nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒04‒08
28 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Immigration, Social Networks and Occupational Mismatch By Alaverdyan, Sevak; Zaharieva, Anna
  2. Policy Recommendations on the Gender Effects of Changes in Tax Bases, Rates, and Units. Results of Microsimulation Analyses for Six Selected EU Member Countries By Marian Fink; Jitka Janová; Danuše Nerudová; Jan Pavel; Margit Schratzenstaller; Friedrich Sindermann-Sienkiewicz; Martin Spielauer
  3. Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis By Hundt, Christian; Holtermann, Linus; Steeger, Jonas; Bersch, Johannes
  4. What Causes the Child Penalty? Evidence from Same Sex Couples and Policy Reforms By Emily Nix; Martin Eckhoff Andresen
  5. Pension Uncertainty and Demand for Retirement Saving By Tullio Jappelli; Immacolata Marino; Mario Padula
  6. The German Statutory Minimum Wage and Its Effects on Regional Employment and Unemployment By Bonin, Holger; Isphording, Ingo E.; Krause-Pilatus, Annabelle; Lichter, Andreas; Pestel, Nico; Rinne, Ulf
  7. Intergenerational Health Mobility: Evidence from Danish Registers By Carsten Andersen
  8. Grandparents, Mothers, or Fathers? Why Children of Teen Mothers do Worse in Life By Anna Aizer; Paul J. Devereux; Kjell G. Salvanes
  9. Long-term evolution of inequality of opportunity By Maurizio Bussolo; Daniele Checchi; Vito Peragine
  10. Estimating road transport costs between EU regions By Damiaan Persyn; Jorge Diaz-Lanchas; Javier Barbero
  11. Is there a wage cost for employees in family-friendly workplaces? The effect of different employer policies By Ariane Pailhé; Anne Solaz
  12. Out-of-Partnership Births in East and West Germany By Uwe Jirjahn; Cornelia Struewing
  13. The social cost of unemployment in Spain: who are the losers? By Lucía Gorjón García; Sara de la Rica; Antonio Villar
  14. Does combining different types of collaboration always benefit firms? Collaboration, complementarity and product innovation in Norway By Fitjar, Rune Dahl; Haus-Reve, Silje; Rodríguez-Pose, Andrés
  15. “The Institutional Adjustment Margin to Import Competition: Evidence from Italian Minimum Wages” By Alessia Matano; Paolo Naticchioni; Francesco Vona
  16. Transaction-tax evasion in the housing market By José Garcia Montalvo; Amedeo Piolatto; Josep M. Raya
  17. Different counselors, many options: Career guidance and career plans in secondary schools By Fitzenberger, Bernd; Hillerich-Sigg, Annette; Sprietsma, Maresa
  18. A Tale of Comprehensive Labor Market Reforms: Evidence from the Italian Jobs Act By Tito Boeri; Pietro Garibaldi
  19. R&D Subsidies and Firms’ Debt Financing By Andrea Bellucci; Luca Pennacchio; Alberto Zazzaro
  20. Talent Misallocation in Europe By Almarina Gramozi; Theodore Palivos; Marios Zachariadis
  21. The Influence of Mental Health on Job Retention By Thomas Barnay; Éric Defebvre
  22. Credit Access and Approval By Stefania Basiglio; Paola De Vincentiis; Eleonora Isaia; Mariacristina Rossi
  23. Is Public Sector Performance just a matter of money? The case of the Spanish regional governments By Raúl García-Gómez; Jorge Onrubia; A. Jesús Sánchez-Fuentes
  24. Self-Employment and Support for the Dutch Pension Reform By Izabela Karpowicz
  25. Mums Go Online: Is the Internet Changing the Demand for Healthcare? By Amaral Garcia, Sofia; Nardotto, Mattia; Propper, Carol; Valletti, Tommaso
  26. Globalization and the fall of markups By Michał Gradzewicz; Jakub Mućk
  27. The Economics of Extortion: Theory and Evidence on the Sicilian Mafia By Luigi Balletta; Andrea Mario Lavezzi
  28. Water demand responds asymmetrically to rising and falling prices By Schleich, Joachim; Hillenbrand, Thomas

  1. By: Alaverdyan, Sevak (Center for Mathematical Economics, Bielefeld University); Zaharieva, Anna (Center for Mathematical Economics, Bielefeld University)
    Abstract: In this study we investigate the link between the job search channels that workers use to find employment and the probability of occupational mismatch in the new job. Our specific focus is on differences between native and immigrant workers. We use data from the German Socio-Economic Panel (SOEP) over the period 2000-2014. First, we document that referral hiring via social networks is the most frequent single channel of generating jobs in Germany; in relative terms referrals are used more frequently by immigrant workers compared to natives. Second, our data reveals that referral hiring is associated with the highest rate of occupational mismatch among all channels in Germany. We combine these findings and use them to develop a theoretical search and matching model with two ethnic groups of workers (natives and immigrants), two search channels (formal and referral hiring) and two occupations. When modeling social networks we take into account ethnic and professional homophily in the link formation. Our model predicts that immigrant workers face stronger risk of unemployment and often rely on recommendations from their friends and relatives as a channel of last resort. Furthermore, higher rates of referral hiring produce more frequent occupational mismatch of the immigrant population compared to natives. We test this prediction empirically and confirm that more intensive network hiring contributes significantly to higher rates of occupational mismatch among immigrants. Finally, we document that the gaps in the incidence of referrals and mismatch rates are reduced among second generation immigrants indicating some degree of integration in the German labour market.
    Keywords: job search, referrals, social networks, occupational mismatch, immigration
    Date: 2019–03–29
  2. By: Marian Fink (WIFO); Jitka Janová; Danuše Nerudová; Jan Pavel; Margit Schratzenstaller (WIFO); Friedrich Sindermann-Sienkiewicz; Martin Spielauer (WIFO)
    Abstract: The design of tax systems has a considerable impact on the distribution of income and wealth at the household and the individual level, and due to gender-differentiated socio-economic conditions also in a gender perspective. One of the most important areas of taxation is the taxation of personal incomes. Besides the level of income tax rates and the design of the income tax schedule (progressive versus flat tax schedule), the system of household taxation (joint versus individual taxation), the determination of taxable income and the design of tax exemptions (tax allowances versus credits), particularly child-related ones, are crucial determinants of the distributional effects and work incentives of the personal income tax. The study presents an overview of the microsimulation results for selected provisions of the personal income tax system on income distribution and work incentives. The microsimulations are based on EUROMOD for six selected EU countries: Germany, Austria, Spain, Czech Republic, UK, and Sweden, countries of different "families" of welfare and taxation traditions.
    Keywords: EUROMOD, microsimulations, gender effects, income taxation
    Date: 2019–03–29
  3. By: Hundt, Christian; Holtermann, Linus; Steeger, Jonas; Bersch, Johannes
    Abstract: In this paper, we examine the macro-to-micro-transition of cluster externalities to firms and how it is affected by the macroeconomic instability caused by the recessionary shock of 2008/2009. Using data from 16,166 manufacturing and business services firms nested in 390 German regions, we employ within-firm regression techniques to estimate the impact of crosslevel interactions between firm- and cluster-level determinants on phase-related differences in firm performance between a pre-crisis (2004-2007) and a crisis period (2009-2011). The empirical results validate the existence of a macro-to-micro-transition that evolves best in the case of broad firm-level capabilities and variety-driven externalities. Furthermore, the results indicate that the transition strongly depends on the macroeconomic cycle. While the transition particularly benefits from a stable macroeconomic environment (2004-2007), its mechanisms are interrupted when being exposed to economic turmoil (2009-2011). Yet, the crisisinduced interruption of the transition is mainly restricted to the national recession in 2009. As soon as the macroeconomic pressure diminishes (2010-2011), we observe a reversion of the transmission mechanisms to the pre-crisis level. Our study contributes to the existing literature by corroborating previous findings that the economic performance of firms depends on a working macro-to-micro transition of external resources, which presupposes sufficient cluster externalities and adequate firm-level combinative capabilities. In contrast to previous studies on this topic, the transition mechanism is not modeled as time-invariant. Instead, it is coupled to the prevailing macroeconomic regime.
    Keywords: macro-to-micro-transition,combinative capabilities,agglomeration economies,cluster-level externalities,unrelated variety,related variety,macroeconomic regimes,Great Recession,economic resilience
    JEL: C33 R11 R58
    Date: 2019
  4. By: Emily Nix; Martin Eckhoff Andresen (Statistics Norway)
    Abstract: Women experience significant reductions in labor market income following the birth of children, while their male partners experience no such income drops. This “relative child penalty” has been well documented and accounts for a significant amount of the gender income gap. In this paper we do two things. First, we use a simple household model to better understand the potential mechanisms driving the child penalty, which include gender norms around child care, female preferences for child care, efficient specialization within households, and the biological cost of giving birth. The model, combined with the estimated child penalties for heterosexual and same sex couples, suggests that the child penalty experienced by women in heterosexual couples is primarily explained by female preferences for child care and gender norms, with a smaller contribution due to the biological costs of giving birth. Second, we provide causal estimates on the impact of two family policies aimed at reducing the relative child penalty: paternity leave and subsidized early child care. Our precise and robust regression discontinuity results show no significant impact of paternity leave use on the relative child penalty. Early subsidized care seems to have more promise as a policy tool for affecting child penalties, as we find a 25% reduction in child penalties per year of child care use from a large Norwegian reform that expanded access to child care.
    Keywords: Gender wage gap; labor supply; child penalty; paternity leave; child care; same sex couples; event study; regression discontinuity; instrumental variables
    JEL: I21 J13 J22 J71
    Date: 2019–03
  5. By: Tullio Jappelli (Università di Napoli Federico II, CSEF and CEPR); Immacolata Marino (Università di Napoli Federico II and CSEF); Mario Padula (Università "Ca' Foscari" Venezia and CSEF)
    Abstract: According to the life-cycle model, if there is an expectation that social security benefits will fall, demand for retirement saving should increase. In precautionary saving models, the risk associated to future benefits matters and, if benefits become more uncertain, individuals will react by increasing their demand for retirement saving. To assess the empirical relevance of this mechanism, we rely on unique Italian data to obtain individual level measures of the subjective distribution of the social security benefit replacement rate. Italy is an interesting example, because of the frequent changes to eligibility rules and benefits implemented in the past thirty years, fueling individual uncertainty about future pension outcomes. We find evidence of wide cross-sectional heterogeneity in both the location and scale of the subjective replacement rate distribution. Our results indicate higher participation in private pension funds among individuals who expect lower and more uncertain replacement rates. JEL Classifications: D12, D14, E21
    Keywords: Pension uncertainty; Retirement saving; Subjective distributions; Social security.
    Date: 2019–03–23
  6. By: Bonin, Holger (IZA); Isphording, Ingo E. (IZA); Krause-Pilatus, Annabelle (IZA); Lichter, Andreas (Heinrich Heine University Düsseldorf); Pestel, Nico (IZA); Rinne, Ulf (IZA)
    Abstract: This paper studies the effects of the introduction of Germany's statutory minimum wage in 2015 on employment and unemployment on the level of regional labor markets. Using variation in the regional exposure to the new wage floor, we employ a difference-in-differences approach that compares the evolution of employment and unemployment between regions with varying minimum wage bites. Overall, we find no statistically significant effect of the introduction of the German minimum wage on regular employment subject to social insurance, but a statistically significant negative effect on marginal employment. The reduction is not accompanied by a proportional increase in unemployment.
    Keywords: minimum wage, employment, unemployment, labor market regions, Germany
    JEL: J21 J31 J38
    Date: 2019–03
  7. By: Carsten Andersen (Department of Economics and Business Economics, Aarhus University, Denmark)
    Abstract: To what extent status depends on family background has been of great interest in the social sciences and the general public for centuries. The transmission of income, earnings and educational attainment is often studied, while equality of opportunity with respect to health outcomes has received far less attention. This paper is the first to investigate intergenerational health mobility using high-quality administrative data from Denmark. The attractiveness of this approach lies in objective health measures and large sample sizes allowing twin analyses. I operationalise health mobility by a variety of statistics: rank-rank slopes, intergenerational correlations and sibling and identical twin correlations. Mobility in health is found to be relatively high for men, both when compared to similar US-based studies, and when contrasted with outcomes such as educational attainment and income. For Danish women, health-related dependence on family background is on par with similar statistics for income and earnings for other Scandinavian countries. Mobility is thus, perhaps somewhat nonintuitively, higher in health than in income. Contrasting sibling and identical twin correlations with parent-child associations confirm earlier findings in the literature on equality of opportunity, namely that sibling correlations capture far more variation than traditional intergenerational correlations. 14-38 percent of the variation in individual health outcomes can be ascribed to family background and genes, factors which the individual cannot be held accountable for. Only a negligible share of this variation can be explained by parental health, which suggests that other family-specific characteristics may play an important role for health mobility.
    Keywords: Health, inequality, intergenerational mobility, sibling correlations, family background
    JEL: I1 I14 J62 D30
    Date: 2019–04–02
  8. By: Anna Aizer; Paul J. Devereux; Kjell G. Salvanes
    Abstract: Women who give birth as teens have worse subsequent educational and labor market outcomes than women who have first births at older ages. However, previous research has attributed much of these effects to selection rather than a causal effect of teen childbearing. Despite this, there are still reasons to believe that children of teen mothers may do worse as their mothers may be less mature, have fewer financial resources when the child is young, and may partner with fathers of lower quality. Using Norwegian register data, we compare outcomes of children of sisters who have first births at different ages. Our evidence suggests that the causal effect of being a child of a teen mother is much smaller than that implied by the cross-sectional differences but that there are still significant long-term, adverse consequences, especially for children born to the youngest teen mothers. Unlike previous research, we have information on fathers and find that negative selection of fathers of children born to teen mothers plays an important role in producing inferior child outcomes. These effects are particularly large for mothers from higher socio-economic groups.
    Keywords: Teen pregnancy; Intergenerational mobility; Family fixed effects
    JEL: J12 J13 I31 I32
    Date: 2019–03
  9. By: Maurizio Bussolo (World Bank, USA); Daniele Checchi (University of Milan); Vito Peragine (University of Bari)
    Abstract: The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity and thus extend the recent empirical literature, which is mainly concerned with its measurement at a specific point in time. Using repeated cross-section surveys for five European countries (France, Germany, Great Britain, Italy, and Switzerland), the evolution of inequality of opportunity is measured for a period of about two decades for the whole populations, as well as for different birth cohorts. Relative inequality of opportunity represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs (and reaching a lower share in case of mean log deviation) and, for all the countries, it shows a stable or declining time trend. When the birth cohorts are followed across time, inequality of opportunity decreases with age: the effect of circumstances seems to weaken over the life cycle. This is a quite different age profile from that of inequality of outcomes (income or consumption), which generally increases with age. A decomposition of the relative inequality of opportunity allows highlighting some key drivers of its time evolution. In all the countries, there has been a clear enhancement of equality of educational opportunity (as captured by a downward trending intergenerational education persistence) and a reduction of the returns to education. However, for some countries, notably Italy, these trends have failed to translate into decreasing inequality of opportunity in the income distribution because of the increasing role of parental networking (an additional channel through which parental background affects the incomes of offspring).
    Keywords: Inequality of Opportunity, Decomposition methods, Education mobility, Returns to Education, Family Networking, Cohort Analysis.
    JEL: D31 D63 E24 I24 J62
    Date: 2019–01
  10. By: Damiaan Persyn (European Commission - JRC); Jorge Diaz-Lanchas (European Commission - JRC); Javier Barbero (European Commission - JRC)
    Abstract: Transport costs are a crucial element of any spatial economic model. Surprisingly, good transport cost estimates at a detailed spatial level for the EU are not readily available. In this paper we address this issue by estimating a novel dataset of road freight transport costs for goods for the EU regions at the NUTS 2 level. In the spirit of the generalized transport cost (GTC) concept, we calculate the composite cost related to distance and time for the optimal route of a representative truck. We consider routes between large random samples of centroids drawn from a 1kmx1km population density grid. These transport costs are averaged to obtain an origin-destination cost matrix (in euros) at the region-pair level. The sampling approach also allows calculating the average transport cost within the regions. We separately report the corresponding iceberg transport costs for each pair of European regions, since this is the form of input required by many economic models. We also consider the effect of changes in the components of the GTC in order to evaluate transport policies. We set up a transport policy tool to assess the impact of road-transport infrastructure investment in a region by considering upgrading roads to highways. We apply this tool to study transport infrastructure investment through the European Cohesion Policy program 2014-2020.
    Keywords: Rhomolo, Region, Growth, Generalized Transport Costs, Infrastructure, Cohesion Policy, OSM, EU.
    JEL: R11 R12 R40 R41
    Date: 2019–03
  11. By: Ariane Pailhé (INED - Institut national d'études démographiques); Anne Solaz (INED - Institut national d'études démographiques)
    Abstract: This article assesses the wage impact of different family‐friendly employer policies: in‐kind or in‐cash child‐related benefits and flexible work schedule arrangements. We use French matched employee–employer data with a rich set of indicators of family‐friendly benefits, and we pay attention to the possible endogeneity of worker–employer matching. Our results show that the provision of in‐cash or in‐kind benefits is associated with higher wages for women, while flexible work schedules have no significant effect on wages. Our results lead us to reject the hypothesis of compensating wage differentials: women do not appear to face a trade‐off between wages and a better work–life balance. Our findings are more in line with the enhancing productivity theory: in‐kind benefits reduce the time devoted to household activities and alleviate conflict between professional life and family life, thereby improving women's work effort and productivity. This is not the case for flexible work arrangements, which may be perceived as negatively related to workers' commitment to their job.
    Keywords: France,family pay-gap,women's employment,family-friendly employment policies,flexible work schedules,wages
    Date: 2019
  12. By: Uwe Jirjahn; Cornelia Struewing
    Abstract: Using data from the German Socio-Economic Panel (SOEP), we show that single women in East Germany are significantly more likely to give birth to a child than single women in West Germany. This applies to both planned and unplanned births. Our analysis provides no evidence that the difference between East and West Germany can be explained by economic factors or the higher availability of child care in East Germany. This suggests that the difference in out-of-partnership births is rather driven by behavioral and cultural differences. However, these behavioral and cultural differences do not only reflect different gender role models that evolved under the former communist regime in East Germany and the democratic one in West Germany. Partly, they also reflect a long historical divide that predates the 1945 separation of Germany.
    Keywords: Unpartnered birth, gender role models, culture, East Germany, West Germany, politico-economic systems
    JEL: J12 J13 P20
    Date: 2019
  13. By: Lucía Gorjón García (ISEAK and FEDEA); Sara de la Rica (Universidad del País Vasco & FEDEA); Antonio Villar (Universidad Pablo de Olavide & IVIE)
    Abstract: The social cost of unemployment is an evaluation protocol proposed by Gorjón, de la Rica & Villar (2018) that integrates into a single indicator three different dimensions of this phenomenon: incidence (the conventional unemployment rate), severity (depending on the unemployment duration and the lost income) and hysteresis (the probability of remaining unemployed). This indicator corresponds to the aggregate disutility of unemployed workers and can thus be regarded as a measure of the social welfare loss due to unemployment. We apply here this evaluation protocol to the Spanish labour market, using the official register of unemployed workers compiled by the Public Employment Service, focusing on the differences among the types of unemployed workers that can be defined according to gender, age, level of studies, unemployment duration, and type of compensation received. Then we identify the population subgroups that suffer most the impact of unemployment.
    Keywords: social cost of unemployment, unemployment duration, incidence, severity and hysteresis of unemployment, Spanish labour market, types of workers.
    JEL: J64 J65 I31
    Date: 2019–03
  14. By: Fitjar, Rune Dahl; Haus-Reve, Silje; Rodríguez-Pose, Andrés
    Abstract: Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006â??2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing "more of all" on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products.
    Keywords: firms; Innovation; Interaction; Norway; scientific and supply-chain collaboration
    JEL: O31 O32 O33
    Date: 2019–03
  15. By: Alessia Matano (AQR-IREA, University of Barcelona); Paolo Naticchioni (AQR-IREA, University of Barcelona); Francesco Vona (AQR-IREA, University of Barcelona)
    Abstract: A growing body of research has contributed to understanding the labor market and political effects of globalization. This paper explores an overlooked aspect of trade-induced adjustments in the labor market: the institutional aspect. We take advantage of the two-tier collective bargaining structure of the Italian labor market, whereby the first tier entails setting minimum wages at the contract level. Using an instrumental variable strategy and exploiting variations in contract-level exposure to trade, we find for the 1995-2003 period that on average, the surge in imports decreased contractual minimum wages by 1.5%. This impact increased with the increase in the share of unskilled workers employed under this contract. This negative institutional effect contrasts with a nonsignificant effect of trade on total wages, with the latter becoming positive and large only for highly skilled workers.
    Keywords: bargained minimum wages; import competition; labor market institutions; skills JEL classification: J50, F16, J31, J24
    Date: 2019–04
  16. By: José Garcia Montalvo; Amedeo Piolatto; Josep M. Raya
    Abstract: We model the behaviour of a buyer trying to evade the real estate transfer tax. We identify over-appraisal as a key, easily-observable element that is inversely related with tax evasion. We conclude that the tax authority could focus auditing e orts on low-appraisal transactions. We include `behavioural'components (shame and stigma) allowing to introduce buyers'(education) and societal (social capital) characteristics that explain individual and idiosyncratic variations.Our empirical analysis con rms the predictions using a unique database, where we directly observe: real payment, value declared to the authority,appraisal, buyers' educational level and local levels of corruption and trust.
    Keywords: transfer tax, tax evasion, second-hand housing market, overappraisal, Loan-To-Value, corruption, social capital, stigma, shame, education
    JEL: G21 H26 R21
    Date: 2019–03
  17. By: Fitzenberger, Bernd; Hillerich-Sigg, Annette; Sprietsma, Maresa
    Abstract: Career guidance assists students with the school-to-work transition. Based on a survey in secondary schools in Germany, we analyze career guidance activities and how these affect career plans. The take-up of career guidance depends upon the school track attended and upon the school and class room context, while personal characteristics are hardly relevant. The effects of counseling depend upon the counselor. Counseling by the employment agency reduces plans for educational upgrading and increases the probability of applying for an apprenticeship, while the effects of school counselors work in the opposite direction for lower track students.
    Keywords: educational aspirations,career guidance,counseling,career planning,school-to-work transition,secondary school
    JEL: J24 I28 I21
    Date: 2019
  18. By: Tito Boeri; Pietro Garibaldi
    Abstract: The Italian Jobs Act introduced a subsidy for new hirings as well as a new open ended labor contract based on graded security, with severance payments increasing with tenure, while phasing out the compulsory reinstatement of workers in the case of unfair dismissals applied until March 2015. Simple models of job creation and destruction predict that hiring subsidies and lower _ring costs unambiguously increase hirings. Moreover, lower _ring costs associated with graded security should also increase layoffs. These effects need not to be uniform across the size distribution of firms, especially when firms of different size are treated differently by the policy changes as in the case of the Jobs Act. On the one hand, the hiring subsidy was proportional to wages, but had a cap, hence was more generous for small firms - typically paying lower wages than large firms - making them particularly responsive along the job creation margin. On the other hand, the reduction in _ring costs applied mainly to large firms concentrating on them the adjustment along the job destruction margin. To investigate empirically the effects of the Italian Jobs Act, we draw on a unique dataset covering the universe of private firms in Italy having at least once 10 to 20 employees in the two years prior to the reform of January 2015. We find evidence of a substantial increase in open ended hirings, and in the transformation of fixed-term into open ended contracts, in the aftermath of the Jobs Act. The effects of the Jobs Act on firings- conversely- are much smaller, and are concentrated on large _firms, while small _firms react more intensively- creating new open ended contracts - to the hiring subsidy.
    Keywords: labor mobility, jobs act
    JEL: J10 J23
    Date: 2019–04
  19. By: Andrea Bellucci (European Commission - Joint Research Centre and MoFiR); Luca Pennacchio (Università di Napoli Parthenope); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: This study investigates the impact of public subsidies for research and development (R&D) on the debt financing of small and medium-sized enterprises (SMEs). It examines a public program implemented in the Marche region of Italy during the period 2005–2012. The study combines matching methods with a difference-in-difference estimator to examine whether receiving public subsidies affects total indebtedness, the structure and cost of debt of awarded firms. The results indicate that R&D subsidies modify firms’ (especially young firms’) debt structure in favor of long-term financing, and help firms to limit the average cost of debt. Subsidies also foster the use of bank financing, but do not affect the overall level of debt. Taken together, these findings suggest that public funding of SMEs’ innovation projects plays a certification role in access to external financial resources for firms receiving subsidies.
    Keywords: R&D subsidies; Finance gap; Debt financing; Debt structure; Certification effects; Resource effect.
    JEL: G30 H25 O31 O38 R58
    Date: 2019–04–01
  20. By: Almarina Gramozi; Theodore Palivos; Marios Zachariadis
    Abstract: We use microeconomic data on wages and individual characteristics across twenty European economies for the period 2004 to 2015, to detect patterns of misallocation arising in these economies based on individuals’ gender, immigrant status, or private versus public sector affiliation. We develop a theoretical model where being relatively isolated, e.g., due to gender, immigrant status, or private sector affiliation, leads to lower wages and talent misallocation. Our empirical results suggest that being a female or immigrant, and working in the private sector, exert a negative impact on one’s wages beyond that explained by their economic characteristics, suggestive of persistent talent misallocation in Europe during the period under study. Notably, countries such as Cyprus, Greece, Italy and Spain are systematically found at the top of the overall talent misallocation index we construct year-after-year for the period under study. Our work provides new cross-country micro-econometric evidence about the importance of various forms of talent misallocation for aggregate economic outcomes.
    Keywords: economic growth, wage gap, inefficiency
    JEL: E0 J31 O4 O52
    Date: 2019–03
  21. By: Thomas Barnay (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée); Éric Defebvre (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)
    Abstract: Our objective is to measure the causal impact of the self-assessed mental health status of 2006 (anxiety disorders and depressive episodes) on employment in 2010. We use data from the French Health and Professional Route survey (Sip, "Santé et itinéraire professionnel"). In order to control for endogeneity biases coming from the mental health indicator, we use bivariate probit models explaining simultaneously employment status and mental health. We control these results by observing the individual, employment, general health status, risky behaviours and professional characteristics. Our main findings are as follow: men suffering from depression or anxiety are up to 13 percentage points less likely to remain in their job. We do not find such a relationship in women, after controlling for general health status. The robustness checks conducted on age and specifically those taking into account for the 2007-2010 period confirm these results.Our objective is to measure the causal impact of the self-assessed mental health status of 2006 (anxiety disorders and depressive episodes) on employment in 2010. We use data from the French Health and Professional Route survey (Sip, "Santé et itinéraire professionnel"). In order to control for endogeneity biases coming from the mental health indicator, we use bivariate probit models explaining simultaneously employment status and mental health. We control these results by observing the individual, employment, general health status, risky behaviours and professional characteristics. Our main findings are as follow: men suffering from depression or anxiety are up to 13 percentage points less likely to remain in their job. We do not find such a relationship in women, after controlling for general health status. The robustness checks conducted on age and specifically those taking into account for the 2007-2010 period confirm these results.
    Keywords: Mental health,Employment,Instrumental variables
    Date: 2019–03–17
  22. By: Stefania Basiglio (Faculty of Law, University of Trento, Italy); Paola De Vincentiis (Department of Management, University of Torino, Italy); Eleonora Isaia (Department of Management, University of Torino, Italy); Mariacristina Rossi (Department of Management, University of Torino, Italy)
    Abstract: This work focuses on the credit access and credit demand of Italian firms using a sample representative of Italian firms. We investigate whether the gender of the decision-maker of the firm affects the demand for credit and we focus on regional differences in credit access and denial. Results suggest that women are significantly less likely to ask for credit, while no significant differences in credit approval are found between the two genders.
    Keywords: Credit demand, Italian firms, Gender.
    JEL: D22 H81 J16
    Date: 2019–04
  23. By: Raúl García-Gómez (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.); Jorge Onrubia (Instituto Complutense de Estudios Internacionales (UCM), FEDEA and GEN.); A. Jesús Sánchez-Fuentes (Instituto Complutense de Estudios Internacionales (UCM) and GEN.)
    Abstract: Efficient use of public resources is clearly a relevant issue to be studied from several points of view. Among others, it accounts for a significant share of the total economy activity and it deals with non market oriented activities. In Spain, the regional level is particularly relevant due to the progressive decentralization during the 200s of key public policies constituting the welfare state (as education, health, etc.). Consequently,it increased notably their financing needs but affecting asymmetrically because of the important differences in their fiscal capacity. Moreover, they mostly share (15 of 17) a common financing system in which an efficient use of resources is assumed but not evaluated. Our results show that normally a few of the regions tend to be the top performers, but there no regions performing poorly in every aspect. It is also worth noting that no dramatic changes can be seen in terms both of expenditure and performance during the recent Great Recession.
    Keywords: Public sector efficiency; Public sector performance; Fiscal decentralisation; Spanish Autonomous Communities.
    JEL: D24 D60 D61 H40 H50
    Date: 2019
  24. By: Izabela Karpowicz
    Abstract: The Netherlands’ pension system is characterized by high participation rates, adequate retirement income, strong capitalization and sustainability. Pressure points are arising, however, due to population aging and untransparent intergenerational transfers inherent in the system. Moreover, the Dutch pension system needs to adapt to the changing labor market landscape with an increasing share of workers in self-employment not covered by any pension arrangement. The government has proposed replacing collective defined-benefits schemes with personal accounts, and abolishing uniform premia and constant accrual rates. The micro-data analysis shows that allowing greater risk-taking and freedom of choice in managing pension savings could crowd self-employed into pension schemes.
    Date: 2019–03–19
  25. By: Amaral Garcia, Sofia; Nardotto, Mattia; Propper, Carol; Valletti, Tommaso
    Abstract: We study the effect of internet diffusion on childbirth procedures performed in England between 2000 and 2011. We exploit an identification strategy based on geographical discontinuities in internet access generated by technological factors. We show that broadband internet access increased Cesarean-sections: mothers living in areas with better internet access are 2.3 percent more likely to have a C-section than mothers living in areas with worse internet access. The effect is driven by first-time mothers who are 6.1 percent more likely to obtain an elective C-section. The increased C-section rate is not accompanied by changes in health care outcomes of mothers and newborns. Health care costs increased with no corresponding medical benefits for patients. Heterogeneity analysis shows that mothers with low income and low education are those more affected: thanks to the internet, they progressively close the C-section gap with mothers with higher income and education. We show evidence documenting the growing importance of the internet as a source of health related information, and we argue that patient's access to online information is changing the relationship between health care providers and patients.
    Keywords: c-sections; Information; internet
    Date: 2019–03
  26. By: Michał Gradzewicz (Narodowy Bank Polski); Jakub Mućk (Narodowy Bank Polski)
    Abstract: This paper provides the evidence of a fall of markups of price over marginal costs in Poland over the last 15 years. Markups were calculated using a census of firms and the methodology proposed by De Loecker and Warzynski (2012). The fall of markups, by 18.6% for median and by 13.1% for weighted mean and experienced by 70% of firms, is robust to several empirical identification strategies. Moreover, the decline of markups is not related to changes in a sectoral composition and firms demography and is most severe in exporting firms. Our empirical results relate the fall of markups to globalization and emergence of the Global Value Chains. We show that the increasing reliance on imported components in production, together with rising concentration of domestic firms on export markets are the main factors behind the observed compression of markups. We also document a hump-shaped (U-shaped) relationship between foreign value added in exports (distance from final demand) and markups.
    Keywords: markup, globalization, GVC, competition
    JEL: C23 D22 D4 L11
    Date: 2019
  27. By: Luigi Balletta; Andrea Mario Lavezzi
    Abstract: This paper studies extortion of firms operating in legal sectors by a profit-maximizing criminal organization. We develop a simple principal-agent model under asymmetric information to find the Mafia-optimal extortion as a function of firms' observable characteristics, namely size and sector. We test the predictions of the model on a unique dataset on extortion in Sicily, the Italian region where the most powerful criminal organization, the Mafia, operates. In line with our theoretical model, our empirical findings show that extortion is strongly concave in firm's size and highly regressive. The percentage of profits appropriated by Mafia ranges from 40% for small firms to 2% for large firms. We derive some implications of these findings on market structure and economic development.
    Keywords: Organized Crime, Economic Structure, Sicilian Mafia, Asymmetric Information, Principal-Agent Theory
    JEL: C72 D86 K42
    Date: 2019–03–01
  28. By: Schleich, Joachim; Hillenbrand, Thomas
    Abstract: This paper econometrically estimates residential water consumption in Germany between 2007 and 2013 based on a panel of almost 3000 supply areas. In particular, the analysis distinguishes periods of rising and falling water and sewage water prices. The short-run (long-run) price elasticity is estimated at around 4.2% (13%), but water demand appears to respond asymmetrically to rising and falling prices. When prices are rising, the short-run (long-run) price elasticity is around 6.5% (18%). When prices are falling, the short-run price elasticity is not statistically different from zero, and the long-run price elasticity is estimated at around 12%. Additional results illustrate that employing average prices instead of marginal prices results in substantially overestimating the price elasticity. These findings are particularly relevant for utilities and regulators planning to alter the tariff structure towards a higher fixed fee and a lower volumetric fee.
    Keywords: water consumption,econometrics,rebound,tariff,price elasticity,panel data
    Date: 2019

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