age six within a difference-in-differences approach. Our precise and robust estimates reveal no effects of the changes in parental leave benefits on child development across various socio-economic groups, and consequently no effects on socio-economic development gaps.
    Keywords: parental leave benefit, child development, school readiness, motor skills, language skills, socio-emotional stability
    JEL: J13 J18 J22 J24
    Date: 2018–08
  8. By: Simone Moriconi; Giovanni Peri; Riccardo Turati
    Abstract: In this paper we document the impact of immigration at the regional level on Europeans’ political preferences as expressed by voting behavior in parliamentary or presidential elections between 2007 and 2016. We combine individual data on party voting with a classification of each party's political agenda on a scale of their "nationalistic" attitudes over 28 elections across 126 parties in 12 countries. To reduce immigrant selection and omitted variable bias, we use immigrant settlements in 2005 and the skill composition of recent immigrant flows as instruments. OLS and IV estimates show that larger inflows of highly educated immigrants were associated with a change in the vote of citizens away from nationalism. However the inflow of less educated immigrants was positively associated with a vote shift towards nationalist positions. These effects were stronger for non-tertiary educated voters and in response to non-European immigrants. We also show that they are consistent with the impact of immigration on individual political preferences, which we estimate using longitudinal data, and on opinions about immigrants. Conversely, immigration did not affect electoral turnout. Simulations based on the estimated coefficients show that immigration policies balancing the number of high-skilled and low-skilled immigrants from outside the EU would be associated with a shift in votes away from nationalist parties in almost all European regions.
    JEL: D72 I28 J61
    Date: 2018–09
  9. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics (NHH)); Tor Helge Holmäs (Uni Research Rokkan Centre); Karin Monstad (Uni Research Rokkan Centre); Odd Rune Straume (University of Minho and NIPE)
    Abstract: We analyse the effects of two different types of physician remuneration - fee-for-service and fixed salary - on the treatment decisions of general practitioners (GPs) and on patients´ health outcomes. Using rich Norwegian register data during the period 2009-2013, we focus on GP locums working in a succession of temporary positions, which allows us to observe the same GPs working under different remuneration schemes within a relatively short period of time. We find that GPs respond strongly and consistently to changes in remuneration type. Compared with fixed salary, GP payment by fee-for-service leads to an increase in the supply of consultations and a higher provision of medical services (along several dimensions) per consultation. This has also signficant implications for patients´ health outcomes. The probability of experiencing an emergency admission to hospital shortly after a GP consultation is close to 20 percent lower if the GP is paid by fee-for-service instead of fixed salary. Overall, our analysis suggests that fixed-salary remuneration leads to underprovision of primary care.
    Keywords: Physicians, Primary care; Fixed salary; Fee-for-service.
    JEL: I11 I18 J33
    Date: 2018
  10. By: Hyejin Ku; Uta Schönberg; Ragnhild C. Schreiner
    Abstract: In this paper, we evaluate the effects of payroll tax changes on firm behavior, by exploiting a unique policy setting in Norway, where a system of geographically differentiated payroll taxes was suddenly abolished due to an EU regulation. We find that firms are only partially able to shift the increased costs from higher payroll tax rates onto workers’ wages. Instead, firms respond to the tax increase primarily by reducing employment. The drop in employment following the tax reform is particularly pronounced in labor intensive firms—which experience a larger windfall loss due to the tax reform than non-labor intensive firms—and in multi-establishment firms—which respond to the payroll tax increase in part by reducing the number of establishments per firm. Overall, our findings point to liquidity effects whereby a sudden and largely unexpected payroll tax increase aggravates firms’ liquidity constraints, forcing them to cut employment to bring down costs.
    JEL: D22 H25 H32 J18 J23
    Date: 2018–09
  11. By: Fulvio Castellacci (TIK Centre, University of Oslo); Clara Viñas-Bardolet (TIK Centre, University of Oslo)
    Abstract: Temporary contracts are increasingly used in academia. This is a major concern for non-tenured researchers, since weak job security may hamper job satisfaction. In spite of the relevance of this topic, scholarly research on the theme is scant. This paper presents an empirical analysis of the role of academic tenure for job satisfaction of researchers in European countries. The work uses data from the MORE2 survey, a recent large-scale representative survey of researchers in all European countries. The results show that, ceteris paribus, academics with a permanent contract are on average more satisfied with their job than those that are employed on a temporary basis. We also show that academic tenure is a relatively more important factor of job satisfaction for researchers at an intermediate stage of the career. Finally, we point out some important differences in the working of the model among European countries. Our hypotheses receive significant empirical support for the groups of Continental EU and Nordic economies, which combine high job satisfaction and good working conditions, on the one hand, with relatively weak job security for younger academics, on the other.
    Date: 2018–10
  12. By: Xavier Bartoll (AQR-IREA, University of Barcelona. Dpt. Econometrics, Statistics and Applied Economics. Av. Diagonal 690, 08034 Barcelona (Spain).); Joan Gil (BEAT, University of Barcelona. Dpt. Economics. Av. Diagonal 696, 08034 Barcelona (Spain)); Raul Ramos (AQR-IREA, University of Barcelona & IZA. Dpt. Econometrics, Statistics and Applied Economics. Av. Diagonal 690, 08034 Barcelona (Spain))
    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 male workers with a university degree.
    Keywords: Temporary employment; economic crisis; work-related stress; mental health; propensity score weighting. JEL classification:I10, J41, J28.
    Date: 2018–09
  13. By: Daniele Checchi; Maria De Paola (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: We analyse how schooling in multigrade classes affects the formation of student cognitive and non-cognitive skills. Our identification strategy is based on some institutional features of the Italian educational system establishing a minimum number of students per class. Classes that do not reach the minimum number of pupils are organized in multigrade classes. In addition, the Italian law also establishes a maximum number of students for multigrade classes, which implies that class size in multigrade classes is very similar to class size in small single grade classes with a number of students just above the minimum size. Using census data on 5th grade Italian students, we find that pupils in multigrade classrooms obtain worse test scores both in literacy and numeracy standardized tests compared to comparable pupils in single grade classroom. While the effect is small and not always statistically significant for the literacy score, we find a large and highly statistically significant effect on the numeracy score. We also find that pupils placed in multigrade classes tend to have a more external centred locus of control. Our results are robust to different specifications including controls for class size and a number of student and school characteristics.
    Keywords: multigrade classes, mixed-age classes, cognitive skills, non-cognitive skills
    JEL: I21 I28 C36
    Date: 2018–10
  14. By: Jakub Lonsky
    Abstract: Across Europe, far-right parties have made signi ficant electoral gains in recent years, posing aserious threat to the European integration process. Their anti-immigration stance is consideredone of the main factors behind their success. Yet, the causal evidence on how immigrationaffects far-right voting is still relatively scarce. Using data from Finland, this paper studiesthe effect of immigration on voting for the far-right Finns Party on a local level. Exploiting aconvenient setup for a shift-share instrument, I find that one percentage point increase in theshare of foreign citizens in municipality decreases Finns Party's vote share by 3.4 percentagepoints. A placebo test using pre-period data confi rms this effect is not driven by persistenttrends at the municipality level. The far-right votes lost to immigration are captured by the twopro-immigration parties. In addition, immigration is found to increase voter turnout while theprotest vote remains unaffected. Turning to potential mechanisms, the negative effect is onlypresent in municipalities with high initial exposure to immigrants. Moreover, I provide someevidence for welfare-state channel as a plausible mechanism behind the main result.
    Date: 2018–01
  15. By: Denzer, Manuel (University of Mainz); Schank, Thorsten (University of Mainz); Upward, Richard (University of Nottingham)
    Abstract: We examine the impact of household access to the internet on job finding rates in Germany during a period (2006-2009) in which internet access increased rapidly, and job-seekers increased their use of the internet as a search tool. During this period, household access to the internet was almost completely dependent on connection to a particular technology (DSL). We therefore exploit the variation in connection rates across municipalities as an instrument for household access to the internet. OLS estimates which control for differences in individual and local area characteristics suggest a job-finding advantage of about five percentage points. The IV estimates are substantially larger, but much less precisely estimated. However, we cannot reject the hypothesis that, conditional on observables, residential computer access with internet was as good as randomly assigned with respect to the job-finding rate. The hypothesis that residential internet access helped job-seekers find work because of its effect on the job search process is supported by the finding that residential internet access greatly increased the use of the internet as a search method. We find some evidence that household access to the internet reduced the use of traditional job search methods, but this effect is outweighed by the increase in internet-based search methods.
    Keywords: job search, unemployment, job finding rate, internet, DSL
    JEL: J64 C26 L86
    Date: 2018–08
  16. By: Riphahn, Regina T. (University of Erlangen-Nuremberg); Saif, Salwan (University of Erlangen-Nuremberg)
    Abstract: Naturalization may be a relevant policy instrument affecting immigrant integration in host-country labor markets. We study the effect of naturalization on labor market outcomes of immigrants in Germany. We apply recent survey data and exploit a reform of naturalization rules in an instrumental variable estimation. In our sample of recent immigrants, linear regression yields positive correlations between naturalization and beneficial labor market outcomes. Once we account for the endogeneity of naturalization most coefficients decline in magnitude and lose statistical significance: male immigrants' labor market outcomes do not benefit significantly from naturalization. Naturalization reduces the risks of unemployment and welfare dependence for female immigrants. For males and females, the propensity to hold a permanent contract increase as a consequence of naturalization. The results are robust to modifications of samples and the instrument.
    Keywords: citizenship, migration, naturalization, labor market outcomes, instrumental variables
    JEL: J61 J15 C26
    Date: 2018–08
  17. By: Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research); Røgeberg, Ole J. (Ragnar Frisch Centre for Economic Research)
    Abstract: Fertility patterns and assortative mating help shape the level and the distribution of offspring outcomes. Increased assortative mating among the less educated has been reported across Western nations, suggesting that inequality in parental resources may be on the rise. In times of rising attainment, we argue that it is difficult to interpret trends in educational assortative mating as they can arise from change in sorting into education as much as from change in sorting into partnerships. Using rank measures of parental resources that have constant marginal distributions, we uncover evidence of declining assortative mating over the last 30 years in Norway. We also find an increasingly positive selection into parenthood. Estimating the contribution of parental resources to offspring outcomes, we show that recent trends in mating have caused a small rise in average offspring education and earnings as well as a decline in offspring inequality.
    Keywords: assortative mating, homogamy, intergenerational mobility, inequality
    JEL: J12 J24 J62 D63
    Date: 2018–08
  18. By: Baum, Christopher F (Boston College, DIW Berlin, and Centre of Excellence for Science and Innovation Studies (CESIS)); Lööf, Hans (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology); Stephan, Andreas (Jönköping University, DIW Berlin, and Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: STEM-focused industries are critical to the innovation-driven economy. As many firms are running short of STEM workers, international immigrants are increasingly recognized as a potential for high-tech job recruitment. This paper studies STEM occupations in Sweden 2011–2015 and tests hypotheses on new recruitment and the economic impact of foreign STEM workers. The empirical analysis shows that the probability that a new employee is a STEM immigrant increases with the share of STEM immigrants already employed, while the marginal effect on average firm wages is positively associated with the share of immigrant STEM workers. We also document heterogeneity in the results, suggesting that European migrants are more attractive for new recruitment, but non-EU migrants have the largest impact on wage determination.
    Keywords: STEM; migration; employment; wages; correlated random effects
    JEL: C23 J24 J61 O14 O15
    Date: 2018–10–04
  19. By: Avdic, Daniel (CINCH); Lundborg, Petter (Lund University); Vikström, Johan (IFAU)
    Abstract: Evidence suggests that hospital mergers can reduce costs but less is known about their effects on patient outcomes. We study how a wave of mergers that led to the shutdown of one third of all Swedish maternity wards affected the health of mothers who gave birth and their newborns. Applying a difference-in-differences approach to register data on all births in Sweden over two decades, we show that the closures negatively affected the health of mothers, while effects on infant health were small and insignificant. The adverse effects on mothers are mainly driven by crowding effects at remaining wards rather than by increased distance to the wards. Moreover, the closures reduced the use of C-sections for high-risk births.
    Keywords: quality of care, hospital closure, birth outcomes
    JEL: D24 I11 I18 J13 R41
    Date: 2018–08
  20. By: Raffaella Santolini (Dipartimento di Scienze Economiche e Sociali - UNIVPM)
    Abstract: Little attention has been paid to the spatial pattern in local governments' efficiency. This paper intends to fill this gap by conducting an empirical analysis on a sample of 246 Italian municipalities over the decade 1998-2008. The efficiency of the municipal government is measured in terms of the speed of payments for different categories of public spending. Estimation results reveal the presence of spatial interdependence in the speed of payments among the geographically close municipalities, with a greater magnitude for the speed of current outlays. Thus, municipalities mimic the speed with which public spending is carried out by their neighbors.
    Keywords: the speed of payments, neighborhood effects, spatial econometrics, Italian municipalities
    JEL: C23 H72 H73
    Date: 2018–10
  21. By: Huacong Liu (OECD)
    Abstract: This study uses the PIAAC data to examine the relationships between education system characteristics (e.g. early tracking and vocational education orientation) and distributions of adult numeracy skills. It also investigates the effects of postponing the tracking age and easing university access for students on a vocational track on the average skills and different percentiles of the skills distribution.Correlational analysis suggests that education systems with more students enrolled in vocational tracks have on average higher levels of numeracy skills and more compressed skills distributions between the 50th and 90th percentiles.Further analysis suggests that postponing the tracking age among 14 European countries does not have a significant effect on the average skills of the population. However, it increases skills for individuals at the 10th, 20th, and 30th percentiles of the skill distribution.Expanding university access is associated with an increase in numeracy skills, particularly for individuals at the bottom three deciles of the distribution.
    Date: 2018–10–10
  22. By: Nicola Mastrorocco (Trinity College Dublin)
    Abstract: What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing for dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this collusion by using newly collected data on public spending, local taxes and elected politicians at the local level. Differences-in-differences estimates reveal that infiltrated local governments not only spend more on average on construction and waste management and less on police enforcement, but also collect fewer fiscal revenues. In addition, we uncover key elements of local elections associated with mafia-government collusion. In particular, Regression Discontinuity estimates show that infiltration is more likely to occur when right-wing parties win local elections.
    Keywords: Organized crime, Elections, Collusions, Public Spending, Italy.
    JEL: K42 H72 D72
    Date: 2018–09
  23. By: Fiona Kiernan (School of Economics & Geary Institute, University College Dublin)
    Abstract: There is little consensus as to the effect of recessions on health, which may be due to the heterogenous nature of recessions, the choice of health outcome or the description of the independent variable involved. In contrast to previous work, which has predominantly studied labour market loss, I examine the relationship of income loss and health, and in particular focus on psychological rather than physical health. I study disposable income loss because disposable income is related to consumption expenditure, and therefore satisfaction. Psychological, rather than physical, health is important because younger populations are unlikely to manifest clinical evidence of recession-related disease in the short term. The Irish recession provides me with an opportunity to study the effect of changes in income, since households who remained in employment also experienced changes in disposable income. Using panel data from three waves of the Growing Up in Ireland study, I find that income loss is associated with an increase in depression, but not in parental stress. This effect of income loss is seen for those who are home owners, and subjective reports of being in mortgage or rent arrears is also associated with an increase in depression score.
    Date: 2018–10–09
  24. By: Magali Jaoul-Grammare
    Abstract: Despite laws and educational reforms in favour of gender equality, in France both training courses and professions remain highly gendered. The educational system and the labour market continue to conform to stereotypes, and both girls and boys continue to base their educational choices on what society assigns their genders as areas of competence. However, about 10% of master’s graduates make atypical study choices, in the sense that they chose an orientation standardly chosen by the opposite gender. This paper proposes an empirical analysis of these ‘atypical’ students. Our results show that these individuals do not have specific profiles, either in terms of schooling background or social origin. By estimating a logistic regression, we highlight the importance of the expected returns and of the professional project in the atypical study choice. We also underline that although the unconventional choice allows a more rapid integration on the labour market and appears as a cost-effective solution for girls, it does not erase the wage inequalities between men and women.
    Keywords: Educational return, Gender-related study choice, Labour market integration.
    JEL: C25 I24 J24
    Date: 2018
  25. By: Bismark Aha; David.M Higgins; Timothy Lee
    Abstract: Over the last two decades, many developed countries have experienced notable changes in house prices. This exploratory study considers if house price movements in the UK can be linked to the political cycle as governments realise homeowners represent a large portion of the voter base and their voting decisions could be influenced by the magnitude and direction of house price changes. Specifically, the study investigates whether house prices behave differently before and after elections and under different political regimes. To examine this relationship, the study analyzed quarterly UK national house price data since 1960, along with data on the results of UK parliamentary elections during the same period. Over this period, real UK house prices increased by an average of 2.83% per annum. While there is no evidence that house prices in the UK behave significantly differently under different political parties, it is evident that house prices perform much better in the last year before an election, compared to the first year after an election. House prices increased by 5.2% per annum, on the average, in the last year before an election compared to 1.0% per annum in the first year following an election. As this research clearly identifies major variations in house price performance around election times, residential property investment decisions should take into consideration the political cycle.
    Keywords: Housing Market; Political Studies; Property Cycles; Residential house prices; United Kingdom
    JEL: R3
    Date: 2018–01–01
  26. By: Anders Anderson; David T. Robinson
    Abstract: Using a financial literacy survey of Swedish pension investors matched to actual retirement savings decisions, we argue that respondents can be broken into three groups: those who are financially literate, those who mistakenly believe they are financially literate, and those who know that they are not. We examine how these groups respond differently to informational nudges encouraging them to take charge of their own investments. Investors with mistaken beliefs responded to the nudge, and were more likely to work with mass-market advisors who steer them into high-fee funds. They underperform as a result. By comparison, those who either possess financial literacy or else understand that they do not possess financial literacy were less likely to respond to the nudge. They avoided advisors, stayed with the low-cost default fund, and therefore accumulated retirement savings more quickly.
    JEL: G11 G18
    Date: 2018–09
  27. By: Stefano Fusaro (Universitat de Barcelona & AQR-IREA.); Enrique López-Bazo (Universitat de Barcelona & AQR-IREA.)
    Abstract: Whether host countries economically benefit or not from immigration is a longstanding debate. In this paper, by taking advantage of the consistent variation of foreign-born workers' settlements across local labor market, we investigate the impact of immigration on native employment in Italy over the period 2009-2017. Both the country and the time span considered represent an interesting novelty that adds a further piece of evidence to the existing literature. Despite the fact that immigration has recently become a major issue, the studies on the impact of immigration into Italy are indeed relatively scarce. In addition, the peculiar institutional framework of Italy, that plays a crucial role in the extent to which local labor markets are able to absorb immigration-induced supply shocks, makes this analysis particularly relevant. Likewise, the period analyzed is of extreme interest since it is characterized by the combination of the economic downturn and by an unprecedented increase of the migratory in inflows. Overall, the results contradict the belief that immigrants \take away jobs from natives" and present a scenario in which foreign-born workers have an average negligible impact on native employment opportunities. Consistently with the canonical model of immigration however, when distinguishing the native population by education levels, the results indicate a positive impact on high-educated natives and a strong negative one on low-educated. Nevertheless, after controlling for immigrants’ “skill-downgrading” and for natives' over-education,the negative impact estimated for the latter experiences a consistent reduction.
    Keywords: Immigration; Employment; Local Labor Markets; Shift-Share;Bartik Instrument; Italian Provinces. JEL classification:J15; J61; R23.
    Date: 2018–09
  28. By: Douglas, Graeme (MKP Capital); Roberts-Sklar, Matt (Bank of England)
    Abstract: We have developed a structural model to explain defined benefit (DB) pension funds’ investment behaviour. The model is calibrated to the aggregate UK DB pension fund and four different cohorts of funds. We use the model to estimate how pension funds can be expected to adjust their asset portfolios in the face of different exogenous shocks. Our results suggest that pension funds are sensitive to shocks that change their funding ratios — that is, the ratio of pension assets to liabilities. Deteriorations in funding ratios encourage pension funds supported by financially weaker corporate sponsors to switch some equity holdings into bonds. This is because reduced funding ratios weigh on the perceived vulnerability of already weak corporate sponsors. But similar deteriorations in funding ratios encourage funds supported by financially stronger corporates to increase their equity holdings to benefit from their higher expected returns. In contrast, shocks that result in material improvements in funding ratios — for example, resulting from a large rise in interest rates — encourage all pension funds to increase their bond holdings to ‘lock in’ those improved positions.
    Keywords: Pension funds; procyclicality
    JEL: G11 G23
    Date: 2018–10–05
  29. By: Börjesson, Maria (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Eliasson, Jonas (Stockholm City Transport Administration); Rubensson, Isak (KTH and Stockholm Public Transport Agency)
    Abstract: We analyse the distribution of transit subsidies across population groups in Stockholm. We develop a novel methodology that takes into account that the subsidy per passenger varies across transit links, since production costs and load factors vary. With this, we calculate the subsidy per trip in the transit network and analyse the distribution of subsidies across population groups. The average subsidy rate in Stockholm is 44%, but the variation across trips turns out to be large: while 34% of the trips are not subsidized at all but generates a profit, 16% of the trips have a subsidy rate higher than 2/3. We calculate the concentration index to explore the distribution of subsidies across income groups. The average subsidy per person is similar for all income groups, except for the top income quintile. This holds not only for the current flat-fare system, but also for distance-based fares and fares with a constant subsidy rate. Transit subsidies is hence not effective as a redistribution policy in Stockholm. The largest systematic variation we find is across residential areas: the average subsidy per person is five times higher in the peripheral areas of the region compared to the regional core, and the subsidy per trip is ten times higher.
    Keywords: Public Transport; Subsidies; Equity; Progressive; Distribution effect; Concentration index
    JEL: R12 R41 R42
    Date: 2018–10–03
  30. By: Laws, A.
    Abstract: Minimum wages often generate a perplexing set of empirical impacts, including little to no employment consequences but large wage consequences. This paper tests arguably the most promising explanation - search models of minimum wages - in a more direct manner than has been possible to date. The analysis combines extensive data on UK workers' search behaviour with quasi-experimental analysis of the UK minimum wage policy structure, including the 2016 introduction of the National Living Wage. I find robust evidence of increased labour force participation and extensive margin search in response to higher minimum wages with no corresponding change in employment rates. Evidence of decreased average search intensity is uncovered and the duration of unemployed search increases. Taken together, the unemployed search results suggest that minimum wages do impact on labour flow frictions in important ways. In contrast, no significant estimates are found for any on-the-job search moments, i.e. I find no evidence for potential concerns that higher minimum wages provide a disincentive for workers to progress up job ladders.
    Keywords: Equilibrium search models, Minimum wages, Quasi-experimental analysis
    JEL: E24 J21 J64
    Date: 2018–10–11
  31. By: Ouaida, Fadila; El Hajjar, Samer
    Abstract: The benefits of e-commerce are apparent not only for small and medium enterprises (SMEs) and large firms, but also for micro firms. Hence, implementing e-sales for micro firms is worth exploring. This study examines the relationship between the use of e-commerce and productivity implications on micro firms in France using Propensity Score Matching (PSM) for the year 2012. Data used in the analysis is based on community survey "ICT & e-commerce" for micro firms. The main objective of using PSM is to assess productivity between, on the one hand, e-selling micro firms and, on the other hand, the non e-selling micro firms. The empirical results show that e-selling micro firms are more productive and have a higher turnover in 2012.
    Keywords: ICT,E-commerce,micro firms,productivity,Propensity Score Matching
    JEL: L81 O30
    Date: 2018

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