nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒09‒02
twenty-six 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 Eva Sierminska; Daniela Piazzalunga; Markus M. Grabka
  2. Impact of Early Childcare on Immigrant Children’s Educational Performance By Luca Corazzini; Elena Meschi; Caterina Pavese
  3. Who Bears the Burden of Real Estate Transfer Taxes? Evidence from the German Housing Market By h.c. Clemens Fuest; Mathias Dolls; Carla Krolage; Florian Neumeier
  4. Assessing Market Power in the Italian Electricity Market: A synthetic supply approach By Rossetto, F.; Grossi, L.; Pollitt, M.
  5. The impact of EU cartel policy reforms on the timing of settlements in private follow-on damages disputes: An empirical assessment of cases from 2001 to 2015 By Hans W. Friederiszick,; Linda Gratz,; Michael Rauber,
  6. The ties that bind: implicit contracts and management practices in family-run firms By Lemos, Renata; Scur, Daniela
  7. Do board structure and compensation matter for bank stability and bank performance? Evidence from European banks By Mavrakana, Christina; Psillaki, Maria
  8. Gender Differences in Wage Expectations: Sorting, Children, and Negotiation Styles By Kiessling, Lukas; Pinger, Pia; Seegers, Philipp K.; Bergerhoff, Jan
  9. Knocking on Employment´s Door: Internships and Job Attainment By Di Meglio, Gisela; Barge-Gil, Andrés; Camiña, Ester; Moreno, Lourdes
  10. The Public-Private Sector Wage Differential Across Gender in Italy: a New Quantile-Based Decomposition Approach. By Carolina Castagnetti; Luisa Rosti; Marina Toepfer
  11. Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance By Thorben Korfhage
  12. Labor Conflict at the Workplace: Do Dismissal Regulations Matter? By Filippo Belloc
  13. Linking University Harshness and Students’ Choices: Sociodemographic Differences based on Italian Universities’ Characteristics By Gabriele Lombardi; Giulio Ghellini
  14. Dosis facit effectum: Why the scope of the carbon tax matters - Evidence from the Swedish residential sector By Runst, Petrik; Thonipara, Anita
  15. Gift-exchange in society and the social integration of refugees: Evidence from a field, a laboratory, and a survey experiment By Jeworrek, Sabrina; Leisen, Bernd Josef; Mertins, Vanessa
  16. Tax Pass-Through in the European Beer Market By Aria Ardalan; Sebastian G. Kessing
  17. Empirical analysis of unbalanced bidding on Swedish roads By Nyström, Johan; Wikström, Daniel
  19. Power generation and structural change: Quantifying economic effects of the coal phase-out in Germany By Heinisch, Katja; Holtemöller, Oliver; Schult, Christoph
  20. Coupling activity-based modeling and life cycle assessment-a proof-of-concept study on cross-border commuting in Luxembourg By Baustert, Paul; Gutiérrez, Tomás Navarrete; Gibon, Thomas; Chion, Laurent; Ma, Tai Yu; Mariante, Gabriel Leite; Klein, Sylvain; Gerber, Philippe; Benetto, Enrico
  21. European office markets, user costs and speculative bubbles By Voigtländer, Michael; Schuster, Florian
  22. A Social Norm Nudge to Save More: A Field Experiment at a Retail Bank By Robert Dur; Dimitry Fleming; Marten van Garderen; Max van Lent
  23. Sustainability-oriented Future EU Funding. A European Border Carbon Adjustment By Alexander Krenek; Mark Sommer; Margit Schratzenstaller
  24. Does the estimation of the propensity score by machine learning improve matching estimation? The case of Germany’s programmes for long term unemployed By Goller, Daniel; Lechner, Michael; Moczall, Andreas; Wolff, Joachim
  25. A free rider problem? The effect of electric vehicles on urban toll prices in Norway By Lana Krehic
  26. Non-R&D, interactive learning and economic performance: Revisiting innovation in small and medium enterprises By Thomä, Jörg; Zimmermann, Volker

  1. By: Eva Sierminska; Daniela Piazzalunga; Markus M. Grabka
    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: wealth differences, gender, SOEP, decomposition analysis
    JEL: D31 D13
    Date: 2019
  2. By: Luca Corazzini (Department of Economics, University Of Venice Cà Foscari); Elena Meschi (Department of Economics, Management and Statistics DEMS, University of Milano-Bicocca); Caterina Pavese (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper investigates the impact of attending early childcare on second generation immigrant children’s cognitive outcomes. Our analysis draws on administrative data on the entire population of students in fifth grade collected by the Italian Institute for the Evaluation of the Educational System (INVALSI) for school years 2014/2015 to 2016/2017 matched to unique administrative records on the early childcare public available slots at the municipal level. Our identification strategy exploits cross-sectional and time series variation in the provision of early childcare service across Italian municipalities as an instrument for individual early childcare attendance. Our results point out that the effect of early childcare attendance differs between native and immigrant children. Although we find no effects for Italian children, our estimates show a positive and significant effect on literacy test scores for immigrant children of low educated parents, which suggests that early childcare may be particularly relevant for immigrant children from a disadvantaged background.
    Keywords: Childcare, Cognitive skills, Immigrant children, IV
    JEL: J13 J15 H75 I20 I28
    Date: 2019
  3. By: h.c. Clemens Fuest; Mathias Dolls; Carla Krolage; Florian Neumeier
    Abstract: This paper examines the effects of real estate transfer taxes (RETT) on house prices using a rich micro dataset on German properties covering the period from 2005 to 2018. We exploit a 2006 constitutional reform that allowed states to set their own RETT rates, leading to frequent increases in states’ tax rates in subsequent years. Our monthly event study estimates indicate a price response that strongly exceeds the change in the tax burden for single transactions. I.e., twelve months after a reform, a one percentage point increase in the tax rate reduces property prices by on average 3.5%. Effects are stronger for apartments and apartment buildings than for single family houses. We interpret these results in the context of a theoretical model that accounts for the effects of RETT on a property’s resale value. If a property is expected to be traded more frequently in the future, the decline in its price can exceed the in crease in the tax burden. Moreover, larger price effects can be explained by higher bargaining power of sellers.
    Keywords: Real estate transfer taxes, property taxes, housing market
    JEL: H22 H71 R32 R38
    Date: 2019
  4. By: Rossetto, F.; Grossi, L.; Pollitt, M.
    Abstract: The aim of this article is to investigate the effects of the bidding strategies of leading firms on market equilibria. The analysis focuses on the Italian wholesale electricity market from 2015 to 2018. The purpose is to assess if the observed market equilibria are the results of a competitive setting or if more competitive equilibria could have occurred. We use the methodology of synthetic supply proposed by Ciarreta et al. (2010a). This way, a new set of synthetic prices and quantities is computed. The comparison between the actual and synthetic prices allows us to assess the effects of market power on the actual equilibria. Results suggest that whilst there is a significant impact on prices, quantities seem not to be affected, due to the inelastic demand. Moreover, our findings suggest that the main impacts occurred during 2017 especially during those months where above average heating and cooling were required.
    Keywords: Electricity Wholesale Market, Market Power, Bidding Strategy, Synthetic Supply
    JEL: L94
    Date: 2019–08–21
  5. By: Hans W. Friederiszick, (ESMT European School of Management and Technology and E.CA Economics); Linda Gratz, (E.CA Economics); Michael Rauber, (E.CA Economics)
    Abstract: Private cartel damages litigation is on the rise in Europe since early 2000. This development has been initiated by the European courts and was supported by various policy initiatives of the European Commission, which found its culmination in the implementation of the EU Directive on Antitrust Damages end of 2016. This paper explores the impact of this reform process on effective compensation of damaged parties of cartel infringements. For that purpose we analyse all European cartel cases with a decision date between 2001 and 2015, for which we analyse litigation activity and speed. Overall, we find a substantial reduction of the time until first settlement (increase in litigation speed) together with a persisting high share of cases being litigated (high litigation activity). This supports the view that the reform not only increased the claimant’s expectation about the amount of damages being awarded, but also resulted in an alignment in the expectations of claimants and defendants in the final damages amount, i.e. the European Commission succeeded in reaching its objective to clarify and harmonize legal concepts across Europe.
    Keywords: Cartels, private damages, competition law
    Date: 2019–08–26
  6. By: Lemos, Renata; Scur, Daniela
    Abstract: This paper investigates the impact of family CEOs on firm organizational choices and the causes and consequences of these decisions. We focus on second-generation (dynastic) family firms, collect new data on CEO successions for over 900 firms in Latin America and Europe and merge it with unique data on organizational choices, specifically, structured management practices. We use variation in the gender composition of the outgoing CEOs' children for identification. There is clear preference for male heirs: conditional on number of children, having at least one son is correlated with a 30pp higher likelihood of dynastic family succession. As the gender composition of the outgoing CEO's children is unlikely to affect decisions on mid-level managerial practices, we use it as an instrumental variable for family succession. Dynastic CEO successions lead to almost one standard deviation lower adoption of structured management practices, with an implied productivity decrease of about 10%. We rationalize this finding with a new conceptual framework that accounts for the importance of implicit employment commitments to employees of dynastic firms in determining the adoption of monitoring technologies. We find empirical evidence that, controlling for lower levels of knowledge and skills of family CEOs, concerns for reputation and ''family name'' can play a role in constraining investment in structured management practices. Overall, our empirical results shed new light on dynastic firms' persistent performance deficit and apparent lag in the adoption of structured management practices.
    JEL: D22 M11 M12
    Date: 2019–06
  7. By: Mavrakana, Christina; Psillaki, Maria
    Abstract: This paper investigates the impact of bank governance on European bank performance and risk- taking. More precisely, using a sample of 75 banks from 18 European countries over the 2004-2016 period, we examine the relationship between bank governance variables namely board size, age of directors, financial experience, board independency, gender diversity, governance system and compensation on bank performance and risk-taking. Our empirical analysis shows that experienced directors increase bank performance and reduce risk-taking. Moreover, female directors have a positive impact on bank performance but the results are mixed for risk-taking. We also find that the one-tier system improves bank performance and reduces credit risk. Moreover, compensation is positively related with bank performance. The empirical findings are inconclusive regarding risk-taking. In addition, the impact of board size and age on bank performance differs, depending on the measure. We find that older members increase risk-taking. Finally, equity linked wealth leads to better bank performance but it also increases risk-taking. Our results differ according to time period and location criteria.
    Keywords: Bank governance, financial crises, corporate governance, bank performance, executive compensation
    JEL: G01 G21 G28 G34
    Date: 2019
  8. By: Kiessling, Lukas (Max Planck Institute for Research on Collective Goods); Pinger, Pia (University of Cologne); Seegers, Philipp K. (Maastricht University); Bergerhoff, Jan (University of Bonn)
    Abstract: This paper presents evidence from a large-scale study on gender differences in expected wages before labor market entry. Based on data for over 15,000 students, we document a significant and large gender gap in wage expectations that closely resembles actual wage differences, prevails across subgroups, and along the entire distribution. To understand the underlying causes and determinants, we relate expected wages to sorting into majors, industries, and occupations, child-rearing plans, perceived and actual ability, personality, perceived discrimination, and negotiation styles. Our findings indicate that sorting and negotiation styles affect the gender gap in wage expectations much more than prospective child-related labor force interruptions. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, our results provide an explanation for persistent gender inequalities.
    Keywords: subjective wage expectations, gender gap, negotiation styles
    Date: 2019–08
  9. By: Di Meglio, Gisela; Barge-Gil, Andrés; Camiña, Ester; Moreno, Lourdes
    Abstract: Undergraduate internships have gained popularity among students, universities, government and firms since the creation of the European Higher Education Area. However, empirical research on the relationship between internships and labour market performance of graduates is still scarce, particularly in Spain. This paper examines whether internships improve the job attainment in the short run (first employment after graduation) and in the medium /long term (employment four years later). We use the first Spanish University Graduate Job Placement Survey (2014) to estimate linear probability models and probit models. A novel econometric technique is also implemented to evaluate the sensitivity of our findings to omitted variable bias. We disentangle the internship effect on: (i) the speed to find the first job; (ii) the vertical, horizontal and skill/competence matching with the first job; (iii) being employed in the medium/ long term; (iv) the vertical and horizontal matching with the current employment; and (v) wage quintiles of the current job. Our results show that the internship experience smooths the university-to-work transition for Spanish graduates. Although internships effects on employment do not vanish in the medium/long term, there is weak evidence of positive effects on matching or wages four years after graduation.
    Keywords: Internships, employment, job attainment, Spain
    JEL: C21 J21 J22 J40
    Date: 2019–08–26
  10. By: Carolina Castagnetti (University of Pavia); Luisa Rosti (University of Pavia); Marina Toepfer (University of Erlangen-Nuremberg)
    Abstract: We use a novel approach that combines quantile wage gap decomposition to standard technique for panel regression. We apply this methodology to investigate the public sector wage gap throughout the wage distribution in Italy by gender. Controlling for unobserved (time-invariant) individual heterogeneity suggests no positive selection effect in the public sector. The analysis reveals a consistent public sector premium throughout the wage distribution and a cross gender independent from individual endowments (both observed and unobserved).
    Keywords: quantile regression for panel, public-private wage differential
    JEL: J3 J45
    Date: 2019–03
  11. By: Thorben Korfhage
    Abstract: In this paper, I estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. I find that informal elderly care has adverse and persistent effects on labor market outcomes and therefore negatively affects lifetime earnings, future pension benefits, and individuals’ well-being. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that, even though fiscally costly, public long-term care insurance can offset the personal costs of caregiving to a large extent – in particular for low-income individuals.
    Keywords: long-term care; informal care; long-term care insurance; labor supply; retirement; pension benefits; structural model
    JEL: I18 I38 J14 J22 J26
    Date: 2019
  12. By: Filippo Belloc
    Abstract: Using data on more than 13000 European establishments over the 2009-2013 period, I analyze the relationship between discharge regulation and industrial actions. I introduce a simple theoretical framework allowing for both positive and negative effects of dismissal constraints on the occurrence of labor disputes, and empirically answer the question as whether stricter dismissal laws make EU establishments experience more frequent and intense industrial actions (work-to-rule, strikes and occupation). I find that a change from employment at-will to a regime with very strict dismissal constraints is associated with an increase in the likelihood of observing an industrial action at the establishment-level ranging between 10.5 and 14.8 percentage points, and that this effect reduces to around 6.7 percentage points when only company-specific industrial actions are considered. Discharge constraints effects on industrial actions are then confirmed through a difference-in-differences analysis, by exploiting quasi-experimental variations in national dismissal regulations. My findings show that less strict discharge regulations moderate labor conflicts in EU establishments, by disciplining workers and restraining unions' activism.
    Keywords: industrial action, dismissal regulation, unions, European Company Survey
    JEL: J52 J58 K31
    Date: 2019–07
  13. By: Gabriele Lombardi; Giulio Ghellini
    Abstract: Through the decades, the Higher Education System globally experimented a huge increase in the average marks that each student receives. Among several hypothesis, in this article the idea that grading is one of the tool that every department can use in order to attract a larger amount of students will be stressed. Regarding the Italian case, the speed in obtaining a degree is among the criteria considered by the Ministry of Education in order to evaluate universities, financing them proportionally. As a shortcoming, this can boost an artificial increase in marks. So, the number of students becomes important for those universities with the worst ranking positions, in order to finance themselves through fees. On the other side, it is reasonable to expect that a student emigrates toward places which offer higher chances of receiving a job. In other words, mobility might be driven by the search for better working conditions, and not by the ’ease’ of the faculty. Testing this hypothesis, a Multinomial Conditional Logit Model will be implemented in order to measure the probability of choosing a certain destination depending on the harshness and reputation of a University and on the rates of unemployment at a regional level.
    JEL: I23 I24 R23
    Date: 2019–07
  14. By: Runst, Petrik; Thonipara, Anita
    Abstract: Sweden has gradually increased its carbon tax within the past 25 years and imposes the world's highest tax on carbon dioxide emissions today. This paper examines the impact of the Swedish carbon tax on residential carbon emissions as well as on consumer behavior. We perform Difference-in-Differences (DiD) regressions and Synthetic Control Methods (SCM) in order to evaluate the causal impact of carbon taxation on carbon emissions in the residential sector. Both methods provide evidence for a causal effect of the carbon tax augmentation in the early 2000s on residential carbon emissions. We find that the scope of the reduction of residential carbon emissions due to the carbon tax augmentation range between 200kg (when compared to other countries with a carbon tax of more than 20 Euros implemented) and 800 kg of CO2 per capita per year (when compared to countries without a carbon tax). Hence, the evidence points towards the effectiveness of carbon taxation in reducing residential CO2 emissions and, thus, mitigating climate change.
    Keywords: carbon tax,Sweden,residential building,CO2 emissions
    JEL: Q54 P28 Q4 O38
    Date: 2019
  15. By: Jeworrek, Sabrina; Leisen, Bernd Josef; Mertins, Vanessa
    Abstract: Refugee integration needs broad support from society, but only a minority is actively engaged. Given that most individuals reciprocate kind behaviour, we examine the idea that the proportion of supporters is increasing as a reciprocal response to refugees' contributions to society through volunteering. Our nationwide survey experiment shows that the intentions to contribute time and money rise significantly when citizens learn about refugees' pro-social activities. Importantly, this result holds for individuals who have not been in contact to refugees so far. We complement this investigation by experiments in the lab and the field - which confirm our findings for actual behaviour.
    Keywords: gift-exchange,reciprocity,refugees,integration,field experiment,laboratory experiment
    JEL: C93 D63 D91 J15
    Date: 2019
  16. By: Aria Ardalan; Sebastian G. Kessing
    Keywords: Tax incidence, Pass-through, VAT, Excise Taxes, EU, Beer
    JEL: H22 H23
    Date: 2019
  17. By: Nyström, Johan (Swedish National Road & Transport Research Institute (VTI)); Wikström, Daniel (Swedish National Road & Transport Research Institute (VTI))
    Abstract: Based on anecdotal evidence, claims are made that unbalanced bidding is a major problem in the construction industry. This concept refers to a sealed price auction setting with asymmetric information and unit prices, where information rents are extracted. Theoretical literature has shown that it is rational for an informed contractor to skew unit prices. However, empirical studies on the magnitude of the problem are lacking. As the first quantitative study based on European data, it is shown that unbalanced bidding exists, but in small magnitudes. The result is in line with earlier studies from the US.
    Keywords: Unbalanced bidding; Asymmetric information; Information rent
    JEL: D22 D82 D86 H57 L92
    Date: 2019–08–23
  18. By: Sandra Bestakova (Czech Technical University in Prague)
    Abstract: Prague has for a long time been struggling with the problem of constantly increasing housing prices and their lack. Offer available apartments is extremely low and is manifested by significant price growth and also the limited supply of apartments for sale and rent. One of the factors influencing the price of flats in Prague may be short-term rentals. Today there is an increasing number of flats in the total offer of short-term rentals and the number of hosts with more than one offer is also rising. Airbnb will deviate from its original idea of sharing "extra beds".
    Keywords: short-term rental; Prague; sharing economy; Airbnb
    JEL: R10 R21 R31
    Date: 2019–07
  19. By: Heinisch, Katja; Holtemöller, Oliver; Schult, Christoph
    Abstract: In the fight against global warming, the reduction of greenhouse gas emissions is a major objective. In particular, a decrease in electricity generation by coal could contribute to reducing CO2 emissions. Using a multi-region dynamic general equilibrium model, this paper studies potential economic consequences of a coal phase-out in Germany. Different regional phase-out scenarios are simulated with varying timing structures. We find that a politically induced coal phase-out would lead to an increase in the national unemployment rate by about 0.10 percentage points from 2020 to 2040, depending on the specific scenario. The effect on regional unemployment rates varies between 0.18 to 1.07 percentage points in the lignite regions. However, a faster coal phase-out can lead to a faster recovery. The coal phase-out leads to migration from German lignite regions to German non-lignite regions and reduces the labour force in the lignite regions by 10,000 people by 2040.
    Keywords: general equilibrium model,labour market friction,energy,structural change
    JEL: E17 O11 O21 O44 Q28
    Date: 2019
  20. By: Baustert, Paul; Gutiérrez, Tomás Navarrete; Gibon, Thomas; Chion, Laurent; Ma, Tai Yu; Mariante, Gabriel Leite; Klein, Sylvain; Gerber, Philippe; Benetto, Enrico
    Abstract: According to the Intergovernmental Panel on Climate Change (IPCC), in 2010 the transport sector was responsible for 23% of the total energy-related CO2 emissions (6.7 GtCO2) worldwide. Policy makers in Luxembourg are well-aware of the challenges and are setting ambitious objectives at country level for the mid and long term. However, a framework to assess environmental impacts from a life cycle perspective on the scale of transport policy scenarios, rather than individual vehicles, is lacking. We present a novel framework linking activity-based modeling with life cycle assessment (LCA) and a proof-of-concept case study for the French cross-border commuters working in Luxembourg. Our framework allows for the evaluation of specific policies formulated on the trip level as well as aggregated evaluation of environmental impacts from a life cycle perspective. The results of our proof-of-concept-based case study suggest that only a combination of: (1) policy measures improving the speed and coverage of the public transport system; (2) policy measures fostering electric mobility; and (3) external factors such as de-carbonizing the electricity mix will allow to counteract the expected increase in impacts due to the increase of mobility needs of the growing commuting population in the long term.
    Keywords: Activity-based modeling; Life cycle assessment; Policy analysis; Sustainable mobility
    JEL: N0
    Date: 2019–07–27
  21. By: Voigtländer, Michael; Schuster, Florian
    Abstract: Over the last years, prices for European office space have reached new peaks. This naturally provokes discussion about a possible overheating in the market. One approach to assess price development of real estate markets is the so-called "user cost approach". Typically, this approach is applied to housing markets, but it can also be applied to commercial markets. The model follows the idea of no-arbitrage. If one kind of tenure is economically more attractive than another, households or corporates will shift demand, so that both tenures - buying and renting - should equalise over time. Thus, major differences between buying and renting indicate a possible over- or undervaluation of properties. In this contribution, user costs for offices have been calculated for 18 European capitals. The results indicate that in most European office markets, further price appreciations are likely. In Paris, Helsinki, Prague, Berlin, Stockholm, Amsterdam, Oslo and Luxembourg in particular, huge gaps between prime rents and user costs indicate further price increases, whereas in Madrid, Lisbon, Rome, London and Budapest further price decreases seem plausible. However, these likely price decreases do not follow the typical pattern of a correction of a speculative bubble, but are more or less the result of falling prime rents that have not been fully captured in prices, yet. The user cost approach has some predictive power, but can only provide an initial pointer towards under- or overvaluations. For instance, structural breaks such as Brexit can change long-term expectations, which cannot be captured properly in a model. However, the approach appears valuable in providing a first assessment. In future, the German Economic Institute will do further research on this topic in order to strengthen its understanding of commercial property markets.
    JEL: G12 O52 R33
    Date: 2019
  22. By: Robert Dur (Erasmus University Rotterdam); Dimitry Fleming (ING Netherlands); Marten van Garderen (ING Netherlands); Max van Lent (Leiden University)
    Abstract: A large fraction of households have very little savings buffer and are therefore vulnerable to financial shocks. We examine whether a social norm nudge can stimulate such households to save more by running a small-scale survey experiment and a large-scale field experiment at a retail bank in the Netherlands. The survey experiment shows that a social norm nudge increases intended savings. In line with this, we find in our field experiment that households who are exposed to the social norm nudge click more often on a link to a personal webpage where they can start or adjust an automatic savings plan. However, analyzing detailed bank data, we find no treatment effect on actual savings, neither in the short run nor in the long run. Our null findings are quite precisely estimated.
    Keywords: household savings, field experiment, nudges, social norms
    JEL: C93 D14
    Date: 2019–08–26
  23. By: Alexander Krenek; Mark Sommer (WIFO); Margit Schratzenstaller
    Abstract: The need to reform EU funding and recent political developments such as Brexit and the withdrawal from the USA from the 2015 Paris climate agreement could revitalise the debate about the introduction of border carbon adjustments (BCA) for the European emission trading system (ETS). The introduction of a BCA would allow the EU to phase out current carbon leakage provisions of the ETS and to auction off all emission allowances, thus rendering the ETS a more effective unilateral tool to price and reduce carbon emissions. By using a dynamic new Keynesian (DYNK) model, we estimate that potential revenues of a BCA for the ETS would generate substantial and stable revenues. Given different assumptions about the development of the carbon intensity of non-EU production and different BCA designs we find that estimated revenues would suffice to finance between a third and all of current EU expenditures by the year 2027, thus allowing member countries to reduce their current contributions to the EU budget accordingly. Administered at the EU borders a BCA would represent a sustainability-oriented instrument to finance the EU allowing EU countries to cut more distortionary taxes such as those on labour, thereby increasing growth- and employment-friendliness of taxation. The proposed measure could thus contribute to tackle both environmental and fiscal challenges currently facing the EU.
    Keywords: EU budget, sustainability-oriented taxation, border carbon adjustment, EU revenue system, carbon pricing
    Date: 2019–08–24
  24. By: Goller, Daniel; Lechner, Michael; Moczall, Andreas; Wolff, Joachim
    Abstract: Matching-type estimators using the propensity score are the major workhorse in active labour market policy evaluation. This work investigates if machine learning algorithms for estimating the propensity score lead to more credible estimation of average treatment effects on the treated using a radius matching framework. Considering two popular methods, the results are ambiguous: We find that using LASSO based logit models to estimate the propensity score delivers more credible results than conventional methods in small and medium sized high dimensional datasets. However, the usage of Random Forests to estimate the propensity score may lead to a deterioration of the performance in situations with a low treatment share. The application reveals a positive effect of the training programme on days in employment for longterm unemployed. While the choice of the “first stage” is highly relevant for settings with low number of observations and few treated, machine learning and conventional estimation becomes more similar in larger samples and higher treatment shares.
    Keywords: Programme evaluation, active labour market policy, causal machine learning, treatment effects, radius matching, propensity score
    JEL: J68 C21
    Date: 2019–08
  25. By: Lana Krehic (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Several cities around the world try to internalise congestion costs from road traffic by instituting charges for entering their city centres. The revenues collected from these charges are often redistributed to improve conditions for motorists, cy- clists, pedestrians and public transport. At the same time, many schemes allow for exemption of cleaner vehicles, which might offset the reduction in congestion and reduce revenue. In this paper, I assess the effects of exempting electric vehicles from charge on the charge level. Using panel data of Norwegian cities with urban toll rings, I exploit regional variation, and and that a higher share of electric vehicles increase toll charges. The results imply that owners of conventional cars pay 2.5 NOK (0.3 USD) more per passing because of the exemption. The estimates are robust to variations in estimation method and sample. As the majority of electric vehicle owners have above-average income, exempting electric cars from toll charges suggests a distribution effect that have implications for social welfare.
    Keywords: Electric vehicles, Toll road, Distributional effects
    JEL: H23 R40 R42
    Date: 2019–07–25
  26. By: Thomä, Jörg; Zimmermann, Volker
    Abstract: In the present paper, various groups of innovating German SMEs are empirically identified according to their use (or non-use) of in-house R&D, their reliance on external sources of knowledge, and the degree of internal interactive learning that they employ.In order to account for non-R&D innovation activities, we apply the STI/DUI concept as a theoretical starting point. This distinguishes between (1) the science, technology, innovation (STI) mode with its strong emphasis on formal processes of in-house R&D and (2) the doing, using, interacting (DUI) mode with its focus on experience-based knowledge and interactive learning. On this basis, the empirical results indicate that three groups associated with different modes of learning and innovation exist within the German SME sector: the supplier-dependent DUI group, the customer-oriented DUI group and the STI/DUI group. The corresponding findings confirm that SMEs innovate differently depending on the specificities of their knowledge environments. In order to evaluate this in terms of innovation policy, we examine how these learning modes among innovating SMEs relate to overall company performance. Our main observation is that each learning mode is likely to positively affect performance, at least to some degree. There isno differ-ence in economic performance between the three learning modes as long as non-high-growth SMEs are considered. Hence, in large parts of the SME sector, it is economically rational to choose a non-R&D-oriented mode of learning and innovation. The paper con-cludes with some policy implications of these findings.
    Keywords: Modes of learning,R&D,Non-R&D innovation,Interactive learning,SMEs
    JEL: M21 O32 O38
    Date: 2019

This nep-eur issue is ©2019 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.