nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒02‒04
thirty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Do digital information technologies help unemployed job seekers find a job? Evidence from the broadband internet expansion in Germany By Gürtzgen, Nicole; Diegmann (né Nolte), André; Pohlan, Laura; van den Berg, Gerard J.
  2. Early labor market prospects and family formation By Engdahl, Mattias; Godard, Mathilde; Nordström Skans, Oskar
  3. Sources and determinants of responsible innovations: occupational health and safety in italian firms By Marialuisa Divella; Alessandro Sterlacchini
  4. The 2015 European Refugee Crisis and Residential Housing Rents in Germany By Kürschner Rauck, Kathleen; Kvasnicka, Michael
  5. Growing up in Ethnic Enclaves: Language Proficiency and Educational Attainment of Immigrant Children By Alexander M. Danzer; Carsten Feuerbaum; Marc Piopiunik; Ludger Woessmann
  6. University Tuition Fees and High School Students' Educational Intentions By Bahrs, Michael; Siedler, Thomas
  7. Salience of Inherited Wealth and the Support for Inheritance Taxation By Bastani, Spencer; Waldenström, Daniel
  8. Justice Delayed Is Assimilation Denied: Rightwing Terror, Fear and Social Assimilation of Turkish Immigrants in Germany By Sumit S. Deole
  9. The effect of the Brexit referendum result on subjective well-being By Kavetsos, Georgios; Kawachi, Ichiro; Kyriopoulos, Ilias; Vandoros, Sotiris
  10. The changing geography of intergenerational mobility By Bell, Brian; Blundell, Jack; Machin, Stephen
  11. A regression discontinuity evaluation of reducing early retirement eligibility in Poland By Joanna Tyrowicz; Oliwia Komada; Pawel Strzelecki
  12. Impact of the German real estate transfer: Tax on the commercial real estate market By Frenzel Baudisch, Coletta; Dresselhaus, Carolin
  13. Econometric analysis of the effects of economic conditions on the health of newborns By van den Berg, Gerard J.; Paul, Alexander; Reinhold, Steffen
  14. Different Strokes for Different Folks: Entrepreneurs' Job Satisfaction and the Intersection of Gender and Migration Background By Teita Bijedić; Alan Piper
  15. Working for nothing: personality, time allocation and earnings in the UK. By Della Giusta, Marina; Jewell, Sarah
  16. Higher Education Supply, Neighbourhood effects and Economic Welfare By Elena Cottini; Paolo Ghinetti; Simone Moriconi;
  17. The strange case of appropriate C-sections:DRG-tariff regulation, hospital ownership, and market concentration By Berta, P.;; Martini, G.;; Piacenza, M.;; Turati, G.;
  18. Well-being, political decentralisation and governance quality in Europe By Andrés Rodríguez-Pose; Vassilis Tselios
  19. The productivity-wage premium: does size still matter in a service economy? By Berlingieri, Giuseppe; Calligaris, Sara; Criscuolo, Chiara
  20. Changing Risk Preferences at Older Ages By James Banks; Elena Bassoli; Irene Mammi
  21. The Survival of Italian Individual Firms to Local Demand Shocks During the Great Recession By Giovanni Marin; Marco Modica
  22. The Deterrent Effect of an Anti-Minaret Vote on Foreigners’ Location Choices By Slotwinski, Michaela; Stutzer, Alois
  23. Early Labor Market Prospects and Family Formation By Engdahl, Mattias; Godard, Mathilde; Nordström Skans, Oskar
  24. Offshoring and Skill-upgrading in French Manufacturing By Juan Carluccio; Alejandro Cuñat; Harald Fadinger; Christian Fons-Rosen
  25. Household Location in English Cities By David Cuberes; Jennifer Roberts; Cristina Sechel
  26. The Role of Body Weight for Health, Earnings and Life Satisfaction By Hübler, Olaf
  27. The effects of language skills on immigrant employment and wages in Italy By Pieroni, Luca; d'Agostino, Giorgio; Lanari, Donatella
  28. The Causal Effects of the Minimum Wage Introduction in Germany: An Overview By Caliendo, Marco; Schröder, Carsten; Wittbrodt, Linda
  29. The impact of minimum wages on wages and employment: evidence from Greece By Georgiadis, Andreas; Kaplanis, Ioannis; Monastiriotis, Vassilis
  30. Does Society Influence the Gender Gap in Risk Attitudes? Evidence from East and West Germany By Cornelia Chadi; Uwe Jirjahn
  31. Assessing job quality in the French labour market: decompositions of the native/migrant wage gap By Ilaria Benedetti; Andrea Regoli
  32. Explaining and measuring tolerant behavior By Caterina Liberati; Riccarda Longaretti; Alessandra Michelangeli

  1. By: Gürtzgen, Nicole (Institute for Employment Research); Diegmann (né Nolte), André (Centre for European Economic Research (ZEW) and Institute for Employment Research (IAB)); Pohlan, Laura (Centre for European Economic Research (ZEW) and Institute for Employment Research (IAB)); van den Berg, Gerard J. (University of Bristol, IFAU Uppsala, IZA, ZEW, CEPR and CESifo)
    Abstract: This paper studies effects of the introduction of a new digital mass medium on reemployment of unemployed job seekers. We combine data on high-speed (broadband) internet availability at the local level with German individual register data. We address endogeneity by exploiting technological peculiarities that affected the roll-out of high-speed internet. The results show that highspeed internet improves reemployment rates after the first months in unemployment. This is confirmed by complementary analyses with individual survey data suggesting that internet access increases online job search and the number of job interviews after a fewmonths in unemployment.
    Keywords: Unemployment; online job search; information frictions; matching technology; search channels
    JEL: C26 H40 J64 K42 L96
    Date: 2018–11–30
  2. By: Engdahl, Mattias (IFAU - Institute for Evaluation of Labour Market and Education Policy); Godard, Mathilde (University of Lyon, CNRS, GATE-LSE); Nordström Skans, Oskar (Uppsala Universitets centrum för arbetslivsforskning (UCLS))
    Abstract: We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females’ family formation outcomes. A policy-pilot affecting the length of upper-secondary education in Swedish vocational schools allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find that graduating straight into the recession had negative labor market consequences during the first few years but we find no evidence of permanent labor market scars. In contrast, graduating into the crisis had lasting effects on family formation outcomes of low-grade students in particular. Those who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter.
    Keywords: Family formation; female labor supply; cost of recessions
    JEL: E32 J12 J13 J22 J31
    Date: 2018–12–10
  3. By: Marialuisa Divella (Department of Economics and Social Sciences, Universita' Politecnica delle Marche); Alessandro Sterlacchini (Department of Economics and Social Sciences, Universita' Politecnica delle Marche)
    Abstract: This paper provides a micro-econometric analysis of the factors facilitating the introduction of responsible innovations by firms, with a focus on those aimed at improving occupational health and safety. These innovations have been rarely investigated with quantitative methods, especially if compared to those aimed at protecting the environment. Accordingly, we also assess whether firms pursuing health and safety innovations are also those ascribing high importance to the reduction of environmental impacts. The evidence provided by using firm-level data taken from the Italian Community Innovation Surveys highlights the key role played by some external sources of knowledge and internal human resource practices for the achievement of responsible innovations. Many similarities but also important differences between firms emerge, according to whether they are committed to health and safety or environmental innovation.
    Keywords: responsible innovation, occupational health and safety; environment protection.
    JEL: O31 Q55
    Date: 2019–01
  4. By: Kürschner Rauck, Kathleen (Otto-von-Guericke University Magdeburg); Kvasnicka, Michael (Otto-von-Guericke University Magdeburg)
    Abstract: We study the impact of the 2015 mass arrival of refugees to Germany on residential housing rents. Using unique data on end of year county-level refugee populations and data on monthly offers of flats for rent from Germany’s leading online property broker Immobilienscout24, we find strong evidence in difference-in-differences regressions for a negative effect of refugee immigration on rental prices. Adverse price effects, however, appear attenuated in the heyday of the crisis in late 2015 if a larger share of refugees is housed in decentralized accommodation. Various robustness checks corroborate our findings, including IV regressions that exploit for identification information on the pre-crisis location of refugee reception centers and group quarters.
    Keywords: housing rents, refugee migration, Germany
    JEL: F22 R23 R21 R31
    Date: 2018–12
  5. By: Alexander M. Danzer; Carsten Feuerbaum; Marc Piopiunik; Ludger Woessmann
    Abstract: Does a high regional concentration of immigrants of the same ethnicity affect immigrant children’s acquisition of host-country language skills and educational attainment? We exploit the exogenous placement of guest workers from five ethnicities across German regions during the 1960s and 1970s in a model with region and ethnicity fixed effects. Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children’s host-country language proficiency and increases school dropout. A key mediating factor for this effect is parents’ lower speaking proficiency in the host-country language, whereas inter-ethnic contacts with natives and economic conditions do not play a role.
    Keywords: immigrant children, ethnic concentration, language, education, guest workers
    JEL: J15 I20 R23 J61
    Date: 2018
  6. By: Bahrs, Michael (University of Hamburg); Siedler, Thomas (University of Hamburg)
    Abstract: This paper studies whether higher education tuition fees influence the intention to acquire a university degree among high school students and, if so, whether the effect on individuals from low-income households is particularly strong. We analyze the introduction and subsequent elimination of university tuition fees in Germany across states and over time in a difference-in-differences setting. Using data from the Youth Questionnaire of the German Socio-Economic Panel (SOEP), we find a large negative effect of tuition fees on the intention of 17-years-olds to acquire a higher educational degree, with a decrease of around eight percentage points (ten percent). Individuals from low-income households mainly drive the results. This study documents that the introduction of relatively low university tuition fees of 1,000 euros per academic year can considerably lower young people's educational intentions and choices.
    Keywords: tuition fees, educational inequality, difference-in-differences
    JEL: I22 I23 I24
    Date: 2018–12
  7. By: Bastani, Spencer (Department of Economics and Statistics, Linnaeus University); Waldenström, Daniel (Paris School of Economics)
    Abstract: We study how attitudes to inheritance taxation are influenced by information about the role of inherited wealth in society. Using a randomized experiment in a register-linked Swedish survey, we find that informing individuals about the large aggregate importance of inherited wealth and its link to inequality of opportunity significantly increases the support for inheritance taxation. The effect is almost uniform across socio-economic groups and survives a battery of robustness tests. Changes in the perceived economic importance of inherited wealth and altered views on whether luck matters most for economic success appear to be the main driving factors behind the treatment effect. Our findings suggest that the low salience of inherited wealth could be one explanation behind the relatively marginalized role of inheritance taxation in developed economies.
    Keywords: Capital taxation; Tax attitudes; Equality of opportunity; Randomized experiment
    JEL: D31 H20 H31
    Date: 2019–01–24
  8. By: Sumit S. Deole
    Abstract: Using the German Socioeconomic Panel (SOEP) data, this paper offers the first evidence that the 2011 news revelations about crimes committed by National Socialist Underground (NSU) network in early the 2000s resulted in an increase in worries about xenophobic hostility among NSU’s targeted groups. This serves as an indication of the minority’s perceived maltreatment by German institutions while investigating the NSU crimes. The results further show that the revelations significantly reinforced a feeling of estrangement among Turks, who were now less likely to self-identify as Germans and more likely to see themselves as foreigners; they, therefore, tended to bond more strongly with the ethos of their country of origin. The results also demonstrate that Turks reported a substantial decrease in their health satisfaction and subjective wellbeing. In conclusion, the paper underlines the pertinence of judicial efficacy over rightwing crimes for assimilation and welfare of immigrants.
    Keywords: Rightwing crimes, immigration, delayed justice, social assimilation
    JEL: D63 F22 J15 Z10
    Date: 2018
  9. By: Kavetsos, Georgios; Kawachi, Ichiro; Kyriopoulos, Ilias; Vandoros, Sotiris
    Abstract: We study the effect of the Brexit referendum result on subjective well-being in the United Kingdom. Using a quasi-experimental design, we find that this outcome led to an overall decrease in subjective well-being in the UK compared to a control group. The effect is driven by individuals who hold an overall positive attitude towards the EU and shows little signs of adaptation. Subjective well-being of those with a very negative attitude towards the EU increases in the short-run but turns negative, possibly due to unmet expectations. Using three different measures of socio-economic connection between the UK and other European countries, we generally do not find evidence supporting the presence of spillover effects of the Brexit referendum result on subjective well-being of individuals in other EU countries.
    Keywords: subjective well-being; happiness; Brexit; referendum; election
    JEL: D72 I30 I31 I38
    Date: 2018–12
  10. By: Bell, Brian; Blundell, Jack; Machin, Stephen
    Abstract: Does the importance of your family background on how far you get in adulthood also depend on where you grow up? For many countries, Britain included, a paucity of data has made this a question with very little reliable evidence to answer. To redress this evidence lacuna, we present a new analysis of intergenerational mobility across three cohorts in England and Wales using linked decennial census microdata. As well as testing the robustness of existing survey evidence on mobility trends over time, this large dataset permits analysis to be undertaken at a more geographically disaggregated level than was previously feasible. Evidence is presented on occupational wages, home ownership and education. Our new analysis shows a slight decline in occupation-wage mobility and a substantial decline in home ownership mobility over the late 20th century in England and Wales, while the picture for educational mobility is less clear. Focusing on the most recent cohort, we find marked geographic differences in mobility. We find that occupation-wage mobility is exceptionally high in London, while ex-industrial and mining areas experience the lowest rates of mobility. Areas with low occupation-wage mobility were more likely to vote to leave the European Union in the 2016 referendum. Home ownership mobility is negatively correlated with house prices and not correlated with occupation-wage mobility, suggesting that geographical comparisons based on one dimension of mobility need not always align with those based on alternative measures.
    JEL: I2 J62 R23 R31
    Date: 2018–12
  11. By: Joanna Tyrowicz (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Oliwia Komada (Warsaw School of Economics); Pawel Strzelecki (Warsaw School of Economics, National Bank of Poland)
    Abstract: The reform introduced in Poland in 2009 substantially and abruptly reduced the number of workers eligible for early retirement. This paper evaluates the causal effects of this reform on labor force participation and exit to retirement. We use rich rotating panel from the Polish Labor Force Survey and exploit the discontinuity imposed by this reform. We find a statistically significant, but economically small discontinuity at the timing of the reform. The placebo test shows no similar effects in earlier or later quarters, but in a vast majority of specifications the discontinuity is not larger for the treated individuals, i.e. those whose occupation lost eligibility. We interpret these results as follows: the changes in the eligibility criteria were not instrumental in fostering the participation rates among the affected cohort, i.e. the immediate contribution to increased labor force participation of these cohorts is not economically large.
    Keywords: retirement age, early retirement, regression discontinuity, Poland
    JEL: J14 J26
    Date: 2018–10
  12. By: Frenzel Baudisch, Coletta; Dresselhaus, Carolin
    Abstract: The tax burden of real estate transactions in Germany increased considerably since the constitutional reform in 2006. We examine the impact of the real estate transfer tax (RETT) on transactions and (net-of-tax) prices of commercial buildings and vacant commercial lots by means of a fixed-effects panel regression. The empirical analysis shows an association of a rise of the RETT by 1% with a decrease of office transactions by up to 0.41% and reduced prices by up to 0.22%. On the market for other commercial properties, transactions and prices decline by 0.17% and 0.19% respectively following a RETT increase. The negative price effects on the commercial real estate market tentatively indicate tax incidence with the seller. In the case of vacant commercial lots, a RETT increase seems to induce an increase of average prices by 0.36%, denoting tax incidence with the buyer. We find no significant effect on transactions of vacant lots in the data. In addition, we analyze possible neighborhood effects among the states. The empirical evidence for these effects implies that with an average of a 1% RETT increase in the bordering states of one state, the prices for other commercial properties and for vacant lots rise by 0.51% and 0.71% respectively. Hence, the border effect seems to surpass the direct price effect and suggests spatial structural changes in the investment behavior.
    Keywords: real estate transfer tax,commercial real estate market,share deal,panel regression
    JEL: H20 H22 H77 R33
    Date: 2018
  13. By: van den Berg, Gerard J. (IFAU - Institute for Evaluation of Labour Market and Education Policy); Paul, Alexander (Aarhus University, and TrygFonden’s Centre); Reinhold, Steffen (Germany and Max Planck Institute for Social Law and Social Policy (MEA))
    Abstract: We examine whether economic downturns are beneficial to health outcomes of newborn infants in developed countries. For this we use merged populationwide registers on health and economic and demographic variables, including the national medical birth register and intergenerational link registers from Sweden covering 1992–2004. We take a rigorous econometric approach that exploits regional variation in unemployment and compares babies born to the same parents so as to deal with possible selective fertility based on labor market conditions. We find that downturns are beneficial; an increase in the unemployment rate during pregnancy reduces the probability of having a birth weight less than 1,500 grams or of dying within 28 days of birth. Effects are larger in low socio-economic status households. Health improvements cannot be attributed to the parents’ own employment status. Instead, the results suggest a pathway through air pollution.
    Keywords: Economic conditions; Health of newborns
    JEL: I14
    Date: 2018–12–05
  14. By: Teita Bijedić; Alan Piper
    Abstract: Migrant enterprises comprise about 10% of all enterprises in Germany and are therefore a crucial part of the German economy and its entrepreneurial ecosystems. Relatedly, migrant entrepreneurship is a highly recognized topic within political discussions as well as within entrepreneurship research. While there is already an impressive body of work regarding the nature and quality of migrant enterprises, many questions regarding the personal motives and satisfaction of migrant entrepreneurs still remain unanswered (particularly with reference to gender and generation of migration). Using the German Socio-Economic Panel dataset, we close this research gap by investigating the job satisfaction of migrant entrepreneurs in Germany compared with native entrepreneurs, and also with conventionally employed migrants and natives. First generation migrants show, in general, less job satisfaction than the native population. Second generation male migrant entrepreneurs’ show less job satisfaction, however this association is reversed for females: second generation female migrant entrepreneurs are more satisfied with their self-employment than their native counterparts. These differing results lead to differing implications for policy makers who wish to create and develop entrepreneurial and labour market support for different target groups.
    Keywords: Migrant entrepreneurship, family firms, job satisfaction, intersectionality
    JEL: L26 J15 J16 J28
    Date: 2018
  15. By: Della Giusta, Marina; Jewell, Sarah
    Abstract: The UK has historically had some of the longest average working hours in the EU (Hogart et al, 2007), and the TUC reports that unpaid overtime is rife in the UK labour market (TUC, 2017). Supply side explanations have instead focused on peer pressure and status races, preference for work over family, and strong work identity (Hochschild, 1997; Besley and Gathak, 2008; Bryan and Nandi, 2015). Here we focus on personality traits, which have been studied in connection with occupational choice, labour market outcomes, participation, job performance, and absenteeism, and investigate their relationship with working hours. We make use of all seven available waves of the Understanding Society Survey and ask in particular whether certain personality types are more systematically associated with long working hours and experiencing time pressures and whether there are personality premia and penalties across the wage distribution. We find that particular personality types are more prone to working longer hours and experiencing time pressures. These effects are significant and bigger than some of the conventional variables such as human capital and, for women, the presence of small children. Whilst the effect of most personality traits is consistent with a rational theory of time allocation, we also find that neuroticism is instead associated with inconsistent behaviour (working fewer paid and more unpaid hours). In terms of personality payoffs, we find that neuroticism carries a penalty across the wage distribution, conscientiousness pays off (and more so at the top for men), extraversion pays off for women (and more so at the top), and, finally, that it really does not pay to be nice: agreeableness carries a penalty, and particularly so at the top of the wage distribution.
    Keywords: labour supply, overtime, time pressure, time allocation, personality.
    JEL: A13 D01 J22 Z1
    Date: 2018
  16. By: Elena Cottini (Universita' Cattolica di Milano); Paolo Ghinetti (Universita' del Piemonte Orientale); Simone Moriconi (IÉSEG School of Management and LEM-CNRS (UMR 9221));
    Abstract: This paper estimates neighbourhood effects in the local provision of higher education, and incorporates them in a welfare analysis of higher education supply. We use an own built dataset on the history of higher education institutions in Italy during 1861-2010 to implement an instrumental variables approach that exploits initial conditions in the pre-unitarian Italian states, interacted with post-unification comprehensive reforms of the university system. We provide robust evidence of local displacement between higher education supply in neighbouring provinces. These effects are mostly concentrated within the same field of study, the same region, and a spatial reach of 90 Km. We show that accounting for these displacement forces is important to evaluate the local economic returns of higher education supply. On average, higher education returns explain more than 4% of local value added per capita. Returns are very localised, and larger in provinces that host university hubs.
    Keywords: : : neighbourhood effects; higher education supply; historical data; initial conditions; economic welfare.
    JEL: I23 I28 N00 R1
    Date: 2019–01
  17. By: Berta, P.;; Martini, G.;; Piacenza, M.;; Turati, G.;
    Abstract: The aim of this paper is to discuss how different types of hospitals respond to large financial incentives for vaginal deliveries and to financial disincentives for C-sections. We focus on a public health care system based on the quasi–market model. We theoretically and empirically evaluate a government policy equalizing the tariff for C-section and vaginal deliveries at a level such that hospitals face monetary disincentives for C-section and monetary incentives for vaginal deliveries. We first theoretically show that hospital ownership matters insofar different types of hospitals are characterized by different ethical preferences; but ownership interacts with market concentration. We then consider the case-study of Lombardy in Italy. We exploit spatial variation in the presence of for-profit, not-for-profit and public hospitals and in the market concentration at the local level to evaluate the relationship between ownership and the probability of C-section. Our empirical results strongly suggest that competitive pressures from alternative providers tend to homogenize behaviors. However, in local monopolies, we do observe less C-section from private for-profit hospitals than from public and private non-profit hospitals especially when they are medically appropriate.
    Keywords: public; for-profit and nonprofit hospital; market for birth deliveries; tariff regulation; c-sections;
    JEL: I11 I18 L22 L33 D21 D22
    Date: 2019–01
  18. By: Andrés Rodríguez-Pose; Vassilis Tselios
    Abstract: The well-being and welfare of their citizens through a fair and efficient distribution of these public goods and services. However, ?who? delivers these goods and services and ?how well? they are delivered are essential in determining outcomes in terms of well-being. Drawing on data from the European Social Survey database, this paper uses Amartya Sen?s social welfare index framework ? accounting for the trade-off between the maximization of public sector resources and an equitable distribution of these resources ? to examine the influence of political decentralisation (?who? delivers the resources) and whether this influence is moderated by governance quality (?how well? they are delivered) on individual subjective well-being. The findings of the econometric analysis reveal that decentralisation does not always lead to higher well-being, as the benefits of political decentralisation are highly mediated by the quality of national governance. In countries with high governance quality, political decentralisation results in a greater satisfaction with health provision, while in lower quality governance countries, a more decentralized government can increase the overall satisfaction with life, the economy, government, democracy and the provision of education, but not necessarily with health-related services.
    Keywords: well-being, political decentralisation, quality of governance, Europe, European Social Survey
    JEL: I31 H70 H11
    Date: 2019–01
  19. By: Berlingieri, Giuseppe; Calligaris, Sara; Criscuolo, Chiara
    Abstract: Ever since Moore (1911) a large empirical and theoretical literature has established the existence of a firm size-wage premium. At the same time, a second regularity in empirical work, linking size and productivity, has inspired a vast literature in multiple fields. However, the majority of the existing evidence is based on manufacturing data only. With manufacturing nowadays accounting for a very small share of the economy in many countries, whether productivity, size, and wages are closely linked, and how tight this link is across sectors, is still an open question. Using a unique dataset that collects micro-aggregated firm-level information on productivity, size, and wages for the entire economy in 17 countries over the 1994-2012 period, this paper unveils a much more subtle picture. First, while in the manufacturing sector both productivity and wages increase monotonically with firm size, the same is not true in the service sector. Second, a tight and positive link between wages and productivity is instead found in both manufacturing and services. The combination of these results suggests that, when looking at data for a much larger share of the economy, the "size-wage premium" becomes more a "productivity-wage premium". Unbundling the relationship between size, wages, and productivity has first-order policy implications for both workers and firms.
    Keywords: productivity; size-premium; wages
    JEL: D2 E2 J3
    Date: 2018–07
  20. By: James Banks (Institute for Fiscal Studies and University of Manchester); Elena Bassoli (Department of Economics, University Of Venice Cà Foscari); Irene Mammi (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper investigates risk preference at older ages in 14 European countries. Older individuals report greater risk aversion. Using the longitudinal nature of the data we are able to show this relationship between risk preferences and age is not due to cohort effects or selective mortality. We also show, however, that on average roughly forty percent of this overall age effect is actually due to life events such as retirement, health shocks and widowhood or marital change that occur increasingly as individuals age. These life events are a particularly important explanation of the age `effect' for women and for the age group 50-64.
    Keywords: Risk attitude, ageing, health status, life-related events, SHARE
    JEL: D90 D91 D81
    Date: 2019
  21. By: Giovanni Marin (University of Urbino Carlo Bo, Italy; SEEDS, Italy); Marco Modica (Gran Sasso Science Institute, Italy; SEEDS, Italy)
    Abstract: The Great Recessions a ected the Italian economy in a particularly severe way in terms of GDP collapse, increase in the unemployment rate and also in terms of number of firms that left the market. Moreover, because of its peculiar structural features, that is characterized by a business sector composed prevalently by a large number of micro and small firms, the Italian economy results to be particularly exposed to recession periods, especially so when these periods are prolonged and hit many sectors in the economy. The aim of this paper is to evaluate the impact of the Great Recession on the survival of firms for universe of Italian individual firms. Our main contributions consist in the estimation of an indicator to capture the local demand shocks in order to infer about the link between local demand shock, firms' characteristics and hazard of exit. General results show that the conditional and unconditional hazard of exit is larger for female, old and foreign-born entrepreneurs. However, when considering the e ect of local demand shocks, this appears to be stronger for female, old, Italian entrepreneurs and for entrepreneurs located in highly- exposed labour market areas.
    Keywords: Resilience, Micro-firms, Survival, Great Recession
    Date: 2019–01
  22. By: Slotwinski, Michaela; Stutzer, Alois
    Abstract: In a national ballot in 2009, Swiss citizens surprisingly approved an amendment to the Swiss constitution to ban the further construction of minarets. The ballot outcome manifested reservations and anti-immigrant attitudes in regions of Switzerland which had previously been hidden. We exploit this fact as a natural experiment to identify the causal effect of negative attitudes towards immigrants on foreigners’ location choices and thus indirectly on their utility. Based on a regression discontinuity design with unknown discontinuity points and administrative data on the population of foreigners, we find that the probability of their moving to a municipality which unexpectedly expressed stronger reservations decreases initially by about 40 percent. The effect is accompanied by a drop of housing prices in these municipalities and levels off over a period of about 5 months. Moreover, foreigners in high-skill occupations react relatively more strongly highlighting a tension when countries try to attract well-educated professionals from abroad.
    Keywords: attitudes,foreigners,location choice,popular initiative,regression discontinuity design
    JEL: D83 J61 R23 Z13
    Date: 2019
  23. By: Engdahl, Mattias (IFAU); Godard, Mathilde (GATE, University of Lyon); Nordström Skans, Oskar (Uppsala University)
    Abstract: We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females' family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter.
    Keywords: cost of recessions, female labor supply, family formation
    JEL: E32 J12 J13 J22 J31
    Date: 2019–01
  24. By: Juan Carluccio; Alejandro Cuñat; Harald Fadinger; Christian Fons-Rosen
    Abstract: Using French manufacturing firm-level data for the years 1996 -2007, we uncover a novel set of stylized facts about offshoring behavior: (i) Low-productivity firms ("non-importers") obtain most of their inputs domestically. (ii) Medium-productivity firms offshore skill-intensive inputs to skill-abundant countries and are more labor intensive in their domestic production than non-importers. (iii) Higher-productivity firms additionally offshore labor-intensive inputs to labor-abundant countries and are more skill intensive than non-importers. We develop a model in which heterogeneous firms, subject to fixed costs, can offshore intermediate inputs of different skill intensities to countries with different skill abundance. This leads to endogenous within-industry variation in domestic skill intensities. We provide econometric evidence supporting the factor-proportions channel through which reductions in offshoring costs to labor-abundant countries have signicantly increased firm-level skill intensities of French manufacturers.
    Keywords: offshoring, heterogeneous firms, firm-level factor intensities, skill upgrading, Heckscher-Ohlin
    JEL: F11 F12 F14
    Date: 2018–05
  25. By: David Cuberes (Clark University, US); Jennifer Roberts (Department of Economics, University of Sheffield, UK); Cristina Sechel (Department of Economics, University of Sheffield, UK)
    Abstract: This paper is the first to test an amenity-based sorting model for cities in England. We use individual level data on urban households for the period 2011-2016, combining this with data on local amenities to explore household location under both monocentric and polycentric assumptions about city structure. On average we find that there is no systematic relationship between income and household distance to the ‘city centre’, once neighbourhood amenities and other household characteristics are taken into account. Household heterogeneity is important, and as well as influencing location directly, we also find interactions between the effects of household characteristics and local amenities. There are also important differences between cities in England; for example higher income households seem to live further from the city centre in Birmingham, but closer to it in Newcastle. Our results reveal some important differences to the US evidence that has dominated this literature. Migrant status is important in England, and on average migrants live much closer to the city centre than non-migrants, but race per se does not seem to influence household location. Also it appears that in England only the employed (and those above the poverty line) are influenced by the availability of public transport; which is in direct opposition to the US evidence. Overall we conclude that the standard urban land use model provides a partial explanation of how households sort by income in cities, but that the role of amenities and household heterogeneity is large and warrants more attention.
    Keywords: cities; household location; income; amenities
    JEL: R20 R23
    Date: 2019–01
  26. By: Hübler, Olaf (Leibniz University of Hannover)
    Abstract: Based on the German Socio-Economic Panel, the influence of the body mass index on health, earnings and satisfaction is analysed by gender. Basic results are: health worsens, income declines and satisfaction is poorer with higher body mass index. If control variables are added, estimates are split by gender and different effects of over- and underweight people are determined, the health estimates show nonlinear effects but the direction of action is unchanged. Effects on earnings differ. Underweight women earn more and overweight less than others. For normal-weight men the income is on average higher than for over- and underweight men. This is also confirmed for self-employed persons. The pattern for employees is equal to the total sample. No effects on life satisfaction can be found except for underweight men. They reveal less satisfaction. Only in the public sector the sign of the coefficient changes. The results for eastern Germany are different with respect to satisfaction. Overweight women are less satisfied than others while this is not confirmed for underweight men from eastern Germany. When interdependencies are taken into account and matching procedures are applied, the outcome matches to that of independent and unmatched estimates. However, no clear-cut disadvantage in income of underweight men can be found. Stable coefficients result for the health estimates while satisfaction results fluctuate. Underweight women and especially underweight men tend to less happiness. For overweight men the influence is ambiguous but more speaks in favour of a less level of satisfaction. Overweight women seem to be happier.
    Keywords: over- and underweight, health, income, satisfaction, gender, self-confidence, wage earners vs. self-employed, private vs. public sector, Eastern vs. Western Germany, interdependencies, matching
    JEL: I15 I31 J16 J31
    Date: 2019–01
  27. By: Pieroni, Luca; d'Agostino, Giorgio; Lanari, Donatella
    Abstract: In this paper, we examine how the Italian language problems of immigrants affect their labour market performance using two hitherto unexploited immigration surveys recently published by the Italian Institute of Statistics. With respect to immigrants with good Italian proficiency, our empirical findings suggest that language problems reduce the employment rate by about 30%, and point estimates are even larger when evaluating job discrimination. Italian language skills also significantly affect the wages of immigrants. The point estimates suggest a wage gap of about 20% between immigrants with Italian proficiency and those without Italian proficiency, a magnitude that increases to 25% for male immigrants. Robustness checks confirmed our estimates.
    Keywords: Immigrants, Language skills, Employment, Wages
    JEL: J15 J20 J31
    Date: 2019–01–25
  28. By: Caliendo, Marco (University of Potsdam); Schröder, Carsten (DIW Berlin); Wittbrodt, Linda (University of Potsdam)
    Abstract: In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the short-run effects of this new minimum wage on a wide set of socio-economic outcomes, such as employment and working hours, earnings and wage inequality, dependent and self-employment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialized in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of non-compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.
    Keywords: minimum wage, evaluation, earnings, working hours, employment
    JEL: J22 J23 J31 J38
    Date: 2018–12
  29. By: Georgiadis, Andreas; Kaplanis, Ioannis; Monastiriotis, Vassilis
    Abstract: This paper investigates the impact of minimum wages on wages and employment in Greece between 2009 and 2017. Our main contribution is the examination of the effects of minimum wages under a dramatically changing context, as during this period Greece has experienced the deepest recession in its recent history, extensive labour market reforms, and several changes in the minimum wage, including a large decrease. Employing a unique administrative panel matched employer-employee data set and a range of estimators, such as difference-in-differences, fixed effects, and Instrumental Variables, we find that minimum wages have a positive and significant effect on individual and firm-level wages with significant positive wage spill-overs extending, sometimes, above the median wage, but no systematic employment effects.
    Keywords: minimum wage; wages; employment
    JEL: N0 R14 J01
    Date: 2018–12
  30. By: Cornelia Chadi; Uwe Jirjahn
    Abstract: Previous international research has shown that women are more risk averse than men. This gives rise to the question whether the gender gap in risk attitudes is shaped by the social environment. We address this question by examining risk attitudes among East and West Germans. Originated from different family policies during Germany’s separation, East Germans have more equal gender roles than West Germans. Thus, if the gender gap reflects socially constructed norms, it should be smaller among East Germans. Using data of the German Socio-Economic Panel (SOEP), our empirical analysis confirms this prediction. Specifically with respect to career and financial matters, the gender gap in risk tolerance is smaller among East Germans. We find no evidence that the East German gender gap has converged to the higher West German level after reunification. By contrast, the West German gap has narrowed over time.
    Keywords: Risk Preferences, Gender Roles, Nurture, Family Policy
    JEL: D91 J16 P51
    Date: 2019
  31. By: Ilaria Benedetti; Andrea Regoli
    Abstract: Having a job, and particularly having a job of good quality, is an important determinant of people’s well-being. In many countries, inequality starts in the labour market. Indeed, changes in the distribution of wages are found to be the key factors behind recent inequality trends (ILO 2015). A high level of inequality can create divisions within society, reduce opportunity and social mobility: it could weaken the social cohesion and reduce household consumptions with low rates of economic growth. All these issues can threaten the political stability. In this study, we contribute to the literature on immigrants in the French labour market by analysing the earnings differentials between workers born in France and workers born abroad. We used the wage indicator of job quality by using the 2013 French Working condition survey carried out by DARES (Directorate for Research, Studies and Statistics). Given the importance of the immigration phenomenon in the EU countries and in particular in the French labour market context, the aim of the paper is to explain the differences between immigrant and native workers in terms of wage by using decomposition techniques, controlling for a large set of covariates. The decomposition methods allow us to decompose mean differences in two components: the "explained" and the "unexplained" part (the second one is often used as a measure for discrimination). In particular, as an extension to the classical decomposition method, proposed by Oaxaca (1973) and Blinder (1973), we applied the decomposition method proposed by Firpo et al. (2007, 2009) to consider the ways in which various characteristics of immigrants and natives affect the wage gap along the whole distribution of wages, at points other than the mean.
    Keywords: Wage inequality, Rif-regression, Immigrant workers, Wage differential
    JEL: J31 J61 C21
    Date: 2019–01–01
  32. By: Caterina Liberati (Department of Economics, Management, and Statistics, University of Milan-Bicocca, Italy); Riccarda Longaretti (Department of Economics, Management, and Statistics, University of Milan-Bicocca, Italy); Alessandra Michelangeli (Department of Economics, Management, and Statistics, University of Milan-Bicocca, Italy; Rimini Centre for Economic Analysis)
    Abstract: In recent studies, there has been a growing interest towards tolerance and its implications in the socio-economic system. This paper aims to contribute to this flourishing research area into two directions. First, we develop a theoretical framework to explain individual’s tolerant attitudes without necessarily resorting to altruistic preferences. Second, this paper addresses the issue of measuring tolerance when information about several dimensions of tolerance is available and data are of Likert's scale type. To show how our new measure of tolerance works in practice, we carry out a case study using an Italian recent survey asking the opinion of university students about different subjects, such as interreligious dialogue, women/religion relationship, religion/death relationship, multicultural society, and homosexuality. We, finally, highlight the key policy implications arising from our study.
    Keywords: Economic behavior, social interactions, methodology
    JEL: A13 C43
    Date: 2019–01

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