nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒07‒08
thirty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Educational attainment, age and the consequences of job loss: empirical evidence from Germany By Alexandra Effenberger; Verena Lauber; Sebastian Schmitz; Charlotte Senftleben-König
  2. In-work benefits across Europe By Laun, Lisa
  3. Discontinuity in Care: Practice Closures among Primary Care Providers and Patient Health By Marianne Simonsen; Lars Skipper; Niels Skipper; Peter Rønø Thingholm
  5. Short-term household income mobility before and after the Great Recession: A four-country study By Elizabeth Jane Casabianca; Elena Giarda
  6. Quashing Demand Criminalizing Clients? Evidence from the UK By Della Giusta, Marina; Di Tommaso, Maria Laura; Jewell, Sarah; Bettio, Francesca
  7. Closing the Finance Gap by Nudging: Impact Assessment of Public Grants for Women Entrepreneurs By Stjepan Srhoj; Bruno Skrinjaric; Sonja Radas; Janette Walde
  8. Transfer taxes and household mobility: distortion on the housing or labor market? By Hilber, Christian A. L.; Lyytikäinen, Teemu
  9. Diversifying in green technologies in European regions: does political support matter? By Artur Santoalha; Ron Boschma
  10. Firm survival in new EU member states By Eduard Baumohl; Ichiro Iwasaki; Evžen Koèenda
  11. The Impact of Banning Mobile Phones in Swedish Secondary Schools By Kessel, Dany; Lif Hardardottir, Hulda; Tyrefors, Björn
  12. Impacts of industry 4.0 investments on firm performance: Evidence from Italy By Marco Bettiol; Mauro Capestro; Eleonora Di Maria; Andrea Furlan
  13. The effect of house prices on household borrowing: a new approach By Cloyne, James; Huber, Kilian; Ilzetzki, Ethan; Kleven, Henrik
  14. Threats and opportunities in the digital era: automation spikes and employment dynamics By Giacomo Domini; Marco Grazzi; Daniele Moschella; Tania Treibich
  15. The emergence of an innovation ecosystem in a low innovation region: Disrupting inertia by a young university By Elisa Villani; Christian Lechner
  16. Ethnic identity and the employment outcomes of immigrants: evidence from France By Isaure Delaporte
  17. New(s) data for Entrepreneurship Research? An innovative approach to use Big Data on media coverage By Johannes von Bloh; Tom Broekel; Burcu Oezgun; Rolf Sternberg
  18. The Gender Gap in Informal Child Care: Theory and Some Evidence from Italy By Barigozzi, Francesca; Cremer, Helmuth; Monfardini, Chiara
  19. Equal treatment for highly qualified labour migrants By Herzfeld Olsson, Petra
  20. Technology-induced Trade Shocks? Evidence from Broadband Expansion in France By Clément Malgouyres; Thierry Mayer; Clément Mazet-Sonilhac
  21. Increased instruction time and stress-related health problems among school children By Jan Marcus; Simon Reif; Amelie C. Wuppermann; Amélie Rouche
  22. The Role of Relationship Lending on Employment Decisions in Firms’ Bad Times By Pierluigi Murro; Tommaso Oliviero; Alberto Zazzaro
  23. Exuberant proclivity towards non-standard employment: evidence from linked employer-employee data By A. Arrighetti; E. Bartoloni; F. Landini; C. Pollio
  24. Wages, Experience and Training of Women over the Lifecycle By Richard Blundell; Monica Costa Dias; David Goll; Costas Meghir
  25. Exploring the role of industrial structure for regional economic resilience By Luciana Lazzeretti; Stefania Oliva; Niccolò Innocenti
  26. Migration and Post-Conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia By Bahar, Dany; Özgüzel, Cem; Hauptmann, Andreas; Rapoport, Hillel
  27. UK House Prices – Connectedness or Ripple Effect? By Taufiq Choudhry; Syed S. Hassan; Sarosh Shabi
  28. Pre- and Post-Birth Components of Intergenerational Persistence in Health and Longevity: Lessons from a Large Sample of Adoptees By Björkegren, Evelina; Lindahl, Mikael; Palme, Mårten; Simeonova, Emilia
  29. How computerisation is transforming jobs: Evidence from the European Working Conditions Survey By Martina Bisello; Eleonora Peruffo; Enrique Fernandez-Macías; Riccardo Rinaldi
  30. The Dynamic Effects of Tax Audits By Advani, Arun; Elming, William; Shaw, Jonathan

  1. By: Alexandra Effenberger; Verena Lauber; Sebastian Schmitz; Charlotte Senftleben-König
    Abstract: Education is a crucial determinant of labour market success. We investigate whether education is an appropriate means to cushion the negative consequences of job loss and study the role of age as a second major labour market factor. Using German Socio-Economic Panel (SOEP) data for the years 2000 to 2016, we analyse unemployment durations and unemployment-induced wage penalties for prime-age men. We show that individuals without formal qualifications face a significantly lower probability of finding a new job than workers with some kind of formal qualification, and hence face a higher risk of long-term unemployment. Furthermore, the duration of unemployment prior to finding a new job rises with age. This pattern is particularly pronounced for individuals with upper secondary education or no formal qualifications. Moreover, we find a negative relationship between unemployment and an individual’s subsequent wage. This depressing impact is significant only for unqualified workers and workers with intermediate vocational education. Yet, differences between educational groups are not statistically significant. Across all education groups, unemployment depresses subsequent wages more strongly at a higher age. However, the results suggest that this is due to longer unemployment spells of older workers, not age per se.
    Keywords: returns to education, unemployment duration, wage differentials
    JEL: J64 J31
    Date: 2019–07–10
  2. By: Laun, Lisa (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: In-work benefits, often in the form of earned income tax credits (EITCs), have become increasingly popular over the last decades. Early versions of in-work benefits in the US, the UK and Ireland, primarily motivated as a poverty alleviation measure, have been followed by a large expansion of in-work benefits in other European countries, stressing employment goals rather than redistributive concerns. This review describes the in-work benefit schemes in a selection of countries across Europe and summarizes the evidence of these schemes. The selected countries are France, the Netherlands, Germany, Belgium, Denmark, Finland and Sweden.
    Keywords: Earned income tax credit; EITC; Europe; tax and benefit system
    JEL: H24 I38
    Date: 2019–06–17
  3. By: Marianne Simonsen (Department of Economics and Business Economics, Aarhus University); Lars Skipper (Department of Economics and Business Economics, Aarhus University); Niels Skipper (Department of Economics and Business Economics, Aarhus University); Peter Rønø Thingholm (Department of Economics and Business Economics, Aarhus University)
    Abstract: This paper investigates consequences of practice closures among primary care providers on subsequent patient health care utilization and health. Critically, the analysis relies on population-level administrative Danish data that facilitate a unique link between all Danes and their family doctor. We start by characterizing the nature of a practice closure, including the change in provider characteristics that occurs when patients change provider. Practice closure leads patients to choose a systematically younger and less experienced primary care provider. Using a difference-in-differences strategy that compares individuals who experience a practice closing with similar individuals enrolled in similar practices that do not close until later, we next investigate consequences for patient health care utilization and health outcomes. We find that a change in provider due to practice closure increases detection of chronic illness but does not lead to concurrent changes in primary care utilization. We do detect a considerable increase in the use of emergency care, however. A decomposition exercise shows that both physician practice style and the disruption itself plays a role for the total effects but that the direction of their relative influence varies across outcome domains. Importantly, disruption is not always negative from the perspective of the patient.
    Keywords: Physician practice closure, disruption, practice styles
    JEL: I11 I12 I18
    Date: 2019–06–24
  4. By: Manuela Stranges (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni 'G. Parenti' - DiSIA, Università degli Studi di Firenze); Alessandra Venturini (Dipartimento di Economia e Statistica "Cognetti de Martiis", Campus "Luigi Einaudi", Università degli Studi di Torino)
    Abstract: This paper contributes to the growing strand of literature that investigates migrants’ subjective wellbeing by analysing how the social comparison with two reference groups (natives and other migrants) within the host country affects migrants’ life satisfaction. Using data from six rounds of the European Social Survey, we constructed two measures of economic distance that compare each migrant’s situation with the average of the group of natives and the group of migrants with similar characteristics. Our results indicate that when the disadvantage between the migrant and the reference groups becomes smaller, migrant’s life satisfaction increases. The effect of the social comparison with natives appears larger than the social comparison with migrants and, in both cases, it is stronger for individuals with higher levels of education. We also show that social comparison is stronger for second generation migrants than for first generation migrants and, within this latter group, it intensifies as length of stay in the host country increases. Overall, the role of social comparison seems crucial to understanding patterns of integration in an enlarged Europe.
    Keywords: subjective well-being, migrants, social comparison
    JEL: I31 F22
    Date: 2019–06
  5. By: Elizabeth Jane Casabianca; Elena Giarda
    Abstract: This paper analyses short-term intra-generational income mobility in France, Italy, Spain and the UK by exploiting the longitudinal component of EU-SILC for the periods 2005-2008 and 2012-2015. We investigate whether and to what extent the ability of households to move along the income distribution changed after the 2008 crisis and whether heterogeneities among countries exist. For this purpose, we employ mobility indexes and transition matrices as well as estimation of a 2SLS regression and of a dynamic ordered probit with random effects. Overall, indexes and transition matrices point to a decrease of mobility in the aftermath of the crisis. The econometric analyses suggest both the existence of a convergence process of incomes and state dependence of current and lagged income in both periods. We also observe sluggish income convergence and lower upward mobility in the second period. Among the microeconomic drivers, education and employment status are positive determinants of mobility. Finally, our results confirm cross-country heterogeneity.
    Keywords: intra-generational income mobility, mobility indexes, 2SLS, dynamic ordered probit, EU-SILC
    JEL: C25 C26 D31 J60
    Date: 2019–06
  6. By: Della Giusta, Marina (University of Reading); Di Tommaso, Maria Laura (University of Turin); Jewell, Sarah (University of Reading); Bettio, Francesca (University of Siena)
    Abstract: We discuss changes in the demand for paid sex accompanying the criminalization of prostitution in the United Kingdom, which moved from a relatively permissive regime under the Wolfenden Report of 1960, to a much harder line of aiming to crack down on prostitution with the Prostitution (Public Places) Scotland Act 2007 and the Policing and Crime Act of 2009 in England and Wales. We make use of two waves of a representative survey, the British National Survey of Sexual Attitudes and Lifestyles (Natsal2, conducted in 2000-2001 and Natsal3, conducted in 2010-2012) to illustrate the changes in demand that have taken place across the two waves. We do not find demand decreasing in our sample and find a shift in the composition of demand towards more risky clients, which we discuss in the context of the current trends towards criminalization of prostitution.
    Keywords: criminalization, prostitution, demand
    JEL: C35 J16 J22 K42
    Date: 2019–06
  7. By: Stjepan Srhoj (Department for Economics and Business Economics, University of Dubrovnik); Bruno Skrinjaric (The Institute of Economics, Zagreb); Sonja Radas (The Institute of Economics, Zagreb); Janette Walde (Department of Statistics, Faculty of Economics and Statistics, University of Innsbruck)
    Abstract: Several recent papers draw attention to a lack of rigorous research on public policies supporting women entrepreneurs' competitiveness. This paper evaluates the effect of small business development gender-specific matching grants using a quasi-experimental approach. The grants have a positive effect on firm survival, as well as positive effects on obtaining bank loans, turnover, value added, employment, and total factor productivity. Heterogeneous treatment effects show that the grants increase the chance of young women entrepreneurs' firm survival and are even more effective for firms owned by mature women. Cost-benefit analysis estimates an increase in value added, which outweighs scheme-induced costs by 80% in the short-run and 170% in the long run.
    Keywords: women entrepreneurship, public grants, policy evaluation, gender financing gap, behavioral additionality, nudging
    JEL: B54 J16 H81 L26 L38 H43
    Date: 2019–05
  8. By: Hilber, Christian A. L.; Lyytikäinen, Teemu
    Abstract: We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. Overall, our results suggest that transfer taxes may mainly distort housing rather than labor markets.
    Keywords: transfer taxes; stamp duty; transaction costs; homeownership; household mobility
    JEL: R14 J01
    Date: 2017–09–01
  9. By: Artur Santoalha; Ron Boschma
    Abstract: Regional diversification is a process characterized by past and place dependence: new activities tend to emerge and develop in a region in technological or industrial fields closely related to existing local activities. Recently, the relatedness concept has also been applied successfully to studies on green diversification of regions, providing new insights to the transition literature that is primarily focused on disruptive change. What has received little attention is a systematic approach that assesses the role of political support for the ability of regions to diversify into new green activities. This paper makes a first attempt to test the impact of regional capabilities and political support for environmental policy at the national and regional scale on the ability of 95 regions in 7 European countries to diversify into new green technologies during the period 2000-2012. We find evidence that related capabilities rather than political support in a region is associated with green diversification of regions in Europe. However, political support tends to moderate the role of regional capabilities.
    Keywords: green technologies, regional diversification, sustainability transition, political support, relatedness
    JEL: O18 O44 Q55 R11
    Date: 2019–06
  10. By: Eduard Baumohl (Národná banka Slovenska, Bratislava); Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University, Tokyo, Japan); Evžen Koèenda (Institute of Economic Studies, Charles University, Prague, Czech Republic)
    Abstract: We analyze firm survival determinants in four new European Union member states (the Czech Republic, Hungary, Poland, and Slovakia). We employ the Cox proportional hazards model on firm-level data for the period of 2006 to 2015. We show that in all four countries, less concentrated control of large shareholders, higher solvency, and more board directors are linked with the increased probability of firm survival. However, an excessive number of board directors has a detrimental effect. Firms with foreign owners and higher returns on their assets exhibit better survival chances. Conversely, across countries and industries, larger firms and those hiring international auditors have lower probabilities of survival. A number of specific determinants influence firm survival in different ways, emphasizing the importance of country and industry differences when studying firm survival. We also document that in an economic sense, determinants associated with the legal form, ownership structure and corporate governance show the most beneficial effects with respect to firm survival.
    Keywords: firm survival, new EU member states, survival and exit determinants, hazards model
    JEL: D22 G01 G33 G34 P34
  11. By: Kessel, Dany (Södertörn University); Lif Hardardottir, Hulda (Stockholm University); Tyrefors, Björn (Research Institute of Industrial Economics (IFN))
    Abstract: Recently, policy makers worldwide have suggested and passed legislation to ban mobile phone use in schools. The influential and only quantitative evaluation by Beland and Murphy (2016), suggests that this is a very low-cost but effective policy to improve student performance. In particular, it suggests that the lowest-achieving students have the most to gain. Using a similar empirical setup but with data from Sweden, we partly replicate their study and thereby add external validity to this policy question. Furthermore, we increase the survey response rate of schools to approximately 75 % compared to 21 % in B&M, although at the expense of the amount of information collected in the survey. In Sweden, we find no impact of mobile phone bans on student performance and can reject even small-sized gains.
    Keywords: Mobile phone ban; Student performance
    JEL: I21 I28 J24 O33
    Date: 2019–06–25
  12. By: Marco Bettiol (Department of Economics and Management, University of Padova); Mauro Capestro (Department of Economics and Management, University of Padova); Eleonora Di Maria (Department of Economics and Management, University of Padova); Andrea Furlan (Department of Economics and Management, University of Padova)
    Abstract: The adoption of industry 4.0 technologies is assumed to bring superior competitive advantage for adopting firms as drivers of efficiency, differentiation as well as support to innovation. However, no studies capture the impacts of industry 4.0 technologies on firm’s financial performance. The paper explores the relationship between investments in digital technologies and firm performances, by also examining which are the technologies more likely to be associated with superior performance and eventually the cumulative effect of technologies on performance. Based on unique data gathered in 2017 on a sample of 1,149 Italian firms, results show the positive impacts on adopters’ performance and the role of robotics and laser cutting in this relationship. No cumulative effect (i.e. adopting more than one or two technologies) is instead observed.
    Keywords: digital technologies, performance, strategy, industry 4.0
    Date: 2019–06
  13. By: Cloyne, James; Huber, Kilian; Ilzetzki, Ethan; Kleven, Henrik
    Abstract: We investigate the effect of house prices on household borrowing using administrative mortgage data from the United Kingdom and a new empirical approach. The data contain household-level information on house prices and borrowing in a panel of homeowners, who refinance at regular and quasi-exogenous intervals. The data and setting allow us to develop an empirical approach that exploits house price variation coming from the idiosyncratic and exogenous timing of refinance events around the Great Recession. We present two main results. First, there is a clear and robust effect of house prices on borrowing. Second, the effect of house prices on borrowing can be explained largely by collateral effects. We study the collateral channel through a multivariate and nonparametric heterogeneity analysis of proxies for collateral and wealth effects.
    JEL: D14 E32 R31
    Date: 2019–06–01
  14. By: Giacomo Domini; Marco Grazzi; Daniele Moschella; Tania Treibich
    Abstract: This paper investigates how investment in automation-intensive goods impacts on worker flows at the firm level and, within firms, across occupational categories. Resorting to an integrated dataset encompassing detailed information on firms, their imports, and employer-employee data for French manufacturing employers over 2002-2015, we identify 'automation spikes' using imports of intermediates embedding automation technologies and then test their impact on employment dynamics. We find that automation spikes are positively correlated with preceding and contemporaneous growth in employment, mainly due to lower separation rates of investing firms. These differential patterns of net and gross worker flows do not appear to change significantly across different types of workers (occupational categories, 'techies', routine-intensive vs. non routine-intensive jobs).
    Keywords: Automation; Skills; Technological Change; Gross Worker Flows..
    Date: 2019–07–01
  15. By: Elisa Villani (University of Bologna, Italy); Christian Lechner (Free University of Bolzano, Italy)
    Abstract: Innovation ecosystems are characterised by a variety of complementary actors and relationships among them. Universities are considered a key player in innovation ecosystems for their ability of generating knowledge and qualified expertise for entrepreneurial innovation. While much attention has been paid to mature ecosystems characterised by cutting-edge technologies, the role of less established universities in less innovative regions, characterised by a lack of relationships, familyowned firms, difficult university-industry collaborations, but great potential, has remained very much underexplored. Based on a longitudinal case study of a young university in Italy, this paper aims at contributing to existing literature by looking at the role of the university in defining actors’ positions and relationships in establishing an innovation ecosystem. In doing so, we contribute to existing literature in several ways. First, we highlight that the formation of an innovation ecosystem in a small area highly depends on the university’s potential of disrupting established relationships, creating new ones and, thus, playing an active role in designing the ecosystem. Second, we provide a process-based view for understanding the establishment of an innovation ecosystem through the evolution of interactions, roles and activities. Finally, we describe the micro-dynamics characterising innovation ecosystem emergence and institutionalisation and we show that bottomup approaches are possible as well.
    Keywords: Ecosystems, university, university-industry collaboration, innovation, longitudinal case study
    JEL: M10
    Date: 2019–06
  16. By: Isaure Delaporte
    Abstract: The objective of this paper is twofold: first, to determine the immigrants’ ethnic identity, i.e. the degree of identification to the culture and society of the country of origin and the host country and second, to investigate the impact of ethnic identity on the immigrants’ employment outcomes. Using rich survey data from France and relying on a polychoric principal component analysis, this paper proposes two richer measures of ethnic identity than the ones used in the literature, namely: i) the degree of commitment to the origin country culture and ii) the extent to which the individual holds multiple identities. The paper investigates the impact of the ethnic identity measures on the employment outcomes of immigrants in France. The results show that having multiple identities improves the employment outcomes of the migrants and contribute to help design effective post-immigration policies.
    Keywords: ethnic identity, immigration, employment, polychoric principal component analysis
    JEL: J15 J21 J71 Z13
    Date: 2019
  17. By: Johannes von Bloh; Tom Broekel; Burcu Oezgun; Rolf Sternberg
    Abstract: Although conventional register and survey data on entrepreneurship have enabled remarkable insights into the phenomenon, the added value has slowed down noticeably over the last decade. There is a need for fresh approaches utilising modern data sources such as Big Data. Until now, it has been quite unknown whether Big Data actually embodies valuable contributions for entrepreneurship research and where it can perform better or worse than conventional approaches. To contribute towards the exploration of Big Data in entrepreneurship research, we use a newly developed dataset based on publications of the German Press Agency (dpa) to explore the relationship between news coverage of entrepreneurship and regional entrepreneurial activity. Furthermore, we apply sentiment analysis to investigate the impact on sentiment of entrepreneurial press releases. Our results show mixed outcomes regarding the relationship between reporting of entrepreneurial events, i.e., media coverage, and entrepreneurial activity in German planning regions. At this stage, our empirical results reject the idea of a strong relationship between actual entrepreneurial activities in regions and the intensity of it being reported. However, the results also imply much potential of Big Data approaches for further research with more sophisticated methodology approaches. Our paper provides an entry point into Big Data usage in entrepreneurship research and we suggest a number of relevant research opportunities based on our results.
    Keywords: entrepreneurship, media coverage, mass media, Big Data, sentiment analysis, GEM, entrepreneurial ecosystem, region, news data
    JEL: C8 L26 R12
    Date: 2019–06
  18. By: Barigozzi, Francesca (University of Bologna); Cremer, Helmuth (Toulouse School of Economics); Monfardini, Chiara (University of Bologna)
    Abstract: Our model studies couples. time allocation and career choices, which are a¤ected by a social norm on gender roles in the family. Parents can provide two types of informal child care: basic care (feeding, changing children, baby-sitting) and quality care (activities that stimulate children.s social and cognitive skills). We obtain the following main results. Traditional mothers provide some informal basic care, whereas career mothers purchase full time formal basic care in the market. Informal basic care is too large and the group of career mothers is too small because of the social norm. Informal quality care is increasing in the couple.s income and is provided in larger amount by mothers. We test the model.s predictions for Italy using the most recent ISTAT "Use of Time" survey. In line with the model, mothers devote more time than fathers to both basic and quality informal care; more educated parents devote more time to quality informal care than less educated parents; more educated mothers spend more time in the labor market than less educated mothers.
    Keywords: social norms, basic and quality child care, women's career choices, gender gaps
    JEL: D13 H23 J16 J22
    Date: 2019–06
  19. By: Herzfeld Olsson, Petra (Law Faculty, Stockholm university)
    Abstract: According to EU-law, third country national labour migrants shall be treated equally to local workers with regard to wages. The aim of this working paper is to clarify whether Swedish law meets this demand with regard to highly qualified labour migrants. The analysis reveals that the combined effect of entry conditions and the content of the collective agreements applicable in the sectors where highly qualified labour migrants work makes it difficult to safeguard that they are treated equally with comparable national workers. The study also demonstrates that Swedish law does not provide highly qualified labour migrants with any robust means to enforce equal treatment. Hence, it is not likely that Swedish law complies with EU law, at least not for those workers employed by an entity in Sweden. For labour migrants intra-corporate transferred or posted to Sweden in other ways the EU law demands are less clear.
    Keywords: Highly qualified labour migrants; pay; collective agreements; equal treatment
    JEL: J31 J61 J71 J83 K31
    Date: 2019–06–10
  20. By: Clément Malgouyres (IPP - Institut des politiques publiques - PSE - Paris School of Economics, PSE - Paris School of Economics, 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); Thierry Mayer (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France, CEPR - Center for Economic Policy Research - CEPR); Clément Mazet-Sonilhac (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France)
    Abstract: In this paper, we document the presence of "technology-induced" trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the "sub-extensive" margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.
    Date: 2019–06
  21. By: Jan Marcus; Simon Reif; Amelie C. Wuppermann; Amélie Rouche
    Abstract: While several studies suggest that stress-related mental health problems among school children are related to specific elements of schooling, empirical evidence on this causal relationship is scarce. We examine a German schooling reform that increased weekly instruction time and study its effects on stress-related outpatient diagnoses from the universe of health claims data of the German Social Health Insurance. Exploiting the differential timing in the reform implementation across states, we show that the reform slightly increased stress-related health problems among school children. While increasing instruction time might increase student performance, it might have adverse effects in terms of additional stress.
    Keywords: stress, mental health, instruction time, G8 reform
    JEL: I18 I28
    Date: 2019
  22. By: Pierluigi Murro (LUISS-Guido Carli University.); Tommaso Oliviero (Università di Napoli Federico II and CSEF); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: Using firm-level survey information, we study if relationship lending affects companies’ employment decisions when they face adverse conditions. Our empirical analysis reveals that firms with durable lending relationships show a significantly lower degree of sensitivity of internal workforce variation to shocks in sales. This result is robust to different measures of the shocks in sales and to an instrumental variable strategy. We also show that the result is stronger for younger, smaller and more innovative firms, confirming that relationship lending provides insurance against adverse conditions for companies whose internal labor force is arguably more valuable.
    Keywords: Employment, relationship banking, insurance
    JEL: G32 G38 H53 J65
    Date: 2019–06–26
  23. By: A. Arrighetti; E. Bartoloni; F. Landini; C. Pollio
    Abstract: In most industrialized countries temporary and non-standard forms of employment (NSFE) have become a pervasive feature of the labor market. However, at the firm level, the diffusion of NSFE is less uniform than expected: while some firms exhibit high propensity to use NSFE, others make no use of it. Most conventional explanations of NSFE use (market uncertainty, production regimes, competitive pressure) fail to account for such heterogeneity. In this article the authors develop an alternative explanation that links the use of NSFE to firm-specific availability of managerial resources: whenever the latter are relatively scarce, firms make larger use of NSFE to reduce coordination and operating costs. Using a linked employer-employee panel of manufacturing firms from the Emilia-Romagna region (Italy), the authors provide empirical support for this hypothesis. The result is robust to different estimation strategies and controlling for alternative drivers of NSFE use. This novel finding suggests that, the use of NSFE has strong managerial roots: it allows firms to compensate for firm-specific managerial weaknesses.
    Keywords: non-standard employment, managerial resources, span of control, firm heterogeneity
    JEL: D22 L23 M51 M52 J41 J23
    Date: 2019
  24. By: Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies, Centre for Economics and Finance); David Goll (University College London); Costas Meghir (Yale University)
    Abstract: We investigate the role of training in reducing the gender wage gap using the UK-BHPS which contains detailed records of training. Using policy changes over an 18 year period we identify the impact of training and work experience on wages, earnings and employment. Based on a lifecycle model and using reforms as a source of exogenous variation we evaluate the role of formal training and experience in defining the evolution of wages and employment careers, conditional on education. Training is potentially important in compensating for the effects of children, especially for women who left education after completing high school.
    Keywords: gender gap, wage gap, Earnings
    JEL: J16 J31
    Date: 2019–06
  25. By: Luciana Lazzeretti; Stefania Oliva; Niccolò Innocenti
    Abstract: The evolutionary approach of regional economic resilience suggests that an external shock can lead to a structural change and the development of new industrial specializations. Among its determinants, a role is played by the industrial structure where a certain degree of specialisation or diversification may influence the response of regions to shocks. The article aims at investigating the role of the relatedness of new specialisations to the existing industrial structure in favouring resilience of territories. Evaluating the resilience of Italian provinces in relation to the economic crisis of 2008, the analysis seeks to understand if provinces who resisted and recovered better, followed a ?related? or ?unrelated? diversification strategy. Conclusions discusses the implications for the policy debate on smart specialisation.
    Keywords: industrial structure, resilience, relatedness, smart specialisation
    JEL: O25 L16 R11
    Date: 2019–05
  26. By: Bahar, Dany (Brookings Institution); Özgüzel, Cem (Université Paris 1 Panthéon-Sorbonne); Hauptmann, Andreas (Institute for Employment Research (IAB), Nuremberg); Rapoport, Hillel (Paris School of Economics)
    Abstract: During the early 1990s Germany offered temporary protection to over 600,000 Yugoslavian refugees fleeing war. By 2000, many had been repatriated. We exploit this natural experiment to investigate the role of migrants in post-conflict reconstruction in the former Yugoslavia, using exports as outcome. Using confidential social security data to capture intensity of refugee workers to German industries–and exogenous allocation rules for asylum seekers within Germany as instrument—we find an elasticity of exports to return migration between 0.08 to 0.24. Our results are stronger in knowledge-intensive industries and for workers in occupations intensive in analytical and managerial skills.
    Keywords: migration, refugees, knowledge diffusion, management, exports, productivity
    JEL: O33 F14 F22
    Date: 2019–06
  27. By: Taufiq Choudhry (Southampton Business School, University of Southampton); Syed S. Hassan (School of Management, Swansea University); Sarosh Shabi (School of Management, Swansea University)
    Abstract: Using nonlinear causality and impulse response we show bidirectional dependence between the London house prices and other UK regions’ house prices except for Northern Ireland and Wales. This result has important implications for policy makers and investors.
    Keywords: Connectedness, Nonlinearity, House Prices
    JEL: R2 R21 R31
    Date: 2019–07–04
  28. By: Björkegren, Evelina (Department of Economics, Stockholm University); Lindahl, Mikael (Department of Economics, School of Business, Economics and Law, Göteborg University); Palme, Mårten (Department of Economics, Stockholm University); Simeonova, Emilia (Johns Hopkins University)
    Abstract: We use data on a large sample of Swedish-born adoptees and their biological and adopting parents to decompose the persistence in health inequality across generations into pre-birth and post-birth components. We use three sets of measures for health outcomes in the second generation: mortality, measures based on data on hospitalization and, finally, measures using birth outcomes for the third generation. The results show that all of the persistence in mortality is transmitted solely via pre-birth factors, while the results for the hospitalization measures suggest that at least three quarters of the intergenerational persistence in health is attributable to the biological parents.
    Keywords: Heath inequality; nature and nurture; intergenerational transmission
    JEL: I10 I14
    Date: 2019–06
  29. By: Martina Bisello (Eurofound); Eleonora Peruffo (Eurofound); Enrique Fernandez-Macías (European Commission - JRC); Riccardo Rinaldi (University of Siena)
    Abstract: This paper investigates changes in the task content, methods and tools of European jobs from 1995 to 2015. Drawing on the taxonomy of tasks proposed by Bisello and Fernández-Macías (2016), this work tries to better understand whether changes in the average intensity of tasks performance are the result of changes in the shares of employment across jobs, or changes in the task content within-jobs, or both. The main findings from a combined analysis of the European Working Conditions Survey (EWCS) and European Jobs monitor data (EJM) suggest that jobs with more social task content expanded relative to the rest, but this is in contrast with a decline in the amount of social tasks people actually do in those (and other) jobs over the same period. A similar contradictory trend can be observed in terms of routine tasks, with compositional and intrinsic changes going in opposite directions: an actual increase in the total levels of routine at work is recorded, notwithstanding marginal compositional declines. The implications of these findings in the context of the current debate on the impact of technological change on employment are discussed.
    Keywords: Tasks, Technical Change, Structural Change, Labour Markets, Europe, Occupations
    Date: 2019–06
  30. By: Advani, Arun (University of Warwick ; the Institute for Fiscal Studies (IFS) ; the Tax Administration Research Center (TARC) ; and the Centre for Competitive Advantage in the Global Economy (CAGE)); Elming, William (IFS and TARC at the time of involvement in this work); Shaw, Jonathan (Financial Conduct Authority)
    Abstract: Understanding causes of and solutions to non-compliance is important for a tax authority. In this paper we study how and why audits affect reported tax in the years after audit – the dynamic effect – for individual income taxpayers. We exploit data from a random audit program covering more than 53,000 income tax self assessment returns in the UK, combined with data on the population of tax filers between 1999 and 2012. We first document that there is substantial non-compliance in this population. One in three filers underreports the tax owed. Third party information on an income source does not predict whether a taxpayer is non-compliant on that income source, though it does predict the extent of underreporting. Using the random nature of the audits, we provide evidence of dynamic effects. Audits raise reported tax liabilities for at least five years after audit, implying an additional yield 1.5 times the direct revenue raised from the audit. The magnitude of the impact falls over time, and this decline is faster for less autocorrelated income sources. Taking an event study approach, we further show that the change in reporting behaviour comes only from those found to have made errors in their tax report. Finally, using an extension of the Allingham-Sandmo (1972) model, we show that these results are best explained by audits providing the tax authority with information, which then constrains taxpayers’ ability to misreport.
    Keywords: tax audits ; tax revenue ; tax reporting decisions ; income tax ; self assessment ; HMRC
    JEL: D04 H26 H83
    Date: 2019

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