nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒10‒21
thirty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Legal Status and Immigrants’ Labour Market Outcomes: Comparative Evidence from a Quasi-Experiment in Western and Southern Europe By Ivana Fellini; Raffaele Guetto
  2. Occupational Mobility in Europe: Extent, Determinants and Consequences By Bachmann, Ronald; Bechara, Peggy; Vonnahme, Christina
  3. Gendered Wealth Losses after Dissolution of Cohabitation but not Marriage in Germany By Diederik Boertien; Philipp M. Lersch
  4. Preferences for redistribution and exposure to tax-benefit schemes in Europe By Francesco Andreoli; Javier Olivera
  5. Behind the success of dominated personal pension plans: sales force and financial literacy factors By Giuseppe Marotta
  6. Local governments’ efficiency and its heterogeneity – empirical evidence from a Stochastic Frontier Analysis of Italian municipalities 2010-2015 By Tommaso Agasisti; Francesco Porcelli
  7. Effects of social origin and own abilities on income development - New findings from Germany By Hartwig Hümme
  8. Preterm Births and Educational Disadvantage: Heterogeneous Effects Across Families and Schools By Anna Baranowska-Rataj; Kieron Barclay; Joan Costa-i-Font; Mikko Myrskylä; Berkay Özcan
  9. Tax Compliance in the Rental Housing Market: Evidence from a Field Experiment By Eerola, Essi; Kosonen, Tuomas; Kotakorpi, Kaisa; Lyytikäinen, Teemu; Tuimala, Jarno
  10. Not Just a Work Permit: EU Citizenship and the Consumption Behavior of Documented and Undocumented Immigrants By Adamopoulou, Effrosyni; Kaya, Ezgi
  11. Exposure to More Female Peers Widens the Gender Gap in STEM Participation By Brenøe, Anne; Zölitz, Ulf
  12. Intertemporal substitution for consumption and leisure: empirical evidence for Spain By Antonio Cutanda; Juan A. Sanchis Llopis
  13. Fertility Implications of Policy Granting Legal Status Based on Offspring's Nationality By Amuedo-Dorantes, Catalina; Borra, Cristina; Rivera Garrido, Noelia
  14. Hysteresis from Employer Subsidies By Saez, Emmanuel; Schoefer, Benjamin; Seim, David
  15. Works Councils and Performance Appraisals By Grund, Christian; Sliwka, Dirk; Titz, Krystina
  16. Procuring Medical Devices: Evidence from Italian Public Tenders By Atella, Vincenzo; Decarolis, Francesco
  17. Local Labor Demand and Participation in Social Insurance Programs By Andersen, Asbjørn Goul; Markussen, Simen; Røed, Knut
  18. The influence of health in early adulthood on male fertility By Kieron J. Barclay; Martin Kolk
  19. Treatment responses of mental health care providers after a demand shock By Rudy Douven; Minke Remmerswaal; Tobias Vervliet
  20. Locational Choice and Spatial Wage Inequality By Schran, Felix
  21. The role of preferences, attitudes, and personality traits in labor market matching By Haylock, Michael; Kampkötter, Patrick
  22. Buildings' energy efficiency and the probability of mortgage default: The Dutch case By Billio, Monica; Costola, Michele; Pelizzon, Loriana; Riedel, Max
  23. Are Women Doing It For Themselves? Gender Segregation and the Gender Wage Gap By Theodoropoulos, Nikolaos; Forth, John; Bryson, Alex
  24. Personal income distribution and progressive taxation in a neo-Kaleckian model: Insights from the Italian case By Barbieri Góes, Maria Cristina
  25. Transit-oriented developments and residential property values By Koen van Ruijven; Paul Verstraten; Peter Zwaneveld
  26. Do house prices matter for household consumption? By Lu Zhang
  27. The Risk Weighted Ownership Index: an ex-ante measure of banks' risk and performance By Luca Bellardini; Pierluigi Murro; Daniele Previtali
  28. A shot in the dark? Policy influence on cluster networks By Holger Graf; Tom Broekel
  29. The Quasi-Market of Employment Services in Italy By Pastore, Francesco
  30. Does accessibility to local public employment agencies matter? Answers from a French quasi- experiment By Matthieu Bunel; Élisabeth Tovar
  31. The real effects of bank distress: Evidence from bank bailouts in Germany By Bersch, Johannes; Degryse, Hans; Kick, Thomas; Stein, Ingrid
  32. Behind the Veil: The Effect of Banning the Islamic Veil in Schools By Maurin, Eric; Navarrete H., Nicolas

  1. By: Ivana Fellini (Dipartimento di Sociologia e Ricerca Sociale, Università degli Studi di Milano-Bicocca); Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze)
    Abstract: Improved legal status has been found to be associated with better employment chances and higher wages for immigrants, although causal effects remain difficult to ascertain due to severe endogeneity issues. This article contributes to the debate on the "citizenship/legal status premium" in the labour market by providing quasi-experimental evidence based on the 2007 EU Eastern Enlargement, following which immigrants from Romania and Bulgaria, the new EU Member States, exogenously acquired the EU citizen status. The article also contributes to the literature on legal status effects, mainly focused on single-country studies, by comparing "older" destination countries of Western Europe with "newer" ones of Southern Europe. Results show that while improved legal status is associated to higher employment rates in Western European countries, the association is null or even negative in Southern European countries, where immigrants are more strongly urged to be employed. However, improved legal status is more strongly associated with better job quality in Southern Europe, where immigrants are usually segregated in low-skilled jobs. The article concludes that possible effects of improved legal status should be interpreted taking into account the different institutional contexts and models of immigrants’ labour market incorporation.
    Keywords: Legal Status; Ethnic penalty; EU enlargement; Labour market; Naturalisation; Southern Europe; Quasi-experiment
    JEL: A14 J61 J21 Z13 C10
    Date: 2019–10
  2. By: Bachmann, Ronald (RWI); Bechara, Peggy (RWI); Vonnahme, Christina (RWI)
    Abstract: We examine occupational mobility and its link to wage mobility across a large number of EU countries using worker-level micro data. In doing so, we document the extent, the individual-level determinants and the consequences of occupational mobility in terms of wage outcomes and structural change across the EU. In addition, we identify potential explanations for the observed cross-country variation. Our results show that on average, 3% of European workers change their occupation per year, and that the extent of occupational mobility differs strongly by country. Individual characteristics play an important role for person-specific occupational mobility, but have little explanatory power for differences between countries. Occupational mobility is strongly associated with earnings mobility, and occupation movers are more likely than job movers to experience a downward rather than an upward earnings transition; by contrast, changing occupation voluntarily is more often followed by an upward wage transition. As opposed to composition effects, employment protection legislation seems to play an important role for explaining cross-country differences in occupational mobility through its impact on overall job mobility.
    Keywords: occupational mobility, job mobility, wage mobility, European labour markets, EU-SILC
    JEL: J62 J63 P52
    Date: 2019–10
  3. By: Diederik Boertien; Philipp M. Lersch
    Abstract: Objective: To document gender differences in how economic wealth changes following the dissolution of marriage and cohabitation in Germany. Background: Wealth can be an important resource to deal with the adverse economic consequences of union dissolution. Marital property regimes usually ensure that both partners receive a share of the couples’ wealth following a divorce. The dissolution of cohabiting unions is not governed by such rules in most countries, including Germany, which may lead to a more unequal division of wealth following the dissolution of cohabitation as compared to marriage. Method: The analysis consists of multivariable fixed-effects regression models based on longitudinal data from the German Socio-Economic Panel (N = 6,388 individuals) for the years 2002 to 2017. Results: Changes in wealth are relatively similar for men and women after the dissolution of marriage. The dissolution of cohabiting unions is related to losses in wealth for women, but not for men. Controlling for post-dissolution processes, gender inequality increases after the dissolution of cohabitations. Conclusion: Union dissolution is associated with wealth losses. The legal protection of the economically weaker spouse in marriage prevents gender inequality in these wealth losses. Lacking such legal protection, cohabitation is associated with gender inequality in the consequences of dissolution.
    Date: 2019
  4. By: Francesco Andreoli (University of Verona, Italy and LISER); Javier Olivera (Luxembourg Institute of Socio-Economic Research - LISER)
    Abstract: This paper provides evidence that attitudes towards redistribution are associated with the extent of generosity of the redistributive context experienced by the individual, as measured by the likelihood of receiving positive benefit transfers net of fiscal contribution. We estimate reduced form tax-benefit equations with the EU Statistics on Income and Living Conditions (EU-SILC), and match the implied parameters to the respondents of the European Social Survey (ESS) on the basis of their characteristics. The period of analysis is 2008-2016. For identification, we exploit exogenous cross-country and time variation in tax rules and market income to disentangle implications of exposure to tax-benefit rules on preferences for redistribution from the effects of changes in income inequality. We find that exposure to positive net benefits increases demand for redistribution by about 1.2\%, the effect being robust across a variety of specifications. The signs of the effects are consistent with those predicted by a simple model where exposure to redistribution affects expectations for consumption, but risk averse individuals discount this effect by the nature of income shocks they are exposed to in the market.
    Keywords: Income Inequality, Preferences for redistribution, ESS, EU-SILC, tax-benefit system.
    JEL: D31 D63 D72 H20
    Date: 2019–09
  5. By: Giuseppe Marotta
    Abstract: The revealed preference for dominated insurance-based personal pension plans in Italy is a decade-long puzzle. I surmise that a motivation from the supply side is a sales force factor deriving from the geographical distribution of financial providers, including the countrywide network of the state controlled Post Office. I provide supporting evidence using three biennial waves of the Bank of Italy’s survey on household finances from 2010 to 2014. The time interval includes a public pension system reform sharply raising the statutory age retirement, legislated in December 2011 to defuse a sovereign debt crisis. I show that the salience effect on the awareness of the benefits of supplementing lower perspective public pensions with personal pension plans strengthened the explanatory power of financial strength indicators. Exploiting a module in the 2010 wave I estimate a surprising decrease in the probability of subscription to personal pension plans in 2014 associated to the indicator for the highest financial literacy level.
    Keywords: Pensions, Private pension systems, Retail financial products distribution, Italy
    JEL: D91 E21 G11 H55
    Date: 2019–10
  6. By: Tommaso Agasisti (Politecnico di Milano School of management); Francesco Porcelli (SOSE)
    Abstract: This paper investigates the efficiency of Italian local governments using a novel dataset collected by SOSE (an agency of the Italian Ministry of Finance specialized in econometric analysis) and by means of Stochastic Frontier Analysis, for the period 2010-2015. As dependent variable of the cost function, we consider the total current expenditure for producing six “essential” local public services: education (ancillary services), waste management, general administration, local police, urbanization and road conditions, and social services. As outputs, we employ indicators for outputs for each of the six services, although they enter simultaneously in the multioutput cost function. In an alternative specification of the model, we use a composite indicator for the output volume. Thus, we estimate a global efficiency score for each local government in each year. The findings reveal that the total expenditure declined over time, less than proportionally when compared with reduction of outputs produced. As a consequence, the global efficiency of Italian municipalities is estimated to be lower in 2015 than it was in 2010. Moreover, there is evidence of substantial scale economies as well as congestion effects, with municipalities with around 10,000 inhabitants being more efficient than their smaller and larger counterparts. Lastly, on average local governments are more efficient in providing public services in northern Regions than in southern ones.
    Keywords: Efficiency, local governments, panel Stochastic Frontier Analysis
    JEL: D78 H11 H50 H72 H75
    Date: 2019–10
  7. By: Hartwig Hümme (University of Potsdam)
    Abstract: The relationship between social origin and future income has been the subject of numerous studies and debates in economics and sociology. It has been proven that there is a strong link between social origin, educational attainment, and social destination in terms of economic success. However, there is still widespread disagreement as to whether social origin has an influence on later children income. The results of previous studies are not unequivocal in their findings and contradict each other in the effects observed. It?s also still completely unclear whether there are differences between the genders.However, studies based on correlations between siblings or twins show that there is a strong correlation between social origin and economic success achieved in later working life. But these studies only show that there are effects and not which mechanisms are responsible for them. But it is very important to understand these mechanisms as they are responsible for the persistence of social inequality and gender differences.In this study, I take up the proposal by Bukodi & Goldthorpe (2013) to decompose social origin into its main factors parental class, status and education in order to examine the distinct effect on income over the life course. To do this, I use the data from the German LifE-Study, one of the longest running longitudinal studies in the German regions following the life courses of N=1.359 individuals from the ages of 12 to 45. Different linear regressions and linear structural equation models show that the three factors of social origin have different effects on income. These effects also differ between age 35 and age 45 of the analyzed individuals and largely between men and women. For women not only their own education is responsible for the returns to education, it?s also the social background in which they grew up.
    Keywords: Social origin, income, sociology
    JEL: I25 I24 I21
    Date: 2019–10
  8. By: Anna Baranowska-Rataj; Kieron Barclay; Joan Costa-i-Font; Mikko Myrskylä; Berkay Özcan
    Abstract: 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 (
    Keywords: premature births, human capital, early life investments, education investments, Sweden
    JEL: I10 I20 J13
    Date: 2019
  9. By: Eerola, Essi; Kosonen, Tuomas; Kotakorpi, Kaisa; Lyytikäinen, Teemu; Tuimala, Jarno
    Abstract: We study rental income tax compliance using a large-scale randomized fild experiment and register data with third-party information on the ownership of apartments. We analyze the responses of potential landlords to treatment letters notifying them of stricter tax enforcement, or providing simplifying information on filing practices for the rental income tax. We find that both types of letters caused an increase in the propensity to report rental income, with letters notifying landlords of the use of third-party information in tax enforcement having the strongest effect. Our research design also allows us to analyze different types of spillover effects in tax enforcement. We find an indication of positive reporting spillovers within the household, but do not find clear evidence of spillovers between landlords in local rental markets.
    Keywords: tax compliance, field experiment, rental market, Social security, taxation and inequality, H26, H31,
    Date: 2019
  10. By: Adamopoulou, Effrosyni (University of Mannheim); Kaya, Ezgi (Cardiff University)
    Abstract: This paper explores the impact of the 2007 EU enlargement on the consumption behavior of immigrant households. Using data from a unique Italian survey and a diff-in-diff approach, we find that the enlargement induced a consumption increase for immigrants from new member states. This effect concerned both undocumented and documented immigrants, albeit through different channels. Detailed information on immigrants' legal status and sector of employment allows us to shed light on the exact mechanisms. Following the enlargement, previously undocumented immigrants experienced increases in labor income by moving away from the informal sector, whereas immigrants who were already working legally in Italy benefitted from an increased probability of getting permanent contracts. Enhanced employment stability in turn reduced uncertainty, leading to an increase in documented immigrants' consumption.
    Keywords: (un)documented immigrants, informality, citizenship, consumption, work permit
    JEL: D12 E21 F22
    Date: 2019–09
  11. By: Brenøe, Anne; Zölitz, Ulf
    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
  12. By: Antonio Cutanda (Department of Economic Analysis, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Sanchis Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: In this paper we test the three first-order conditions of an intertemporal optimization model for a representative individual who chooses simultaneously for her level of consumption and leisure, assuming a separable utility function. We estimate these first order conditions separately and jointly using a Spanish pseudo-panel data set built by combining the Family Expenditure Survey and the Labour Survey for Spain over the period 1987-1997. Our results confirm previous empirical evidence as regards the elasticity of intertemporal substitution for consumption, that we estimate around 0.4/0.5, and provide an estimate for the leisure intertemporal elasticity around 0.2/0.3. Finally, we provide further evidence controlling for human capital. This allows checking that the model ignoring human capital produces biased estimates for the elasticity of intertemporal substitution for leisure.
    Keywords: Euler equation, Instrumental variables, Intertemporal Substitution, Panel data
    JEL: C33 C36 E21 E24 J22
    Date: 2019–10
  13. By: Amuedo-Dorantes, Catalina (University of California, Merced); Borra, Cristina (University of Seville); Rivera Garrido, Noelia
    Abstract: We examine the fertility impact of a change in immigration policy granting temporary legal status to undocumented immigrants based on their offspring nationality. The policy, intended to facilitate family reunification, was enacted in a 2011 Royal Decree in Spain. It recognized the ability for undocumented parents to become temporary legal residents if they had a Spanish child under the age of 18. Using data from the Spanish Labor Force Survey for the 2007 through 2016 period, along with a quasi-experimental approach that exploits the change in legal residency eligibility requirements, we show that the 2011 Royal Decree increased fertility among individuals potentially affected by the reform by approximately 32 percent.
    Keywords: immigrants, legalization, fertility, Spain
    JEL: J13 J15
    Date: 2019–09
  14. By: Saez, Emmanuel; Schoefer, Benjamin; Seim, David
    Abstract: This paper uses administrative data to analyze a large and 8-year long employer payroll tax rate cut in Sweden for young workers aged 26 or less. First, we document that while active, the reform raised youth employment among the treated workers. The long-run effects are twice as large as the medium-run effects and likely driven by labor demand (as workers' take-home wages did not respond). Second, we document novel labor-demand-driven "hysteresis" from this policy â?? i.e. persistent employment effects even after the subsidy no longer applies â?? along two dimensions. Over the lifecycle, employment effects persist even after workers age out of eligibility. Two years after the repeal, employment remains elevated at the maximal reform level in the formerly subsidized ages. These hysteresis effects triple the direct employment effects of the reform. Discrimination against young workers in job posting fell during the reform and does not bounce back after repeal, potentially explaining our results.
    Date: 2019–10
  15. By: Grund, Christian (RWTH Aachen University); Sliwka, Dirk (University of Cologne); Titz, Krystina (RWTH Aachen University)
    Abstract: Drawing on two large German representative data sets, we analyze the role of works councils for the use of performance appraisals (PA). We distinguish between the incidence of performance appraisal systems as intended by the firm and their actual implementation on the level of the individual employee. We find that works councils tend to promote rather than restrict PA. Employees working in establishments with a works council are more likely to face a formal performance appraisal procedure. Works councils also act as a transmission institution for the actual use of an existing PA system – i.e. among the firms that claim to implement performance appraisals for all their employees, the likelihood of their employees actually having regular appraisals is substantially larger when works councils are in place. Moreover, the existence of works councils is positively related particularly to PA systems, which affects bonus payments.
    Keywords: performance appraisals, voice, works councils, performance pay
    JEL: M54 M12 J53 J83
    Date: 2019–10
  16. By: Atella, Vincenzo; Decarolis, Francesco
    Abstract: The public procurement of medical devices is increasingly relying on auction mechanisms to move toward more transparent procedures and to promote competition between suppliers in a market where the quality of the products matters enormously and an improper auction design could be very harmful. Based on Italian hospital data, we present new evidence on the performance of the public tenders to procure orthopaedic prosthesis for hips, knees and shoulders. Focusing on three main outcomes, the number of participants, the presence of a single firm bidding and the winning rebate, for the first time we describe how features related to the tender, hospital, region and bidders' competition all contribute to explain the functioning of the procurement auctions. The evidence we obtain can meaningfully help policy makers in designing and implementing better public procurement systems.
    Keywords: Italy; medical devices; orthopaedic prosthesis; Procurement auctions; tender characteristics
    JEL: C21 I18 J18
    Date: 2019–10
  17. By: Andersen, Asbjørn Goul (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: Based on administrative data from Norway, we explore the "grey area" between the roles of unemployment- and temporary disability-insurances by examining how participation in these two program types is affected by local labor demand conditions. Local labor demand is identified by means of a shift-share instrumental variables strategy, where initial local industry-composition is interacted with sub-sequent national industry-specific employment fluctuations. Our results indicate that local labor demand has a large negative effect on the propensity to claim disability insurance, which, for some groups, is remarkably similar to its effect on the propensity to claim unemployment insurance. Based on this finding, we question whether it is meaningful to maintain a sharp distinction between these two programs.
    Keywords: unemployment, disability insurance, program substitution, shift-share analysis
    JEL: J23 J58 J65 H55
    Date: 2019–10
  18. By: Kieron J. Barclay (Max Planck Institute for Demographic Research, Rostock, Germany); Martin Kolk
    Abstract: Despite the large literature examining socioeconomic predictors of fertility and the influence of reproductive history on post-reproductive mortality, previous research has not offered a population-level perspective on how male health in early adulthood is related to subsequent fertility. Using Swedish population registers and military conscription data, we study how body mass index (BMI), physical fitness and height are associated with total fertility and parity transitions by 2012 amongst 405,427 Swedish men born 1965-1972, meaning we observe fertility up to age 40 or older. Applying linear regression as well as sibling fixed effects, we find that our anthropometric measures are strong predictors of later fertility, even after accounting for educational attainment and cumulative income up to age 40. Men with a 'normal' BMI and in the highest decile of physical fitness have the most children by the end of our follow-up period. Men who were already obese at ages 17-20 had a relative probability of childlessness almost twice as high as men who had a 'normal' BMI at ages 17-20, and men in the bottom decile of physical fitness had a relatively probability of childlessness almost 50% higher than men in the top decile of physical fitness. These patterns were at least as strong in our models applying the sibling fixed effects design. We find that the association between male height and fertility is curvilinear in models estimated without sibling fixed effects, but only men in the lowest decile of height have lower fertility in sibling comparison models. Further analyses show that the strong associations between our anthropometric measures and male fertility persist even amongst men who married. We discuss the implications of our findings for fertility in high-income countries in light of secular increases in the prevalence of overweight/obesity.
    Keywords: Sweden, anthropometry, body height, body weight, cohort fertility, fertility, health, population registers, siblings
    JEL: J1 Z0
    Date: 2019–10
  19. By: Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis); Minke Remmerswaal (CPB Netherlands Bureau for Economic Policy Analysis); Tobias Vervliet (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper investigates how two different groups of Dutch mental health care providers responded to an exogenous 20% drop in the number of patients in 2012. Providers that operated under a budget increase treatment duration on average by 8%. We fi nd suggestive evidence for over-treatment as the longer treatments did not result in better patient outcomes, i.e. general assessment of functioning scores. Both professional uncertainty and income effects may explain the results. For the group of self-employed providers, paid by a stepwise fee-for-service function, we find only a small signi cant increase in treatment duration for the least altruistic providers, which we relate to an income effect.
    JEL: H51 I11 I12 J22 J31 J33
    Date: 2019–09
  20. By: Schran, Felix (University of Bonn and IZA)
    Abstract: During the last few decades, aggregate wage growth has been very unevenly distributed across space in Germany. While wages in Southern German local labor markets rose by up to 28 log points, they increased only modestly or even declined in the north. Similar results apply to employment changes. Overall, this has led to a strong positive correlation between local wage and employment growth. What is driving these differential trends across space? This paper examines to what extent regions with growing employment are increasingly paying workers higher wage premia or, in contrast, to what extent the quality of workers in growing regions has risen. To decouple the demand for skill and supply of skill from each other, I estimate how regional wage premia have changed over time using administrative panel data that allow me to hold constant changes in unobserved worker quality. I find that wage premia in regions with expanding employment did not rise more than in regions with declining employment. Instead, the quality of workers in growing regions went up. I investigate the importance of various possible observables for this relationship including local amenity differences, changes in occupation and industry structure as well as variation in education rates. Last, I explore the impact of changing wage premia and changing worker quality on the recent rise in the density wage premium.
    Keywords: location choice, density premium, Roy model
    JEL: R11 R12 J21 J24 J31
    Date: 2019–09
  21. By: Haylock, Michael; Kampkötter, Patrick
    Abstract: We provide new evidence of worker-firm matching based on preferences, attitudes and personality traits using new, representative matched employer-employee data from Germany. Time-constant firm characteristics explain a significant proportion of total variance in a series of outcome variables commonly applied in behavioral economics research. Hence, behavioral characteristics play an important, yet under researched, role in the labor market matching process.
    Keywords: Preferences,Attitudes,Personality,Sorting,Matching
    JEL: D90 D91 J01 M50
    Date: 2019
  22. By: Billio, Monica; Costola, Michele; Pelizzon, Loriana; Riedel, Max
    Abstract: In this paper, we investigate the relation between buildings' energy efficiency and the probability of mortgage default. To this end, we construct a novel panel dataset by combining Dutch loan-level mortgage information with provisional building energy ratings that are calculated by the Netherlands Enterprise Agency. By employing the Logistic regression and the extended Cox model, we find that buildings' energy efficiency is associated with lower likelihood of mortgage default. The results hold for a battery of robustness checks. Additional findings indicate that credit risk varies with the degree of energy efficiency.
    Keywords: Mortgages,Energy Efficiency,Credit Risk
    JEL: G21
    Date: 2019
  23. By: Theodoropoulos, Nikolaos (University of Cyprus); Forth, John (Cass Business School); Bryson, Alex (University College London)
    Abstract: Using matched employer-employee data from the 2004 and 2011 Workplace Employment Relations Surveys (WERS) for Britain we find a raw gender wage gap (GWG) in hourly wages of around 0.18-0.21 log points. The regression-adjusted gap is around half that. However, the GWG declines substantially with the increasing share of female managers in the workplace. The gap closes because women's wages rise with the share female managers in the workplace while men's wages fall. Panel and instrumental variables estimates suggest the share of female managers in the workplace has a causal impact in reducing the GWG. The role of female managers in closing the GWG is more pronounced when employees are paid for performance, consistent with the proposition that women are more likely to be paid equitably when managers have discretion in the way they reward performance and those managers are women. These findings suggest a stronger presence of women in managerial positions can help tackle the GWG.
    Keywords: gender wage gap, female managers, performance pay
    JEL: J16 J31 M52 M54
    Date: 2019–09
  24. By: Barbieri Góes, Maria Cristina
    Abstract: This paper develops a stylized short-run neo-Kaleckian model incorporating personal income inequality and income taxes based on You and Dutt (1996). The main goal is to investigate how changes in income taxes and personal income distribution affect output growth. The theoretical discussion of the stylized model is then empirically assessed, using data for Italy retrieved from the Survey of Household Income and Wealth published by the Bank of Italy. The empirical analysis confirms both the heterogeneity of the propensities to consume of Italian households and the dominance of absolute income effects in the Italian consumer behavior that assures the negative trade-off between inequality and aggregate demand. More specifically, it is shown that, overall, Italians are still income constrained, not allowing for a compensation of the demand-depressing effects of raising inequality via debt and wealth-based consumption. Likewise, it is argued that decreasing personal income inequality via progressive income tax reforms would have positive effects on aggregate demand, utilization, and growth.
    Keywords: Income inequality,Personal Income Distribution,Income Taxes,Kaleckian model
    JEL: D11 D12 D31 E12 E21 H24
    Date: 2019
  25. By: Koen van Ruijven (CPB Netherlands Bureau for Economic Policy Analysis); Paul Verstraten (CPB Netherlands Bureau for Economic Policy Analysis); Peter Zwaneveld (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: As urbanization continues, congestion externalities are becoming more important due to an increasing utilization of the prevailing infrastructure. A growing number of cities have conducted transit-oriented developments to mitigate these congestion externalities. In this article, we analyze the effects of transit-oriented developments on residential property values As an extension to the standard hedonic pricing method, we employ the synthetic control method to estimate the value-added of transit-oriented developments. Three quantitative case studies in the Netherlands indicate that the effects of transit-oriented developments are highly heterogeneous. One case shows strong positive results. The other two are either insignificant, or temporarily negative.
    JEL: R38 R58
    Date: 2019–05
  26. By: Lu Zhang (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: To what extent do large drops in house prices drive household consumption? Using a large panel of Dutch households over the period 2007 to 2014, when house price dropped 27%, we find a significantly positive relationship between house prices and household (durable) consumption. A 10% change in home values leads to a 0.7% change in household consumption for homeowners, but a negligible response for renters. Young and middle-aged homeowners have larger consumption sensitivities to house prices than old households. Delving into the underlying channels, a pure wealth effect can explain part of the consumption sensitivity to house prices. Furthermore, we find strong evidence that house prices affect consumption through the borrowing collateral (and precautionary saving) channel.
    JEL: D12 D14 E21
    Date: 2019–04
  27. By: Luca Bellardini (University of Rome Tor Vergata); Pierluigi Murro (LUISS University); Daniele Previtali (University of Naples Parthenope)
    Abstract: Attributing ratings to the top-20 owners, we construct a Risk-Weighted Ownership index (RWO) to measure the profitability and risk-taking behaviour of the ownership structure at banks. Collecting data from 19 European countries plus the UK over the 2008-2017 period, preliminary results show strong evidence that RWO measures are significant in explaining bank performance and risk, at both an accounting and a market-based level. Overall, these results suggest that not only markets and regulators should look at bank’s owners: instead, it is far more relevant to assess the contribution carried by top-owners to bank risk, both individually and collectively.
    Keywords: bank, ownership, risk, corporate governance
    JEL: G21 G32
    Date: 2019–04
  28. By: Holger Graf; Tom Broekel
    Abstract: Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 17 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly.
    Keywords: Cluster Policy, Knowledge Networks, Network Analysis, Patent Data, Regional Innovation, Policy Evaluation
    JEL: O31 Z13
    Date: 2019–10
  29. By: Pastore, Francesco (Università della Campania Luigi Vanvitelli)
    Abstract: This paper aims to study the shortcomings and merits of the first experiment of quasi-market in the provision of employment services: the Lombardy DUL (Dote Unica Lavoro). This system, which has inspired the 2015 national reform within the Jobs Act, has reactivated and revitalized the sector by providing important job opportunities to jobless workers. The system has the typical problems of quasi-markets in the provision of public services (lion's share of private organizations; cherry picking; gaming). However, different expedients are devised in the program to minimize these shortcomings. The empirical analysis suggest that such phenomena if existent are at a physiological level. Analysis of the determinants of completing successfully the program provides non-trivial results as to, among others, the role organizations of different ownership type and of services provided.
    Keywords: public employment services, quasi-markets, cherry-picking, gaming, Lombardy region, jobs act
    JEL: H44 H52 H76 I38 J68 R23
    Date: 2019–09
  30. By: Matthieu Bunel; Élisabeth Tovar (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We question whether accessibility to local public employment agencies impacts exits from unemployment. We deal with the potential endogeneity of the residential location of jobseekers by using the unanticipated creation of a new agency in the French region of Lyon as a quasi-natural experiment. We use exhaustive and geo-located individual data on jobseekers and local public employment agencies. Contrary to past evidence based on aggregated data, we find no evidence that jobseekers with improved accessibility to the local public employment services experience an improvement of their probability of exiting unemployment. We however find evidence of transitory organizational effects. These findings strongly question the costly strategy of a fine distribution of local public employment agencies across the territory while suggesting that institutional issues are key.
    Date: 2019
  31. By: Bersch, Johannes; Degryse, Hans; Kick, Thomas; Stein, Ingrid
    Abstract: How does bank distress impact their customers' probability of default and trade credit availability? We address this question by looking at a unique sample of German firms from 2000 to 2011. We follow their firm-bank relationships through times of distress and crisis, featuring the different transmission of bank distress shocks into already weakened firm balance sheets. We find that a distressed bank bailout, which is subject to restructuring and deleveraging conditions, leads to a bank-induced increase of firms' probabilities of default. Moreover, bailouts tend to reduce trade credit availability and ultimately firms' sales. We further find that the direction and magnitude of the effects depends on firm quality and the relationship orientation of banks.
    Keywords: bank distress,bank risk channel,firm risk channel,relationship banking,firm defaults,financial crisis
    JEL: G01 G21 G24 G33
    Date: 2019
  32. By: Maurin, Eric (Paris School of Economics); Navarrete H., Nicolas (Paris School of Economics)
    Abstract: Immigration from Muslim countries is a source of tensions in many Western countries. Several countries have adopted regulations restricting religious expression and emphasizing the neutrality of the public sphere. We explore the effect of the most emblematic of these regulations: the prohibition of Islamic veils in French schools. In September 1994, a circular from the French Ministry of Education asked teachers and principals to ban Islamic veils in public schools. In March 2004, the parliament took one-step further and enshrined prohibition in law. This paper provides evidence that the 1994 circular contributed to improving the educational outcomes of female students with a Muslim background and to reducing educational inequalities between Muslim and non-Muslim students. We also provide evidence suggesting that the 2004 law has not generated any further improvements.
    Keywords: Islamic veil, high-school graduation
    JEL: I21 J15
    Date: 2019–09

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.