nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒03‒04
28 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Wage Equalization and Regional Misallocation: Evidence from Italian and German Provinces By Boeri, Tito; Ichino, Andrea; Moretti, Enrico; Posch, Johanna
  2. Labour Courts and Firing Costs: The Labour Market Effects of Trial Delays By Giuseppina Gianfreda; Giovanna Vallanti
  3. Universal Childcare for the Youngest and the Maternal Labour Supply By Kunze, Astrid; Liu, Xingfei
  4. Severe housing deprivation: Addressing the social sustainability challenge in the EU By Nessa Winston; Patricia Kennedy
  5. Job mobility and heterogeneous returns to apprenticeship training in Italy By d'Agostino, Giorgio; Raitano, Michele; Scarlato, Margherita
  6. DETERMINANTS OF INVOLUNTARY EMPLOYMENT IN EUROPE By Lieze Sohiers; Luc Van Ootegem; Elsy Verhofstadt
  7. Parental Child Care Time, Income and Subjective Well-Being: A Multidimensional Polarization Approach for Germany By Merz, Joachim; Peters, Normen
  8. Impact of later retirement on mortality: Evidence from France By Antoine Bozio; Clémentine Garrouste; Elsa Perdrix
  9. WELL-BEING DURING THE TRANSITION FROM WORK TO RETIREMENT. By Lieze Sohiers; Luc Van Ootegem; Elsy Verhofstadt
  10. Robustness of the Norwegian wage formation system and free EU labour movement. Evidence from wage data for natives. By Dapi, Bjorn; Nymoen, Ragnar; Sparrman, Victoria
  11. The Nativity Wealth Gap in Europe: a Matching Approach By Ferrari, Irene
  12. The Effect of a University Degree in English on International Labour Mobility By Samuel Nocito
  13. Measuring the effeciency of medical tourism industry in EU members states By ANDROUTSOU, LORENA; METAXAS, THEODORE
  14. Children, Unhappiness and Family Finances: Evidence from One Million Europeans By David G. Blanchflower; Andrew E. Clark
  15. The Reformed EU ETS - Intertemporal Emission Trading with Restricted Banking By Bocklet, Johanna; Hintermayer, Martin; Schmidt, Lukas; Wildgrube, Theresa
  16. A mailshot in the dark? The impact of the UK government's lea fet on the 2016 EU referendum By Harry Pickard
  17. The Impact of the Introduction of the National Living Wage on Employment, Hours and Wages By Andrew Aitken; Peter Dolton; Rebecca Riley
  18. Parental ethnic identity and child development By Stuart Campbell; Ana Nuevo-Chiquero; Gurleen Popli; Anita Ratcliffe
  19. Poverty and unemployment in Spain during the 2008's financial crises By Workneh, Migbaru Alamirew
  20. Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs? By Albanese, Andrea; Ghirelli, Corinna; Picchio, Matteo
  21. Micro-mechanisms behind declining labour shares: Market power, production processes, and global competition By Mertens, Matthias
  22. The Evolution of Factor Shares: Evidence from Switzerland By Baldi, Guido; Pons, Martina
  23. Do couples pool their income? Evidence from demand system estimation for Germany By Beznoska, Martin
  24. Charitable Behaviour and Political Ideology: Evidence for the UK By Sarah Brown; Karl Taylor
  25. Let’s Stick Together: Labor Market Effects from Immigrant Neighborhood Clustering By Lobo, José; Mellander, Charlotta
  26. Local Norms Describing the Role of the State and the Private Provision of Training By Kuhn, Andreas; Schweri, Jürg; Wolter, Stefan C.
  27. When stealing, go for millions? Quantitative analysis of white-collar crime sentencing in Poland. By Czarnocki, Kazimierz; Janulek, Dawid; Olejnik, Łukasz
  28. Norms, Enforcement, and Tax Evasion By Timothy Besley; Anders Jensen; Torsten Persson

  1. By: Boeri, Tito; Ichino, Andrea; Moretti, Enrico; Posch, Johanna
    Abstract: In many European countries, wages are determined by collective bargaining agreements intended to improve wages and reduce inequality. We study the local and aggregate effects of collective bargaining in Italy and Germany. The two countries have similar geographical differences in firm productivity - with the North more productive than the South in Italy and the West more productive than the East in Germany - but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible system that allows for local bargaining. We find that, as a consequence, Italy exhibits limited geographical wage differences in nominal terms and almost no relationship between local productivity and local nominal wages, while Germany has larger geographic wage differences and a tighter link between local wages and local productivity. While the Italian system is successful at reducing nominal wage inequality, it also creates costly geographic imbalances. In Italy, low productivity provinces have significantly higher non-employment rates than high productivity provinces, because employers cannot lower wages, while in Germany the relationship between non-employment and productivity is significantly weaker. In Italy, the relationship between real wages and productivity is negative, with lower real wages in the North compared to the South, since the latter has low housing costs but similar nominal wages. Thus, conditional on having a job, Italian workers have higher purchasing power in the South, but the probability of having a job is higher in the North. We conclude that the Italian system has significant costs in terms of forgone aggregate earnings and employment because it generates a spatial equilibrium where workers queue for jobs in the South and remain unemployed while waiting. If Italy adopted the German system, aggregate employment and earnings would increase by 11.04% and 7.45%, respectively. Our findings are relevant for several other European countries with systems similar to Italy's.
    JEL: J3 J5
    Date: 2019–02
  2. By: Giuseppina Gianfreda (Università della Tuscia); Giovanna Vallanti (Università LUISS "Guido Carli")
    Abstract: Employment protection is the result of labour laws as well as of institutional factors which are not encompassed in official legislation. Courts' delays in settling labour disputes are among those factors. Using individual data from the Italian Labour Force Survey for the period 2008-2010 and exploiting the territorial heterogeneity in the duration of labour trials across Italian regions, we investigate the effect of dismissal costs on the composition of employment. We find that labour courts' delays reduce the employment rate and increase inactivity of specific categories of workers, i.e. women, young and low skilled individuals. Furthermore, lengthy trials reduce the likelihood of accessing a permanent occupation and increase the incidence of long term unemployment for the same groups of workers. These results also imply that trials length and, more generally, courts activity have an impact on labour market outcomes which goes in the same direction as explicitly written rules.
    Keywords: Labour courts, EPL, institutions, employment rate, inactivity rate, temporary jobs
    JEL: K31 K41 J21 J23 J63
    Date: 2018
  3. By: Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration); Liu, Xingfei (University of Alberta and IZA)
    Abstract: In this paper, we investigate whether the expansion of childcare leads to an increase in the female labour supply. We measure female labour supply at both the extensive and intensive margin. For identification, we exploit a nationwide reform that expanded childcare for 1–2year-olds in Norway. Our results reveal a significant increase in the overall employment of mothers in the target group, but only weak evidence of an increase in contracted hours of work. However, both adjustments are only short term following the reform. When we consider subgroups of mothers more closely, we find substantial heterogeneity in the affected outcomes and the timing of these effects. In particular, when we exclude mothers on job-protected maternity leave and with currently zero hours of work from the target group, we estimate even larger effects on employment and now significant effects on actual hours of work. For mothers with more than one child, we find significant long-term effects of the reform on both employment and hours of work.
    Keywords: Childcare; female labour supply; contracted hours; actual hours; causal effects.
    JEL: J08 J13 J22
    Date: 2019–02–18
  4. By: Nessa Winston (School of Social Policy, Social Work and Social Justice, University College Dublin); Patricia Kennedy (IT Carlow)
    Abstract: Severe housing deprivation is an important element of social sustainability. Social sustainability has been described as a concept in ‘chaos’ and of limited utility. This paper argues that meeting basic human needs is central to social sustainability and housing is a key dimension of need. It examines severe housing deprivation by analysing the extent to which households living in extreme poverty experience problems such as overcrowding, sub-standard dwelling quality and housing-related risks such as unaffordable housing and rent/mortgage arrears. The paper draws on data from the EU Survey on Income and Living Conditions for this purpose. However, household surveys are somewhat limited in the extent to which they capture some groups living in ‘extreme poverty’. Therefore, we supplement these data with a case study of a particularly vulnerable group who experience housing exclusion in several relatively wealthy European countries - Roma in Ireland. The paper concludes with a discussion of strategies to address severe housing deprivation in the EU.
    Keywords: Housing quality; housing affordability; Roma; social sustainability; poverty; deprivation; UN SDGs
    Date: 2019–02–13
  5. By: d'Agostino, Giorgio; Raitano, Michele; Scarlato, Margherita
    Abstract: Apprenticeship may provide an important opportunity to improve human capital and future earnings of young people, especially those with low levels of education. Based on new administrative data, we provide the first empirical evidence of the effect on wages and employability of the mobility across firms and economic sectors of apprentices after graduation in Italy. We use an instrumental variable approach to account for endogenous selection that is based on observed and unobserved characteristics when estimating the causal effects of mobility. Our main finding is that job switchers outside the economic sector of the training firm faced a considerable gap in wages and weeks worked in comparison to stayers in the training firm, indicating a loss of firm-specific human capital. In addition, the new apprenticeship introduced by the Biagi reform, which lessened the stringency of the norms on the training content delivered by firms, resulted in further reductions of the transferability of skills for trainees relative to the previous regime. Overall, the apprenticeship contract in Italy generated earning gaps according to the workers’ mobility after graduation, thus increasing inequality among similar employees.
    Keywords: Apprenticeship training, Job mobility, Wages.
    JEL: J24 J31 J38 J62
    Date: 2019–02–19
  6. By: Lieze Sohiers; Luc Van Ootegem; Elsy Verhofstadt (-)
    Abstract: The worker’s perception of a forced decision to work (i.e. involuntary employment) has a negative effect on the overall well-being of the older worker (aged 50 and above). This paper first investigates the job situation, the financial and health situation and the relationship status of the involuntary workers. The micro data of the Survey of Health, Ageing and Retirement in Europe (SHARE) allows for panel estimations. We control for unobserved differences in personality traits between voluntary and involuntary workers. We find that the job situation of the worker and the retirement of the partner are important drivers of involuntary employment. Specifically, involuntary workers are more frequently employed in jobs that are physically demanding or that have more stress related tasks. Involuntary workers also often feel underappreciated for their work by the management or colleagues. Second, we focus on cross-country differences. The fraction of involuntary workers in the labor population aged 50 and more ranges from 29 percent in Switzerland to 62 percent in Spain. We find that in the countries with the lowest rates of involuntary employment, the involuntary workers have better working conditions and are more easily able to make ends meet. Furthermore, the country dummies in our estimations indicate that the probability of being involuntarily employed is partly explained by time-invariant factors that differ across countries, for example public policies, e.g. pension systems. We investigate cross-country differences in four aspects of the pension system. The countries with the lowest rates of involuntary employment are those with the highest rates of partial and joint retirement.
    Keywords: older workers; involuntary employment longer working careers; aging
    JEL: J26 J28
    Date: 2019–02
  7. By: Merz, Joachim (Leuphana University Lüneburg); Peters, Normen (Leuphana University Lüneburg)
    Abstract: Neither market income nor consumption expenditure provides an adequate picture of individual standard of living. It is time which enables and restricts individual activities and is a further brick to a more comprehensive picture of individual well-being. In our study we focus on a prominent part of time use in non-market services: it is parental child care which contributes not only to individual but also to societal well-being. Within a novel approach we ask for multidimensional polarization effects of parental child care where compensation/substitution of time for parental child care versus income is interdependently evaluated by panel estimates of society's subjective well-being. The new interdependent 2DGAP measure thereby provides multidimensional polarization intensity information for the poor and the rich and disentangles the single time and income contribution to subjective well-being for targeted policies ensuring at the same time the interdependence of the polarization dimensions. Socio-economic influences on the polarization pole risk and intensity will be quantified by two stage Heckman estimates. The analyses are based on the German Socio-Economic Panel with 21 waves and robust fixed effects estimates as well as the German Time Use Surveys 1991/92 and actual 2012/13 with detailed diary time use data. Prominent result: compensation between parental child care time and income proved to be significant, but there are multidimensional regions with no compensation, where parental child care time deficit is not compensated by income. Interdependent multidimensional polarization by headcount and intensity increased significantly over the twenty years under investigation with remarkable risk and intensity differences.
    Keywords: parental child care, multidimensional polarization of interdependent time and income, subjective well-being, poverty and affluence, minimum multidimensional 2DGAP risk and intensity, German Socio-Economic Panel (SOEP), German Time Use Study (GTUS 1991/92 and 2012/13)
    JEL: I31 I32 J22 D10 D31
    Date: 2019–02
  8. By: Antoine Bozio (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Clémentine Garrouste (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris-Dauphine); Elsa Perdrix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: This paper investigates the impact of delaying retirement on mortality among the French population. We take advantage of the 1993 pension reform in the private sector to identify the causal effect of an increase in claiming age on mortality. We use administrative data which provide detailed information on career characteristics, dates of birth and death. Our results, precisely estimated, show that an exogenous increase of the claiming age has no significant impact on the probability to die between age 65 and 72, conversely we find that an increase of the retirement age of one year leads to an increase of 0.004 in the death rate between age 72 and 77. This effect is qualitatively small, and we discuss more generally the ability to estimate small effects in rare event data using minimal detectable effect procedure.
    Keywords: pension reform,health,mortality
    Date: 2019–02
  9. By: Lieze Sohiers; Luc Van Ootegem; Elsy Verhofstadt (-)
    Abstract: We investigate the consequences of retirement from work for the overall well-being of individuals aged 50 and above. The overall well-being is approximated by two indicators: the life satisfaction indicator which is a cognitive reflection of the satisfaction with life and a multidimensional indicator about Control, Autonomy and Self-realizations (CAS). The latter indicator is related to the capabilities concept (specifically agency-freedom) of Sen (1985, 1999). It evaluates overall well-being by the level of agency or the ability of people to pursue the things they want to do and be the humans they want to be. Using the longitudinal Survey of Health, Ageing and Retirement in Europe (SHARE), we find that employed and recently retired respondents have no different level of life satisfaction. Older workers do report a higher level of agency-freedom when they retire. This paper additionally investigates several forms of heterogeneities in the transition from work to retirement. We consider partial, early and joint retirement, part-time and self-employment, and job quality. We also investigate whether the extra leisure time of retired respondents affects well-being. We find that there is no difference in overall well-being between being partially and fully retired, between being retired before or after the normal retirement age or between those who retire simultaneously with their partner and those who don’t. However, for some older workers, such as those employed with a low quality job, retirement can be a relief from their current employment status. Retired respondents have more care duties which affects their well-being negatively. Charity work and sport activities affect well-being positively.
    Keywords: retirement; life satisfaction; agency; CASP; aging; well-being
    Date: 2019–02
  10. By: Dapi, Bjorn (Statistics Norway); Nymoen, Ragnar (Dept. of Economics, University of Oslo); Sparrman, Victoria (Statistics Norway)
    Abstract: Norway experienced a high immigration flow after the EEA directive in 2004 stating workers right to free movement within the European Union and EEA-countries. There is no clear consensus in the literature on how immigration affects native wages, but some studies using Norwegian micro data have estimated a negative effect of higher immigration for some type of workers. In this paper, to capture that the wage setting is highly coordinated in Norway, we model a system of native wages for three sectors; manufacturing, private service industries and public sector. We estimate that labour immigration has had a negative effect on the attainable wage growth for natives in all three sectors, but that the largest and most direct impact on wages has been in the private service industries. Immigration is found to be exogenous with respect to the parameters of our model of wage formation.
    Keywords: Cointegration; Error-correcting adjustment; Estimation and hypothesis testing in cointegrated models; Macroeconomic fluctuations and transmission mechanisms; Short-run and long-run impact; Vector Autoregressive Processes; Pattern wage bargaining; Small open economy wage policies
    JEL: C52 E24 E31 J31
    Date: 2019–02–21
  11. By: Ferrari, Irene
    Abstract: This paper uses a matching method to provide an estimate of the nativity wealth gap among older households in Europe. This approach does not require imposing any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows not only the estimation of the mean of the wealth gap but also its distribution for the common-support subpopulation. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. A heterogeneity analysis shows the importance of origin, age at migration and citizenship status in reducing the gap. Indeed, households who migrated within Europe, those who moved at younger ages rather than as adults and those who hold the citizenship of the destination country display a wealth gap that is rather consistently lower over the entire distribution.
    Keywords: Migrants,Natives,Wealth,Gap,Propensity Score Matching
    JEL: D31 J15 E21
    Date: 2019
  12. By: Samuel Nocito (Università LUISS "Guido Carli")
    Abstract: I investigate the effect of studying in English language on international labour market mobility for university graduates from a non-English speaking country. I exploit the introduction of Master of Arts degrees in English when students where enrolled in their Bachelor as an instrument for studying in English. I find that studying in English increases the individual’s probability of working abroad by 11.2 percentage points. I also estimate the effect of an English degree on wages, and I find that graduates in English benefit almost a 60 percent increase in wage compared to graduates in national language. Finally, I provide evidence that the strong effect on wages can be explained because individuals who study in English self-select into more remunerative labour contracts and economic sectors
    Keywords: degree in English, graduates labour mobility, graduates wage, return to education, high skill migration
    JEL: I21 I23 J24 J61
    Date: 2018
    Abstract: Under the Directive 2011/24/EU, medical tourism and cross-border health are interrelated terms regarding the freedom to move to get the most accessible medical treatment into EU Member State within the defined procedures for reimbursement. Little known empirically regarding the efficiency of the cross-border health/medical tourism industry. This study aims to measure its efficiency in Europe for the years 2010-2014, by using Data Envelopment Analysis (DEA). Data obtained from OECD and the European Core Health Indicators (ECHI), which is collecting the data through Eurostat. Eurostat collects data on health care activities and provides data on hospital discharges, including the hospital discharges of non-residents and these include hospital discharges of in-patients and day care patients. The analysis uses “DEA.P, 2.1 for windows” by Coelli (1996). The results show that the Members States health systems were very efficient in handling non-residents in-patients, however when managing day cases/outpatients the efficiency scores dropped. The findings would have significant associations affecting intentions to revisit clinics and the destination country. In addition, will be useful to those seeking a better understanding of the cross-border health and medical tourism industry efficiency. Extending the findings of the European Commission report (2015c) by examining how well medical tourists are informed about the decision they are making, would be of perceived value. These are important indicators at European level by helping each Member State to measure its medical tourism services.
    Keywords: cross-border health, medical tourism, efficiency, DEA
    JEL: I11 Z10
    Date: 2018
  14. By: David G. Blanchflower; Andrew E. Clark
    Abstract: The common finding of a zero or negative correlation between the presence of children and parental well-being continues to generate research interest. We here consider over one million observations on Europeans from ten years of Eurobarometer surveys, and in the first instance replicate this negative finding, both in the overall data and then for most different marital statuses. Children are expensive, and controlling for financial difficulties turns almost all of our estimated child coefficients positive. We argue that financial difficulties explain the pattern of existing results by parental education and income, and country income and social support. Marital status matters. Kids do not raise happiness for singles, the divorced, separated or widowed. Last, we underline that all children are not the same, with step-children commonly having a more negative correlation than children from the current relationship.
    JEL: D14 I31 J13
    Date: 2019–02
  15. By: Bocklet, Johanna (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Hintermayer, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Schmidt, Lukas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Wildgrube, Theresa (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: With the increase of the linear reduction factor (LRF), the implementation of the market stability reserve (MSR) and the introduction of the cancellation mechanism (CM), the EU ETS changed fundamentally. We develop a discrete time model of the intertemporal allowance market that accurately depicts these reforms assuming that prices develop with the Hotelling rule as long as the TNAC is non-empty. A sensitivity analysis ensures the robustness of the model results regarding its input parameters. The accurate modelling of the EU ETS allows for a decomposition of the effects of the individual amendments and the evaluation of the dynamic efficiency. The MSR shifts emissions to the future but is allowance preserving. The CM reduces the overall emission cap, increasing allowance prices in the long run, but does not significantly impact the emission and price path in the short run. The increased LRF leads with 9 billion cancelled allowances to a stronger reduction than the CM and is therefore the main price driver of the reform.
    Keywords: Market Stability Reserve; Dynamic Optimization; Cap and Trade; EU ETS; Cancellation Mechanism; Intertemporal Trading
    JEL: C61 H23 H41 L52 P14 Q48 Q54 Q58
    Date: 2019–02–25
  16. By: Harry Pickard (Department of Economics, University of Sheffield, UK)
    Abstract: In this paper I explore the causal effect of exposure to the UK government’s mailshot on vote preference in the 2016 EU referendum. I find that exposure caused a drop in the probability of voting leave by 3 percentage points. The effect is stronger in individuals who were exposed to few other sources of referendum information. For instance, females and the risk averse were even less likely to vote leave after exposure. The effect was also larger for Conservative party supporters who consumed many other sources of information. The evidence is consistent with voters being liable to persuasion. On the mechanism, I show that exposed individuals experiencea “persuasion-through-knowledge” effect, which changes beliefs on topics of contention.
    Keywords: Mass media; Mailshot; Leaflet; European Union; Brexit
    JEL: D72 J10 L82
    Date: 2019–02
  17. By: Andrew Aitken; Peter Dolton; Rebecca Riley
    Abstract: In 2015 the UK government announced the introduction of a new ‘National Living Wage’ (NLW) that would apply to those aged 25 and above from April 2016. At a rate of £7.20, this represented a significant increase of 7.5% over the existing National Minimum Wage (NMW) rate. Previous research has generally found, with some exceptions, that the NMW has raised the earnings of low paid workers, without significantly affecting their employment opportunities. The relatively large increase in the wage floor with the introduction of the NLW, and plans to raise the NLW to 60% of median earnings by 2020, raises the possibility of detrimental effects on employment retention and hours worked. We use a difference-in-differences approach and data from the Annual Survey of Hours and Earnings to examine the effects of the NLW introduction and April 2017 uprating on employment retention and hours worked. Overall we find that recent NLW upratings have increased wages for the low paid with generally little adverse effect on employment retention. However, consistent with previous research, we do find some evidence of adverse effects on the employment retention rates of women working part-time. We also find evidence of a reduction in employment retention for some of the lowest paid workers in the retail industries.
    Date: 2019–02
  18. By: Stuart Campbell (University College London); Ana Nuevo-Chiquero (University of Edinburgh and IZA); Gurleen Popli (Department of Economics, University of Sheffield, UK); Anita Ratcliffe (Department of Economics, University of Sheffield, UK)
    Abstract: We examine the relationship between parental ethnic identity and cognitive developmentin ethnic minority children. This aspect of parental identity may shape children’s cognitive outcomes through a direct influence on parenting behaviour, or by mediating parental access to social resources. Drawing an ethnic minority sample from a detailed UK cohort study, we find a negative association between maternal majority identity and children’s cognitive test scores. This result is driven by poor households, by those who lack local family support networks, and by those who mostly speak a foreign language at home. We suggest that differential access to social resources is the most persuasive explanation of this result. Differences in parenting behaviour do not seem to play an important role.
    Keywords: ethnic identity; national identity; child development
    JEL: I21 J13 J15
    Date: 2019–02
  19. By: Workneh, Migbaru Alamirew
    Abstract: The main objective of this paper is to examine the contribution of the high unemployment rate for the increase in the level of poverty and income inequality during and after the 2008 global financial crisis in Spain. Secondary household survey data from the European Union database (EU_SLIC) for 2008 and 2014 was used for the descriptive and inferential statistics. The two years are chosen purposely since 2008 was the year that the global financial crisis began, and 2014 was the year that unemployment rate was very high and Spain's economy was starting to revive from the crisis. Binary Logistic regression is used for inferential statistics since the dependent variable (being poor) is a binary variable and basic activity status(with four categorical variables), citizenship (with three categorical variables) and a number of workers in the household (as a ratio of the total number of individuals in the household) are used as explanatory variables. Based on the descriptive and inferential statistics results, the contribution of the high unemployment rate for the increase in poverty rate and income inequality was high in Spain during and after the 2008 global financial crisis. The probability of being poor for unemployed increases from 0.18 in 2008 to 0.255 in 2014. Being unemployed, being inactive households, and being from other citizens are more likely to poor compared with workers, and local citizens respectively.
    Keywords: Poverty, Inequality, Unemployment, Financial crisis, Bi- nary Logit model
    JEL: D00 D04 D1 D10
    Date: 2018–08–31
  20. By: Albanese, Andrea; Ghirelli, Corinna; Picchio, Matteo
    Abstract: We study how unemployment benefit eligibility affects the layoff exit rate by exploiting quasi-experimental variation in eligibility rules in Italy. By using a difference-indifferences estimator, we find an instantaneous increase of about 12% in the layoff probability when unemployment benefit eligibility is attained, which persists for about 16 weeks. These findings are robust to different identifying assumptions and are mostly driven by jobs started after the onset of the Great Recession, in the South and for small firms. We argue that the moral hazard from the employer’s side is the main force driving these layoffs.
    Keywords: Unemployment insurance,layoffs,employer–employee moral hazard,difference-in-differences,heterogeneous effects
    JEL: C31 C41 J21 J63 J65
    Date: 2019
  21. By: Mertens, Matthias
    Abstract: This article investigates how changing production processes and increasing market power at the firm level relate to a fall in Germany's manufacturing sector labour share. Coinciding with the fall of the labour share, I document a rise in firms' product and labour market power. Notably, labour market power is a more relevant source of firms' market power than product market power. Increasing product and labour market power, however, only account for 30% of the fall in the labour share. The remaining 70% are explained by a transition of firms towards less labour-intensive production activities. I study the role of final product trade in causing those secular movements. I find that rising foreign export demand contributes to a decline in the labour share by increasing labour market power within firms and by inducing a reallocation of economic activity from nonexporting-high-labour-share to exporting-low-labour-share firms.
    Keywords: labour share,market power,labour market distortions,international trade,factor substitution
    JEL: D24 E25 F16 J50 L10 L60
    Date: 2019
  22. By: Baldi, Guido; Pons, Martina
    Abstract: While the labor share of income has decreased in most advanced economies since the 1980s, it has remained relatively stable in Switzerland. However, this does not imply that the capital share of income has also remained stable. Our results suggest that the share of imputed capital rental payments to income has decreased. Similar to other countries, Switzerland has seen an increase in the so-called factorless income share that cannot be readily attributed to capital and labor. The increase in factorless income may re ect a rise in economic rents, higher compensation for business risks, or increased compensation for unmeasured input factors, especially intangible capital. We find that the stable labor share in Switzerland cannot be traced back to high wage growth, but rather to subdued investment growth and a high growth rate of the labor force.
    Date: 2019
  23. By: Beznoska, Martin
    Abstract: Whether couples pool their resources and behave like a unit or spend their income individually is crucial for social and tax policy. In this paper, I provide a test of the income pooling hypothesis using administrative cross-sectional survey data on expenditures and individual incomes of couple households in Germany. The test is performed within the Quadratic Almost Ideal Demand System (QUAIDS) framework, which allows for an endogenous expenditure budget and endogenous individual income contribution shares in an instrumental variables approach. Although the hypothesis is broadly rejected, there are significant differences regarding the marital status, the presence of at least one child in the household and whether the household is located in a former West or East German federal state. Married couples and couples with children are closer to the acceptance of the hypothesis than unmarried couples without children.
    Keywords: Income Pooling,Intra-Household Allocation,Consumer Demand,QUAIDS
    JEL: D12 D13 H24 J12
    Date: 2019
  24. By: Sarah Brown (Department of Economics, University of Sheffield, UK); Karl Taylor (Department of Economics, University of Sheffield, UK)
    Abstract: Using data from the most recent large scale UK household longitudinal survey (UKHLS), we explore the effects of political ideology on charitable behaviour, specifically monetary donations and time volunteered. The UKHLS contains detailed information on political preferences, in terms of: political affiliation; the strength of support for political parties; the level of interest in politics and the party an individual would vote for tomorrow. We employ a number of modelling frameworks including static and dynamic models and double hurdle models, which allow political influences to have differing effects across the decision to donate and the amount of money or time donated. The consistent finding across the different estimators is that being aligned to a stated political party is positively associated with donating time and money. In addition, we find that political liberalism has a larger effect on both types of philanthropic behaviour than political conservatism. The largest effects across specifications are generally for alignment with the Green Party. However, further analysis reveals that, during the period of the UK Coalition Government and after its collapse when the Conservative Party gained power, the effect of political affiliation to the Green Party on monetary donations is substantially reduced, whereas the opposite effect is found for the amount of time volunteered.
    Keywords: Monetary donations; Political affiliation; Volunteering
    JEL: C24 D64 H41 N3
    Date: 2019–02
  25. By: Lobo, José (School of Sustainability, Arizona State University); Mellander, Charlotta (Jönköping International Business School, Jönköping University & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: We investigate if there are positive economic effects for individuals residing in ethnic neighborhoods, in particular if the likelihood of labor market participation among foreign born is affected by residentially aggregating with other people from the same region. We also examine to what extent the income level among foreign born who has a job is affected by the extent to which they congregate in ethnic enclaves. We use Swedish micro-level data for the time period 2007 to 2015 and run a Heckman estimation for the population overall, for immigrants, but also for four distinct immigration groups: those from poor and middle-income countries in Africa or Asia, from Former Yugoslavia, and from the Middle East. We control for personal and neighborhood characteristics, as well as work place characteristics. The results suggest that there may be positive effects from ethnic concentration, but only if the group makes up a significant share of the population in that neighborhood.
    Keywords: Labor market participation; foreign born; immigration; clustering effects; income levels
    JEL: J15 J31 R23
    Date: 2019–02–18
  26. By: Kuhn, Andreas (Swiss Federal Institute for Vocational Education and Training); Schweri, Jürg (Swiss Federal Institute for Vocational Education and Training); Wolter, Stefan C. (University of Bern)
    Abstract: Apprenticeship systems are essentially based on the voluntary participation of firms that provide (and usually also finance) training positions, often incurring considerable net training costs. One potential, yet under-researched explanation for this behavior is that firms act in accordance with the norms and expectations they face with in the local labor market in which they operate. In this paper, we focus on the Swiss apprenticeship system and ask whether local norms towards the private, rather than the public, provision of training influence firms' decisions to offer apprenticeship positions. In line with this hypothesis, we find that the training incidence is higher in communities characterized by a stronger norm towards the private provision of training, which we measure using local results from two national-level plebiscites that explicitly dealt with the role of the state in the context of the apprenticeship system. This finding turns out to be robust to a series of alternative specifications and robustness checks, as well as to an instrumental-variable strategy that tackles the issue of potential endogeneity of normative attitudes.
    Keywords: public goods, private provision of training, social norms, normative attitudes towards the role of the state, vocational education and training, apprenticeship training
    JEL: D22 D63 H41 I22 J24
    Date: 2019–02
  27. By: Czarnocki, Kazimierz; Janulek, Dawid; Olejnik, Łukasz
    Abstract: The aim of this article is to analyse the length of custodial sentences for white-collar crimes in the context of Polish criminal policy. The analyses, based on the new and original data set obtained from case files, showed the non-linear dependency between the custodial sentence and the damage caused by a given fraud. From the perspective of the criminal law and economics, such a non-linearity may generate incentives for committing frauds on a bigger scale, because as the scale increases the relative severity of punishment decreases. Moreover, the gender bias in sentencing for the white-collar crimes in Poland was proven and in such cases women not only did receive lower custodial sentences, but also those ruled by female judges were lower.
    Keywords: court decisions; white-collar crime; bias in sentencing
    JEL: K42
    Date: 2019–02–23
  28. By: Timothy Besley; Anders Jensen; Torsten Persson
    Abstract: This paper studies individual and social motives in tax evasion. We build a simple dynamic model that incorporates these motives and their interaction. The social motives underpin the role of norms and is the source of the dynamics that we study. Our empirical analysis exploits the adoption in 1990 of a poll tax to fund local government in the UK, which led to widespread evasion. The evidence is consistent with the model's main predictions on the dynamics of evasion.
    JEL: H26 H3
    Date: 2019–02

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