nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒07‒15
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Transitioning Towards More Equality? Wealth Gender Differences and the Changing Role of Explanatory Factors over Time By Sierminska, Eva; Piazzalunga, Daniela; Grabka, Markus M.
  2. Who pays the price of folly? The business cycle and income and wealth mobility in Spain By Clara Martinez-Toledano; David Law; David Haugh; Müge Adalet McGowan
  3. Complementarities between Labour Market Institutions and Their Causal Impact on Youth Labour Market Outcomes By O'Higgins, Niall; Pica, Giovanni
  4. Time to Care? The Effects of Retirement on Informal Care Provision By Björn Fischer; Kai-Uwe Müller
  5. Your vote is (no) secret! How low voter density harms voter anonymity and biases elections in Italy By Mauro Caselli; Paolo Falco
  6. Decomposing Immigrant Differences in Physical and Mental Health: A 'Beyond the Mean' Analysis By Gabriella Berloffa; Francesca Paolini
  7. Say it like Goethe: Language learning facilities abroad and the self-selection of immigrants By Jaschke, Philipp; Keita, Sekou
  8. Having a child? Here is the bill - Parenthood, Earnings and Careers in an Internal Labor By Dominique Meurs; Elena Vilar; Claudio Lucifora
  9. Understanding Day Care Enrolment Gaps By Jonas Jessen; Sophia Schmitz; Sevrin Waights
  10. Diversity of greenhouse gas emission drivers across European countries since the 2008 crisis By Quentin Perrier; Céline Guivarch; Olivier Boucher
  11. Work incentives and the cost of redistribution via tax-transfer reforms under constrained labor supply By Fischer, Benjamin; Jessen, Robin; Steiner, Viktor
  12. Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK By Marion Leroutier
  13. Not Just a Work Permit: EU Citizenship and the Consumption Behavior of Documented and Undocumented Immigrants By Effrosyni Adamopoulou; Ezgi Kaya
  14. The real effects of EU loan guarantee schemes for SMEs: A pan-European assessment By Brault, Julien; Signore, Simone
  15. Does combining different types of collaboration always benefit firms? Collaboration, complementarity and product innovation in Norway By Haus-Reve, Silje; Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  16. Pay and Job Rank Amongst Academic Economists in the UK: Is Gender Relevant? By Mumford, Karen A.; Sechel, Cristina
  17. Bridge employment and full retirement intentions: the role of Person-Environment fit By Khaled Lahlouh; Delphine Lacaze; Richard Huaman-Ramirez
  18. Does additional spending help urban schools? An evaluation using boundary discontinuities By Gibbons, Stephen; McNally, Sandra; Viarengo, Martina
  19. The Long-Run Effects of Reducing Early School Tracking By Canaan, Serena
  20. Jobs multipliers: evidence from a large fiscal stimulus in Spain By Mario Alloza; Carlos Sanz
  21. The Heterogeneous Price of a Vote: Evidence from France, 1993-2014 By Yasmine Bekkouche; Julia Cage
  22. Flat-lining or seething beneath the surface?: two decades of changing economic inequality in the UK By Obolenskaya, Polina; Hills, John
  23. Scientific Education and Innovation: From Technical Diplomas to University STEM Degrees By Nicola Bianchi; Michela Giorcelli
  24. Trainspotting: "Good Jobs", Training and Skilled Immigration By Mountford, Andrew; Wadsworth, Jonathan
  25. Education and Gender Differences in Mortality Rates By Cristina Bellés-Obrero; Sergi Jiménez-Martín; Judit Vall Castello
  26. Trade Exposure and the Decline in Collective Bargaining: Evidence From Germany By Baumgarten, Daniel; Lehwald, Sybille
  27. Parental Leave, Household Specialization and Children's Well-Being By Canaan, Serena
  28. Local Rates of New Firm Formation: An Empirical Exploration using Swedish Data By Andersson, Martin; Lavesson, Niclas; Partridge, Mark D.
  29. Gender Identity and Relative Income within Households-Evidence from Sweden By Hederos, Karin; Stenberg, Anders

  1. By: Sierminska, Eva (LISER (CEPS/INSTEAD)); Piazzalunga, Daniela (FBK-IRVAPP); Grabka, Markus M. (DIW Berlin)
    Abstract: The objective of the study is to investigate the changing role of explanatory factors of wealth and the gender wealth gap in Germany over the period 2002-2012 using individual level microdata from the German Socio-Economic Panel. The authors apply distributional decomposition methods and focus on the role of changes in labor supply, permanent income, portfolio composition, and marital status in this process. Results show that real mean wealth levels for the working age population have been decreasing for both women and men since 2002 and that the wealth gap has decreased by 13.5% to 30.700€. The growing labor market participation of women and the resulting occupational structure has a positive effect on women's wealth accumulation. In comparison to previous analyses, the authors use the panel dimension of the data and find that the role of permanent income is decreasing due to a reduction in the gender difference in permanent income and in gender differences in its returns.
    Keywords: decomposition analysis, SOEP, gender, wealth differences
    JEL: D31 D13
    Date: 2019–06
  2. By: Clara Martinez-Toledano; David Law; David Haugh; Müge Adalet McGowan
    Abstract: Spain has experienced a dramatic business cycle, starting with a large construction based boom followed by a long recession, resulting in a substantial rise in unemployment, and income and wealth inequality. This paper uses longitudinal data from the Survey of Household Finances over the period 2002 to 2014 to examine the distributions of income and wealth in Spain, as well as the mobility of households within those distributions. Results show an increase in the concentration of both income and wealth following the sharp decline in house prices that occurred since 2008, with house price fluctuations affecting more negatively the young than the old. Furthermore, differences in average income and wealth by education, gender and home ownership status were accentuated during the crisis, with lower and middle group incomes falling on average and top group incomes rising. In addition, higher levels of mobility within the middle of the household wealth distribution are observed than at either the top or bottom, although mobility at the extremes of the distribution increased after 2008. Finally, a number of characteristics of households, including age, property ownership, being employed on a permanent contract and good health, are found to be positively associated with wealth accumulation over time, while having a mortgage is negatively related. Overall, the paper finds it is the young and those with low income, wealth and education, bad health, temporary contracts and a mortgage that became relatively worse off in Spain’s early 21st century boom and bust cycle. This Working Paper relates to the 2018 OECD Economic Survey of Spain ( mic-snapshot)
    Keywords: housing market, income, inequality, mobility, Spain, wealth
    JEL: D31 E21 N3
    Date: 2019–07–11
  3. By: O'Higgins, Niall (ILO International Labour Organization); Pica, Giovanni (USI Università della Svizzera Italiana)
    Abstract: We analyse theoretically and empirically the effects on young people's labour market outcomes of two specific labour market institutions and their interaction: employment protection legislation andactive labour market policy. The paper examines recent policy reforms in Italy focusing on the impact of the 2012 Fornero reforms of employment protection legislation as well as the initial impact of the EU-wide Youth Guarantee scheme introduced in Italy in March 2014. The paper then examines how these two policy reforms interacted. The analysis first confirms the finding that the Fornero reform increased permanent hires particularly amongst the very youngest workers; it then goes on to find that the YG was indeed successful in increasing the hires of young people, although this operated through a statistically significant increase in female hires on temporary contracts. Third, it finds some evidence of dampening effect of the YG on EPL reforms as predicted by theory.
    Keywords: youth employment, job search, ALMPs, EPL
    JEL: J13 J63 J68
    Date: 2019–06
  4. By: Björn Fischer; Kai-Uwe Müller
    Abstract: This paper analyzes the impact of a reduction in women's labor supply through retirement on their informal care provision. Using SOEP data from the years 2001- 2016 the analysis addresses fundamental endogeneity problems by applying a fuzzy regression discontinuity design. We exploit early retirement thresholds for women in the German pension system as instruments for their retirement decision. We find significant positive effects on informal care provided by women retiring from employment at the intensive and extensive margin that are robust to various sensitivity checks. Women retiring from full-time employment, highly educated women and women providing care within the household react slightly stronger. Findings are consistent with previous evidence and underlying behavioral mechanisms. They point to a time-conflict between labor supply and informal care before retirement. Policy implications are far-reaching in light of population aging. Prevalent pension reforms that aim to increase life-cycle labor supply threaten to reduce informal care provision by women and to aggravate the existing excess demand for informal care.
    Keywords: retirement; informal care; regression discontinuity; age threshold
    JEL: J22 J13 H43
    Date: 2019
  5. By: Mauro Caselli; Paolo Falco
    Abstract: Italian voters are assigned to a specific polling station according to their address. After an election, candidates know how many votes they received in each polling station. When the number of voters per polling stations is low and candidates are many, this jeopardises the secrecy of voting and candi- dates can more easily detect deviations from pre-electoral pledges. Exploit- ing variation in the number of voters per polling station across cities and over time, combined with rich data on politicians in office in all Italian mu- nicipalities between 1989 and 2015, we estimate the effect of voter density on the probability of re-election for local politicians. We find that when the number of voters per polling station is lower (and secrecy is at greater risk), incumbents have a higher probability of re-election. The analysis addresses the potential endogeneity of voter density. The results are stronger in regions with lower social capital and worse institutions.
    Keywords: elections, secret ballot, incumbency advantage, polling stations, voter density, institutions, social capital, Italy
    JEL: D02 D72 H70
    Date: 2019
  6. By: Gabriella Berloffa; Francesca Paolini
    Abstract: This paper takes a ‘beyond the mean’ perspective on physical and mental health differences between natives and immigrants and among immigrants themselves. We test the ‘healthy immigrant effect’ (HIE) and assess its deterioration, focusing on the evolution of the entire health distributions over time. Indeed, mean differ- ences can have very different consequences in terms of health care costs and health inequalities, according to the underlying differences at the top and at the bottom of the health distribution. Using unconditional quantile regressions on data from the Italian Health Condition Survey, we find a HIE for both physical and mental health, which is mainly due to large differences in the lowest quartiles. Detailed decompositions show that observed characteristics (such as age, gender, and occu- pation) are associated with better health for both natives and long-stay immigrants compared to short-stay immigrants. At the bottom of both physical and mental health distributions, these gains are more than offset by the negative impact of some unobserved characteristics. Our results point towards the need of improving the data collection on health determinants, especially among immigrants, in order to uncover what is behind the unobserved component.
    Keywords: Immigration; health, unconditional quantile regression, decomposition analysis,Italy
    JEL: I14 C21 J15 O15
    Date: 2019
  7. By: Jaschke, Philipp (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Keita, Sekou (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Immigration policy in most high-income countries is designed to promote qualified migration while maintaining high requirements on characteristics such as education and language skills. We rely on a standard self-selection model with heterogeneous migration costs to discuss the effect of access to language learning services in the country of origin on the skill composition of immigrants in Germany. Using individual-level survey data on immigrants from different cohorts over the period 2000 - 2014, combined with unique data on the presence of Goethe Institutes - a German association promoting German language and culture worldwide - in origin countries, the results of our empirical analysis show that the acquisition of the German language is fostered by the availability of language courses abroad. Moreover, we find that language services abroad induce a positive (self-)selection of migrants along several dimensions, such as education, experience, and the probability of holding a job offer at arrival. These characteristics are in turn highly relevant for long- term integration in Germany. To disentangle transmission channels, we perform a causal mediation analysis. We find that 25 % of the total effect of language services abroad on language skills at immigration trace back directly to migrants' participation in language courses, revealing important spillover effects." (Author's abstract, IAB-Doku) ((en))
    JEL: F22 J18 J24 J61 Z13
    Date: 2019–07–03
  8. By: Dominique Meurs; Elena Vilar; Claudio Lucifora
    Abstract: Using a unique 12-years panel of personnel records from a large French company, we ndthat becoming mother (extensive fertility margins) largely a ects labor market outcomes.Instead, fatherhood does not signi cantly impact on men's wages or careers. An event studyapproach with the use of non-parents as control group enables us to show that, prior tochildbirth, future mothers' earnings are in line with that of non-mothers. However, one yearafter birth, they start to fall, reaching -9% in total pay and -30% in individual bonuses.This drop is persistent: 8 years after childbirth there is no evidence of a catching-up trend.Mothers also have lower chances to climb-up the hierarchy of the rm and be promoted tomanagerial positions. A decomposition of the motherhood penalty shows that these \missedpromotions", likely due to an increase in absenteeism during the child's pre-school age, arethe main determinants of mothers' lower outcomes within the rm.
    Keywords: Children Motherhood penalty Gender inequalities Event study
    JEL: J13 J16 J31
    Date: 2019
  9. By: Jonas Jessen; Sophia Schmitz; Sevrin Waights
    Abstract: We document day care enrolment gaps by family background for children under 3 in Germany. Research demonstrates that children of less-educated or foreign-born parents benefit most from day care, making it important to understand the causes of such enrolment gaps. Using a unique data set that records both actual and preferred day care usage, we demonstrate that differences in demand cannot fully explain the enrolment gaps. Investigating supply-side factors using quasi-experimental designs, we find that reducing both parental fees and scarcity of places significantly decreases enrolment gaps by parental education but not by parental country of birth. We discuss implications.
    Keywords: Child care, Early education, Inequality, Socio-economic status, Discrimination, Synthetic control
    JEL: I24 J13
    Date: 2019
  10. By: Quentin Perrier (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech); Céline Guivarch (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech); Olivier Boucher (LOA - Laboratoire d’Optique Atmosphérique - UMR 8518 - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - Université de Lille)
    Abstract: In the context of climate change mitigation and the Paris Agreement, it is critical to monitor and understand the dynamics of greenhouse gas emissions over different regions of the world. In this study, we quantify the contributions of different drivers behind the observed emission decrease in Europe between 2009 and 2014. To this end, we build a novel dataset of deflated input-output tables for each of the 28 EU countries. This dataset enables us to conduct the first Structural Decomposition Analysis of emissions in European countries since the economic crisis. Our results show that the largest drivers of emissions have been the improvement in carbon intensity (−394 MtCO 2 e), largely offset by the economic recovery (+285 MtCO 2 e). However, other less intuitive drivers also played a significant role in the emission decline: changes in the production system (−104 MtCO 2 e), mostly driven by an increase in imports; the evolution of final demand patterns (−101 MtCO 2 e); a decrease in emissions due to household heating (−83 MtCO 2 e) and private transport (−24 MtCO 2 e), with a small offset from population growth (+39 MtCO 2 e). However, these aggregate figures mask significant variations between EU countries which we also document. This study highlights the importance of including changes in consumption patterns, trade and temperature anomalies in tracking and fostering progress towards the Paris Agreement goals.
    Keywords: GHG emissions,Structural decomposition analysis,European Union
    Date: 2019–06–19
  11. By: Fischer, Benjamin; Jessen, Robin; Steiner, Viktor
    Abstract: Using information on desired and actual hours of work, we formulate a discrete choice model of constrained labor supply. Using the German Socio-Economic Panel and the microsimulation model STSM, we find that hours and participation elasticities are substantially smaller than those in the conventional model. We evaluate two reforms for Germany. Both redistribute to the working poor. The first reform is financed through an increase in the effective marginal tax rate for welfare recipients, the second through an increase in taxes. The first reform is desirable with equal weights, the second if the social planner has substantial redistributive taste.
    Keywords: Tax-benefit systems,Household labor supply,Labor market constraints,Involuntary unemployment,Marginal cost of public funds
    JEL: J22 H21 D10
    Date: 2019
  12. By: Marion Leroutier (Paris School of Economics (PSE), Université Paris I-Panthéon-Sorbonne, Centre International de Recherche pour l'Environnement et le Développement (CIRED))
    Abstract: The electricity and heat generation sector represents about 40 % of global greenhouse gas (GHG) emissions in 2016. Policy-makers have implemented a variety of instruments to decarbonise their power sector. This paper examines the UK Carbon Price Floor (CPF), a novel carbon pricing instrument implemented in the United Kingdom in 2013. After describing the potential mechanisms behind the recent UK power sector decarbonisation, I apply the synthetic control method on country-level data to estimate the impact of the CPF on per capita emissions. I discuss the importance of potential confounders and the amount of net electricity imports imputable to the policy. Depending on the specification, the abatement associated with the introduction of the CPF range from 106 to 185 millions tons of equivalent CO2 over the 2013-2017 period. This implies a reduction of between 41% and 49% of total power sector emissions by 2017. Several placebo tests suggest that these estimates capture a causal impact. This paper shows that a carbon levy on high-emitting inputs used for electricity generation can lead to successful decarbonisation.
    Keywords: carbon tax, electricity generation, synthetic control method
    JEL: D22 H23 Q41 Q48
    Date: 2019–05
  13. By: Effrosyni Adamopoulou; Ezgi Kaya
    Abstract: This paper explores the impact of the 2007 European Union enlargement on the consumption behavior of immigrant households. Using data from a unique Italian survey and a difference-in-differences approach, we find that the enlargement induced a significant consumption increase for the immigrant households from new member states both in the short- and in the medium-run. This enlargement effect cannot be attributed to the mere legalization as it concerns both undocumented and documented immigrants, albeit through different channels. Detailed information on immigrants' legal status (undocumented/documented) and sector of employment (informal/formal) allows us to shed light on the exact mechanisms. Following the enlargement, previously undocumented immigrants experienced an increase in the labor income by moving from the informal towards the formal economy, whereas immigrants who were already working legally in Italy benefitted from the increased probability of getting a permanent contract. Enhanced employment stability in turn reduced the uncertainty about future labor income leading to an increase in documented immigrants' consumption expenditure.
    Keywords: consumption; citizenship; informality; (un)documented immigrants; work permit
    JEL: D12 E21 F22
    Date: 2019–07
  14. By: Brault, Julien; Signore, Simone
    Abstract: This paper provides a pan-European assessment of EU credit guarantees to SMEs. Synthesizing past research, it investigates the firm-level economic impact of over 360,000 guaranteed loans under the EU MAP and CIP programmes from 2002 to 2016. These loans represented a total amount of EUR 22bn spanning 19 European countries - approximately 60% of all loan amounts guaranteed under these programmes. The paper reports estimates of the average treatment effect on the treated of these loans on the financial growth and survivability of firms, through a comparison against SMEs that were not supported by these programmes. Guaranteed loans are found to positively affect the growth of firms' assets (by 7 to more than 35%), the share of intangible assets (by one third of the initial share in Italy and the Nordic countries), sales (by 6 to 35%), employment (by 8 to 30%), and lower their probability to default (by 4 to 5%). The paper decomposes these effects by size, age, industry, and discusses implications.
    Keywords: EIF,credit guarantees,credit constraints,real effects,small and medium-sized enterprises
    JEL: G2 H25 O16
    Date: 2019
  15. By: Haus-Reve, Silje; Fitjar, Rune Dahl; 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 2006–2010. 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: innovation; firms; scientific and supply-chain collaboration; interaction; Norway
    JEL: O31 O32 O33
    Date: 2019–07–01
  16. By: Mumford, Karen A. (University of York); Sechel, Cristina (University of Sheffield)
    Abstract: This article presents and explores a rich new data source to analyse the determinants of pay and job rank amongst academic Economists in the UK. Characteristics associated with individual productivity and workplace features are found to be important determinants of the relative wage and promotion structure in this sector. However, there is also a substantial unexplained gender pay gap. Men are considerably more likely to work in higher paid job ranks where there are also substantial within-rank gender pay gaps. We show that the nature of the gender pay gap has changed over the last two decades; but its size has not, suggesting a role for suitable policy intervention.
    Keywords: economist, academia, pay-gap, gender
    JEL: A1 A11 A2 I3 J01 J31 J7
    Date: 2019–06
  17. By: Khaled Lahlouh (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Delphine Lacaze (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Richard Huaman-Ramirez (EM Strasbourg - Ecole de Management de Strasbourg)
    Abstract: Purpose - This study explores the relationship between different categories of Person-Environment fit and two types of retirement intentions (i.e. full retirement and bridge employment). Design/methodology/approach - Data were collected from a convenience sample of 357 executives aged 50 and over, employed in French private sector companies. Hypotheses were tested using structural equation modeling. Findings - Perceptions of value congruence at vocational level and needs and supplies fit at organizational and job levels were positively related to the intention to hold a bridge employment after retirement. The fit between older worker's abilities and job demands was positively related to the two types of retirement intentions. Originality/value - The complexity of retirement transition is taken into account with the introduction of two types of retirement intentions. Person-Environment fit is proved to be an antecedent of career intentions after retirement.
    Keywords: Person-Environment fit,Bridge employment,Full Retirement
    Date: 2019–06–22
  18. By: Gibbons, Stephen; McNally, Sandra; Viarengo, Martina
    Abstract: This study exploits spatial anomalies in school funding policy in England to provide new evidence on the impact of resources on student achievement in urban areas. Anomalies arise because the funding allocated to Local Education Authorities (LEA) depends, through a funding formula, on the ‘additional educational needs’ of its population and prices in the district. However, the money each school receives from its LEA is not necessarily related to the school’s own specific local conditions and constraints. This implies that neighbouring schools with similar intakes, operating in the same labour market, facing similar prices, but in different LEAs, can receive very different incomes. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school, showing that school resources have an important role to play in improving educational attainment, especially for lower socio-economic groups. The design is geographical boundary discontinuity design which compares neighbouring schools, matched on a proxy for additional educational needs of its students (free school meal entitlement – FSM), in adjacent districts. The key identification requirement is one of conditional ignorability of the level of LEA grant, where conditioning is on geographical location of schools and their proportion of FSM children. Acknowledgements:
    Keywords: urban schools; education; resources
    JEL: N0
    Date: 2018–10–01
  19. By: Canaan, Serena (American University of Beirut)
    Abstract: Grouping students by ability is a controversial issue, and its impacts are likely to depend on the type of tracking students are exposed to. This paper studies a reform that moved French schools from a rigorous tracking system, which assigned students to tracks with significantly different learning environments and career options, to a milder form of ability-tracking that only grouped students into different classrooms. Using a regression discontinuity design, I find that the reform raised individuals’ level of education and increased their wages by 4.7 percent at ages 40 to 45, with the strongest effects occurring among individuals from low socioeconomic backgrounds.
    Keywords: tracking, returns to education, school quality
    JEL: I21 I28 J24
    Date: 2019–06
  20. By: Mario Alloza (Banco de España); Carlos Sanz (Banco de España)
    Abstract: We estimate the employment effect of a large fiscal stimulus in Spain (PlanE), in which the national government transferred funds to municipalities to carry out local investment projects. Using a difference-in-difference approach by exploiting variation in the timing of the execution of projects across municipalities, we find that 100,000 euros of stimulus reduced unemployment by 0.62 jobs per year. We allow for possible spatial effects, i.e. the propagation of the stimulus to neighboring municipalities, and find that these are sizable, representing 8.4% of the “local” effect. We also present evidence on the transmission mechanism, finding that the effect was: (i) initially concentrated in the construction and industrial sectors, but later spilled over to the broader economy, (ii) larger for males than females, (iii) larger when the shock represented a higher share of the budget, and (iv) not larger for municipalities headed by more educated mayors. Our estimate of the multiplier falls in the lower range of previous work.
    Keywords: fiscal policy, local fiscal multipliers, spillovers
    JEL: E24 E62 H30 H72
    Date: 2019–06
  21. By: Yasmine Bekkouche (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Julia Cage (Département d'économie)
    Abstract: What is the impact of campaign spending on votes? Does it vary across election types and across political parties? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that successfully deal with the endogeneity of campaign spending. We provide novel contributions in both of these areas. We build a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We propose two new instruments to overcome the endogenous nature of campaign spending; they rely on the fact that candidates are differentially affected by regulation on campaign funding depending on the source of funding they depend on the most. We find that an increase in spending per voter consistently increases a candidate’s vote share both for municipal and legislative elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by extreme-right candidates has much lower returns than spending by other parties. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of the mechanisms at play.
    Keywords: Elections; Campaign financing; Campaign expenditures; Campaign spending limits; Campaign finance reform; Multiparty electoral data; Heterogeneous effects of campaign spending
    JEL: D72 P48 H7
    Date: 2019–06
  22. By: Obolenskaya, Polina; Hills, John
    Abstract: This paper analyses what happened to economic inequalities in the United Kingdom in the two decades from 1995-96. In aggregate, inequality changes were unremarkable, especially by comparison with sharp increases in the 1980s. However, over the first decade economic outcomes improved across population groups, while over the second near-stagnation accompanied continuing high inequality. We show that the apparent stability of inequality in this period masked the way in which the nature and depth of economic inequalities changed after the economic crisis, leading to substantial differences between and within groups defined in different ways. Pervasively, younger adults lost out in the second decade compared to older ones. When population groups are defined in other ways (such as region, housing tenure or ethnicity) patterns are more complex, but with the worst-off in particular groups often being ‘left behind’. more complex, but with the worst-off in particular groups often being ‘left behind’.
    Keywords: inequality; wealth; income; wages; distribution
    JEL: D30 D31
    Date: 2019–07
  23. By: Nicola Bianchi; Michela Giorcelli
    Abstract: This paper studies the effects of university STEM education on innovation and labor market outcomes by exploiting a change in enrollment requirements in Italian STEM majors. University-level scientific education had two direct effects on the development of patents by students who had acquired a STEM degree. First, the policy changed the direction of their innovation. Second, it allowed these individuals to reach top positions within firms and be more involved in the innovation process. STEM degrees, however, also changed occupational sorting. Some higher-achieving individuals used STEM degrees to enter jobs that required university-level education, but did not focus on patenting.
    JEL: I21 I25 I28 J24 O30
    Date: 2019–06
  24. By: Mountford, Andrew (Royal Holloway, University of London); Wadsworth, Jonathan (Royal Holloway, University of London)
    Abstract: While skilled immigration ceteris paribus provides an immediate boost to GDP per capita by adding to the human capital stock of the receiving economy, might it also reduce the number of 'good jobs', i.e. those with training, available to indigenous workers? We analyse this issue theoretically and empirically. The theoretical model shows how skilled immigration can affect the sectoral allocation of labor and how it may have a positive or negative effect on the training and social mobility of native born workers. The empirical analysis uses UK data from 2001 to 2018 to show that training rates of UK born workers have declined in a period where immigration has been rising strongly, and have declined significantly more in high wage non-traded sectors. At a more disaggregated level however this link is much less strong, though there is evidence of different training effects of skilled immigration across traded and non-traded sectors. Hiring of UK born workers in high wage non-traded sectors has also been negatively affected by skilled immigration, although this effect is not large. Taken together the theoretical and empirical analyses suggest that skilled immigration may have some role in allocating native born workers away from 'good jobs' sectors but it is unlikely to be a major driver of social mobility.
    Keywords: immigration, training, income distribution
    JEL: J6
    Date: 2019–06
  25. By: Cristina Bellés-Obrero; Sergi Jiménez-Martín; Judit Vall Castello
    Abstract: We examine the gender asymmetries in mortality generated by a Spanish reform raising the legal working age from 14 to 16 in 1980. While the reform, though its effects on education, decreased mortality at ages 14-29 among men (6.3%) and women (8.9%), it increased mortality for prime-age women (30-45) by 6.3%. This last effect is driven by increases in HIV mortality, as well as by diseases of the nervous and circulatory system. All in all, these patterns help explain the narrowing age gap in life expectancy between women and men in Spain.
    Keywords: minimum working age, education, mortality, gender
    JEL: I12 I20 J10
    Date: 2019–07
  26. By: Baumgarten, Daniel (LMU); Lehwald, Sybille (Federal Ministry for Economic Affairs and Energy)
    Abstract: We analyze the effect of the increase in trade exposure induced by the rise of China and the transformation of Eastern Europe on collective bargaining coverage of German plants in the period 1996-2008. We exploit cross-industry variation in trade exposure and use trade flows of other high-income countries as instruments for German trade exposure. We find that increased import exposure has led to an increase in the probability of German plants leaving industry-wide bargaining agreements, accounting for about one fifth of the overall decline in the German manufacturing sector. The effect is most pronounced for small and medium-sized plants.
    Keywords: international trade; import competition; collective bargaining;
    JEL: F16 J51
    Date: 2019–07–11
  27. By: Canaan, Serena (American University of Beirut)
    Abstract: Many countries offer new parents long periods of paid leave. Proponents argue that parental leave programs can reduce gender gaps in the labor market, support marital stability and promote children's well-being. In this paper, I show that lengthy leaves can instead work against several of these intended goals. Using a regression discontinuity design, I find that a 3-year expansion of paid leave in France increases household specialization by inducing mothers to exit the labor force and fathers to raise their work hours. The leave further discourages marriages among cohabiting couples and harms children's verbal development.
    Keywords: parental leave, household specialization, marriage, child development
    JEL: J12 J13 J18 J22
    Date: 2019–06
  28. By: Andersson, Martin (Department of Economics, Blekinge Institute of Technology); Lavesson, Niclas (CIRCLE, Lund University); Partridge, Mark D. (Ohio State University)
    Abstract: We assess the empirical literature on the determinants of spatial variations in new-firm formation rates by undertaking a systematic empirical analysis of the relative roles of different demand- and supply-side factors. Using instrumental variables to address endogeneity, we find that local growth drives local entrepreneurship exclusively in services industries. Average establishment size has a robust negative influence on local new-firm formation rates, but its effect varies across industries. Local industry diversity is only positive for new-firm formation in high-tech and knowledge-intensive activities. There is also some evidence of that longer distances to urban centers is associated with higher new-firm formation rates. The only local factor with a consistent positive effect on new-firm formation across industries is local density of skilled workers. We conclude that industry structure, geography and agglomeration matter, but in the end, new firms are started by people, so it is unsurprising that the main factor driving local entrepreneurship is the characteristics of the local residents.
    Keywords: Entrepreneurship; New firm formation; Geography; Human capital; Agglomeration; Local growth; Startups
    JEL: L26 M13 R11 R30
    Date: 2019–06–27
  29. By: Hederos, Karin (Swedish Institute for Social Research, Stockholm University); Stenberg, Anders (Swedish Institute for Social Research, Stockholm University)
    Abstract: Bertrand et al. (2015) show that in the U.S.,the distribution of the wife’s share of household income drops sharply at the point where the wife starts to earn more than her husband. They attribute the drop to a gender identity norm prescribing that a wife’s income should not exceed her husband’s income. We document a similar sharp drop in Swedish administrative register data. However, we also show that there is a large spike in the distribution of the wife’s share of household income at the point where spouses earn exactly the same. The wives in the equal-earning couples do not have higher earnings potential than their husbands, suggesting that the spike is not generated by couples seeking to avoid that the wife earns more than her husband. Excluding the equal-earning couples, the drop is small and mostly statistically insignificant. We conclude that, if anything, we find only weak evidence that Swedish couples comply with a norm against wives earning more than their husbands.
    Keywords: Gender roles; gender norms; marriage market; gender gap; gender identity
    JEL: D10 J12 J16
    Date: 2019–06–28

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