nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒10‒29
twenty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Quality of Politicians and Electoral System. Evidence from a Quasi-experimental Design for Italian Cities By Marco Alberto De Benedetto
  2. Transitioning towards more equality? Wealth gender differences and the changing role of explanatory factors over time By SIERMINSKA Eva; PIAZZALUNGA Daniela; GRABKA Markus
  3. The tourist tax in the Italian municipalities By Laura Conti; Elena Gennari; Fabio Quintiliani; Roberto Rassu; Elena Sceresini
  4. Pension Strategies of Workers in a Country Getting Old before Getting Rich By Buchholtz, Sonia; Gaska, Jan; Góra, Marek
  5. The effect of grants on university drop-out rates: evidence on the Italian case By Francesca Modena; Giulia Martina Tanzi; Enrico Rettore
  6. Do Alimony Regulations Matter inside Marriage? Evidence from the 2008 Reform of the German Maintenance Law By Schaubert, Marianna
  7. Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy By Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
  8. Long-Term Changes in Married Couples' Labor Supply and Taxes: Evidence from the US and Europe since the 1980s By Bick, Alexander; Brüggemann, Bettina; Fuchs-Schündeln, Nicola; Paule-Paludkiewicz, Hannah
  9. Labor Market Responses to Partners' Unemployment and Low-Pay Employment By Keldenich, Carina; Knabe, Andreas
  10. Royalty Taxation under Tax Competition and Profit Shifting By Juranek, Steffen; Schindler, Dirk; Schneider, Andrea
  11. EU regions and the upgrading for the digital age By Antonio Vezzani; Emanuele Pugliese; Petros Gkotsis
  12. Explaining Wage Losses after Job Displacement: Employer Size and Lost Firm Rents By Fackler, Daniel; Mueller, Steffen; Stegmaier, Jens
  13. Asymmetric information and heterogeneous effects of R&D subsidies: evidence on R&D investment and employment of R&D personel By Ugur, Mehmet; Trushin, Eshref
  14. Absorptive capacity, economic freedom and the conditional effects of regional policy. By Jonathan Eberle; Thomas Brenner; Timo Mitze
  15. On the competitiveness effects of quality labels: Evidence from the French cheese industry By Sabine Duvaleix-Treguer; Charlotte Emlinger; Carl Gaigné; Karine Latouche
  16. Crowding-out effects of subsidized housing at the city level By Elias Oikarinen
  17. The impact of exogenous shocks on house prices: The case of the Volkswagen-emission scandal By Heiko Kirchhain; Joachim Zietz
  18. Assessing poverty persistence in households with dependent children: the role of poverty measurement By Enrico Fabrizi; Chiara Mussida
  19. Working from Home: Heterogenous Effects on Hours Worked and Wages By Arntz, Melanie; Ben Yahmed, Sarra; Berlingieri, Francesco
  20. Obesity in Scotland: A bad diet or bad supermarket promotions? By Placzek, O.
  21. Granular sources of the Italian business cycle By Nicolò Gnocato; Concetta Rondinelli
  22. Raising aspirations and higher education: evidence from the UK’s Widening Participation policy By Lucia Rizzica
  23. Funding Council Housing Provision, Management and Maintenance: An analysis of the financial sustainability of local authority provided social housing. By Michelle Norris; Aideen Hayden
  24. Quiet please! Adverse effects of noise on child development By Makles, Anna; Schneider, Kerstin
  25. The Long-Term Effects of Long Terms. Compulsory Schooling Reforms in Sweden By Karlsson, Martin; Schwarz, Nina; Fischer, Martin; Nilsson, Therese
  26. Brownfield areas and housing value: Evidence from Milan By Lucia Gibilaro; Gianluca Mattarocci

  1. By: Marco Alberto De Benedetto (Birkbeck, University of London)
    Abstract: We study the effect of the electoral system on the quality of politicians, measured by the average educational attainment, at the local level in Italy over the period 1994-2017. Since 1993, municipalities below 15,000 inhabitants vote with a single-ballot system, whereas cities above 15,000 inhabitants threshold are subject to a double ballot.Exploiting the discontinuous policy change nearby the population cut-off we have implemented a RDD and found that runoff elections lead to a decrease in the educational attainment of local politicians by about 2% compared to years of schooling of politicians in municipalities voting with a single-ballot scheme.We speculate that the negative effect is driven by the different selection process of candidates adopted by political parties between runoff and single-ballot system. Findings are similar when we use alternative measures of quality of politicians related both to the previous occupation and to previous political experience, and when we control for different measures of political closeness.
    JEL: C31 D72 I20 J42
    Date: 2018–10
    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: D13 D31
    Date: 2018–10
  3. By: Laura Conti (Bank of Italy); Elena Gennari (Bank of Italy); Fabio Quintiliani (Bank of Italy); Roberto Rassu (Bank of Italy); Elena Sceresini (Bank of Italy)
    Abstract: We study the implementation of the tourist tax in Italian municipalities, highlighting the link between its reach and the inbound tourist flows. The reference period is the year 2016. Municipalities with the tourist tax in 2016 are only one ninth of all Italian municipalities and one sixth of those eligible to do so, but they attract 70 per cent of inbound tourists. Revenues are on average about 4 per cent of all local taxation (around €20 per resident). Rome, Milan, Florence and Venice head the municipalities in terms of revenues. In fact, although these four towns only account for 7 per cent of total nights spent by tourists in Italy, their revenue share is over 50 per cent. A simple econometric estimation shows that the probability of introducing a tourist tax in a municipality is highly correlated to the tourist attractions of the local area and to the same tax being applied in the neighbouring municipalities, suggesting possible strategic interaction between them
    Keywords: ecotax, tourist tax, local taxation, lodging tax
    JEL: H23 H71
    Date: 2018–10
  4. By: Buchholtz, Sonia (Warsaw School of Economics); Gaska, Jan (Warsaw School of Economics); Góra, Marek (Warsaw School of Economics)
    Abstract: The downward trend in replacement rate is going to affect the material wellbeing of Polish future retirees. The aim of this paper is to identify the pension strategies working Poles undertake to counteract future deterioration in material conditions, with particular interest in saving practices and labour market activity. We make use of the Pension awareness of Poles survey data (N=1006) and apply quantitative methods: binary logistic regressions and principal component analysis (PCA). We distinguish between first-best and second-best strategies. The former relates to accumulating pension wealth, while the latter to the range of actions aimed at making ends meet, provided insufficient benefit. The results show that there is a poor relationship between knowledge, plans and behaviour. Moreover, knowledge itself is limited. Even though the awareness of the worsening conditions of retirees-to-be is increasing, little is being done to counteract it. Among various demographic and socio-economic descriptors income and education play an important role in distinguishing patterns, as well as status of self-employed. Three second-best strategies have been distinguished: own responsibility, external support, rebellion. We conclude that information policy on the pension system should be improved, and the incentives for older workers to continue their careers should be strengthened.
    Keywords: pension system, population ageing, supplementary saving, labour force
    JEL: J26 D14 D91
    Date: 2018–09
  5. By: Francesca Modena (Bank of Italy); Giulia Martina Tanzi (Bank of Italy); Enrico Rettore (University of Trento, Department of Sociology and Social Research and FBK-IRVAPP)
    Abstract: In this paper we measure the impact of need-based grants on university dropout rates in the first year, using student-level data from all Italian universities in the period 2003-2013. In Italy, some of the students eligible for grants do not receive them due to a lack of funds. We exploit this phenomenon to identify the causal effect of financial assistance. We find that need-based aid prevents students belonging to low-income families from dropping out from higher education; the estimated effect is sizeable. This evidence is robust to a variety of specifications and sample selection criteria.
    Keywords: human capital, higher education, university dropout, student financial aid, treatment effect model, Italy
    JEL: I22 I23 C21 C35
    Date: 2018–09
  6. By: Schaubert, Marianna
    Abstract: This study investigates how West German spouses have responded by adjusting their time allocation to the alimony reform introduced in 2008. This reform imposed financial self-responsibility after a finalized divorce. It weakened the relative bargaining position of the spouse with a claim for maintenance in the case of a potential divorce prior to the law change. Therefore, the present study helps to verify bargaining models by considering the 2008 policy change as a shift of spousal bargaining power. Estimating di_erence-in-di_erences models I find that, indeed, wives who face a potential low alimony loss might have increased their working hours as a result of the 2008 reform. To my knowledge, the present investigation is the first analysis of the behavioral response of individuals in longer marriages to the 2008 reform. Its approach to identifying those who have been (dis)advantaged by this reform is a new one, proposing a method that reflects the realities of alimony arrangements in Germany.
    Keywords: Alimony,family,bargaining,institutional change,labor supply,time allocation
    JEL: D13 J12 J13 J22 K36
    Date: 2018
  7. By: Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
    Abstract: The effect of marijuana liberalization on crime is object of a large interest by social scientists and policy-makers. However, due to the scarcity of relevant data, the displacement effect of liberalization on the supply of illegal drugs remained substantially unexplored. This paper exploits the unintended liberalization of cannabis light (C-light, i.e. with low THC) occurred in Italy in December 2016 by means of a legislative gap, to assess its effect in a quasi-experimental setting. Although the liberalization interested all the Italian territory, the intensity of liberalization in the short-run varied according to the pre-liberalization market configuration of grow-shops, i.e. shops selling industrial canapa-related products that have been able to first place the canapa flowers (C-light) on the new market. We exploit this variation in a Differences-in-Differences design using a unique dataset on monthly confiscations of drugs at province level (NUTS-3 level) over the period 2016-2018 matched with data on the geographical location of shops and socio-demographic variables. We find that the legalization of C-light led to a reduction of 12% of confiscation of marijuana per each pre-existing grow-shop and a significant reduction of other canapa-derived drugs (plants of cannabis and hashish). Back-to-envelope calculations suggest that forgone revenues for criminal organizations amount to at least 160-200 million Euros per year. These results support the argument that, even in a short period of time and with an imperfect substitute, the organized crime's supply of illegal drugs is displaced by the entry of official and legal retailers.
    Keywords: cannabis,marijuana light,crime,illegal market,diff-in-diff
    JEL: K23 K42 H75 I18
    Date: 2018
  8. By: Bick, Alexander (Arizona State University); Brüggemann, Bettina (McMaster University); Fuchs-Schündeln, Nicola (Goethe University Frankfurt); Paule-Paludkiewicz, Hannah (Goethe University Frankfurt)
    Abstract: We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016. Relying on a model of joint household labor supply decisions, we quantitatively analyze the role of non-linear labor income taxes for explaining the evolution of hours worked of married couples over time, using as inputs the full country- and year-specific statutory labor income tax codes. We further evaluate the role of consumption taxes, gender and educational wage premia, and the educational composition. The model is quite successful in replicating the time series behavior of hours worked per employed married woman, with labor income taxes being the key driving force. It does however capture only part of the secular increase in married women's employment rates in the 1980s and early 1990s, suggesting an important role for factors not considered in this paper. We will make the non-linear tax codes used as an input into the analysis available as a user-friendly and easily integrable set of Matlab codes.
    Keywords: taxation, two-earner households, hours worked
    JEL: E60 H20 H31 J22
    Date: 2018–09
  9. By: Keldenich, Carina; Knabe, Andreas
    Abstract: This paper revisits the added worker effect. Using bivariate random-effects probit estimation on data from the German Socio-Economic Panel we show that women respond to their partners’ unemployment with an increase in labor market participation, which also leads to an increase in their employment probability. Our analysis considers within- and between-effects separately, revealing differences in the relationships between women’s labor market statuses and their partners’ unemployment in the previous period (within effect) and their partners’ overall probability of being unemployed (between-effect). Furthermore, we demonstrate that partners’ employment in low-paid jobs has an effect on women’s labor market choices and outcomes similar to that of his unemployment.
    Keywords: Added Worker Effect,Labor Supply,Family Economics,Unemployment,Low-Pay Employment
    JEL: D12 D13 J22 D12 D13 J22
    Date: 2018
  10. By: Juranek, Steffen; Schindler, Dirk; Schneider, Andrea
    Abstract: The increasing use of intellectual property as a means to shift profits to low-tax jurisdictions or jurisdictions with so-called `patent boxes' is a major challenge for the corporate tax base of medium- and high-tax countries. Extending a standard tax competition model for capital-enhancing technology, royalty payments, and profit shifting, this paper suggests a simple fix: It is always optimal to set a withholding tax on (intra-firm) royalty payments equal to the corporate tax rate and deny any deductibility of royalties. As the tax applies to the full payment, the problem of identifying the arm's-length component in a digital economy (OECD BEPS Action 1) does not apply. Most importantly, the denial of royalty deductions is the Pareto-efficient solution under coordination and the unilaterally optimal policy under competition for mobile capital. In the latter case, a weakened thin capitalization rule is a crucial part of the policy package in order to avoid negative investment effects. Our results question the ban of royalty taxes in double tax treaties and the EU Interest and Royalty Directive.
    Keywords: source tax on royalties,tax competition,multinationals,profit shifting
    JEL: H25 F23
    Date: 2018
  11. By: Antonio Vezzani (European Commission – JRC); Emanuele Pugliese (European Commission - JRC); Petros Gkotsis (European Commission - JRC)
    Abstract: In this work we use patent data from the European patent office (EPO) to assess the capabilities of EU regions in developing digital technologies especially focusing on those that are more closely related to the digital transformation. More specifically, we measure ICT patents by considering those containing digital codes, as defined by the OECD. The penetration of digital technologies in the development of innovative products is instead captured by the co-occurrence of digital and non-digital codes within patent documents; we call these patents ICT-combining patents.
    Keywords: Industrial transformation, Industry, Digital technologies, ICT, Regional specialisation
    JEL: O30 O14 R10 R58
    Date: 2018–10
  12. By: Fackler, Daniel; Mueller, Steffen; Stegmaier, Jens
    Abstract: Why does job displacement, e.g., following import competition, technological change, or economic downturns, result in permanent wage losses? The job displacement literature is silent on whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We therefore estimate losses in wages and firm wage premiums. Premiums are measured as firm effects from a two-way fixed-effects approach, as described in Abowd, Kramarz, and Margolis (1999). Using German administrative data, we find that wage losses are, on average, fully explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses in wages and premiums are minor for workers displaced from small plants and strongly increase with pre-displacement firm size, which provides an explanation for the large and persistent wage losses that have been found in previous studies mostly focusing on displacement from large employers.
    Keywords: job displacement,wages,firm size,firm rents
    JEL: J31 J63 J65
    Date: 2018
  13. By: Ugur, Mehmet; Trushin, Eshref
    Abstract: Public subsidies are expected to stimulate business R&D investment by correcting market failures. However, the existing evidence varies considerably and the causes of heterogeneous effect sizes remain largely unexplored. We draw on the theory of contracts to argue that effect-size heterogeneity is due to different levels of informational rents that heterogeneous firm types can extract in a second-best environment of asymmetric information, risk aversion and incomplete contracting. Using two estimators and a panel dataset of 43,650 R&D-active UK firms from 1998-2012, we report that the effect of the subsidy on innovation inputs (i) is smaller or even negative during economic downturns; (ii) is positive among start-ups, younger and smaller firms, but negative among older and larger firms; and (iii) follows an inverted-U pattern when evaluated against the firm’s R&D intensity. Our findings are consistent across two estimation methods (propensity score matching and double robust estimators) and two innovation inputs (privately-funded R&D investment and employment of scientists and technicians).
    Keywords: Contract theory; treatment effect; R&D subsidy; innovation; additionality;
    Date: 2018–10–16
  14. By: Jonathan Eberle (Department of Geography, Philipps University Marburg); Thomas Brenner (Department of Geography, Philipps University Marburg); Timo Mitze (Department of Business and Economics, University of Southern Denmark)
    Abstract: This paper analyzes the role played by regional conditioning factors, namely absorptive capacity and economic freedom, for the working of regional policy in Germany. We construct synthetic composite indicators to measure differences in these factors across German regions and stratify regions by their respective values. We then identify the subsample-specific transmission channels of regional policies in a spatial panel vector-autoregressive (VAR) framework and compare the direction and magnitude of effects by impulse-response function analysis and ex-post t-tests. The results point to two main channels of policy impact: While regions with low levels of absorptive capacity and economic freedom benefit from public funding only in terms of a traditional funding channel (i.e. higher investment rates and partly increased human capital levels), the link between regional policy, GDP and technology growth is very weak for these regions. In comparison, our findings hint at significant positive effects on regional GDP per workforce and patent activity for regions with a high absorptive capacity and economic freedom (i.e. a knowledge-based funding channel). This underlines the role of regional conditions for the direction and magnitude of funding effects and should be considered by policy makers as a means to trigger policy effectiveness in times of stagnating or decreasing funding volumes.
    Keywords: regional policy, production function, absorptive capacity, economic freedom, SpPVAR, impulse-response functions
    JEL: C33 R11 R58 O38 O47
    Date: 2018–10
  15. By: Sabine Duvaleix-Treguer; Charlotte Emlinger; Carl Gaigné; Karine Latouche
    Abstract: The paper questions the impact of geographical indication labels on firm export competitiveness in the French cheese and cream industry. We use firm level data from the French custom and an original dataset of firms and products concerned by Protected Designations of Origin (PDO). Our estimations show that PDO labeling allows firms to increase their price by 11.5% on average. Moreover these products are perceived by consumers as products of better quality than non-PDO products. Regarding trade margins, while the effect on trade volume (the intensive margin of trade) is not significant, PDO labeling increases the probability of serving a foreign country (the extensive margin of trade). Our estimations show that exports of PDO products would increase by 11.4% if non-EU consumers value PDO label as much as EU consumers.
    Keywords: Geographical Indication;PDO;Trade Margins;Product Quality;Price
    JEL: F10 F14
    Date: 2018–10
  16. By: Elias Oikarinen
    Abstract: This study provides theoretical consideration and empirical estimation of the crowding out effects of subsidized housing supply at the city level. In particular, the aim is to explore the influence of subsidized housing stock on supply and prices in the non-subsidized housing sector. The empirical analysis is based on data for 1995-2015 for a panel of ten largest Finnish cities, all of which have a considerable supply of subsidized housing offering rental dwellings at lower than market rents. The empirical results indicate that, on average, one more subsidized dwelling is associated with 0.4 fewer non-subsidized dwellings. While the influence on non-subsidized housing prices could be either positive or negative in theory, the effect is price decreasing in the Finnish case. The study contributes to the very scarce scientific literature on crowding out effects of subsidized housing and appears to be the first one to distinguish between the crowding out impact that takes place through the influence via demand for non-subsidized housing vs. the supply curve effect.
    Keywords: Crowding out; Housing; supply
    JEL: R3
    Date: 2018–01–01
  17. By: Heiko Kirchhain; Joachim Zietz
    Abstract: The study demonstrates that real estate prices react in a statistically significant manner to exogenous announcement effects that may affect regional employment opportunities. We analyze the impact of the announcement of the VW emissions scandal on 9/18/2015 on house prices in the vicinity of Chattanooga, TN, the location of the only current VW production plant in the United States using quantile regression-analysis. Our results indicate that the announcement of the VW emission scandal lowered average, quality adjusted sale prices by an average of 3.3 percent 31 to 60 days after the announcement and by 4.5 percent after 61 to 90 days. There are no statistically significant effects after 90 days. The quantile regressions show that in particular the mid-price range is negatively influenced by this exogenous shock. Our robustness checks show that the price impact increases with proximity to the production plant.
    Keywords: Announcement effect; Hedonic house price model; Quantile Regression; VW emission scandal
    JEL: R3
    Date: 2018–01–01
  18. By: Enrico Fabrizi (DISCE, Università Cattolica); Chiara Mussida (DISCE, Università Cattolica)
    Abstract: The burden of poverty in Italy is unevenly distributed among various household types; in particular, those with dependent children are characterized by much higher incidences rates. As a consequence Italian children are more likely to experience poverty with respect to the general population, hindering their effective inclusion in the Italian society. This paper analyses the determinants of the risk of poverty and severe material deprivation for households with dependent children in Italy for the period 2010-2013. The analysis is based on the EU-SILC survey. We consider three indicators: the at risk-of-poverty, the subjective poverty, and the severe material deprivation rates. We apply a dynamic random effects probit model with autocorrelated error separately to the analysis of each indicator to assess genuine state dependence after controlling for various structural characteristics of the households. A strong state dependence emerges, regardless of the considered poverty measure thus providing evidence of poverty persistence or poverty trap. We also find that household work intensity is fundamental to prevent household to fall into poverty and material deprivation.
    Keywords: Risk of poverty, Subjective poverty, Severe material deprivation, Dynamic probit models, State dependence
    JEL: C23 I32 J13 J21
    Date: 2018–07
  19. By: Arntz, Melanie; Ben Yahmed, Sarra; Berlingieri, Francesco
    Abstract: Working from home has become more and more common, especially among high-skill workers, since the early 2000s. In this paper we investigate how such alternative work arrangements affect hours of work including overtime, wages, job and life satisfaction. We exploit five waves of the German Socio-Economic Panel between 1997 and 2014, a period during which the revolution in telecommunication technologies has dramatically reduced the costs to perform certain tasks at home. Controlling for individual fixed effects, we find that home-based work has led to an expansion of overtime hours among full-time employees, especially among women. However, these overtime hours seem to pay off in terms of wages for men only. We do not find that childless women are affected differently from mothers. We also control for selection into employment in a panel setting when time-varying unobserved preferences or characteristics may affect employment decision.
    Keywords: working from home,working hours,wages,gender,technological change
    JEL: J2 J31 O33
    Date: 2018
  20. By: Placzek, O.
    Abstract: Context : Scotland has some of the highest rates of obesity in Europe. It also has a diet high in calorie-dense food mainly purchased in supermarkets. Objective: This paper investigates the role of supermarket promotions on consumption of healthy/ unhealthy food in Scotland using Kantar Worldpanel data recording weekly purchases of over 3,000 households over ten-year period (2006-2015). Design: This study combines three large datasets to address important questions relating to the effect of supermarketpromotions on purchases among socioeconomic classifications of food consumers.The food consumption data are combined with socioeconomic characteristics of households obtained from the Scottish Index of Multiple Deprivation and the UK FSA Nutrient Profiling to assess the impact of promotions on purchases of healthy/ unhealthy food. Subsequent analysis will be undertaken to apply the approach to the consumption of all food. Results: The preliminary results are presented from an on-going study and show that the consumption of breakfast cereals is less healthy in 2015 compared to 2006. A decrease in full price purchases and an increase in promotion type price reduction has been found across all SIMD groups. Conclusion: The results after a regression will give implication on how the purchases of healthy/ unhealthy foods are influenced through promotion types in supermarkets. Acknowledgement : I want to acknowledge the financial support of the Scottish Rural College (SRUC) in Edinburgh and the Bournmouth University for the BU Matched funding scheme.
    Keywords: Consumer/Household Economics
    Date: 2018–07
  21. By: Nicolò Gnocato (Bank of Italy); Concetta Rondinelli
    Abstract: A recent strand of literature has investigated the granular sources of the business cycle, i.e. to what extent firm-level dynamics have an impact on aggregate fluctuations. From a conceptual point of view, in the presence of fat-tailed firm-size distributions, shocks to large firms may not average out and may then have a direct effect on aggregate fluctuations; in addition, firm-to-firm linkages can propagate shocks to individual firms, leading to movements at the aggregate level. Using Cerved and INPS data, we test the granular hypothesis on a large sample of Italian firms, covering the period 1999-2014. Idiosyncratic Total Factor Productivity (TFP) shocks are found to explain around 30 per cent of aggregate TFP volatility; furthermore, the contribution of these linkages to firm-specific aggregate volatility is more important than that of the direct effect, especially for the manufacturing sector.
    Keywords: aggregate fluctuations, firm-level dynamics, productivity
    JEL: D24 E32 L25
    Date: 2018–09
  22. By: Lucia Rizzica (Bank of Italy)
    Abstract: This paper investigates the relationship between aspirations and inequality in higher education participation. Using a regression discontinuity design, I evaluate the impact of a nationwide UK policy aimed at raising aspirations towards college education in pupils from disadvantaged backgrounds by involving them in outreach activities. I find that the policy successfully raised the aspirations of the target students and their participation in post compulsory education. However, its final effect on college enrolment was negligible overall and appears concentrated among students from the most affluent families and those in the central part of the ability distribution.
    Keywords: aspirations, tertiary education, evaluation of education reform
    JEL: J24 H52 I24
    Date: 2018–09
  23. By: Michelle Norris (School of Social Policy, Social Work and Social Justice, University College Dublin); Aideen Hayden (School of Social Policy, Social Work and Social Justice, University College Dublin)
    Abstract: The article examines the funding and financial sustainability of local authority provided social housing in Ireland. To do so it draws on: a comprehensive analysis of arrangements for funding the sector and expenditure trends since 1990; comparison of these arrangements with those used to fund social housing in other Western European Countries and case-studies of council housing output, management and maintenance in five local authorities. The argument offered here is that the arrangements used to fund council housing provision are highly unusual in the international context and, although useful in ensuring the affordability of housing for low-income tenants, are very problematic from the perspective of enabling the efficient and affordable delivery, management and maintenance of dwellings.
    Date: 2018–10–12
  24. By: Makles, Anna; Schneider, Kerstin
    Abstract: Noise pollution is detrimental to health and to the cognitive development of children. This is not only true for extreme levels of noise in the neighborhood of an airport but also for traffic noise in urban areas. Using a census of preschool children, we show that children exposed to intensive traffic noise significantly fall behind in terms of school readiness. Being exposed to an additional 10 dB(A) counteracts the benefits to school readiness from about 3 months of kindergarten. We contribute to the literature and the policy debate on noise reduction by working with administrative data and focusing on everyday exposure to noise. The proposed method is easily applied to other regions. We assess the public costs of different abatement instruments and perform a cost-benefit analysis accordingly. It turns out that the commonly used abatement measures—e.g., quiet pavement or noise protection walls in densely populated areas of about 3,000 to 5,000 inhabitants per km2—are potentially cost efficient, even under a conservative assessment of the benefits.
    Keywords: Noise,child development,early education,abatement,abatement costs
    JEL: Q53 I18 H23 H54
    Date: 2018
  25. By: Karlsson, Martin; Schwarz, Nina; Fischer, Martin; Nilsson, Therese
    Abstract: We evaluate the impact on earnings, pensions, and further labor market outcomes of two parallel educational reforms increasing instructional time in Swedish primary school. The reforms extended the annual term length and compulsory schooling by comparable amounts. We find striking differences in the effects of the two reforms: at 5%, the returns to the term length extension were at least half as high as OLS returns to education and benefited broad ranges of the population. The compulsory schooling extension had small (2%) albeit significant effects, which were possibly driven by an increase in post-compulsory schooling. Both reforms led to increased sorting into occupations with heavy reliance on basic skills.
    Keywords: Educational reforms,Compulsory schooling,Term length,Returns to Education
    JEL: J24 J31 I28
    Date: 2018
  26. By: Lucia Gibilaro; Gianluca Mattarocci
    Abstract: The existence of brownfield areas inside a city has negative effects on the real estate market due to the decrease of the demand for real estate assets nearby for both the prices and rents.The impact could be different on the basis of the different type of real estate investment considered and normally the impact is expected to be higher for residential assets. The paper evaluates the economic effect of abandoned real estate in the city of Milan for the time period 1993-2016 and shows that the city is characterised by a concentration of abandoned/dismissed assets in some city districts. Using standard hedonic models, the paper shows that the existence of brownfield areas nearby a real estate asset affects negatively its price and the negative contribution on price could be even higher than some district/building features.
    Keywords: Brownfield areas; Hedonic price model; Housing Price
    JEL: R3
    Date: 2018–01–01

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