nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒10‒28
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Excess Churn in Integrated Labor Markets By Bratsberg, Bernt; Raaum, Oddbjørn; Røed, Knut
  2. The Heterogeneous Effects of Workers' Countries of Birth on Over-Education By Jacobs, Valentine; Mahy, Benoît; Rycx, Francois; Volral, Mélanie
  3. Evidence on Intergenerational Income Transmission Using Complete Dutch Population Data By Carmichael, Fiona; Darko, Christian; Ercolani, Marco G; Ozgen, Ceren; Siebert, W. Stanley
  4. TBTs, Firm Organization and Labour Structure By Giorgio Barba Navaretti; Lionel Fontagné; Gianluca Orefice; Giovanni Pica; Anna Rosso
  5. Hysteresis from Employer Subsidies By Emmanuel Saez; Benjamin Schoefer; David Seim
  6. Building Bridges and Widening Gaps: Efficiency Gains and Equity Concerns of Labor Market Expansions By Bütikofer, Aline; Løken, Katrine V.; Willen, Alexander
  7. Occupational segregation of female and male immigrants in the European Union: accounting for cross-country differences By Amaia Palencia-Esteban
  8. What explains the gender gap in wealth? Evidence from administrative data By Jaanika Merikull; Merike Kukk; Tairi Room
  10. Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom By Era Dabla-Norris; Carlo Pizzinelli; Jay Rappaport
  11. Does CSR influence M&A target choices? By Mathieu Gomes
  12. Regional diversification patterns and Key Enabling Technologies (KETs) in Italian regions By Roberto Antonietti; Sandro Montresor
  13. Explaining the Gender Gap in Job Satisfaction By Redmond, Paul; McGuinness, Seamus
  14. Scientifico! like Dad: On the Intergenerational Transmission of STEM Education in Italy By Chise, Diana; Fort, Margherita; Monfardini, Chiara
  15. The Effect of Class Size on Grades and Course Evaluations: : Evidence from Multi-section Courses By A.O. Karas
  16. The Pathways to College By Agarwal, Lisha; Brunello, Giorgio; Rocco, Lorenzo
  17. Intimate partner violence and women 's health : the private and social burden By Carrasco, Raquel; Alonso-Borrego, César
  18. What does leadership look like in schools and does it matter for school performance? By Alex Bryson; Lucy Stokes; David Wilkinson
  19. Yours inclusively? Income mobility in Ireland, 10 years of tax record microdata By Seán Kennedy; David Haugh; Brian Stanley
  20. Catching up or Lagging Behind? The Long-Term Business and Innovation Potential of Subsidized Start-Ups out of Unemployment By Caliendo, Marco; Künn, Steffen; Weissenberger, Martin
  21. The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 By Justin Van de Ven; Nicolas Herault
  22. Valuable experience: How internships affect university graduates’ income By Thomas Bolli; Katherine Caves; Maria Esther Oswald-Egg
  23. How Do Short-term Financial Constraints Affect SMEs’ Long-Term Investment: Evidence from the Working Capital Channel By Théo Nicolas
  24. A Drive Time-Based Definition of Cross-Border Regions and Analysis of Population Trends By Boyan KAVALOV; Andrius KUCAS; Filipe BATISTA E SILVA; Mert KOMPIL; Jean-Philippe AURAMBOUT; Carlo LAVALLE
  25. Passports for Sale: The Political Economy of Conflict and Cooperation in a Meta-Club By Konrad, Kai A.; Rees, Ray
  26. You’re the One That I Want! Public Employment and Women’s Labor Market Outcomes By Gomes, Pedro Maia; Kuehn, Zoë
  27. Education and Health: Long-run Effects of Peers, Tracking and Years By Fischer, Martin; Gerdtham, Ulf-G; Heckley, Gawain; Karlsson, Martin; Kjellsson, Gustav; Nilsson, Therese
  28. The Long-Run Effects of Cesarean Sections By Costa-Ramón, Ana; Kortelainen, Mika; Rodríguez-González, Ana; Sääksvuori, Lauri
  29. Stay or Flee? Probability versus Severity of Punishment in Hit-and-run Accidents By Stefano Castriota; Mirco Tonin

  1. By: Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: The common European labor market encourages worker mobility that enhances allocative efficiency, but certain institutional features may trigger inefficient migration. As a job in one of Europe's high-income countries typically also entails coverage in a generous welfare and social insurance system, migrants' reservation wages may lie below their opportunity cost of labor. This represents an externality because employers and migrant workers can pass some of their remuneration costs onto the welfare state. Once welfare benefit entitlement is secured, the reservation wage of the migrant worker is expected to rise, giving the firm an incentive to replace the worker with a new migrant willing to accept lower pay. This leads to excess churn—the reallocation of labor within firms simultaneously involving the flow of employees to unemployment insurance and the hiring of similar workers. Based on Norwegian data, we present evidence of high excess churn rates in firms with many workers from the new EU member states.
    Keywords: churning, Integrated labor markets, social dumping, EU enlargement
    JEL: F22 D62 E24
    Date: 2019–10
  2. By: Jacobs, Valentine (Free University of Brussels); Mahy, Benoît (University of Mons); Rycx, Francois (Free University of Brussels); Volral, Mélanie (University of Mons)
    Abstract: This paper examines the relationship between immigration and over-education, taking advantage of access to rich matched employer-employee data for the Belgian private sector for the period 1999-2010. Covering more than 1.2 million workers, the data enable the authors to: i) measure over-education with higher precision, ii) examine the heterogeneous effects of detailed countries of birth, and iii) test the role of key moderating factors. More precisely, this paper is not only the first to investigate the effect of citizenship acquisition and workers' tenure on the nexus between immigration and over-education, but also one of the few to study the moderating roles of gender and education for detailed categories of immigrants. With ordered probit estimates, the authors highlight that immigrant workers are much more likely to be over-educated than their native counterparts, especially when the former originate from the Maghreb or Asia. Over-education also appears to be particularly critical among higher-educated immigrants. Gender-based differences in immigrants' penalties, in contrast, are found to be quite modest overall. Results further show that tenure has a strong moderating effect on the likelihood for immigrants born in developing countries to be over-educated and that citizenship acquisition is also associated with substantially improved job matches.
    Keywords: immigrants, over-education, gender, tenure, citizenship acquisition
    JEL: I21 J15 J24 J61 J71
    Date: 2019–10
  3. By: Carmichael, Fiona (University of Birmingham); Darko, Christian (University of Birmingham); Ercolani, Marco G; Ozgen, Ceren (University of Birmingham); Siebert, W. Stanley (University of Birmingham)
    Abstract: We estimate the intergenerational elasticity (IGE) of income for the Netherlands using complete population data for around 177,000 28-year olds. We find that IGEs are much lower when actual individual income data are used rather than proxies or aggregates for income. Though low, daughters' IGEs are higher than sons' indicating lower income mobility for women.
    Keywords: intergenerational elasticity, intergenerational mobility, income, equality of opportunity, Great Gatsby curve, Netherlands
    JEL: J62 J61 D31
    Date: 2019–10
  4. By: Giorgio Barba Navaretti (Università degli Studi di Milano and LdA.); Lionel Fontagné (Paris School of Economics – Université Paris I, CEPII and CESifo.); Gianluca Orefice (CEPII and CESifo.); Giovanni Pica (Università della Svizzera Italiana, LdA and CSEF.); Anna Rosso (Università degli Studi di Milano, LdA and CEP)
    Abstract: Trade shocks in export markets may affect the employment composition and the organization of exporting firms. In particular, the imposition of new technological standards in destination markets may force exporters to adjust the firm's organization to comply and cope with the additional complexity of the new production process. This paper investigates the effects on firms' organization of shocks induced by the introduction of Technical Barriers to Trade (TBTs) in exporting countries. It relies on the Specific 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 firm, it finds 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 firms 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: 2019–10–18
  5. By: Emmanuel Saez; Benjamin Schoefer; David Seim
    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 – i.e. persistent employment effects even after the subsidy no longer applies – 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.
    JEL: H2 J23 J71
    Date: 2019–10
  6. By: Bütikofer, Aline (Dept. of Economics, Norwegian School of Economics and Business Administration); Løken, Katrine V. (Dept. of Economics, Norwegian School of Economics and Business Administration); Willen, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We exploit the opening of a large bridge to study how access to a larger labor market affects economic efficiency, and how these potential efficiency gains are distributed across workers. The bridge we study connected the third largest city of Sweden to the capital of Denmark, and led to a substantial increase in the labor market opportunities of Swedes. Using unique cross-country matched registry data, we find that the bridge led to a large increase in cross-country commuting among Swedes, driven both by extensive and intensive employment responses. This commuting effect translates into a significant increase in the average wage of Swedes residing close to the bridge, providing strong evidence of an efficiency gain for individuals in Sweden. However, these efficiency gains are unevenly distributed across workers: the effect is largest for high-educated men and smallest for low-educated women. Thus, the efficiency gains come at the cost of rising income inequality and an increase in the gender wage gap, both within- and across-households. These equity effects are driven not only by differences in the propensity to commute, but also by occupational segregation.
    Keywords: Efficiency; Gains
    JEL: J00
    Date: 2019–10–20
  7. By: Amaia Palencia-Esteban
    Abstract: The paper studies occupational segregation by gender and immigration status in the European Union using the 2005–2015 European Labour Force Survey. Compared to prior studies, it quantifies the levels of segregation that female and male immigrants experience in each country, while undertaking counterfactual and regression analyzes to account for cross-country differences. Overall, male immigrants have lower occupational segregation than their female counterparts and the second-generation is less segregated than the first one. Regarding the geographical differences, a larger union density and involuntary part-time employment are associated with higher segregation, whereas a larger welfare provision, unemployment rate and policies easing family reunion or access to nationality reduce segregation.
    Keywords: Occupational segregation; gender; immigration; European Union
    JEL: D63 J15 J16 J71
    Date: 2019–10
  8. By: Jaanika Merikull; Merike Kukk; Tairi Room
    Abstract: This paper studies the gender gap in net wealth. We use administrative data on wealth that are linked to the Estonian Household Finance and Consumption Survey, which provides individual-level wealth data for all household types. We find that the unconditional gender gap in mean wealth is 45% and that it is caused by large wealth disparities in the upper end of the wealth distribution. The structure of assets owned by men is more diversified than that for women. Men own more business assets and vehicles, while women own more deposits. The gender gaps in these asset components cannot be explained by observable characteristics. For partner-headed households the raw gender gaps across deciles are mostly in favour of men, and more strongly so for married couples, indicating that resources are not entirely pooled within households. For single-member households the raw gaps across quantiles are partially in favour of women. Accounting for observable characteristics renders the unexplained parts of the gaps mostly insignificant for all household types
    Keywords: gender gap, wealth, inequality, intra-household allocation of wealth, Estonia
    JEL: D31 J16 J71
    Date: 2019–10–16
  9. By: Natalia Soboleva (National Research University Higher School of Economics)
    Abstract: Nowadays, in Europe, women do not have lower education as compared to men, but they are often less advantaged in their careers. The study aimed to reveal the association between gender attitudes, achievement motivation and realisation of this achievement motivation among the working women in Europe. According to multilevel regression modelling on European Social Survey (2010) data on employed individuals, women and men with more egalitarian gender attitudes in general have higher achievement motivation and are more likely to be able to influence policy decisions in their organisations. The impact of achievement motivation on the possibility to influence decisions was very strong in all the countries. The models with cross-level interaction showed that in most cases the association between the three aspects are more pronounced in countries with higher female participation in the labor market.
    Keywords: Gender attitudes, gender differences, achievement motivation, cross-country analysis, labour market
    JEL: Z
    Date: 2019
  10. By: Era Dabla-Norris; Carlo Pizzinelli; Jay Rappaport
    Abstract: This paper uses a life-cycle framework to document new stylized facts about the nexus between job polarization and earnings inequality. Using quarterly labor force data for the UK over the period 2000-2018, we find clear life-cycle profiles in the probability of being employed within each occupation type and wages earned therein. Cohort plots and econometric analysis suggest that labor market outcomes and prospects have gradually worsened for the young. These adverse trends are particularly significant for low-skill women: estimated cohort effects point to a fall in wages within each occupation as well as a lower propensity of being employed in abstract-task occupations. We also find evidence of general occupational downgrading in the UK, with more educated workers taking up fewer high-skill occupations than they did in the past. Our analysis informs the policy debate over appropriate measures needed to reduce skill mismatches and alleviate labor market transitions.
    Date: 2019–10–11
  11. By: Mathieu Gomes (CleRMa - Clermont Recherche Management - Clermont Auvergne - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)
    Abstract: We examine the impact of corporate social responsibility (CSR) on mergers and acquisitions (M&A) target choices. We offer evidence that CSR performance of firms matter for M&A acquirers. Indeed, our results based on 608 deals between 2003 and 2014 reveal that target firms have on average higher CSR scores than similar non-target firms. We also show directly that a firm's CSR is positively associated with its propensity to become a M&A target. These results hold for all CSR dimensions (environment, social, and governance). Overall, our results suggest that CSR matters in M&A decisions.
    Keywords: Corporate social responsibility,Mergers and acquisitions,Matched-pair analysis,Logistic regression
    Date: 2019–09–02
  12. By: Roberto Antonietti; Sandro Montresor
    Abstract: This paper investigates the role of Key Enabling Technologies (KETs) in the regional diversification of economic activities. We maintain that KETs drive different diversification trajectories, leading regions from the most conservative to the most radical pattern of diversification. Using an original dataset for Italian NUTS3 regions, we estimate a series of ordered logit models, in which a region’s propensity to move across industry diversification patterns depends on its KETs endowment. We find regions with more KETs better able to move towards more ‘unrelated’ diversification patterns, but only when KETs are combined with other technologies, and only in densely populated regions.
    Keywords: diversification patterns, Key Enabling Technologies, ordered logit
    JEL: R11 R58 O31 O33
    Date: 2019–10
  13. By: Redmond, Paul (ESRI, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin)
    Abstract: In general, women report greater job satisfaction than men. The existing literature cannot fully explain the nature of this difference, as the gap tends to persist even when controlling for job characteristics. In this paper, we study job satisfaction using recent data for 28 EU countries. Women, on average, are more satisfied than men and the gap remains even when we account for a wide range of personal, job and family characteristics. However, the gap disappears when we include job preferences, as women place greater importance on work-life balance and the intrinsic desirability of the work.
    Keywords: job satisfaction, job preferences, gender
    JEL: J16 J28 J24
    Date: 2019–10
  14. By: Chise, Diana (European Central Bank); Fort, Margherita (University of Bologna); Monfardini, Chiara (University of Bologna)
    Abstract: We provide novel evidence on the existence and the extent of intergenerational transmission of STEM (Science, Technology, Engineering and Mathematics) education using a recent large administrative dataset of Italian graduates obtained from the Almalaurea data. Parental influence on two STEM educational outcomes (high school and university degree completion) is strong and, net of student's time-invariant unobserved heterogeneity, proves to be stronger at the stage of the educational career closer to labour market entry. At this stage, the influence of fathers outweighs the one of mothers and is larger for sons than for daughters. The documented STEM intergenerational transmission is not driven by liberal profession of parents for most of STEM fields, while it is for some non-STEM fields (economic and legal studies), consistently with the presence of entry barriers in some professions.
    Keywords: gender, intergenerational transmission, parents, STEM
    JEL: J16 J24 I24
    Date: 2019–10
  15. By: A.O. Karas
    Abstract: Using rich administrative data from a small Dutch liberal arts college, I study how the number of students enrolled in a course affects student grades and course evaluations. To identify the causal effect I exploit variation in class size across parallel sections of the same course taught by the same instructor in the same semester. I show that class size has a stronger negative effect on student grades in mandatory courses compared to electives. I show similar results for various components of student course evaluations: perceived overall course quality, perceived amount learned, student participation and engagement. I interpret these findings to be consistent with class size affecting educational outcomes through student engagement.
    Keywords: Class size, Grades, Course evaluations, Student engagement
    Date: 2019–01
  16. By: Agarwal, Lisha (University of Padova); Brunello, Giorgio (University of Padova); Rocco, Lorenzo (University of Padova)
    Abstract: We estimate the effect of the high school curriculum (or track) on the returns to college using data from the Italian PLUS (Participation Labour and Unemployment Survey) survey. We find that college graduates with vocational high school are less likely to be employed than graduates with academic high school. When employed, they earn 7.3 percent less per hour but work 3.8 percent more hours per week. They are less likely to fill high ranked occupations and more likely to find their first job quickly after school completion than other graduates. The wage penalty associated to vocational education in high school is larger for females than for males and for those born in the less economically developed Southern regions.
    Keywords: high school curriculum, returns to college, Italy
    JEL: J24
    Date: 2019–10
  17. By: Carrasco, Raquel; Alonso-Borrego, César
    Abstract: This paper is concerned with the impact of intimate partner violence (IPV) against women on both the victims' health and the healthcare system. We address this issue using Spanish data for 2011. Given the lack of a single data set including complete individual-level information on IPV and healthcare use, we undertake a stepwise proce- dure using two complementary and compatible data sets: the Violence Against Women Survey and the National Health Survey. To address potential endogeneity issues, we estimate bivariate models of health status, IPV and healthcare use, exploiting exoge- nous sources of variation in the data. Our results indicate that IPV experience makes it 18 percentage points more likely to be in any of the three worst health states and that it increases the probability of hospitalization, emergency care and sedative and/or antidepressant consumption by 3:7, 7 and 9:8 percentage points, respectively. According to these estimates, the percentage of the total cost of each of these health services for adult women that could be saved in the absence of IPV is around 0:44% of hospitalization expenditure, 0:84% of emergency care expenditure, and 1:18% of the sedative consumption. These results point out that the costs of IPV are borne by the wider economy and society, not only by the victims, as they entail a signi cant drain on healthcare resources.
    Keywords: Endogeneity; Ordered Response; Medical Care Costs; Gender Inequality; Health; Intimate-Partner Violence
    JEL: C36 C35 C26 C25 C24 D19 J16 J12 I14
    Date: 2019–10
  18. By: Alex Bryson; Lucy Stokes; David Wilkinson
    Abstract: We consider the role played by school leaders in improving pupil attainment, going beyond previous studies by exploring the leadership roles of deputy and assistant heads and classroom-based teachers with additional leadership responsibilities. Using panel data for state-funded secondary schools in England for the period 2010/11-2015/16 we find academy schools typically employ more staff in leadership roles than community schools. Increases in the number of staff in leadership roles below headship level are associated, at least to some extent, with improved school performance in Single Academy Trusts, but this is not the case for schools that are part of Multi Academy Trusts. Our findings suggest that the potential benefits of distributing leadership within schools may only be realised when leaders have sufficient autonomy.
    Keywords: school performance, distributed leadership, leadership, school autonomy
    JEL: I21
    Date: 2019–10
  19. By: Seán Kennedy; David Haugh; Brian Stanley
    Abstract: While policymakers are rightly concerned about evidence of rising income concentration at the top, it is often wrongly assumed that the same rich individuals stay rich. In reality, the membership of this group are in a state of constant flux. This new study, based on more than 20 million tax records over 10 years, examines the highest income earners in Ireland but also who moves up and down the income ladder over time. While income inequality has increased in most OECD countries, in Ireland it has been broadly stable for most of the income distribution. The top 10% of income earners receive 1/3 of total income and pay around 2/3 of all income tax. Unlike other OECD countries, the top 1% has not expanded its gross income share, partly due to long range downward mobility during the recession for those with the highest incomes. Moreover, more progressive taxation has also reduced the top 1 per cent’s share of disposable income. This paper finds that income inequality increases with age and differs dramatically across economic sectors – the difference between the top 1% and the median is greatest in the professional, financial and health sectors. In the professional sector for example, the top 1% threshold is 12 times the median compared to 3 times in the public sector. The share of employment in these sectors has grown contributing to greater income inequality but also higher upward income mobility. Indeed, the analysis in the paper shows upward income mobility is higher for those working in finance, professional and technical occupations and among the young, those living in Dublin, and those changing jobs. Finally, there is also evidence that economic mobility has declined among median income classes over the past 10 years in Ireland – relatively fewer workers are now moving up or down the income ladder than before.
    Keywords: administrative data, growth, income distribution, income mobility, inequality, tax
    JEL: D31 D63 E24 H24
    Date: 2019–10–25
  20. By: Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Weissenberger, Martin (University of Potsdam)
    Abstract: From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from non-unemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix.
    Keywords: entrepreneurship, start-up subsidies, business growth, innovation, job creation
    JEL: L26 M13 J68
    Date: 2019–10
  21. By: Justin Van de Ven; Nicolas Herault
    Abstract: An issue of interest in the literature that explores the drivers of inequality is the distributional bearing of tax and transfer policy, where an important theme concerns changes in the relative treatment of alternative population subgroups. We develop an empirical approach for quantifying the value judgements implicit in the relative treatment of demographic subgroups by a tax and transfer system. We apply this approach to UK data reported at annual intervals between 1968 and 2015, documenting remarkable improvements in tax and transfer treatment enjoyed by some population subgroups – particularly families with children and age pensioners – relative to the wider population. We show that accounting for the changing value judgements implicit in tax and transfer policy provides a fresh perspective on the evolution of income inequality and redistribution; one that departs from the prevailing view that UK inequality stopped rising from the early 1990s.
    Keywords: equivalence scale, inequality, redistribution, horizontal equity
    JEL: D31 H23 I38
    Date: 2019–10
  22. By: Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Katherine Caves (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Maria Esther Oswald-Egg (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper analyzes whether and how attending an internship during tertiary education affects income. We address endogeneity with an IV approach that exploits information regarding whether the internship was a mandatory component of the study. We further address selection into programs with mandatory internship by using the share of mandatory internships at the closest university, exploiting the low mobility of Swiss students. The results suggest that doing an internship increases income. In contrast to the literature on internships we find that the effect mainly works by increasing human capital rather than through signaling, and mainly works through general rather than firm- or field-specific human capital.
    Keywords: Internship, Income, Human capital, Signaling, Soft skills, Experience
    JEL: I23 J01 J31
    Date: 2019–08
  23. By: Théo Nicolas
    Abstract: This paper investigates the real effects of short-term financial constraints in the light of the working capital channel: cash credit constraints may force SMEs to forgo investment opportunities in order to finance their working capital needs. Building on unique indicators of cash and investment credit constraints derived from survey data, I find that: (1) short-term credit constraints are as important as long-term ones in SMEs' investment decisions; (2) the detrimental effect of cash credit constraints on corporate investment is even stronger for firms with higher working capital needs; (3) the negative relationship between working capital and fixed investment is associated with short-term financial frictions; and (4) only liquid SMEs are able to offset short-term financial frictions by adjusting their accounts receivable and inventories.
    Keywords: : Investment, Bank credit, Financial constraints, Working capital, Survey data.
    JEL: D82 E32 E51 G01 G21
    Date: 2019
  24. By: Boyan KAVALOV (European Commission – JRC); Andrius KUCAS (European Commission – JRC); Filipe BATISTA E SILVA (European Commission – JRC); Mert KOMPIL (European Commission – JRC); Jean-Philippe AURAMBOUT (European Commission – JRC); Carlo LAVALLE (European Commission – JRC)
    Abstract: This study aims to add technical insights to the debate about overcoming the cross-border obstacles to growth and jobs in the EU internal border regions. It proposes new border geography by defining distinct drive time zones (30, 30-60, 60-90, 90+ minutes) to terrestrial paved border crossing points. The drive time zones are delineated by applying network analysis algorithms to the TomTom Multinet (2017) road network data, based on governing speed limits for passenger cars and assuming free-flow i.e. without congestions and/or border crossing delays. Paved bridges and river ferries are also included. At the next stage, the study looks at the population changes during the period 2001-2011 in the adjacent to the borders "30 minutes" drive time zones and compares these changes with the respective country population trends. The analysis encompasses thirty one couples of EU border areas and three complex border regions, where more than two EU border areas are included. The analysis is executed in the context of the Knowledge Centre for Territorial Policies (KCTP) of the European Commission.
    Keywords: Cross-border regions and cooperation, drive-time border zones, border population change
    Date: 2019–10
  25. By: Konrad, Kai A. (Max Planck Institute for Tax Law and Public Finance); Rees, Ray (University of Munich)
    Abstract: Some of the member states of the European Union sell citizenship or residence to wealthy foreign investors. We analyse these "golden-passport" programs as a study in the political economy of conflict and cooperation in an international meta-club. Seen through the lens of club goods theory, the EU is a club of nations, each of which can be interpreted as itself a club. Each single nation reserves the right to govern the admission of new individual members into its own club, and new members automatically benefit from the EU wide meta-club good. We characterize the unique equilibrium when individual clubs that may differ in membership size are free to choose the terms on which they admit members, and evaluate it from the point of view of the wellbeing of the set of clubs as a whole. We identify club size and benefits as well as differences in cost externalities as the key determinants. We also consider how the set of clubs as a whole can respond to the economic inefficiency problems such a situation creates.
    Keywords: club of clubs, membership rights, European Union, quotas
    JEL: F15 F53 H77
    Date: 2019–10
  26. By: Gomes, Pedro Maia (Birkbeck, University of London); Kuehn, Zoë (Universidad Autónoma de Madrid)
    Abstract: In most countries, the public sector hires disproportionally more women than men. We document gender differences in employment, transition probabilities, hours, and wages in the public and private sector using microdata for the United States, the United Kingdom, France, and Spain. We then build a search and matching model where men and women decide if to participate and if to enter private or public sector labor markets. We calibrate our model separately to the four countries. Running counterfactual experiments, we quantify whether the selection of women into the public sector is driven by: (i) lower gender wage gaps and thus relatively higher wages for women in the public sector, (ii) possibilities of better conciliation of work and family life for public sector workers, (iii) greater job security in the public compared to the private sector, or (iv) intrinsic preferences for public sector occupations. We find that, quantitatively, women's higher public sector wage premia and their preferences for working in the public sector explain most of the selection. We calculate the monetary value of public sector job security and work-life balance premia, for both men and women, and we estimate how higher public sector wages and employment affect male and female unemployment, inactivity rates, and wages differently.
    Keywords: public sector employment, female labor force participation, gender wage gap
    JEL: J21 J16 J45 H10 E60
    Date: 2019–10
  27. By: Fischer, Martin; Gerdtham, Ulf-G (Department of Economics); Heckley, Gawain (Department of Health Economics); Karlsson, Martin (Healf Economics); Kjellsson, Gustav (University of Gothenburg); Nilsson, Therese (Research Institute of Industrial Economics (IFN))
    Abstract: We investigate two parallel school reforms in Sweden to assess the long-run health effects of education. One reform only increased years of schooling, while the other increased years of schooling but also removed tracking leading to a more mixed socioeconomic peer group. By differencing the effects of the parallel reforms we can separate the effect of de-tracking and peers from that of more schooling. We find that the pure years of schooling reform reduced mortality and improved current health. Differencing the effects of the reforms shows significant differences in the estimated impacts, suggesting that de-tracking and subsequent peer effects resulted in worse health.
    Keywords: Health returns to education; School tracking; Peer effects
    JEL: I12 I18 I26
    Date: 2019–10–21
  28. By: Costa-Ramón, Ana; Kortelainen, Mika; Rodríguez-González, Ana; Sääksvuori, Lauri
    Abstract: This paper analyzes the long-term effects of potentially avoidable C-sections on children's health. Using Finnish administrative data, we document that physicians perform more unplanned C-sections during their regular working hours on days that precede a weekend or public holiday and use this exogenous variation as an instrument for C-sections. We supplement our instrumental variables results with a differences-in-differences estimation that exploits variation in birth mode within sibling pairs and across families. Our results suggest that avoidable unplanned C-sections increase the risk of asthma, but do not affect other immune-mediated disorders previously associated with C-sections.
    Keywords: c-section, child health, natural experiment, instrumental variables, family fixed effects, Local public finance and provision of public services, I10, I12, I18, J13,
    Date: 2019
  29. By: Stefano Castriota (University of Pisa, Italy); Mirco Tonin (Free University of Bolzano, Italy)
    Abstract: The empirical literature testing the economic theory of crime has extensively studied the relative importance of the probability and the severity of punishment with reference to planned criminal activities. There are, however, also unplanned crimes and in this paper we focus on a very serious and widespread one, hit-and-run road accidents. In fact, it is not only unplanned, but also largely committed by citizens without criminal records and the decision whether to stay or run must be taken within a few seconds. Using Italian data for the period 1996-2016, we rely on daylight as an exogenous source of variation affecting the probability of apprehension and find that the likelihood of hit-and-run conditional on an accident taking place increases by around 20% with darkness. Relying on two legislative reforms which increased the penalties in case of hit-and-run, we find no significant effect on drivers’ behavior. Our results show that criminal activities in unplanned circumstances and under intense time pressure and emotional distress are deterred more by the certainty rather than the severity of legal sanctions.
    Keywords: Crime, hit-and-run, road accidents, punishment
    JEL: D91 K14 K42 R41
    Date: 2019–10

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