nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒09‒23
39 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Homeownership Investment and Tax Neutrality: a joint assessment of income and property taxes in Europe By Figari, Francesco; Verbist, Gerlinde; Zantomio, Francesca
  2. Does Migration Policy affect the Residential Pattern of Immigrants? evidence from UK quasi-experimental research By Anupam Nanda; Sarah Jewel; Olayiwola Oladiran
  3. Examining the Relationships between Young Adults’ Housing Tenure, Elements of Perceived Job Security and Social Capital in Britain By Oluwadamilola Aguda; Obas John Ebohon; Chris Leishman
  4. Financial literacy among German students at secondary schools: Some empirical evidence from the state of Hesse By Brühl, Volker
  5. Preterm Births and Educational Disadvantage: Heterogeneous Effects Across Families and Schools By Anna Baranowska-Rataj; Kieron J. Barclay; Joan Costa-Font; Mikko Myrskylä; Berkay Özcan
  6. Capabilities and firm growth: the role of formal collaboration agreements By Roberto Gabriele; Andrea Mazzitelli; Giuseppe Espa; Maria Michela Dickson
  7. Labor Reallocation and Convergence: Evidence from East Germany By Wolfgang Dauth; Sang Yoon (Tim) Lee; Sebastian Findeisen; Tommaso Porzio
  9. Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge By Bruno de Borger; Ismir Mulalic; Jan Rouwendal
  10. 'First in Family' University Graduates in England By Henderson, Morag; Shure, Nikki; Adamecz-Völgyi, Anna
  11. The TBTs, Firm Organization and Labour Structure By Giorgio Barba Navaretti; Lionel Fontagné; Gianluca Orefice; Giovanni Pica; Anna Cecilia Rosso
  12. Preferences or Prices? Differences in Home vs Market Production in Europe and the US By Axel Gottfries; Hannes Malmberg
  13. The impact of an urban toll-ring on housing prices By Anne Wenche Emblem; Theis Theisen
  14. Labour Market Flows: Accounting for the Public Sector By Fontaine, Idriss; Galvez-Iniesta, Ismael; Gomes, Pedro Maia; Vila-Martin, Diego
  15. Gender Differences in Wage Expectations: Sorting, Children, and Negotiation Styles By Lukas Kiessling; Pia Pinger; Philipp Seegers; Jan Bergerhoff
  16. Comparison is the Thief of Joy. Does Social Comparison Affect Migrants’ Subjective Well-Being? By Stranges, Manuela; Vignoli, Daniele; Venturini, Alessandra
  17. Exposure to More Female Peers Widens the Gender Gap in STEM Participation By Brenøe, Anne Ardila; Zölitz, Ulf
  18. Measuring inefficiency in international electricity trading By Montoya, L.; Guo, B.; Newbery, D. M.; Dodds, P.; Lipman, G.; Castagneto Gissey, G.
  19. Intergenerational transmission of homeownership decisions in Spain By Morales, Marina
  20. Technical Efficiency and Corporate Structure of Italian Private Hospitals: Evidence from One-step Stochastic Frontier Analysis By Marco Alberto De Benedetto; Antonio Fabio Forgione
  21. The fiscal return to childcare policies By David Koll; Dominik Sachs; Fabian Stuermer-Heiber; Helene Turon
  22. The Political Cost of Being Soft on Crime: Evidence from a Natural Experiment By Francesco Drago; Roberto Galbiati; Francesco Sobbrio
  23. Gambling with the family silver. Household consumption and saving responses to fiscal uncertainty By Oddmund Berg
  24. Does Integration Policy Integrate? The Employment Effects of Sweden's 2010 Reform of the Introduction Program By Qi, Haodong; Irastorza, Nahikari; Emilsson, Henrik; Bevelander, Pieter
  25. The Spatial Dimension of Import Competition By Gullstrand, Joakim; Knutsson, Polina
  26. The gendered impacts of delayed parenthood on educational and labor market outcomes: a dynamic analysis of population-level effects over young adulthood By Jessica Nisén; Maarten J. Bijlsma; Pekka Martikainen; Ben Wilson; Mikko Myrskylä
  27. Paying for efficiency: incentivising same-day discharges in the English NHS By Gaughan, James; Gutacker, Nils; Grašič, Katja; Kreif, Noemi; Siciliani, Luigi; Street, Andrew
  28. One size does not fit all. Cooperative banking and income inequality By Raoul Minetti; Pierluigi Murro; Valentina Peruzzi
  29. Economic growth and well-being beyond the Easterlin paradox By Sarracino, Francesco; O'Connor, Kelsey J.
  30. Changing Nordic model? A policy analysis By Palviainen, Heikki
  31. External Monitors and Score Manipulation in Italian Schools: Symptomatic Treatment or Cure? By Bertoni, Marco; Brunello, Giorgio; De Benedetto, Marco Alberto; De Paola, Maria
  32. Educational differences in cohort fertility across sub-national regions in Europe By Jessica Nisén; Sebastian Klüsener; Johan Dahlberg; Lars Dommermuth; Aiva Jasilioniene; Michaela Kreyenfeld; Trude Lappegård; Peng Li; Pekka Martikainen; Karel Neels; Bernhard Riederer; Saskia te Riele; Laura Szabó; Alessandra Trimarchi; Francicso Viciana; Ben Wilson; Mikko Myrskylä
  33. Mergers and market power: Evidence from rivals' responses in European markets By Stiebale, Joel; Szücs, Florian
  34. Granular Search, Market Structure, and Wages By Gregor Jarosch; Jan Sebastian Nimczik; Isaac Sorkin
  35. Hidden Networks within the European Parliament: a Spatial Econometrics Approach. By Giovanna Iannantuoni; Elena Manzoni; Francesca Rossi
  36. Skill-Biased Firms and the Distribution of Labor Market Returns By Giovanni Gallipoli; Khalil Esmkhani; Michael Böhm
  37. Heterogeneity in marginal returns to language training of immigrants By Giesecke, Matthias; Schuss, Eric
  38. Increased market transparency in Germany's gasoline market: What about rockets and feathers? By Frondel, Manuel; Horvath, Marco; Vance, Colin; Kihm, Alexander
  39. The impact of election information shocks on populist party preferences: Evidence from Germany By Gerling, Lena; Kellermann, Kim Leonie

  1. By: Figari, Francesco; Verbist, Gerlinde; Zantomio, Francesca
    Abstract: Western countries’ income tax systems exempt the return from investing in owner-occupied housing. Returns from other investments are instead taxed, thus distorting households’ portfolio choices, although it is argued that housing property taxation might act as a counterbalance. Based on data drawn from the Statistics of Income and Living Conditions and the UK Family Resources Survey, and building on tax-benefit model EUROMOD, we provide novel evidence on the interplay of income and property taxation in budgetary, efficiency and equity terms in eight European countries. Results reveal that, even accounting for recurrent housing property taxation, a sizeable ‘homeownership bias’ i.e. a lighter average and marginal taxation for homeownership investment, is embedded in current tax systems, and displays heterogeneous distributional profiles across different countries. Housing property taxation represents only a partial correction towards neutrality.
    Date: 2019–09–16
  2. By: Anupam Nanda; Sarah Jewel; Olayiwola Oladiran
    Abstract: The United Kingdom is one of the major destination of immigrants and approximately 50% of the UK immigrant population reside in London. This immigrant concentration has been linked to the city’s political, economic and administrative relevance globally and to the UK in particular. This paper presents empirical evidence that migration policy may also play a significant role in the locational choices and residential pattern of UK immigrants. A conceptual link is developed on the premise that migration policy plays a key role in creating and sustaining migration waves and by extension, the socio-economic, socio-cultural and demographic composition of immigrants which are also key factors in individuals’ locational choices and residential patterns. Using rigorous quasi-experimental techniques namely Regression Discontinuity Design (RDD) and Difference-in-Difference (D-in-D) style approaches, this research examines the impact of the 2004 accession of 10 new countries to the EU (EU A10) and the Immigration Act of 1971 on the concentration of immigrants in London as well as the general residential pattern of UK immigrants. The results reveal that EU A10 immigrants that immigrated to the UK after the 2004 migration liberalisation (post-EU A10 immigrants) have a 20% lower likelihood of residing in London and are more spread out to other regions, compared to the pre-EU A10 immigrants who have a higher concentration in London. The results also reveal that Commonwealth immigrants that immigrated after the introduction of new immigration restrictions in 1972 have a 10% higher likelihood of residing in London compared to Commonwealth immigrants that immigrated before 1972. These results provide new insight on the potential link between migration policy, locational choices and residential patterns of immigrants.
    Keywords: Demography; housing; Migration policy; Tenure; Windrush
    JEL: R3
    Date: 2019–01–01
  3. By: Oluwadamilola Aguda; Obas John Ebohon; Chris Leishman
    Abstract: This paper investigates the relationships between young adults’ housing tenure, social capital, and elements of perceived job security in Britain. Young adults are faced with different situations that continue to shape their housing consumptions and decisions. Socio-psychological dimension of housing tenure decisions has been receiving attention by housing market analysts and practitioners seeking deeper understandings of UK housing market dynamics, particularly in the wake of changing tastes and preferences of young people with regards to housing decisions across major cities of the world. More specifically, very little research has been done to investigate the contributions of social capital formation, for example, neighbourhood or social integration and social relations, separated by perceived job security, on housing tenure transitions among British young adults. The initial steps taken include a synthesis of existing literature and confirmation of data availability for the study. This will ensure existing efforts are not duplicated, opening up and further revealing how the current study may contribute to existing knowledge. A quantitative approach has been designed to analyse the data obtained from the British Household Panel Survey (BHPS). The hypothesis drawn is that individual young adult’s tenure mobility may vary by combinations of the direction of transition, social capital, and perceived job security. It is our view that findings from this study will significantly enhance our understanding of tenure shifts amongst young adults in the UK and provide property developers, local authorities, and central governments the knowledge and information to guide urban renewal towards achieving better social cohesion and sustainable communities.
    Keywords: housing tenure; Job Security; Neighbourhood Integration; Social Capital Formation; UK
    JEL: R3
    Date: 2019–01–01
  4. By: Brühl, Volker
    Abstract: Since the financial crisis financial literacy has attracted growing interest among researchers and policy makers, as there is international empirical evidence that financial literacy is poor among both adults and students. In Germany we have almost no empirical evidence on financial literacy, especially in the case of students attending secondary schools, as financial education has not featured on German school curricula to date. Besides, Germany has not yet participated in the optional financial literacy module of PISA, which was offered for the first time in 2012. However, a lack of private pension provisioning, in spite of demographic change, and low stock ownership among German households indicate a deficit in financial knowledge and skills in this country as well. In this paper we investigate financial literacy among students aged 14 to 16 attending a secondary school in the state of Hesse. The foundation is a test designed according to international standards. The statistical analysis of the test reveals substantial deficits in key areas of financial literacy. Particular deficits could be identified in the fields of basic knowledge of financial matters and, to an even greater degree, in more advanced concepts such as risk diversification. Applying interest calculations to financial matters turned out to be problematic for many students. Furthermore, the paper analyses the impact of gender and type of school on the overall test score as well as test performance in specific tasks. The findings suggest that financial matters should be covered in some form at secondary schools. In light of the potentially far-reaching consequences of financial illiteracy for financial wellbeing, German participation in future PISA financial literacy tests seems highly advisable to gain a deeper understanding of the preliminary findings presented in this paper.
    Keywords: Financial Literacy,Household Finance
    JEL: D12 D14
    Date: 2019
  5. By: Anna Baranowska-Rataj; Kieron J. Barclay (Max Planck Institute for Demographic Research, Rostock, Germany); Joan Costa-Font; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Berkay Özcan
    Abstract: Although preterm births are the leading cause of perinatal morbidity and mortality in advanced economies, evidence about the consequences of such births later in life is limited. Using Swedish population register data on cohorts born 1982-1994 (N=1,087,750), we examine the effects of preterm births on school grades using sibling fixed effect models which compare individuals with their non-preterm siblings. We test for heterogeneous effects by degree of prematurity, as well as whether family socioeconomic resources and school characteristics can compensate for any negative effects of premature births. Our results show that preterm births can have negative effects on school grades, but these negative effects are largely confined to children born extremely preterm (<28 weeks of gestation, i.e. born at least 10 weeks earlier). Children born moderately preterm (i.e. born up to 5 weeks early) suffer no ill effects. We do not find any evidence for the moderating effect of parental socioeconomic resources. Our results indicate that school environment is very important for the outcomes of preterm born children, such that those born extremely preterm that are in the top decile of schools have as good grades as those born full-term that are in an average school. However, good schools appear to lift scores for all groups, and as a result that gap between extremely preterm and full-term children remains also in the best schools. This highlights the role of schools as institutions that may either reduce or reinforce the early life course disadvantage.
    Keywords: Sweden, education, premature birth, school success
    JEL: J1 Z0
    Date: 2019–09
  6. By: Roberto Gabriele; Andrea Mazzitelli; Giuseppe Espa; Maria Michela Dickson
    Abstract: The paper presents an empirical analysis of the effect of formal network agreements on growth of firm in Italy in the years 2011-2013. The theoretical background is given by evolutionary theories that assign a key role in determining the ability of firms to capture business opportunities to internal capabilities and to external knowledge and capabilities. We suggest that firms establishing formal relationships with other firms can extend the “set of things that they are able to do†–the set of capabilities– so that they are able to capture opportunities and grow. The study is based on a novel database of Italian firms that matches networked firms in year 2012 with firms that did not sign a formal network agreement but possess similar structural characteristics. In order to deal with possible self-selection phenomenon, we use difference-in-differences regression models to assess the effect on growth of belonging to a formal network agreement. Moreover, to study the effect of characteristics of network we employ two stage Hackman regression models. Results show that networked firms have a higher growth rate and that the size of the network plays a role. Results are in line with the evolutionary interpretation and suggest that formal network agreement can function as long-range antennas for firms that are more constrained from the geographical point of view. These agreements allow to acquire capabilities and knowledge of the market that allow firms to expand their economic activity.
    Keywords: Collaboration agreements, Difference in differences, firm growth
    JEL: D22 L25 M21 L52
    Date: 2019
  7. By: Wolfgang Dauth (University of Wuerzburg); Sang Yoon (Tim) Lee (Queen Mary University of London); Sebastian Findeisen (University of Mannheim); Tommaso Porzio (University of California, San Diego)
    Abstract: In 1992, East Germans’ nominal wages were about half of West Germans’. By 1996, the gap reduced to a third, and today is about a quarter. We use matched employer-employee data for the universe of (male) Germans with social security records to study the determinants of this steep convergence. Our main result is that about half of the total convergence is driven by an improvement in the allocation of East German labor across firms. The bulk of this is driven by improvements in within-region reallocation in earlier years, while migration of East Germans toWestern firms steadily grows to explain more in recent years. Before 1991, both East German firms and workers were exposed to a distorted labor market under the planned economy of the German Democratic Republic. After reunification, both firms and workers were exposed to the same labor market policies as in West Germany, while workers were also allowed to freely move across the (former) border. The evidence suggests that the competitive labor market succeeded in quickly unraveling most of the misallocation generated by the planned economy. Consistent with this hypothesis, older birth-cohorts, who were exposed to distorted labor markets for a longer period, were the ones to gain the most immediately following reunification.
    Date: 2019
  8. By: Dagmara Nikulin (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland)
    Abstract: In this paper we examine the linkages between involvement into global value chains (GVCs) and the gender wage inequalities. We use merged wide-ranging Structure of Earning (SES) and World Input Output Database (WIOD) for the years 2002, 2006, 2010 and 2014, covering manufacturing industries of 18 European countries. We employ a wealth of information on employees’ personal and company characteristics as well as sectoral variable reflecting the involvement in GVC measured by foreign value added embodied in exports (FVA/Exp.) We augment the Mincerian regression with GVC variable and report gender wage discrimination among European employees. The results indicate that wages of workers employed in sectors more involved in GVC are lower. However, the relationship between GVC and wages differs in respect to gender; women are more affected by the negative impact of greater trade involvement in comparison to men. There is some education/skill/occupation heterogeneity with workers with middle education level and middle skills being most affected. Finally, our results show the different patters across concentrated and competitive industries: the wage drop due GVC intensification is observed for the former ones.
    Keywords: gender wage gap, gender inequalities, micro data, European countries
    JEL: J16 J31 F16
    Date: 2019–08
  9. By: Bruno de Borger (University of Antwerp); Ismir Mulalic (Technical University of Denmark); Jan Rouwendal (Vrije Universiteit Amsterdam)
    Abstract: Most studies of the effects of transport infrastructure on the performance of individual firms have focused on marginal expansions of the rail or highway network over time. In this paper, we study the short-run effects of a large discrete shock in the quality of transport infrastructure, viz. the opening of the Great Belt bridge connecting the Copenhagen area with a neighboring island and the mainland of Denmark. We analyse the effect of the opening of the bridge on the productivity of firms throughout the country using a two-step approach: we estimate firm- and year-specific productivity for a large panel of individual firms, using the approaches developed by Levinsohn and Petrin (2003) and De Loecker (2011). Then, controlling for firm-fixed effects, we relate productivity to a calculated measure of accessibility that captures the effect of the opening of the bridge. We find large productivity effects for firms located in the regions near the bridge, especially for relatively small firms in the construction and retail industry. Estimation results further suggest statistically significant but small positive wage effects throughout the country, even in regions far from the bridge. Finally, there is some evidence that the bridge has stimulated new activities in the Copenhagen region at the expense of firms disappearing on the neighboring island Funen.
    Keywords: production functions, productivity, accessibility, agglomeration, transport infrastructure
    JEL: R12 H54 O18
    Date: 2019–09–13
  10. By: Henderson, Morag (UCL Institute of Education); Shure, Nikki (University College London); Adamecz-Völgyi, Anna (UCL Institute of Education)
    Abstract: Universities around the world are attempting to increase the diversity of their student population. This includes individuals who are 'first in family' (FiF), those who achieve a university degree, but whose (step) parents did not. We provide the first large scale, quantitative evidence on FiF graduates in England using a nationally representative survey linked to administrative education data. We find that FiF young people make up 18 percent of a recent cohort, comprising nearly two-thirds of all university graduates. Comparing individuals with no parental higher education we show that ethnic minorities and those with higher levels of prior attainment are more likely to experience intergenerational educational mobility and become a FiF. Once at university, those who are FiF are more likely to study Law, Economics and Management and less likely to study other Social Sciences, Arts and Humanities than students whose parents are university graduates. We also find evidence that FiF students are less likely to graduate from elite universities and have a higher probability of dropping out, even after prior educational attainment, individual characteristics and socio-economic status are taken into account.
    Keywords: higher education, widening participation, university access, dropout, intergenerational educational mobility
    JEL: I21 I23 I24
    Date: 2019–09
  11. By: Giorgio Barba Navaretti (University of Milan and LdA); Lionel Fontagné (Paris School of Economics – Universit´e Paris I and CEPII); Gianluca Orefice (CEPII); Giovanni Pica (Università della Svizzera Italiana, LdA and CSEF); Anna Cecilia Rosso (Università degli Studi di Milano and LdA)
    Abstract: Trade shocks in export markets may affect the employment composition and the organization of exporting ï¬ rms. In particular, the imposition of new technological standards in destination markets may force exporters to adjust the ï¬ rm’s organization to comply and cope with the additional complexity of the new production process. This paper investigates the effects on ï¬ rms’ organization of shocks induced by the introduction of Technical Barriers to Trade (TBTs) in exporting countries. It relies on the Speciï¬ c Trade Concern (STC) data released by the WTO to identify trade-restrictive TBT measures, combined with matched employer-employee data for the population of French exporters over the period 1995-2010. It also exploits information on the list of product-destinations served by each French exporter. Controlling for tariffs and for a given state of technology in the sector of the ï¬ rm, it ï¬ nds that exporters respond to increased complexity associated with restrictive Technical Barriers to Trade at destination by raising the share of managers at the expense of blue collars, white collars and professionals. This paper is related to the growing literature exploring how ï¬ rms organize production in hierarchies to economize on their use of knowledge. It is also related to the well beaten literature on the labour market effects of trade, but from the perspective of exports rather than imports.
    Keywords: skill composition, labor demand, job polarization, trade barriers
    Date: 2019–09–13
  12. By: Axel Gottfries (University of Edinburgh); Hannes Malmberg (University of Minnesota)
    Abstract: Compared to Americans, Europeans allocate less time to market work, and more time to home production and leisure. However, it has been challenging to establish whether this is due to differences in market prices, broadly construed (e.g., taxes and minimum wages), or whether we need to invoke differences in norms and preferences. The key challenge is the lack of appropriate variation in the data. While we observe differences in the relative prices of different forms of home production, long run price elasticities are difficult to estimate, since we lack exogenous price variations that are large and persistent. In this paper, we exploit a unique Swedish policy to estimate the long-run demand response to a change in the price of home production. The policy provided a permanent 50% wage subsidy for household services, which brought the relative price of cleaning services in Sweden in line with US levels. Our analysis compares the evolution of the demand for cleaning services over time in Sweden compared to that in neighboring countries. We make a number of points. First, demand adjustment is very gradual; if we stop our analysis after a couple of years, we only find a modest demand response. However, with a longer time horizon of ten years, we find a very large increase in the demand for cleaning services, corresponding to an estimated elasticity of around 4. After the full adjustment, Swedish consumption patterns of cleaning services are close to those in the US. Thus, our finding supports that prices might explain a large share of the transatlantic differences in home versus market production. Furthermore, our results support that habits or other adjustment frictions make it important to distinguish between the short-run and long-run effects of price changes when it comes to policies that affect household behavior.
    Date: 2019
  13. By: Anne Wenche Emblem; Theis Theisen
    Abstract: Over the last decades, there has been considerable interest in the use of tolls on cars driving into towns. Not only has this been a hot political topic; this issue has also attracted substantial attention from economists. The focus in most of the economics literature has been on how tolls impact traffic volumes, and on how tolls may be used to reduce negative externalities of car use. Less attention has been devoted to how property values and house prices inside and outside toll rings may be affected. From the urban economics literature, it is however well known, that local commuters’ cost of accessing centrally located amenities and work-places will be discounted into house prices. The magnitude of this effect will be contingent on the extent to which tolls also reduce congestion, external effects related to noise, etc. Moreover, since the imposition of a toll ring will alter the long-run spatial equilibrium of a town and the surrounding area, it will set into motion processes of sorting and re-location of households, and possibly also a re-location of some work-places. Consequently, the effects of tolls on house prices may be quite different in the short-run and long-run.In this paper we aim to determine the long-run impact of a toll ring on house prices. In order to assess how much a household initially residing outside the toll ring may gain from relocating to a dwelling within the toll ring we construct a simple household model for choice of location. In the empirical part of the paper we exploit a sample of about 15000 dwellings sold during an eight-year period in the Norwegian town of Kristiansand. We estimate various hedonic house price functions that account for not only whether the house lies within the toll ring or not, but also the precise location of houses and the distance from houses to important amenities. Accounting for other factors beside that of toll, that may impact the sales price of a house, is important in order to identify the impact of the toll ring on house prices. Our findings indicate that introducing a toll ring increases the price of houses located inside this ring with 3 percent. We expect that our findings will be useful in the discussion on establishing toll rings around towns, and on road pricing in general. These issues are particularly relevant for the Norwegian context, where tolls recently have become increasingly more important, not only as means to reduce congestion and other negative externalities, but also as a part of financing the construction of new roads.
    Keywords: Housing Prices; road toll
    JEL: R3
    Date: 2019–01–01
  14. By: Fontaine, Idriss (Université de la Réunion); Galvez-Iniesta, Ismael (Universidad Carlos III de Madrid); Gomes, Pedro Maia (Birkbeck, University of London); Vila-Martin, Diego (University of Amsterdam)
    Abstract: For the period between 2003 and 2018, we document a number of facts about worker gross flows in France, the United Kingdom, Spain and the United States, focussing on the role of the public sector. Using the French, Spanish and UK Labour Force Survey and the US Current Population Survey data, we examine the size and cyclicality of the flows and transition probabilities between private and public employment, unemployment and inactivity. We examine the stocks and flows by gender, age and education. We decompose contributions of private and public job-finding and job-separation rates to fluctuations in the unemployment rate. Public-sector employment contributes 20 percent to fluctuations in the unemployment rate in the UK, 15 percent in France and 10 percent in Spain and the US. Private-sector workers would forgo 0.5 to 2.9 percent of their wage to have the same job security as public-sector workers.
    Keywords: worker gross flows, job-finding rate, job-separation rate, public sector, public-sector employment
    JEL: E24 E32 J21 J45 J60
    Date: 2019–08
  15. By: Lukas Kiessling; Pia Pinger; Philipp Seegers; Jan Bergerhoff
    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
    JEL: D81 D84 I21 I23 J13 J30
    Date: 2019
  16. By: Stranges, Manuela; Vignoli, Daniele; Venturini, Alessandra (University of Turin)
    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.
    Date: 2019–07
  17. By: Brenøe, Anne Ardila (University of Zurich); Zölitz, Ulf (University of Zurich)
    Abstract: This paper investigates how high school gender composition affects students' participation in STEM at college. Using Danish administrative data, we exploit idiosyncratic within-school variation in gender composition. We find that having a larger proportion of female peers reduces women's probability of enrolling in and graduating from STEM programs. Men's STEM participation increases with more female peers present. In the long run, women exposed to more female peers are less likely to work in STEM occupations, earn less, and have more children. Our findings show that the school peer environment has lasting effects on occupational sorting, the gender wage gap, and fertility.
    Keywords: gender, peer effects, STEM studies
    JEL: I21 J16 J31
    Date: 2019–08
  18. By: Montoya, L.; Guo, B.; Newbery, D. M.; Dodds, P.; Lipman, G.; Castagneto Gissey, G.
    Abstract: We show that established metrics used to monitor electricity trading inefficiency become increasingly inaccurate in several trading conditions. We devise the Unweighted and Price-Weighted Inefficient Interconnector Utilisation indices to address these deficiencies. These metrics are substantially more accurate than existing ones and perform equally well whether or not markets are coupled. Our results show a substantial decrease in inefficient trading between Great Britain and both France and the Netherlands after the European Union’s market coupling regulations were introduced in 2014. In view of Great Britain’s likely withdrawal from the European Union, the paper also evaluates how market uncoupling would affect cross-border trade. We find that uncoupling would lead to inefficiencies in trade, the electricity price differential between GB and France (Netherlands) rising by 3% (2%), net imports into GB decreasing by 26% (13%), congestion income decreasing by 10% (5%), and infra-marginal surplus decreasing by 1.6% (1.6%) of coupled congestion income. We also show that, should the EU decide to implement an equivalent carbon tax to GB’s Carbon Price Floor, uncoupling impacts would be slightly magnified due to electricity prices converging (by about 1% of coupled congestion income).
    Keywords: Electricity trading efficiency, cross-border allocation, interconnector, market coupling, metrics
    JEL: C81 F14 F15 Q41
    Date: 2019–09–18
  19. By: Morales, Marina
    Abstract: The aim of this paper is to analyze whether parent’s decision about owning one’s own dwelling may be an important determinant of the future homeownership decisions of their children in Spain. To address this issue, we use data from the Survey of Living Conditions (2011). Our results confirm the intergenerational transmission of homeownership in Spain, in such a way that the probability that the respondent own their home is determined, although not exclusively, by their parent’s homeownership decision during their teenage years.
    Keywords: Homeownership, Intergenerational transmission, Spain
    JEL: D12 R21 Z13
    Date: 2019–09–16
  20. By: Marco Alberto De Benedetto (University of Messina); Antonio Fabio Forgione (University of Messina)
    Abstract: This paper aims to identify the relationship between the output-oriented technical efficiency of Italian private hospitals and their ownership structure. Using the one-step Stochastic Frontier Analysis technique, we explain technical efficiency throughout a set of variables capturing the firm’s shareholder activity, ownership concentration, and managerial ownership. Results suggest that (1) technical efficiency is positively affected by managerial ownership, and (2) private hospitals are more efficient when ownership concentration is low.
    Keywords: Technical Efficiency; Private Health System; Ownership; Stochastic Frontier
    JEL: D24 L25 I10
    Date: 2019–05
  21. By: David Koll (European University Institute); Dominik Sachs (LMU Munich); Fabian Stuermer-Heiber (LMU Munich); Helene Turon (University or Bristol)
    Abstract: We study the long-term fiscal implications of childcare subsidies through their impact on maternal labour supply. Taking human capital accumulation into account, we explicitly capture life-cycle career aspects in a dynamic structural household model of female labour supply and childcare decisions: higher labour supply of mothers today can result in higher future earnings. In our dynamic structural model, we allow households to be heterogeneous in their taste for home produced childcare, their taste for leisure and in their access to informal childcare (e.g. by grandparents). Using German survey data, we provide a structural estimate of the degree to which childcare subsidies are dynamically self-financing through higher labour income tax revenue. Further, we explore how the marginal fiscal returns of childcare subsidies depend on the group of families targeted (e.g. low income, single parents, number of children).
    Date: 2019
  22. By: Francesco Drago (Università degli studi di Napoli Federico II); Roberto Galbiati (Département d'économie); Francesco Sobbrio
    Abstract: This study analyses voters' response to criminal justice policies by exploiting a natural experiment. The 2006 Italian Collective Pardon Bill, designed and promoted by the incumbent center-left (CL) coalition, unexpectedly released about one-third of the prison population, creating idiosyncratic incentives to recidivate across pardoned individuals. Municipalities where resident pardoned individuals had a higher incentive to recidivate experienced a higher recidivism rate. We show that in those municipalities voters "punished'' the CL coalition in the 2008 parliamentary elections. A one standard deviation increase in the incentive to recidivate-corresponding to an increase of recidivism of 15.9 percent-led to a 3.06 percent increase in the margin of victory of the center-right (CR) coalition in the post-pardon national elections (2008) relative to the last election before the pardon (2006). We also provide evidence of newspapers being more likely to report crime news involving pardoned individuals and of voters hardening their views on the incumbent national government's ability to control crime. Our findings indicate that voters keep politicians accountable by conditioning their vote on the observed effects of public policies.
    Keywords: Accountability; Retrospective Voting; Natural Experiment; Crime; Recidivism; Media
    JEL: D72 K42
    Date: 2019–08
  23. By: Oddmund Berg (Statistics Norway)
    Abstract: In the early 2000s, eight Norwegian energy producing municipalities sold up to ten years of future electricity earnings and let two brokers from Terra Securities make investments on their behalf. In the wake of the 2007 credit crash the municipalities lost up to 80 percent of their assets. This paper uses a difference in difference analysis to show that this tightening of the local government budget, and accompanying uncertainty about future economic outcomes, led to a reduction in private consumption of around 2 percent in 2008. I show that the response is driven by households who are the largest recipients of public services - the young and the elderly. The reduction in consumption is a result of households saving more, and not a direct consequence of changes in their disposable income. I also find that households in the affected municipalities rebalance their portfolios to holding a lower share of risky assets. The results are interpreted as households holding back consumption, and reallocating towards safer assets, until uncertainty regarding fiscal outcomes is resolved.
    Keywords: Fiscal uncertainty; consumption and saving; panel data; natural experiment
    JEL: D12 E21 E65 H31
    Date: 2019–08
  24. By: Qi, Haodong (Malmö University); Irastorza, Nahikari (Malmö University); Emilsson, Henrik (Malmö University); Bevelander, Pieter (Malmö University)
    Abstract: Sweden, like many other European countries, has seen a surge in refugee immigrants over recent years, which raises a concern about the labour market integration of these newcomers. This paper investigates whether integration policy may improve refugees' labour market performance. Specifically, we examine the employment effects of the 2010 reform of the introduction program (known as IP), and how the effects vary depending on refugees' educational attainment. Given that the eligibility for the new IP was exogenously determined by whether the refugee status was granted before or after December 1, 2010, we identify the employment effects by comparing those who participated in the new IP (treatment group), with those who participated in the old IP (control group). Using a triple difference method, we find positive employment effects of the new IP that exacerbate over time. The effects are significant and identical for male refugees, regardless of educational attainment; in contrast, the effects of program participation for refugee women vary by education level, and are greater for high-educated women than that for the low-educated counterparts.
    Keywords: labour market policy, employment, refugees
    JEL: J62 J68
    Date: 2019–09
  25. By: Gullstrand, Joakim (Department of Economics, Lund University); Knutsson, Polina (Department of Economics, Lund University)
    Abstract: Exposure to international competition on a country level has been shown to improve the efficiency of domestic producers. We contribute to this literature by assessing whether the distance between producers and importers, within a country, matters for import competition effects at product level. Using detailed geographical information about the location of all manufacturing firms in Sweden during the period 2005–2014, we find strong evidence of an increased efficiency in the domestic production when imports surge, but that the effect diminishes with the distance between the producer and the importer. In addition to the importance of the geographical pattern within a country, we find that the average effect of import competition conceals large variations across firms and products. Highly productive firms respond to import competition by further improving efficiency, which, in turn, is transmitted to both a lower price and a higher markup. Firms are also more likely to drop fringe products while keeping core ones. Products undercut by low import prices in their proximity respond by lowering prices only, although highly efficient products resist this by a more pronounced improvement in the marginal cost, which, in turn, is transmitted to both a lower price and a higher markup.
    Keywords: Import competition; distance; firm-product performance
    JEL: F14
    Date: 2019–09–10
  26. By: Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Maarten J. Bijlsma (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany); Ben Wilson; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Later parenthood is often beneficial for women, but less is known about its impact on men. As first births continue to occur later in life, it is important to understand whether this delay influences the educational and labor market outcomes of women and men differently, and how it changes the socioeconomic characteristics of children’s parents at birth. However, education, employment, and fertility are linked, implying that complex models are required in order to analyze the time-varying impacts of delayed parenthood. We use dynamic longitudinal models and Finnish data to analyze how, and through which socioeconomic mechanisms, a material delay in parenthood is likely to influence educational and labor market outcomes over young adulthood. A three-year delay in young-adult parenthood for all women increases educational enrollment in their early 20s, employment in their late 20s, and partly due to higher education income in their 30s. The impact of the same delay for men is more modest, and almost negligible for their employment, suggesting that later parenthood exacerbates the educational advantage of women and attenuates the income advantage of men. However, it strengthens the socioeconomic standing of both men and women when they become parents, essentially due to the accumulation of effects.
    Keywords: Finland, education, gender, labor market, longitudinal analysis, parenthood
    JEL: J1 Z0
    Date: 2019–09
  27. By: Gaughan, James; Gutacker, Nils; Grašič, Katja; Kreif, Noemi; Siciliani, Luigi; Street, Andrew
    Abstract: We study a pay-for-efficiency scheme that encourages hospitals to admit and discharge patients on the same calendar day when clinically appropriate. Since 2010, hospitals in the English NHS are incentivised by a higher price for patients treated as same-day discharge than for overnight stays, despite the former being less costly. We analyse administrative data for patients treated during 2006–2014 for 191 conditions for which same-day discharge is clinically appropriate – of which 32 are incentivised. Using difference-in-difference and synthetic control methods, we find that the policy had generally a positive impact with a statistically significant effect in 14 out of the 32 conditions. The median elasticity is 0.24 for planned and 0.01 for emergency conditions. Condition-specific design features explain some, but not all, of the differential responses.
    Keywords: Activity based funding; DRGs; Hospital incentives; Pay for performance; Policy evaluation; Prospective payment systems; Synthetic control method
    JEL: I11
    Date: 2019–08–21
  28. By: Raoul Minetti (Michigan State University); Pierluigi Murro (LUISS University); Valentina Peruzzi (LUISS University)
    Abstract: The re-regulation wave following the global financial crisis is putting pressure on local community and cooperative banks. In this paper, we show that cooperative banking can play a pivotal role in reducing income inequalities in local communities. By analyzing Italian local (provincial) credit markets over the 2001-2011 period, we find that cooperative banks mitigate income inequality more than their commercial counterparts. This effect remains significant when we account for the pervasiveness of relationship lending in the provinces, suggesting that it is the specific nature and orientation of cooperative banks, rather than their lending technologies, that improve income distribution. The impact of cooperative banking on inequality appears to be mainly channeled by reduced migratory flows and lower business turnover.
    Keywords: Cooperative banks, income inequality, financial development.
    JEL: G21 G38 O15
    Date: 2019–02
  29. By: Sarracino, Francesco; O'Connor, Kelsey J.
    Abstract: Recent studies suggest that economic growth and well-being can grow together in the long run in presence of generous social safety nets, increasing social capital and declining income inequality. We put these conditions to a test in an attempt to explain the absence of a relation between economic growth and well-being in Luxembourg. To this aim we apply an error correction model to a panel of 15 Western European countries, and we use the results to predict life satisfaction in Luxembourg between 1991 and 2015. We find that the flat trend of life satisfaction in Luxembourg is likely the result of four forces acting in opposite directions. This suggests that the available list of moderating conditions -- although not exhaustive -- is a promising starting point to design new policies to durably improve well-being.
    Keywords: time-series; subjective well-being; error correction model; life satisfaction; dynamics; inclusive growth
    JEL: D60 E6 I31 O11 O21
    Date: 2019–09–13
  30. By: Palviainen, Heikki
    Abstract: Based on simulated counterfactual analyses, this paper studies the long-term evolution of key policy outcomes associated with the Nordic model. The results show that Finland had the most redistributive policy changes in the studied time periods. The Danish flexicurity model involves high benefit levels, and the participation tax rates were the highest. The Swedish work-line policy increased the risk of poverty by 1.0 percentage point and the Gini coefficient by 0.4. In Sweden, the behavioural effects did not fully offset the negative static effects on the risk-of-poverty rate and inequality. From a policy perspective, the results indicate that the Nordic model is resilient. In Sweden, a significant increase in the risk of poverty implies that there are other factors, such as immigration, that challenge the Nordic model.
    Date: 2019–09–14
  31. By: Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova); De Benedetto, Marco Alberto (University of Messina); De Paola, Maria (University of Calabria)
    Abstract: We use the repeated random assignment of external examiners to school institutes in Italy to investigate whether the effect of external monitoring on test score manipulation persists over time. We find that this effect is still present in the tests taken one year after exposure to the examiners, and is stronger for open-ended questions, for small school institutes, and for institutes located in the northern and central regions of the country. In the second year after exposure, however, this effect disappears, suggesting that monitoring is a symptomatic treatment rather than a cure of score manipulation. We discuss learning, reputational concerns, peer pressure and teacher preferences as potential mechanisms behind our findings, and present some evidence on the role played by social capital and high stakes.
    Keywords: education, testing, external monitoring, long-run effects
    JEL: H52 I2
    Date: 2019–09
  32. By: Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Johan Dahlberg; Lars Dommermuth; Aiva Jasilioniene (Max Planck Institute for Demographic Research, Rostock, Germany); Michaela Kreyenfeld (Max Planck Institute for Demographic Research, Rostock, Germany); Trude Lappegård; Peng Li (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany); Karel Neels; Bernhard Riederer; Saskia te Riele; Laura Szabó; Alessandra Trimarchi (Max Planck Institute for Demographic Research, Rostock, Germany); Francicso Viciana; Ben Wilson; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Educational differences in female cohort fertility have been shown to vary across high-income countries and over time, but knowledge about how educational fertility differentials play out at the sub-national regional level is limited. Examining these sub-national regional patterns might improve our understanding of national patterns, as regionally varying contextual conditions may affect fertility. This study provides for the first time for a large number of European countries a comprehensive account of educational differences in the cohort fertility rate (CFR) at the sub-national regional level. We harmonise data from population registers, censuses, and large-sample surveys for 15 countries in order to measure women’s completed fertility by educational level and region of residence at the end of the reproductive lifespan. In order to explore associations between educational differences in CFRs and levels of economic development, we link our data to regional estimates of GDP per capita. Empirical Bayesian estimation is used to reduce uncertainty in the regional fertility estimates. Our results document an overall negative gradient between the CFR and level of education, and notable variation in the gradient across regions. The gradient varies systematically by the level of economic development: moving from less to more developed regions, we observe smallergradients both across countries and within countries. However, the within-country patterns of countries differ. Our findings underline the variability of educational gradients in women’s fertility, suggest that higher levels of development may be associated with less negative gradients, and call for more in-depth fertility analyses by education at the sub-national level.
    Keywords: Europe, cohort fertility, economic development, education, population registers, regions
    JEL: J1 Z0
    Date: 2019–09
  33. By: Stiebale, Joel; Szücs, Florian
    Abstract: This paper analyzes the effects of mergers and acquisitions on the markups of non-merging rival firms across a broad set of industries. We exploit expert market definitions from the European Commission's merger decisions to identify relevant competitors in narrowly defined product markets. Applying recent methodological advances in the estimation of production functions, we estimate markups as a measure of market power. Our results indicate that rivals significantly increase their markups after mergers relative to a matched control group. Consistent with increases in market power, the effects are particularly pronounced in markets with few players, high initial markups and concentration. We also provide evidence that merger rivals reduce their employment, sales and investment, while their profits increase around the time of a merger.
    Keywords: Merger,Markups,Productivity,Market Power,Innovation,Investment
    JEL: D22 L40 L13 O31
    Date: 2019
  34. By: Gregor Jarosch; Jan Sebastian Nimczik; Isaac Sorkin
    Abstract: We build a model where firm size is a source of labor market power. The key mechanism is that a granular employer can eliminate its own vacancies from a worker's outside option in the wage bargain. Hence, a granular employer does not compete with itself. We show how wages depend on employment concentration and then use the model to quantify the effects of granular market power. In Austrian micro-data, we find that granular market power depresses wages by about ten percent and can explain 40 percent of the observed decline in the labor share from 1997 to 2015. Mergers decrease competition for workers and reduce wages even at non-merging firms.
    JEL: E2 J01
    Date: 2019–09
  35. By: Giovanna Iannantuoni (University of Milano-Bicocca); Elena Manzoni (Department of Economics (University of Verona)); Francesca Rossi (Department of Economics (University of Verona))
    Abstract: The European political spectrum can be modelled as a two-dimensional space, whose interpretation has been investigated in the spatial voting literature by regression analysis. However, data on legislators' positions display spatial clustering that is not explained by the standard models. We account for correlation among legislators by modelling spatial dependence across countries, using a new sets of geopolitical and cultural metrics. We confirm the well known result that the first dimension of the European political space is mainly explained by the Members of European Parliament's ideological position on a left-right scale, although correlation across legislators cannot be neglected. We show that spatial correlation plays instead a central role when interpreting the more controversial second dimension of the political spectrum. The most relevant proximity measures are based on geographical proximity, institutional similarities and on three cultural metrics related to which issues play a central role in the political debate.
    Keywords: European political space, spatial autoregressions, NOMINATE, proximity matrices, economic distances.
    JEL: D72 C21
    Date: 2019–09
  36. By: Giovanni Gallipoli (UBC); Khalil Esmkhani (UBC); Michael Böhm (Vancouver School of Economics and Univer)
    Abstract: How much do firms contribute to variation in labor market returns? To address this question we begin by documenting a historical episode that saw the economy-wide return to cognitive skills in Sweden surge in the 1990s and decline after 2000. Both upswing and reversal can be accounted for by between-firm variation. Motivated by this observation we develop and estimate an equilibrium model of skills demand with multi-dimensional firm heterogeneity. The model delivers sorting due to firm-specific skill-biases, which we estimate using rich population data on worker abilities. We find that: (i) the return to cognitive skills varies considerably across firms; (ii) more able workers sort into firms with higher returns; (iii) firm-specific wage premia, independent of workers' skills, exist even after controlling for worker sorting. A numerical implementation of the model shows that firm-level heterogeneity accounts for more than 2/3 of aggregate wage variation, with most of the impact due to skill-independent wage premia. However, firm-level skill-biases and non-pecuniary returns play a critical role for workers' sorting and for the evolution of the economy-wide return to skills.
    Date: 2019
  37. By: Giesecke, Matthias; Schuss, Eric
    Abstract: We estimate the effect of language training on subsequent employment and wages of immigrants under essential heterogeneity. The identifying variation is based on regional differences in language training availability that we use to instrument endogenous participation. Estimating marginal treatment effects along the distribution of observables and unobservables that drive individual participation decisions, we find that immigrants with higher gains are more likely to select into language training than immigrants with lower gains. We document up to 15% higher employment rates and 13% wage gains for immigrants with a high desire to participate but the positive returns vanish with increasing resistance to treatment. This pattern of selection on gains correlates with unobserved ability and motivation, promoting investments in education and job-specific skills that yield higher returns when complemented by language capital in the host country.
    Keywords: language training,heterogeneous returns,marginal treatment effects,continuous instrument
    JEL: F22 J24 J61 J68 O15
    Date: 2019
  38. By: Frondel, Manuel; Horvath, Marco; Vance, Colin; Kihm, Alexander
    Abstract: Drawing on panel data on daily fuel prices covering over 5,000 filling stations in Germany, this paper documents a change in the stations' price setting behavior following the introduction of a legally mandated online price portal in 2013. Prior to the portal, positive asymmetry is found on the basis of error correction models, with prices following the "rockets and feathers" pattern that is typically found for fuels. In the aftermath of the portal, by contrast, negative asymmetry is observed: fuel price decreases in response to refinery price decreases are stronger than fuel price increases due to refinery price increases.
    Keywords: retail markets,competition,error correction model
    JEL: D12 Q41
    Date: 2019
  39. By: Gerling, Lena; Kellermann, Kim Leonie
    Abstract: Despite controversial debates about the social acceptability of its nationalist program, the rightwing populist AfD has recently entered all state parliaments as well as the federal parliament in Germany. Although professed AfD voters faced a likely risk of social stigmatization, electoral support followed a clear upward trend. In order to explain these dynamics, we analyze the impact of information shocks with respect to aggregate-level AfD support on individual party choices. Unexpectedly high aggregate support for a populist party may indicate a higher social acceptance of its platform and reduce the social desirability bias in self-reported party preferences. Consequently, the likelihood to reveal an AfD preference increases. We test this mechanism in an event-study approach, exploiting quasi-random variation in survey interviews conducted closely around German state elections. We define election information shocks as deviations of actual AfD vote shares from pre-election polls and link these to the individual disposition to report an AfD preference in subsequent survey interviews. Our results suggest that exposure to higher-than expected AfD support significantly increases the individual probability to report an AfD vote intention by up to 3 percentage points.
    Keywords: voting behavior,populist parties,contagion effects,information shocks,socialdesirability bias
    JEL: C21 D71 D72 D83 D91
    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.