nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2018‒11‒19
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 De Benedetto, Marco Alberto
  2. Size and distributional pattern of pension-related tax expenditures in European countries By Barrios, Salvador; Coda Moscarola, Flavia; Figari, Francesco; Gandullia, Luca
  3. Childcare - A safety net for children? By Aalto, Aino-Maija; Mörk, Eva; Sjögren, Anna; Svaleryd, Helena
  4. Relocation of the Rich: Migration in Response to Top Tax Rate Changes from Spanish Reforms By David R. Agrawal; Dirk Foremny
  5. Forecasting house prices in Italy By Simone Emiliozzi; Elisa Guglielminetti; Michele Loberto
  6. Household wealth in Italy and in advanced countries By Diega Caprara; Riccardo De Bonis; Luigi Infante
  7. Location Choices of Swedish Independent Schools: How Does Allowing for Private Provision Affect the Geography of the Education Market? By Edmark, Karin
  8. Comparing the Education Gradient in Chronic Disease Incidence Among the Elderly in Six OECD Countries By Aurélie Côté-Sergent; Raquel Fonseca Benito; Erin Strumpf
  9. The Effect of Education on Health: Evidence from National Compulsory Schooling Reforms By Raquel Fonseca Benito; Pierre-Carl Michaud; Yuhui Zheng
  10. Labor supply and the business cycle: The “Bandwagon Worker Effect” By Martín Román, Ángel L.; Cuéllar-Martín, Jaime; Moral de Blas, Alfonso
  11. Runoff vs. Plurality: Does It Matter for Expenditures? Evidence from Italy By Cipullo, Davide
  12. The Effect of Working Hours on Health By Inés Berniell; Jan Bietenbeck
  13. Voter Bias and Women in Politics By Le Barbanchon, Thomas; Sauvagnat, Julien
  14. Quality Assessment of Microsimulation Models: The Case of EUROMOD By Sutherland, Holly
  15. Effects of Market Structure and Patient Choice on Hospital Quality for Planned Patients By Giuseppe Moscelli; Hugh Gravelle; Luigi Siciliani
  16. Matching in Cities By Wolfgang Dauth; Sebastian Findeisen; Enrico Moretti; Jens Suedekum
  17. A case study on Germany's aviation tax using the synthetic control approach By Daniel Borebly
  18. Implementing corporate tax cuts at the expense of neutrality? A legal and optimisation analysis of fundamental reform in practice By Kayis-Kumar, Ann
  19. R&D Intensive Corporations and the Job Market: The Danish Case By Nicola Grassano; Alexander Coad; Jacob Holm; Christian Ostergaard; Bram Timmermans; Antonio Vezzani
  20. Italian Regions In Global Value Chains: an Input-Output Approach By Chiara Bentivogli; Tommaso Ferraresi; Paola Monti; Renato Paniccià; Stefano Rosignoli
  21. Dissecting Between-Plant and Within-Plant Wage Dispersion - Evidence From Germany By Baumgarten, Daniel; Felbermayr, Gabriel; Lehwald, Sybille
  22. Low achievers, teaching practices and learning environment By Artur Pokropek; Patricia Costa; Sara Flisi; Federico Biagi
  23. Crowdinvesting in entrepreneurial projects: Disentangling patterns of investor behavior By Maximilian Goethner; Sebastian Luettig; Tobias Regner
  24. Fatal Attraction? Extended Unemployment Benefits, Labor Force Exits, and Mortality By Kuhn, Andreas; Staubli, Stefan; Wuellrich, Jean-Philippe; Zweimüller, Josef
  25. The effects of innovation on the decisions of exporting and/or importing in SMEs: empirical evidence in the case of Spain. By Alfonso Expósito; Juan A. Sanchis-Llopis
  26. The taxation of savings: the Italian system and international comparison By Nicola Branzoli; Giovanna Messina; Elena Pisano; Giacomo Ricotti; Ernesto Zangari

  1. By: De Benedetto, Marco Alberto
    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.
    Keywords: Regression discontinuity design; Electoral system; Education; Political competition.
    JEL: C31 D72 I20 J42
    Date: 2018–10–14
  2. By: Barrios, Salvador; Coda Moscarola, Flavia; Figari, Francesco; Gandullia, Luca
    Abstract: Policy discussions on pension systems generally focus on their sustainability and design, including retirement age, income reference and contributory period, with relatively little attention devoted to the tax treatment of pension contributions and pension benefits. However, tax expenditures—defined as deviations from an agreed benchmark tax system— are widely used in EU Member States, and little is known about their fiscal and distributional impact. This paper quantifies the fiscal and distributional impact of tax expenditures related to public and private contributory pension schemes, affecting both contributions and pension benefits, in 28 European countries using EUROMOD, the EU-wide microsimulation model. We find that pension-related tax expenditures can have a sizeable impact on revenue and strong effects on inequality and poverty. Tax expenditures tend to be progressive on two levels: first, among pensioners, by favoring those with lower incomes, mainly as a result of the preferential treatment given to pension incomes; and, second, among people of working age, through a partial or no deduction of pension contributions, draining resources from those at the top of the income distribution. Moreover, embracing a lifetime perspective, tax expenditures tend to redistribute resources in favor of women and low educated individuals.Â
    Date: 2018–10–26
  3. By: Aalto, Aino-Maija (UCLS); Mörk, Eva (UCLS, UCFS,CESifo, IZA, IEB); Sjögren, Anna (IFAU Uppsala, UCLS); Svaleryd, Helena (UCLS, UCFS)
    Abstract: We analyze how access to childcare affects health outcomes of children with unemployed parents using a reform that increased childcare access in some Swedish municipalities. For 4–5 year olds, we find an immediate increase in infection-related hospitalization, when these children first get access to childcare. We find no effect on younger children. When children are 10–11 years of age, children who did not have access to childcare when parents were unemployed are more likely to take medication for respiratory conditions. Taken together, our results thus suggest that access to childcare exposes children to risks for infections, but that need for medication in school age is lower for children who had access.
    Keywords: Childcare; Child health; Unemployment; Quasi-experiment
    JEL: I14 J13
    Date: 2018–08–28
  4. By: David R. Agrawal (University of Kentucky, Department of Economics and Martin School of Public Policy & Administration); Dirk Foremny (IEB, Department of Public Economy, Political Economy and Spanish Economy, Universitat de Barcelona, Facultat d'Economia i Empresa)
    Abstract: recent Spanish tax reform granted regions the authority to set income tax rates, resulting in substantial tax di erentials. We use individual-level information from Social Security records over a period of one decade. Conditional on moving, taxes have a significant e ect on location choice. A one percent increase in the net of tax rate for a region relative to others increases the probability of moving to that region by 1.7 percentage points. Focusing on the stock of top-taxpayers, we estimate an elasticity of the number of top taxpayers with respect to net-of-tax rates of 0.85. Using this elasticity, a theoretical model implies that the mechanical increase in tax revenue due to higher tax rates is larger than the loss in tax revenue from the out- ow of migration.
    Keywords: Migration, Taxes, Mobility, Rich, Fiscal Decentralization
    JEL: H24 H31 H73 J61 R23
    Date: 2018–11
  5. By: Simone Emiliozzi (Bank of Italy); Elisa Guglielminetti (Bank of Italy); Michele Loberto (Bank of Italy)
    Abstract: Forecasting house prices is a difficult task given the strong relationship between real estate markets, economic activity and financial stability, but it is an important one. This paper evaluates the out-of-sample forecasting performance of various models of house prices in a quasi-real time setting. Focusing on Italy, we consider two structural models (using simultaneous equations) and a Bayesian VAR and compute both conditional and unconditional forecasts. We find that the models perform better than a simple autoregressive benchmark; however, the relative forecast accuracy depends on the forecast horizon and also changes over time. For the full sample period the simultaneous equation model, which takes into account credit supply restrictions and real estate taxation, shows the best performance measured in terms of root mean squared forecasting error (RMSFE). In the first part of the sample (2005-2010), medium-term forecasts of house prices greatly benefit from conditioning on the evolution of households’ disposable income, whereas from 2010 onwards the path of the stock of mortgages becomes important.
    Keywords: house prices, forecasting, structural model, BVAR
    JEL: C32 C53 E37 R39
    Date: 2018–10
  6. By: Diega Caprara (Bank of Italy); Riccardo De Bonis (Bank of Italy); Luigi Infante (Bank of Italy)
    Abstract: The paper studies the long-term evolution of household wealth in order to compare the changes in Italian financial wealth and real wealth with those of the most advanced countries. In Italy households’ real wealth is 5.5 times disposable income, while housing wealth is 4.6 times, and financial wealth is 3.8 times disposable income. Therefore total gross wealth is around 9.3 times disposable income. Given that household liabilities make up 80 per cent of disposable income, total net wealth is 8.5 times income. In France and Spain household non-financial wealth also exceeds that of financial assets, while the contrary holds in the United States and in Germany. In Italy the ratio of gross financial wealth to disposable income is in line with that in France, greater than in Spain and Germany, and smaller than in the USA, Japan, the UK, and Canada. With the exception of Germany and Japan, changes in financial assets are mainly due to price changes in financial instruments – holding gains or losses – rather than to financial transactions. In the last two decades the financial portfolio of Italian households has become more similar to the average portfolio of the advanced economies. Italian household debt is the lowest by international comparison.
    Keywords: financial wealth, households, non-financial wealth, debts, financial accounts
    JEL: E01 E21
    Date: 2018–11
  7. By: Edmark, Karin (Swedish Institute for Social Research)
    Abstract: This paper studies the location decisions of Swedish start-up independent schools. It makes use of the great expansion of independent schools following a reform implemented in 1992 to test what local market characteristics are correlated with independent school entry. The results suggest that independent schools are more likely to choose locations with a higher share of students with high-educated parents; a higher student population density; and a lower share of students with Swedish-born parents. There is also some evidence that independent schools are less likely to locate in municipalities with a left-wing political majority. These results are robust to various alternative and flexible definitions of local school markets, which were employed in order to alleviate the Modifiable Areal Unit Problem. For some of the included variables, the definition of the local market however had a large impact on the results, suggesting that the issue of how to define regions in spatial analyses can be important.
    Keywords: Private provision; Mixed markets; Education sector; Modifiable Areal Unit Problem
    JEL: H44 I28 L19 R32
    Date: 2018–11–05
  8. By: Aurélie Côté-Sergent; Raquel Fonseca Benito; Erin Strumpf
    Abstract: Inequalities in health by educational attainment are persistent both over time and across countries. However, their magnitudes, evolution, and main drivers are not necessarily consistent across jurisdictions. We examine the health-education gradient among older adults in the United States, Canada, France, the Netherlands, Spain and Italy, including how it changes over time between 2004 and 2010. Using longitudinal survey data, we assess how rates of incident poor health, incident difficulties with activities of daily living, and incident chronic conditions vary by educational attainment across countries. We also examine how potential confounders, including demographic characteristics, income, health care utilisation and health behaviours, affect the health-education gradient within countries over time. We find systematic differences in disease incidence, as well as in the health-education gradients, across countries. We also demonstrate that while adjusting for confounders generally diminishes the health-education gradient, the impacts of these variables vary somewhat across countries.
    Keywords: Disease incidence,Older ages,Education,
    JEL: I1 I2
    Date: 2018–04–12
  9. By: Raquel Fonseca Benito; Pierre-Carl Michaud; Yuhui Zheng
    Abstract: This paper sheds light on the causal relationship between education and health outcomes. We combine three surveys (SHARE, HRS and ELSA) that include nationally representative samples of people aged 50 and over from fifteen OECD countries. We use variations in the timing of educational reforms across these countries as an instrument for education. Using IV-Probit models, we find causal evidence that more years of education lead to a lower probability of reporting poor health, less likely of having limitations in functional status (ADL and iADLs), and lower prevalence for diabetes. These effects are larger than those from the Probit that do not control for the endogeneity of education. The relationship between education and cancer is positive in both Probit and IV-Probit models. The causal impacts of education on other chronic conditions as well as functional status are not established using IV-Probit models.
    Keywords: Education,Health,Causality,Compulsory Schooling Laws,
    JEL: I1 I2
    Date: 2018–04–11
  10. By: Martín Román, Ángel L.; Cuéllar-Martín, Jaime; Moral de Blas, Alfonso
    Abstract: The relationship between the labor force participation and the business cycle has become a topic in the economic literature. However, few studies have considered whether the cyclical sensitivity of the labor force participation is influenced by “social effects”. In this paper, we construct a theoretical model to develop the “Added Worker Effect” and the “Discouraged Worker Effect”, and we integrate the “social effects”, coining a new concept, the Bandwagon Worker Effect (BWE). To estimate the cyclical sensitivity of the labor force participation, we employ a panel dataset of fifty Spanish provinces for the period 1977–2015. Finally, we use spatial econometrics techniques to test the existence of the BWE in the local labor markets in Spain. Our results reveal that there exists a positive spatial dependence in the cyclical sensitivity of the labor force participation that decreases as we fix a laxer neighborhood criterion, which verifies the existence of the BWE. From the perspective of economic policy, our work confirms that “social effects” play a key role at the time of determining the economic dynamics of the territories.
    Keywords: Labor force participation,business cycle,regional labor markets,bandwagon effect,spatial dependence
    JEL: C23 D03 E32 J21 R23
    Date: 2018
  11. By: Cipullo, Davide (Department of Economics)
    Abstract: This paper compares the runoff system and the plurality rule in terms of the size and composition of public expenditures. I use the change in the voting rule in Italian municipalities at 15,000 residents to implement a regression discontinuity design. The results show that municipalities under the runoff system spend at least 20 percent more than those under the plurality rule, and that this effect is primarily driven by a large increase in administrative spending. Additionally, the greater number of candidates and the larger coalitions indicate lower accountability under the runoff system than under the plurality rule.
    Keywords: Voting rules; Fiscal policy; Runoff; Plurality; Regression discontinuity design
    JEL: D72 E02 H39 H50
    Date: 2018–10–11
  12. By: Inés Berniell (CEDLAS-FCE-UNLP); Jan Bietenbeck (Lund University and IZA)
    Abstract: Does working time affect workers' health? We study this question in the context of a French reform which reduced the standard workweek from 39 to 35 hours, at constant earnings. Our empirical analysis exploits variation in the reduction of working time across employers, which was driven by the institutional features of the reform and thus exogenous to workers' health. We find that longer working hours increase smoking and decrease self-reported health, and that these impacts are concentrated among bluecollar workers. In contrast, white-collar workers' body mass index increases with hours worked.
    JEL: I10 I12 J22
    Date: 2018–11
  13. By: Le Barbanchon, Thomas; Sauvagnat, Julien
    Abstract: We study and quantify the implications of voter bias and electoral competition for the gender composition of politicians. We show that unfavorable voters' attitudes towards women and local gender earnings gaps correlate negatively with the share of female candidates in both French Parliamentary elections, and across countries. Using within-candidate variation only, we also find that female candidates in French elections obtain lower vote shares in municipalities with higher gender earnings gaps. We then propose a model of political selection with voter bias. We show theoretically that when voters are biased against women, political parties facing gender quotas tend to select male candidates in the most contestable districts. We take this test to the data using the introduction of gender quotas in France, and find strong support for the existence of a voter bias in favor of male candidates. Finally, we calibrate our model and confirm in simulations that electoral competition significantly hinders the effectiveness of gender quotas in boosting women's presence in politics.
    Keywords: Electoral Competition; gender attitudes; Gender Quotas; women in politics
    JEL: D72 D78 J16
    Date: 2018–10
  14. By: Sutherland, Holly
    Abstract: Assessing the quality of microsimulation models is an important contributing factor for motivating their use in both academic and policy environments. This is particularly relevant for EUROMOD, the tax-benefit microsimulation model for the European Union, because it is intended to be widely used. This paper explains how the quality of EUROMOD is assessed. It focusses on the validity and scope of results as particularly important dimensions of quality, and on the transparency with which this assessment is done. It also provides evidence on the extent and breadth of the use of EUROMOD. Some of the key trade-offs between different aspects of quality are identified and the paper concludes with a view on the appropriate division of responsibility for quality assessment, between model developers and users.Â
    Date: 2018–10–30
  15. By: Giuseppe Moscelli (University of Surrey); Hugh Gravelle (University of York); Luigi Siciliani (University of York)
    Abstract: We investigate the change in the effect of market structure on planned hospital quality for three high-volume treatments, using a quasi difference-in-differences approach based on the relaxation of patient constraints on hospital choice in England. We employ control functions to allow for time-varying endogeneity from unobserved patient characteristics. We find that the choice reforms reduced quality for hip and knee replacement but not for coronary bypass, This is likely due to hospitals making a larger loss on hip and knee replacements, since robustness checks rule out changes in length of stay, new competitors’ entry and hospital-level mortality as possible confounders.
    JEL: H51 I11 I18 L32 L33
    Date: 2018–10
  16. By: Wolfgang Dauth; Sebastian Findeisen; Enrico Moretti; Jens Suedekum
    Abstract: In most countries, average wages tend to be higher in larger cities. In this paper, we focus on the role played by the matching of workers to firms in explaining geographical wage differences. Using rich administrative German data for 1985-2014, we show that wages in large cities are higher not only because large cities attract more high-quality workers, but also because high-quality workers are significantly more likely to be matched to high-quality plants. In particular, we find that assortative matching—measured by the correlation of worker fixed effects and plant fixed effects—is significantly stronger in large cities. The elasticity of assortative matching with respect to population has increased by around 75% in the last 30 years. We estimate that in a hypothetical scenario in which we keep the quality and location of German workers and plants unchanged, and equalize within-city assortative matching geographical wage inequality in Germany would decrease significantly. Overall, assortative matching magnifies wage differences caused by worker sorting and is a key factor in explaining the growth of wage disparities between communities over the last three decades. If high-quality workers and firms are complements in production, moreover, increased assortative matching will increase aggregate earnings. We estimate that the increase in within-city assortative matching observed between 1985 and 2014 increased aggregate labor earnings in Germany by 2.1%, or 31.32 billion euros. We conclude that assortative matching increases earnings inequality across communities, but it also generates important efficiency gains for the German economy as a whole.
    JEL: J0 R0
    Date: 2018–11
  17. By: Daniel Borebly (Department of Economics, University of Strathclyde)
    Abstract: The German Aviation Tax (AT) is a tax levied on departing passengers from German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports. The synthetic control method is used to generate counterfactual passenger numbers for German airports, and for airports outside Germany but near the German border. The results presented are consistent with cross-border substitution of passenger demand in response to AT. Most AT exempt airports near the borders have made sizable, significant, gains in passenger numbers since Germany introduced AT. Within Germany, there appears to be a clear distinction in the impact on small/regional airports and that on larger hubs.
    Keywords: aviation taxes, passenger demand, synthetic control
    JEL: H26 H30 L93
    Date: 2018–10
  18. By: Kayis-Kumar, Ann
    Abstract: Governments and policy-makers are increasingly faced with the trade-off of protecting their tax revenue bases while maintaining their international competitiveness. This is exemplified by the international trend of jurisdictions reducing their headline corporate tax rates, which is often justified on the basis that these cuts will lead to improved efficiency and integrity outcomes. This article explores whether it is more efficient to implement corporate tax cuts or an alternative reform such as an economic rent tax which may better achieve the tax policy goals of efficiency and integrity. In doing so, this article bridges the gap between applied legal research, economic theory and practical optimisation modelling. Specifically, this research presents a simulation analysis of the behavioural responses of a tax-minimising multinational enterprise to both existing and proposed tax regimes and compares efficiency and integrity outcomes upon implementing corporate tax cuts. This is complemented by a legal comparative analysis featuring case studies of an economic rent tax; namely, the Allowance for Corporate Equity (ACE) as introduced in Belgium and Italy. These case studies will focus on the political hurdles to implementing and sustaining these reforms, which will highlight key lessons learnt from the implementation of the ACE in practice.
    Keywords: Tax neutrality, Corporate tax reform, Allowance for Corporate Equity
    JEL: C61 H2 K34
    Date: 2018–09
  19. By: Nicola Grassano (European Commission - JRC); Alexander Coad (Pontificia Universidad Católica del Perú); Jacob Holm (Aalborg University); Christian Ostergaard (Aalborg University); Bram Timmermans (Norwegian School of Economics); Antonio Vezzani (European Commission - JRC)
    Abstract: In this brief we take the case of Denmark to analyse the role big R&D investing companies' play in job polarisation, focusing on a recent JRC report (Holm et al., 2017) studying skills, innovation and reorganization of labour
    Keywords: R&D Scoreboard companies, job polarisation, Denmark case
    Date: 2018–10
  20. By: Chiara Bentivogli (Bank of Italy); Tommaso Ferraresi (IRPET); Paola Monti (Bank of Italy); Renato Paniccià (IRPET); Stefano Rosignoli (IRPET)
    Abstract: This work uses input-output techniques to analyse the value added content of the interregional and international trade of Italian regions, which are characterized by marked differences in their level of development and production structure. Regions differ from one another in their degree of dependence on international and other regions’ demand: in those of the Centre and North, the contribution of foreign demand to regional production of value added is greater than in Southern Italy, where the role of national demand is much more important. Most regions show a significant participation in global value chains for given amounts of exports to other countries and regions which, however, are smaller overall in relation to total production in the South. The latter is also somewhat peripheral in the geography of international trade and depends to a greater extent on national suppliers; moreover, the supply ties between the different regions of the South are weak compared with the ties with some regions of the Centre and North.
    Keywords: global value chains, input-output tables, trade in value added, regional trade
    JEL: F1 F14 F15
    Date: 2018–10
  21. By: Baumgarten, Daniel (LMU Munich); Felbermayr, Gabriel (ifo Institute); Lehwald, Sybille (Federal Ministry for Economic Affairs and Energy)
    Abstract: Using rich linked employer-employee data for (West) Germany between 1996 and 2014, we analyze the most important drivers of the recent rise in German wage dispersion and pin down the relative contribution of plant and worker characteristics. Moreover, we separately investigate the drivers of between-plant and within-plant wage dispersion. We also analyze the sources of the recent slowdown in German wage inequality and compare the results for West Germany to the ones for East Germany. We disentangle the relative contribution of each single variable to the rise in wage dispersion using recentered influence function (RIF) regressions. The most important drivers of wage dispersion are industry effects and the bargaining regime. The former predominantly works through the wage structure effect while, in the latter case, both the decline in collective bargaining coverage and the strong increase in wage dispersion within the group of covered plants have played a substantial role. While education has been another factor contributing to both between-plant and within-plant wage inequality, other candidate factors such as plant size, the exporting status, plant technology, and investment intensity are all of little if any direct quantitative importance for the increase in wage dispersion.
    Keywords: wage inequality; decomposition; rif-regression; linked employer-employee data;
    JEL: J31 J51 C21 F16
    Date: 2018–11–08
  22. By: Artur Pokropek; Patricia Costa (European Commission - JRC); Sara Flisi (European Commission - JRC); Federico Biagi (European Commission - JRC)
    Abstract: The importance of reducing the incidence of low achievement is clearly recognized by the European Union, which – within its strategic framework for European cooperation in education and training – has set the objective of reducing the share of low-achieving 15-year-olds in mathematics, reading and science below 15% by 2020. This report uses data from the 2015 OECD Programme for International Student Assessment (PISA) to analyse the relationship between teaching practices – teacher-directed instruction, enquiry-based teaching, and adaptive instruction – and the likelihood that students are low achievers in science. Results show that teaching practices are strongly related with the probability of being a low-achieving student. Moreover, some complementarity exists between teaching practices. Properly combining different instruction methods leads to lower levels of underachievement in science. In particular, better outcomes are found in situations with high levels of adaptive instruction and teacher-directed methods, and medium intensity of enquiry-based practices.
    Keywords: Education and Lifelong Learning
    Date: 2018–10
  23. By: Maximilian Goethner (FSU Jena); Sebastian Luettig (FSU Jena); Tobias Regner (FSU Jena)
    Abstract: Crowdinvesting emerged recently as an alternative way of funding for start-up projects. Our dataset consists of all pledges made at Companisto, one of the largest crowdinvesting platforms in Europe. Using cluster analysis based on individual investment histories, we find that crowdinvestors differ in their investment strategies and motivations. We can distinguish three types of crowdinvestors that vary in their response to project quality signals of entrepreneurs, project-related information reducing the degree of uncertainty and social influence by fellow investors: Casual Investors, Crowd Enthusiasts, and Sophisticated Investors. We conclude that crowdinvestors are anything but a homogeneous group. Instead, they are motivated by different factors and respond to different signals when making investment decisions.
    Keywords: Crowdinvesting, Entrepreneurial finance, New ventures, Cluster analysis, Social influence, Signaling
    JEL: G23 L26
    Date: 2018–11–07
  24. By: Kuhn, Andreas; Staubli, Stefan; Wuellrich, Jean-Philippe; Zweimüller, Josef
    Abstract: We estimate the causal effect of permanent and premature exits from the labor force on mortality. To overcome the problem of negative health selection into early retirement, we exploit a policy change in unemployment insurance rules in Austria that allowed workers in eligible regions to exit the labor force 3 years earlier compared to workers in non-eligible regions. Using administrative data with precise information on mortality and retirement, we find that the policy change induced eligible workers to exit the labor force significantly earlier. Instrumental variable estimation results show that for men retiring one year earlier causes a 6.8% increase in the risk of premature death and 0.2 years reduction in the age at death, but has no significant effect for women.
    Keywords: early retirement; health behavior; Instrumental Variable; Mortality
    JEL: I10 I12 J14 J26
    Date: 2018–10
  25. By: Alfonso Expósito (Department of Economic Analysis and Political Economy, University of Seville, Calle San Fernando 4, 41004 Sevilla (Spain).); Juan A. Sanchis-Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This paper analyses the involvement of small firms in international trade activities by identifying the comprehensive impact of innovation. Specifically, we study how innovation introduced by these firms determines entrepreneurial decision-making process regarding whether to engage in exporting and/or importing. Moreover, we account for several innovation outputs (product, process, and organisational/managerial innovation) when estimating the potentially interrelated decisions of whether to export and/or import. Results confirm the simultaneity of firms’ exporting and importing decisions and consequently these two decisions should be estimated together when analysing the influence incurred by the introduction of alternative types of innovation on said decisions. Furthermore, findings show complementarity between types of innovation to be relevant in explaining export and import decisions made by SMEs. Specifically, cumulative effects as a result of combining product and process innovation, as well of product, process and organisational innovation, are highly significant in explaining export decisions, while in the case of imports, the combination of product and organisational innovation is shown to be significant. These findings lead to major policy and managerial implications regarding the promotion of SMEs’ participation in international trade flows through alternative innovation strategies.
    Keywords: innovation, exporting, importing, SME
    JEL: F14 O30 L20 M21
    Date: 2018–10
  26. By: Nicola Branzoli (Bank of Italy); Giovanna Messina (Bank of Italy); Elena Pisano (Bank of Italy); Giacomo Ricotti (Bank of Italy); Ernesto Zangari (Bank of Italy)
    Abstract: After a brief review of the economic literature, the paper offers a comparative analysis of the main features of capital income taxation in Italy, the EU and the US. The paper also analyses the recent evolution of capital taxation and portfolio allocation in Italy. The findings point to high heterogeneity in the choice of the type of tax system, taxation level and forms of preferential taxation, suggesting no convergence towards a single model of taxation among countries. However, a common feature of most systems is that capital income is taxed more lightly than labour income. The heterogeneity in the tax treatment of households’ savings is likely to persist in the future; recent developments at international level concerning the transparency of taxation are expected to increase governments’ degrees of freedom in choosing their preferred tax system. Empirical evidence for Italy suggests that the tax burden on financial assets has increased in recent years but the evolution of financial assets over time is not particularly sensitive to tax changes.
    Keywords: capital income, taxation, savings
    JEL: E21 H24 K34
    Date: 2018–10

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