nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2019‒12‒02
33 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Effect of Compulsory Schooling on Skills: Evidence from a Reform in Germany By Franziska Hampf
  2. Occupational Mobility in Europe: Extent, Determinants, and Consequences By Ronald Bachmann; Peggy Bechara; Christina Vonnahme
  3. One or many cohesion policies of the European Union?: on the differential economic impacts of Cohesion Policy across Member States By Crescenzi, Riccardo; Giua, Mara
  4. Do Start-Up Subsidies for the Unemployed Affect Participants' Well-Being? A Rigorous Look at (Un-)Intended Consequences of Labor Market Policies By Caliendo, Marco; Tübbicke, Stefan
  5. Parental Labour Supply Responses to the Abolition of Day Care Fees By Huebener, Mathias; Pape, Astrid; Spiess, C. Katharina
  6. Various Domains of Integration of Refugees and their Interrelationships: A Study of Recent Refugee Inflows in Austria By Michael Landesmann; Sandra M. Leitner
  7. Owners, external managers, and industrial relations in German establishments By Kölling, Arnd; Schnabel, Claus
  8. The Effect of Increasing the Early Retirement Age on Savings Behavior Before Retirement By Etgeton, Stefan; Fischer, Björn; Ye, Han
  9. The Baby Year Parental Leave Reform in the GDR and Its Impact on Children’s Long-Term Life Satisfaction By Katharina Heisig; Larissa Zierow
  10. Combined and Distributional Effects of EPL Reduction and Hiring Incentives: An Assessment Using Non-Linear DiD By Ardito, Chiara; Berton, Fabio; Pacelli, Lia
  11. Youth Drain Entrepreneurship and Innovation By Massimo Anelli; Gaetano Basso; Giuseppe Ippedico; Giovanni Peri
  12. Are Regional Differences in Personality and their Correlates robust? Applying Spatial Analysis Techniques to Examine Regional Variation in Personality across the U.S. and Germany By Tobias Ebert; Jochen E. Gebauer; Thomas Brenner; Wiebke Bleidorn; Samuel D. Gosling; Jeff Potter; P. Jason Rentfrow
  13. Labor Market Frictions and Lowest Low Fertility By Guner, Nezih; Kaya, Ezgi; Sánchez Marcos, Virginia
  14. Birth Order, Parental Health Investment, and Health in Childhood By Pruckner, Gerald J.; Schneeweis, Nicole; Schober, Thomas; Zweimüller, Martina
  15. Age takes hold of us by surprise: Conceptualising Vulnerabilities in Ageing as the Timing of Adverse Events By Vanhoutte, Bram
  16. The Myth of Equal Opportunity in Germany? By Valentina S. Consiglio; Denisa M. Sologon
  17. Trade shocks, product mix adjustment and productivity growth in Italian manufacturing By Maria Gabriela Ladu; Andrea Linarello; Filippo Oropallo
  18. Whose Realm, His Trust - Regional Disparities of Generalized Trust in Europe By Stephany, Fabian
  20. Does the Implementation of the Schengen Agreement Boost Cross-Border Commuting? Evidence from Switzerland By Parenti, Angela; Tealdi, Cristina
  21. Does austerity really kill? By Toffolutti, Veronica; Suhrcke, Marc
  22. Electoral Democracy at Work By Philippe Askenazy; Thomas Breda
  23. Retirement and Household Expenditure in Turbulent Times By Ioannis Laliotis; Mujaheed Shaikh; Charitini Stavropoulou; Dimitrios Kourouklis
  24. Impacts of hospital wait time on patient health and labor supply By Anna Godøy; Venke Furre Haaland; Ingrid Huitfeldt; Mark Votruba
  25. United in Diversity? An Empirical Investigation on Europe's Regional Social Capital By Braesemann, Fabian; Stephany, Fabian
  26. The Welfare Magnet Hypothesis: Evidence From an Immigrant Welfare Scheme in Denmark By Ole Agersnap; Amalie Sofie Jensen; Henrik Kleven
  27. Information Provision and Preferences for Education Spending: Evidence from Representative Survey Experiments in Three Countries By Cattaneo, Maria Alejandra; Lergetporer, Philipp; Schwerdt, Guido; Werner, Katharina; Woessmann, Ludger; Wolter, Stefan C.
  28. Job Quality in Economy for the Common Good Firms in Austria and Germany By Laia OLLÉ-ESPLUGA; Johanna MUCKENHUBER; Markus HADLER
  29. The Wealth of Parents: Trends over Time in Assortative Mating Based on Parental Wealth By Wagner, Sander; Boertien, Diederik; Gørtz, Mette
  30. Convenient primary care and emergency hospital utilisation By Pinchbeck, Ted
  31. The Effect of Citizenship on the Long-Term Earnings of Marginalized Immigrants: Quasi-Experimental Evidence from Switzerland By Hainmueller, Jens; Hangartner, Dominik; Ward, Dalston
  32. The Effect of Stressors and Resilience Factors on Mental Health of Recent Refugees in Austria By Isabella Buber-Ennser; Judith Kohlenberger; Michael Landesmann; Sebastian Leitner; Bernhard Rengs
  33. Children and gender inequality: evidence from Denmark By Kleven, Henrik; Landais, Camille; Søgaard, Jakob Egholt

  1. By: Franziska Hampf
    Abstract: Based on high-quality skill data from PIAAC, this paper provides evidence on the effect of schooling on labor-market relevant cognitive skills. For identification, I exploit the staggered introduction of a compulsory ninth grade in basic track schools across German states, as well as a simultaneous reform that introduced short school years to harmonize the start of the school year nation-wide. Instrumental-variable results suggest that the additional year of compulsory schooling increased numeracy skills of basic-track students by about 0.2 standard deviations. Using superior skill data, the results contrast with previous evidence of zero skill effects of compulsory schooling in Germany
    Keywords: Returns to education, compulsory schooling reform, skills, PIAAC
    JEL: I21 I24 C26
    Date: 2019
  2. By: Ronald Bachmann; Peggy Bechara; Christina Vonnahme
    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
  3. By: Crescenzi, Riccardo; Giua, Mara
    Abstract: To what extent do regions in different member states of the European Union benefit from Cohesion Policy? A spatial regression discontinuity design approach offers distinct but fully comparable estimates of regional impacts for each individual member state. Cohesion Policy has a positive European Union-wide impact on regional growth and employment. However, a large part of the growth bonus is concentrated in Germany, while impacts on employment are confined to the UK. The picture in Southern Europe is less rosy. In Italy, positive impacts on employment do not survive the Great Recession, while in Spain economic growth benefits are limited to the recovery period.
    Keywords: Cohesion policy; European Union; Regions; Growth; employment; ES/M010341/1; Centre for Economic Performance
    JEL: O18 R11 R58
    Date: 2019–10–04
  4. By: Caliendo, Marco (University of Potsdam); Tübbicke, Stefan (University of Potsdam)
    Abstract: We estimate the long-term effects of start-up subsidies (SUS) for the unemployed on subjective outcome indicators of well-being, as measured by the participants' satisfaction in different domains. This extends previous analyses of the current German SUS program ("Gründungszuschuss") that focused on objective outcomes – such as employment and income – and allows us to make a more complete judgment about the overall effects of SUS at the individual level. This is especially important because subsidizing the transition into self-employment may have unintended adverse effects on participants' well-being due to its risky nature and lower social security protection, especially in the long run. Having access to linked administrative-survey data providing us with rich information on pre-treatment characteristics, we base our analysis on the conditional independence assumption and use propensity score matching to estimate causal effects within the potential outcomes framework. We find long-term positive effects on job satisfaction but negative effects on individuals' satisfaction with their social security situation. Further findings suggest that the negative effect on satisfaction with social security may be driven by negative effects on unemployment and retirement insurance coverage. Our heterogeneity analysis reveals substantial variation in effects across gender, age groups and skill levels. The sensitivity analyses show that these findings are highly robust.
    Keywords: start-up subsidies, propensity score matching, counterfactual analysis, well-being
    JEL: C14 L26 H43 I31 J68
    Date: 2019–11
  5. By: Huebener, Mathias (DIW Berlin); Pape, Astrid (affiliation not available); Spiess, C. Katharina (DIW Berlin)
    Abstract: This paper provides evidence that low private contributions to highly subsidised day care constrain mothers from working longer hours. We study the effects of a reform that abolished day care fees in Germany on parental labour supply. The reform removed private contributions to highly subsidised day care in the year before children enter primary school. We exploit the staggered reform across states with a difference-in-differences approach and event studies. Although participation in day care is almost universal for preschoolers, we provide evidence that the reform increases the intensity of day care use and the working time of mothers by about 7.1 percent. Single mothers, mothers with no younger children, mothers in denser local labour markets, and highly educated mothers react strongest. We find no evidence for labour supply responses at the extensive margin, and no evidence of responses in paternal labour supply. The effects on maternal labour supply fade-away by the end of primary school as mothers in the control group also gradually increase their labour supply as their children grow older.
    Keywords: labour supply, child care costs, difference-in-differences, event study
    JEL: J13 J22 J38
    Date: 2019–11
  6. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper addresses the complexity of, and the interrelationships between, two important aspects of integration of refugees in Austria, namely labour market integration and social integration. While labour market integration is captured in terms of being employed as compared to being unemployed or inactive, social integration distinguishes between social networks and their ethnic composition and social capital. It identifies the key determinants of each of these domains of integration and investigates the direction as well as the size of interdependencies among them. The analysis uses a unique dataset built on the basis of a survey of about 1,600 refugees from Syria, Iraq, Afghanistan and Iran who had come to Austria since 2010. The analysis establishes an important causal link between social integration and labour market integration (i.e. employment). Both social network effects with Austrians as well as with co-ethnics are important in this context but the former is more powerful than the latter. It shows that both education and length of stay are key determinants of successful labour market integration. Furthermore, tests regarding the relevance of language command for both social and labour market integration show the strong importance of speaking and understanding German, and much less so, of writing German. Disclaimer Research for this paper was financed by the Anniversary Fund of the Oesterreichische Nationalbank (Project No. 17166). Support provided by Oesterreichische Nationalbank for this research is gratefully acknowledged.
    Keywords: social integration, labour market integration, refugees, migration
    JEL: J60 J15 Z10
    Date: 2019–11
  7. By: Kölling, Arnd; Schnabel, Claus
    Abstract: Using data from the representative IAB Establishment Panel in Germany and estimating a panel probit model with fixed effects, this paper finds a negative relationship between the existence of owner-management in an establishment and the probabilities of having a works council or a collective bargaining agreement. We show that family firms which are solely, partially or not managed by the owners significantly differ in the presence of works councils and collective bargaining agreements. The probabilities of having works councils and collective agreements increase substantially if just some of the managers do not belong to the owner family. We argue that these differences cannot simply be attributed to an aversion of the owners against co-determination and unions but require taking account of the notion of socio-emotional wealth prevalent in family firms. In addition, our results support the idea that external managers mainly act as agents rather than stewards in family firms.
    Keywords: industrial relations,co-determination,works council,collective agreement,family firm,Germany
    JEL: J53 M54 G32
    Date: 2019
  8. By: Etgeton, Stefan (Federal Ministry of Labor and Social Affairs (BMAS), Germany); Fischer, Björn (DIW Berlin); Ye, Han (University of Mannheim)
    Abstract: Facing a reduction in pension generosity, individuals can compensate the loss by working longer or saving more. This paper shows that the impact of changes in pension generosity on saving crucially depends on the possibility of prolonging future employment. Exploiting across cohort variation in expected pension wealth induced by a 3-year lift in early retirement age for women born after 1951 in Germany, we show evidence of a reduction in private savings rate and an increase in leisure consumptions in case of strong responses in future labor earnings.
    Keywords: pension reform, early retirement age, savings, pension wealth
    JEL: D14 J14 J26
    Date: 2019–11
  9. By: Katharina Heisig; Larissa Zierow
    Abstract: This article investigates the effects of an increase in paid parental leave — twelve months instead of six months — on children’s long-term life satisfaction. The historical setting under study, namely the former German Democratic Republic (GDR), allows us to circumvent problems of selection of women into the labor market and an insufficient or heterogeneous non-parental child care supply, which are issues many other studies on parental leave reforms face. Using data from the German Socio-Economic Panel (SOEP) we analyze the birth cohorts from 1980 to 1989 at adult age, and apply a difference-in-difference design making use of the very specific timing of the GDR’s parental leave reforms in 1976 and 1986. We find significant and robust positive parental leave effects on life satisfaction. We also analyze whether the increase in life satisfaction is driven by a positive development of personality, health factors, schooling or labor market outcomes. Our results suggest that the increase in life satisfaction might be partially explained by personality development for individuals from low socioeconomic backgrounds and boys. For individuals from high socioeconomic backgrounds, it might be driven by a better health.
    Keywords: parental leave, child care, child development, well-being, happiness, socio-emotional development
    JEL: J13 J22 I31
    Date: 2019
  10. By: Ardito, Chiara (University of Turin); Berton, Fabio (University of Turin); Pacelli, Lia (University of Turin)
    Abstract: Two decades of unsuccessful marginal labour market reforms provided the political support to reduce the flexibility gap between temporary and open-ended workers by means of a retrenchment of the employment protection benefitting the latter. To support employment levels during the crisis years, these policies have generally been combined with generous employment subsidies. While the theoretical and empirical literature on the two interventions taken in isolation appears generally abundant, almost nothing is known when they come combined. Analogously, no evidence is available about their distributional effects. This paper aims at filling these two gaps by means of non-linear difference-in-differences duration models estimated on high-frequency employer-employee linked Italian data. Taking advantage of the quasi-experimental conditions set by the Italian "Jobs Act", we find that large firms are less sensitive than small ones to hiring subsidies, unless they come combined with lower firing costs. Small firms substitute temporary for permanent employment, while larger ones do not seem to give up on fixed-term contracts, possibly as a probationary period. The reforms have benefitted domestic workers over foreigners, and those with a lower or more general human capital. No gender effects emerge.
    Keywords: employment protection legislation, hiring incentives, non-linear DiD, duration models, impact evaluation, jobs act
    JEL: J08 J63
    Date: 2019–11
  11. By: Massimo Anelli (Bocconi Univerity); Gaetano Basso (Bank of Italy); Giuseppe Ippedico (University of California, Davis); Giovanni Peri (University of California, Davis)
    Abstract: Migration outflows, especially of young people, may deprive an economy of entrepreneurial energy and innovative ideas. We exploit exogenous variation in emigration from Italian local labor markets to show that between 2008 and 2015 larger emigration flows reduced firm creation. The decline affected firms owned by young people and innovative industries. We estimate that for every 1,000 emigrants, 100 fewer young-owned firms were created cumulatively over the whole period. A simple accounting exercise shows that about 60 percent of the effect is generated simply by the loss of young people; the remaining 40 percent is due to a combination of selection of emigrants among highly entrepreneurial people, negative spillovers on the entrepreneurship rate of locals, and negative local firm multiplier effect.
    Keywords: emigration, demography, brain drain, entrepreneurship, innovation
    JEL: J61 H7 O3 M13
    Date: 2019–10
  12. By: Tobias Ebert (University of Mannheim); Jochen E. Gebauer (University of Mannheim, University of Copenhagen); Thomas Brenner (Philipps-University Marburg); Wiebke Bleidorn (University of California at Davis); Samuel D. Gosling (University of Texas at Austin, University of Melbourne); Jeff Potter (Atof Inc., Cambridge, MA.); P. Jason Rentfrow (University of Cambridge)
    Abstract: There is growing evidence that personality traits are spatially clustered across geographic regions and that regionally aggregated personality scores are related to political, economic, social, and health outcomes. However, much of the evidence comes from research that has relied on methods that are ill-suited for working with spatial data. Consequently, the validity and generalizability of that work is unclear. The present work addresses two main challenges of working with spatial data (i.e., Modifiable Aerial Unit Problem and spatial dependencies) and evaluates data-analytic techniques designed to tackle those challenges. Using analytic techniques designed for spatial data, we offer a practical guideline for working with spatial data in psychological research. Specifically, we investigate the robustness of regional personality differences and their correlates within the U.S. (Study 1: N = 3,387,303) and Germany (Study 2: N = 110,029). To account for the Modifiable Aerial Unit Problem, we apply a mapping approach that visualizes distributional patterns without aggregating to a higher level and examine the correlates of regional personality scores across multiple levels of spatial aggregation. To account for spatial dependencies, we examine the correlates of regional personality scores using spatial econometric models. Overall, our results suggest that regional personality differences are robust and can be reliably studied across countries and spatial levels. At the same time, the results also show that ignoring the methodological challenges of spatial data can have serious consequences for research concerned with regional personality differences.
    Keywords: Geographical Psychology, Personality, Spatial Analysis
    Date: 2019–11
  13. By: Guner, Nezih (CEMFI, Madrid); Kaya, Ezgi (Cardiff University); Sánchez Marcos, Virginia (Universidad de Cantabria)
    Abstract: The total fertility rate is well below its replacement level of 2.1 children in high- income countries. Why do women choose such low fertility levels? We study how labor market frictions affect the fertility of college-educated women. We focus on two frictions: uncertainty created by dual labor markets (the coexistence of jobs with temporary and open-ended contracts) and inflexibility of work schedules. Using rich administrative data from the Spanish Social Security records, we show that women are less likely to be promoted to permanent jobs than men. Temporary contracts are also associated with a lower probability of first birth. With Time Use data, we also show that women with children are less likely to work in jobs with split-shift schedules, which come with a fixed time cost. We then build a life-cycle model in which married women decide whether to work or not, how many children to have, and when to have them. In the model, women face a trade-off between having children early and waiting and building their careers. We show that reforms that reduce the labor market duality and eliminate split-shift schedules increase the completed fertility of college-educated from 1.52 to 1.88. These reforms enable women to have more children and have them early in their life-cycle. They also increase the labor force participation of women and eliminate the employment gap between mothers and non-mothers.
    Keywords: fertility, labor market frictions, temporary contracts, split-shift schedules
    JEL: E24 J13 J21 J22
    Date: 2019–11
  14. By: Pruckner, Gerald J. (University of Linz); Schneeweis, Nicole (University of Linz); Schober, Thomas (University of Linz); Zweimüller, Martina (University of Linz)
    Abstract: This paper provides a comprehensive analysis of the relationship between birth order, health at birth and in childhood, and parental health investment using administrative data from Austria. We find significant birth order effects on health at birth and in primary school. These effects are positive, in that later-born siblings are healthier than the first-born child, and increase with birth order. Consequently, first-born children are more likely to consume medical drugs and to utilize medical services. We also find differences in parental health investment. First-born children are more likely to receive preventive medical care and immunization against measles, mumps, and rubella.
    Keywords: birth order, parental health investment, parental health behavior, health at birth, health in childhood, health care utilization, vaccinations
    JEL: I10 I12 I14 J12 J13
    Date: 2019–11
  15. By: Vanhoutte, Bram
    Abstract: Objectives Ageing in the public eye can be distilled to a limited number of adverse events, such as loss of health, partnership and wealth. While these events are a constitutive part of “normal ageing”, they do not occur uniformly at the same time point in the life course. This study investigates to what extent bereavement, functional health loss and onset of poverty are adequate markers of ageing, and illustrates inequalities in their timing according to cohort, gender, class and ethnicity. Methods Data of the English Longitudinal Study of Ageing (ELSA), collected over 7 waves (2002-2016) (n=7913) are examined using survival analysis. Results Persistent associations of manual or routine occupational class and belonging to an ethnic minorities are found with increased hazards of health loss, bereavement and wealth loss. Later born cohorts have higher health loss hazards as well as lower hazards for wealth loss, while earlier born cohorts have lower hazards for bereavement. Gender effects are pronounced in terms of bereavement, limited in terms of health loss and absent in terms of wealth loss. Discussion The timing of adverse events is a crucial gateway through which existing social inequalities are transferred into unequal ageing pathways.
    Date: 2019–02–06
  16. By: Valentina S. Consiglio; Denisa M. Sologon
    Abstract: Providing equal opportunities to all members of society independent of an individual’s socio-economic background is a major objective of German policy makers. However, evidence on the access to education suggests that opportunities of children with a non-academic family background are still unequally obstructed. When analysing the labour market implications of this social disadvantage in human capital, social capital as an additional source of inequality often lacks attention. Drawing on the instrumental value of rather loose contacts (i.e. weak ties) on the labour market as revealed by Mark Granovetter (1974), this research paper goes beyond the human capital approach and includes a measure of instrumental social capital in the form of weak-tie career support in the earnings function. We shed light on the structure of the wage gap between those with and without an academic family background and complement an Oaxaca-Blinder decomposition with quantile regressions to analyse potential capital and return deficits separately. We find that a significant part of the wage gap can be explained by deficits that those from less educated families incur with respect to human and instrumental social capital. While the capital deficit due to educational attainment is larger, a non-academic family background is further associated with a significant deficit in returns to instrumental social capital at some parts of the distribution. As this suggests inequalities of opportunity on the German labour market to occur along the lines of parental education even beyond the education system, it urges policy makers to consider designing equality measures that do the same.
    Keywords: wage gap, (non-)academic family background, German labour market, Oaxaca-Blinder decomposition, quantile regression, human capital, instrumental social capital
    JEL: I24 J31 J62
    Date: 2019
  17. By: Maria Gabriela Ladu (University of Sassari and ISTAT); Andrea Linarello (Bank of Italy); Filippo Oropallo (ISTAT)
    Abstract: In this paper we use firm-level data on the universe of Italian manufacturing multi-product exporters to test whether demand shocks in export markets lead multi-product exporters to increase their productivity. The main mechanism behind the documented productivity gains is the reallocation of resources across products within firms (Mayer et al., 2014 and 2016). Intuitively, the increased demand stemming from foreign markets will induce firms to adjust their product-mix by moving inputs from low to high productive/profitable uses. We find that these productivity gains are significant and account for about 30 per cent of aggregate productivity growth in the manufacturing sector.
    Keywords: Italian manufacturing sector, export, trade shocks, productivity
    JEL: D22 F14
    Date: 2019–10
  18. By: Stephany, Fabian
    Abstract: Trust explains the functioning of markets, institutions or society as a whole. It is a key element in almost every commercial transaction over time and might be one of the main explanations of economic success and development. In Europe, the determinants of (generalized) trust have been investigated in the past. Most scholars have focused on aggregate (national) levels of trust. However, it can be assumed that driving forces, which foster or diminish trust, act at a sub-national level. Regional clusters remain undetected. With the use of the European Social Survey 6 and modern spatial diagnostics, this work examines the individual and regional determinants of trust in 88 European NUTS1 regions in 26 countries. There are two main findings. First, wealth, linguistic fragmentation, and religious ideologies shape trust on a regional level, education, income, and membership in associations foster trust on an individual level. Secondly, the study unravels regional dispersions in different types of "trust regimes" in Europe. Regional clusters of generalized trust are confirmed by spatial diagnostics. The "regionality" of trust could be of importance for future targeted policy making.
    Date: 2019–08–25
  19. By: Claudia Pigini (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); Stefano Staffolani (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche)
    Abstract: A recent reform in the Italian labour market has modified the permanent contract by reducing firing costs. Using a discontinuity in the application of the reform, we evaluate its the effect on the probability of being still employed 600 days later. In contrast with theoretical predictions, we find that the job survival probability is not smaller for the treated and even significantly larger in some cases. We investigate the composition of permanent workers hired after the reform, as we find evidence of treated firms hiring workers eligible for a significant reduction of non-wage labour costs.
    Keywords: Keywords: Deregulation, Employment Protection Legislation, Graded Security, Open-Ended Contracts
    JEL: J23 J30 J41
    Date: 2019–11
  20. By: Parenti, Angela (University of Pisa); Tealdi, Cristina (Heriot-Watt University, Edinburgh)
    Abstract: In this paper we study the effects of Switzerland implementing the Schengen agreement on cross-border commuting from regions of neighbouring countries. As vehicles are allowed to cross borders without stopping and residents in border areas are granted freedom to cross borders away from fixed checkpoints, commuting costs are severely reduced. Using data from the European Labour Force Survey, we estimate that the individual probability to cross-border commute to Switzerland in response to this policy has increased among inter-regional commuters in the range between 3 and 6 percentage points, according to different model specifications. Our result is particularly important due the meaningful policy implications, in a time in which the Schengen agreement is under scrutiny and at risk of termination.
    Keywords: Schengen agreement, labour mobility, commuting costs, policy change
    JEL: D04 J61 R10 R23
    Date: 2019–11
  21. By: Toffolutti, Veronica; Suhrcke, Marc
    Abstract: A growing body of the literature has argued that austerity has been bad for health, though without directly measuring austerity. This paper explicitly distinguishes the association of mortality with macroeconomic fluctuations from that with fiscal policy measures, using data for 28 European Union (EU) countries covering the period 1991-2013. The main results present a nuanced, complex picture about the mortality impact of fiscal policies. We confirm the mortality decreasing (increasing) effect of recessions (booms), with the exception of suicide mortality, which shows the opposite effects. Austerity regimes are associated with an increase in all-cause mortality (0.7%). At the same time, fiscal stimuli tend to significantly increase death rates due to cirrhosis or chronic liver disease (3%) and those due to vehicle accidents (4.3%). Overall, the results appear to be sensitive to the set of countries included: when excluding the Baltics, Romania and Hungary, austerity policies turn out to significantly increase suicide-related mortality (2.8%), while the effect on all-cause mortality remains the same (0.7%).
    Date: 2019–03–08
  22. By: Philippe Askenazy (CMH - Centre Maurice Halbwachs - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Thomas Breda (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We evaluate the short- to medium-run effects on unionization and employers' and workers' trust in unions, of an important reform of French employment relations in 2008. This reform made the conditions for union recognition more liberal and democratic after 2008 in private firms with 11 employees or more. The law gave equal chances to all unions to be recognized for bargaining, putting an end to the quasi-monopoly given to five historical unions until then. The law also introduced votes and minimal electoral requirements to obtain union recognition. These new regulations only became fully effective at the first firms' work councils elections happening after January 1st, 2009. Those elections occur within each firm according to a pre-defined frequency - usually every four years -, so that election dates only depend on former election dates, and can be considered as quasi-random with respect to the application date of the new law, at least in firms that are old enough. The identification thus relies on a regression discontinuity design in which the running variable is the firms' work councils election date: we compare in early 2011 firms that had those elections just before or just after January 1st, 2009. We find that the democratic rules introduced in 2008 quickly improved employers' satisfaction and trust towards unions by around 45% of a standard deviation. Union coverage and membership at the establishment level also increased strongly due to the reform and work stoppages became more likely. Together, these results suggest that the introduction of electoral democracy in French firms managed to improve workers' participation in unions and their ability to voice concerns while also improving employers' opinions of unions.
    Keywords: Union Representativeness,Democracy,Unionization,Social Capital
    Date: 2019–07
  23. By: Ioannis Laliotis; Mujaheed Shaikh; Charitini Stavropoulou; Dimitrios Kourouklis
    Abstract: We examine the impact of own and spousal retirement on household expenditure during a period of financial deterioration. We use detailed household data covering the period 2009- 2016 in Greece, during which the country experienced a severe financial crisis that affectedretirees in ways that were not anticipated. Similar to Moreau and Stancanelli (2015) our empirical strategy allows for the household expenditure to depend on both own and spousalretirement status. We employ an instrumental variable identification strategy by exploiting variation coming from the early retirement age threshold. Our Two-Stage Least Squaresestimates show that, even after controlling for income, total expenditure drops significantly when the husband retires and as he becomes older. The reduction is stronger in 2010, when the first wave of austerity plans, including measures affecting pensioners were announced, and after 2014 when horizontal pension cuts were implemented. Expenditure does not change significantly when the wife retire neither the older she gets. A drop-in expenditure for clothing, transport, housing and communication drives the overall reduction in expenditure. Overall, our results can have significant policy implications in the design of structural pension reforms in a period of financial hardship.
    Keywords: Retirement, Household Expenditure, Crisis, Greece
    Date: 2019–06
  24. By: Anna Godøy; Venke Furre Haaland; Ingrid Huitfeldt (Statistics Norway); Mark Votruba
    Abstract: We estimate the effects of wait time for orthopedic surgery on health and labor market outcomes of Norwegian workers. Our identification strategy exploits variation in wait times for surgery generated by the idiosyncratic variation in system congestion at the time of referral. While we find no significant evidence of lasting health effects, longer wait times have persistent negative effects on subsequent labor supply. For every 10 days spent waiting for surgery, we estimate health-related workplace absences increase 8.7 days over the five years following referral, and the likelihood of permanent disability insurance increases by 0.4 percentage point. Cost benefit calculations point to sizable fiscal savings from shorter wait times.
    Keywords: Wait time; queues; hospital treatment; health outcomes; labor market attachment; sickness absence
    JEL: I12 J32
    Date: 2019–11
  25. By: Braesemann, Fabian; Stephany, Fabian
    Abstract: Aiming to explain the European divide with respect to social and political values, scholars in the past have relied on a simplified four- (or even two-) dimensional regime model which tranches the continent according to the social capacities of its inhabitants. This "cartography" of "Social Europe" proves to be outdated by the results presented in this study which re-measures the social capital landscape in Europe. In this work, we apply a factor analysis model to the most commonly used approximations of social capital on the European Social Survey. In addition, we explore, as a novelty in social capital literature, a classification tree to model generalized trust. The analysis shows that three distinct dimensions of social capital measures are important in Europe: additionally to generalised social capital, which is usually approximated by generalised trust, there is one dimension of civic engagement and one of communitarian values. This distinction leads to a new social landscape of Europe, which highlights the relevance of considering regional and cross-border clusters in all relevant social capital dimensions.The results of the non-parametric model reveal that Protestantism and education are good benchmarks to classify trust on an individual level. Based on these findings we argue for the necessity of policies with a regional focus that take the different sub-national structures of social capacity in Europe into account. We re-measure the European Social Capital landscape using current data and provide a novel non-parametrical statistical method from data science for this purpose.
    Date: 2019–08–25
  26. By: Ole Agersnap; Amalie Sofie Jensen; Henrik Kleven
    Abstract: We study the effects of welfare generosity on international migration using a series of large changes in welfare benefits for immigrants in Denmark. The first change, implemented in 2002, lowered benefits for immigrants from outside the EU by about 50%, with no changes for natives or immigrants from inside the EU. The policy was later repealed and re-introduced. The differential treatment of immigrants from inside and outside the EU, and of different types of non-EU immigrants, allows for a quasi-experimental research design. We find sizeable effects: the benefit reduction reduced the net flow of immigrants by about 5,000 people per year, or 3.7 percent of the stock of treated immigrants, and the subsequent repeal of the policy reversed the effect almost exactly. Our study provides some of the first causal evidence on the widely debated “welfare magnet” hypothesis. While there are many non-welfare factors that matter for migration decisions, our evidence implies that, conditional on moving, the generosity of the welfare system is important for destination choices.
    JEL: H20 H31 J61
    Date: 2019–11
  27. By: Cattaneo, Maria Alejandra (Swiss Co-ordination Center for Research in Education); Lergetporer, Philipp (Ifo Institute for Economic Research); Schwerdt, Guido (University of Konstanz); Werner, Katharina (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research); Wolter, Stefan C. (University of Bern)
    Abstract: Do differences in citizens' policy preferences hamper international cooperation in education policy? To gain comparative evidence on public preferences for education spending, we conduct representative experiments with information treatments in Switzerland using identical survey techniques previously used in Germany and the United States. In Switzerland, providing information about actual spending and salary levels reduces support for increased education spending from 54 to 40 percent and for increased teacher salaries from 27 to 19 percent, respectively. The broad patterns of education policy preferences are similar across the three countries when the role of status-quo and information are taken into account.
    Keywords: policy preferences, cross-country comparison, international cooperation, Switzerland, Germany, United States, education spending, information, survey experiments
    JEL: H52 I22 D72 D83
    Date: 2019–11
  28. By: Laia OLLÉ-ESPLUGA (Department of Sociology, University of Graz (Austria)); Johanna MUCKENHUBER (Department of Social Work, FH Joanneum, Graz (Austria)); Markus HADLER (Department of Sociology, University of Graz (Austria))
    Abstract: The Economy for the Common Good (ECG) pursues an alternative economic model built on values oriented to the common welfare such as human dignity, solidarity, ecological sustainability, social justice, transparency and democratic participation. The principles endorsed by the ECG coincide with those of the social economy as it promotes a system in which the motivation of economic competition is replaced by cooperation so that the collective interest and common good is put above companies’ profits. (High) quality of work plays an important role in the ECG. The main points of its work-related values can be summarised by the willingness to elude discrimination and employment precariousness; the encouragement of information and worker participation; and the promotion of beneficial psychosocial factors at work. However, there is scarce knowledge on the actual labour conditions of workers employed in such type of firms. Thus, in this paper, our goal is to describe the quality of jobs in companies following the Economy for the Common Good in Austria and Germany, the countries where this economic model is most widespread. Using data published in the Common Good Balances reports available on the ECG website1, we extracted data informing about job quality at an organisational level of 59 firms with at least 5 employees in Austria and Germany. Although the breadth and depth of the information collected in the Common Good Balances reports is variable, results suggest a widespread presence of elements of good quality of work: limited use of precarious employment arrangements (yet, thorough information about fixedterm contracts is lacking), provision of training and a decent degree of decisionmaking autonomy. Direct participation practices are more prevailing than representative participation forms.
    Keywords: Economy for the Common Good, job quality, Austria, Germany
    JEL: P49 J81 J82
    Date: 2019
  29. By: Wagner, Sander; Boertien, Diederik; Gørtz, Mette
    Abstract: This paper presents trends in parental wealth homogamy across union cohorts formed between 1987 and 2013 in Denmark. Using high-quality register data on the wealth of parents during the year of partnering through cohabitation or marriage, we show that the correlation between partners’ levels of parental wealth is considerably lower compared to estimates from earlier research on other contexts. Nonetheless, parental wealth homogamy is high at the very top of the parental wealth distribution, and individuals from wealthy families are relatively unlikely to partner individuals from families with low wealth. Even though conclusions regarding trends in parental wealth homogamy depend on methodological choices made, most specifications indicate an increase in homogamy in the 2000s as compared to the 1990s. This raises concerns about the consequences of changes in partnering behavior for wealth inequality between households and social boundaries between groups based on parental wealth and particularly between the wealthiest individuals in society and the rest of the population.
    Date: 2019–03–28
  30. By: Pinchbeck, Ted
    Abstract: Participation and utilisation decisions lie at the heart of many public policy questions. I contribute new evidence by using hospital records to examine how access to primary care services affects utilisation of hospital Emergency Departments in England. Using a natural experiment in the roll out of services, I first show that access to primary care reduces Emergency Department visits. Additional strategies then allow me to separate descriptively four aspects of primary care access: proximity, opening hours, need to make an appointment, and eligibility. Convenience-oriented services divert three times as many patients from emergency visits, largely because patients can attend without appointments.
    Keywords: Primary care; Emergency care; Access; Utilisation decisions; RES-591-28-0001
    JEL: I11 I12 I18 D12
    Date: 2019–10–09
  31. By: Hainmueller, Jens; Hangartner, Dominik; Ward, Dalston
    Abstract: We provide evidence that citizenship catalyzes the long-term economic integration of immigrants. Despite the relevance of citizenship policy to immigrant integration, we lack a reliable understanding of the economic consequences of acquiring citizenship. To overcome non-random selection into naturalization, we exploit the quasi-random assignment of citizenship in Swiss municipalities that held referendums to decide the outcome of individual naturalization applications. Our data combines individual-level referendum results with detailed social security records from the Swiss authorities. This allows us to compare the long-term earnings of otherwise similar immigrants who barely won or lost their referendum. We find that winning Swiss citizenship in the referendum increased annual earnings by an average of approximately 5,000 U.S. dollars over the subsequent 15 years. This effect is concentrated among more marginalized immigrants.
    Date: 2019–02–14
  32. By: Isabella Buber-Ennser; Judith Kohlenberger; Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Bernhard Rengs
    Abstract: Given the exposure to stressors in their home countries, during their migration and in the phase after arrival, refugees are particularly vulnerable to mental health problems. At the same time, their access to adequate healthcare and other social infrastructure might be hampered by factors such as lack of knowledge as well as cultural and language barriers. In addition to other factors, this reduces their ability to take part in social activities as well as their integration into the labour market of the host societies. We examine the prevalence of mental disorders in the refugee population from Afghanistan, Iraq and Syria who arrived in Austria recently, drawing on data from a refugee survey conducted between December 2017 and April 2018 in Austria with a specific focus on Vienna, Salzburg, Graz, Linz and Innsbruck (FIMAS+INTEGRATION). We found a high share of refugees (32%) to have moderate or severe mental health problems. In particular, young refugees (15-34 years) show higher risk levels. When investigating the effects of stressors on the mental health situation, we found a positive association with e.g. experienced discrimination in Austria and the fear for partners and children left behind. In contrast, the results show a negative correlation for a couple of mitigating factors that foster resilience, i.e. proficiency in the German language, being employed (including volunteer work), having more supportive relationships and satisfaction with the housing situation. Disclaimer Research for this paper was financed by the Anniversary Fund of the Oesterreichische Nationalbank (Project No. 17166). Support provided by Oesterreichische Nationalbank for this research is gratefully acknowledged.
    Keywords: refugees, mental health, social integration, labour market integration
    JEL: I10 J15 F22
    Date: 2019–11
  33. By: Kleven, Henrik; Landais, Camille; Søgaard, Jakob Egholt
    Abstract: Using Danish administrative data, we study the impacts of children on gender inequality in the labor market. The arrival of children creates a long-run gender gap in earnings of around 20 percent driven by hours worked, participation, and wage rates. We identify mechanisms driving these "child penalties" in terms of occupation, sector, and firm choices. We find that the fraction of gender inequality caused by child penalties has featured a dramatic increase over the last three to four decades. Finally, we show that child penalties are transmitted through generations, from parents to daughters, suggesting an influence of childhood environment on gender identity.
    Keywords: 679704-DYNAMICSS
    JEL: D63 J13 J16 J22 J31 J71
    Date: 2019–10–01

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.