|
on Microeconomic European Issues |
|
Issue of 2019‒12‒23
nineteen papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Fetzer, Thiemo (University of Warwick and CAGE, Department of Economics); Sen, Srinjoy (University of Warwick and CAGE, Department of Economics); Souza, Pedro CL (University of Warwick and CAGE, Department of Economics) |
| Abstract: | Homelessness and precarious living conditions are on the rise across much of theWesternworld. This paper exploits exogenous variation in the affordability of rents due to a cut that substantially lowered housing benefit – a welfare benefit aimed at helping low income households pay rent. Before April 2011, local housing allowance covered up to the median level of market rents ; from April 2011 onwards, only rents lower than the 30th percentile were covered. We exploit that the extent of cuts significantly depend on statistical noise due to estimation of percentiles. We document that the affordability shock caused a significant increase in : evictions ; individual bankruptcies ; property crimes ; share of households living in insecure temporary accommodation ; statutory homelessness and actual rough sleeping. The fiscal savings of the cut are much smaller than anticipated. We estimate that for every pound saved by the central government, council spending to meet statutory obligations for homelessness prevention increases by 53 pence. We further document political effects : the housing benefit cut causes lower electoral registration rates and is associated with lower turnout and higher support for Leave in the 2016 EU referendum, most likely driven by its unequal impact on the composition of those that engage with democratic processes. |
| Keywords: | housing markets ; welfare cuts ; austerity ; voting |
| JEL: | H2 H3 H5 P16 D72 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1232&r=all |
| By: | Papanicolas, Irene; Mossialos, Elias; Gundersen, Anders; Woskie, Liana; Jha, Ashish |
| Abstract: | Objective To determine how the UK National Health Service (NHS) is performing relative to health systems of other high income countries, given that it is facing sustained financial pressure, increasing levels of demand, and cuts to social care. Design Observational study using secondary data from key international organisations such as Eurostat and the Organization for Economic Cooperation and Development. Setting Healthcare systems of the UK and nine high income comparator countries: Australia, Canada, Denmark, France, Germany, the Netherlands, Sweden, Switzerland, and the US. Main outcome measures 79 indicators across seven domains: population and healthcare coverage, healthcare and social spending, structural capacity, utilisation, access to care, quality of care, and population health. Results The UK spent the least per capita on healthcare in 2017 compared with all other countries studied (UK $3825 (£2972; €3392); mean $5700), and spending was growing at slightly lower levels (0.02% of gross domestic product in the previous four years, compared with a mean of 0.07%). The UK had the lowest rates of unmet need and among the lowest numbers of doctors and nurses per capita, despite having average levels of utilisation (number of hospital admissions). The UK had slightly below average life expectancy (81.3 years compared with a mean of 81.7) and cancer survival, including breast, cervical, colon, and rectal cancer. Although several health service outcomes were poor, such as postoperative sepsis after abdominal surgery (UK 2454 per 100 000 discharges; mean 2058 per 100 000 discharges), 30 day mortality for acute myocardial infarction (UK 7.1%; mean 5.5%), and ischaemic stroke (UK 9.6%; mean 6.6%), the UK achieved lower than average rates of postoperative deep venous thrombosis after joint surgery and fewer healthcare associated infections. Conclusions The NHS showed pockets of good performance, including in health service outcomes, but spending, patient safety, and population health were all below average to average at best. Taken together, these results suggest that if the NHS wants to achieve comparable health outcomes at a time of growing demographic pressure, it may need to spend more to increase the supply of labour and long term care and reduce the declining trend in social spending to match levels of comparator countries. |
| Keywords: | healthcare systems; NHS; high income countries |
| JEL: | J50 |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102714&r=all |
| By: | Guo, B.; Castagneto Gissey, G. |
| Abstract: | This Cost pass-through rates give a useful perspective of market competition. This paper studies how generation costs are passed through to electricity wholesale prices in Great Britain, both theoretically and empirically, between 2015 and 2018. Our empirical results fail to reject the null of 100% pass-through rates for gas prices, carbon prices, and exchange rates, indicating a competitive GB wholesale electricity market. We observe higher pass-through rates in peak compared to off-peak periods, and argue this results from generators bidding at a lower rate during off-peak periods and supplying at minimum load to avoid the cost of shutting down and starting up. We extend the analysis by assessing generators’ bidding behaviour. The study also considers how two key events occurred during the examined period – the 2016 Brexit referendum, and major reformation of the EU Emission Trading System – have affected electricity costs to a typical domestic household, showing they have increased average annual bills by £41 p.a., constituting a 7% rise. |
| Keywords: | Electricity market, Cost pass-through, Competition, Carbon price, VECM |
| JEL: | L13 Q48 D41 H23 C32 |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1997&r=all |
| By: | Jon Pareliussen; Christophe André; Hyunjeong Hwang |
| Abstract: | Swedish school results declined for two decades following a series of reforms in the early 1990s decentralising the school system and introducing choice, competition and management by objectives. The general aims and direction of reform were not destined to lower results, but weaknesses of reform design and implementation, against the backdrop of a deep recession, likely contributed to falling outcomes. Residential segregation and the current model of competition and choice increase school segregation and likely reduce equality of opportunity. A coherent set of reforms should strengthen central government institutions, rebuild a regional governance structure and increasingly target funding to pupils’ needs. Better steering of competition and school choice implies ensuring that grades fairly represent pupils’ skills and knowledge, that municipalities increasingly take the socio-economic mix of pupils into account in entry and investment decisions, and that entry and expansion of private schools are better coordinated to counter school segregation. Teaching needs to become more attractive to raise the quality of recruitment to the profession and to address current and future teacher shortages by improving teacher education, strengthening continuous learning and instigating more cooperation, feedback and support between colleagues. This Working Paper relates to the 2019 OECD Economic Survey of Sweden (http://www.oecd.org/economy/sweden-econ omic-snapshot/). |
| Keywords: | competition, education, governance, Sweden |
| JEL: | H44 H75 I21 I28 |
| Date: | 2019–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1587-en&r=all |
| By: | Ruesga Benito, Santos; Heredero de Pablos, María Isabel; Da Silva Bichara, Julimar; Pérez Ortiz, Laura; Viñas Apaolaza, Ana |
| Abstract: | The paper's main objective is to analyze the collective bargaining response in terms of internal flexibility during the Great Recession (GR) in five EU countries (Spain, Germany, France, Italy, United Kingdom), and three economic sectors (industry, commerce and hospitality, and financial services and real estate), at the establishment level (ECS2013 database). The theoretical frame-work used is linked to the varieties of unionism. Using a descriptive statistical analysis and a probit model, this paper presents new evidences. However, the responses were heterogeneous between countries and sectors, the use of internal functional flexibility has been more intense than the numerical and salary internal flexibility. Moreover, it is related to the intensity of GR. These results, in general, while requiring a more detailed analysis of the effects of the GR on internal flexibility in the EU countries, contribute to introducing a new perspective in the socioeconomic literature about the collective bargaining and internal flexibility. |
| Keywords: | China,collective bargaining,internal flexibility,Great Recession,establishment level |
| JEL: | J51 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201961&r=all |
| By: | Christophe André; Jon Pareliussen; Hyunjeong Hwang |
| Abstract: | This paper presents the econometric analysis of lower secondary school performance carried out for the chapter on education of the 2019 OECD Economic Survey of Sweden. The dataset covers most Swedish schools providing education for 9th graders. Student socio-economic background has a considerable impact on academic results. Policy inputs are also correlated with results, notably in schools with pupils from weaker socio-economic backgrounds, but teacher qualifications and spending per student are endogenous. For-profit private schools underperform compared to non-profit and public schools, albeit with strong heterogeneity between schools. The introduction of an indicator of competition, based on the density of schools, suggests that intensified school competition lowers results in schools with a high share of pupils from weaker socio-economic backgrounds. Schools, and especially those achieving weaker results, have scope to raise their performance by improving their adaptation to student needs. This Working Paper relates to the 2019 OECD Economic Survey of Sweden http://www.oecd.org/economy/sweden-econo mic-snapshot/ |
| Keywords: | competition, education, efficiency, stochastic frontier analysis, Sweden |
| JEL: | C23 H75 I21 I28 |
| Date: | 2019–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1586-en&r=all |
| By: | Damiani, Mirella; Pompei, Fabrizio; Ricci, Andrea |
| Abstract: | This article analyses the role of deviations from higher level collective agreements adopted in firm-level bargaining to regain higher labour mobility, net positive employment effects and a resurgence of labour productivity. Using Italian firm level data, after performing preliminary pooled ordinary least squares and fixed effects estimates, we adopt a difference-in-difference approach combined with a propensity score matching. All the estimations show that opting out clauses notably increases both hiring and separations, but without significant variations in terms of net employment. In addition, no significant labour productivity gains are obtained. The only significant change concerns the increase in the share of temporary workers. |
| Keywords: | Opting Out, Collective Bargaining, Labour Flexibility, Difference in Difference |
| JEL: | J5 J51 J53 J63 J81 J82 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97426&r=all |
| By: | Laura Khoury (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration); Clément Brébion (PSE - Paris School of Economics, CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé); Simon Briole (PSE - Paris School of Economics, J-PAL - Abdul Latif Jameel Poverty Action Lab - MIT - Massachusetts Institute of Technology) |
| Abstract: | Entitlement conditions are a little explored dimension of unemployment insurance (UI) schemes. In this paper, we provide a comprehensive evaluation of a reform that softened the minimum employment record condition to qualify for UI benefits in France after 2009. Using administrative panel data matching employment and unemployment spells, we first provide clear evidence that the reform induced a separation response at the eligibility threshold. It appears both at the micro level – through a jump in transitions from employment to unemployment – and at the macro level – through the scheduling of shorter contracts, in line with the new eli- gibility requirements. Exploiting the reform as well as relevant sample restrictions, we then estimate the effects of receiving UI benefits on subsequent labour market outcomes using a regression discontinuity design. Our findings point to a large negative impact of UI benefits receipt on employment probability up to 21 months after meeting the eligibility criterion, which is not counterbalanced by an increase in job quality. |
| Keywords: | Job quality,Unemployment,Employment duration,Behavioural response,Entitlement conditions |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02393383&r=all |
| By: | Giorgio Calcagnini (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Rebel Cole (College of Business, Florida Atlantic University. U.S.A); Germana Giombini (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Giuseppe Travaglini (Department of Economics, Society & Politics, Università di Urbino Carlo Bo) |
| Abstract: | Despite the recent academic focus on the effects of the crisis on bank loan quality, a fully satisfying analysis of their causes is still missing, likely because of a lack of detailed information on bank-borrower relationships and the way loan decisions are taken within banks. Thanks to the availability of a large dataset provided us by a regional Italian bank for the three calendar years 2010-2012, we are able to describe changes occurred in the bank loan quality of 3,103 firms, primarily small- and medium-sized firms. Besides a generalized deterioration of the loan quality due to the crisis, our findings show that the loan quality (as measured by each loan rating) is largely influenced by how information is processed and used at the different hierarchical levels within the bank at the time of loan decisions. More specifically, the deterioration of loan quality increases as the loan approval decision is made at higher levels of the lending-decision hierarchy, while it decreases with the firm age, size and the proximity of firms to the bank. The latter result supports the primacy of relationship-lending technology relative to transaction-based lending technology. |
| Keywords: | SMEs funding; Relationship lending, Bank-loan policies. |
| JEL: | G21 G24 O16 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:19_07&r=all |
| By: | Salvador Bertomeu |
| Abstract: | This paper analyzes the quantitative impact of the growing role of non-traditional financial actors, in particular institutional investors, in the financing structure and consumer pricing of regulated private utilities. The focus is on the water sector in England and Wales, where the effect of the firms’ corporate financing strategies on key outcome variables may have been underestimated. The analysis is based on a staggered difference-in-differences estimation of the impacts of the evolution of the ownership of the assets, namely an increased participation of institutional investors, on leveraging and water pricing decisions. It shows a statistically significant positive impact on leverage levels and average consumer prices. |
| Keywords: | regulation; corporate finance; water and sewerage; public utilities |
| JEL: | C23 C51 G32 G38 L50 L51 L95 L97 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/297676&r=all |
| By: | Lassila, Jukka; Valkonen, Tarmo |
| Abstract: | Abstract Ageing populations pose a major challenge for long-term sustainability of public finances. The respond has been a wave of pension reforms that has lowered markedly the projected pension expenditure in EU countries. The increase in the second major expenditure item, health and long-term care costs, has become the most important element of fiscal sustainability gaps. We compare different demography-based approaches generally used to evaluate the costs. The interaction of different projection approaches and demography is illustrated by using realizations of a stochastic population projection as inputs in a numerical expenditure model. Our example country is Finland. Our results show that considering the effects of proximity to death on the expenditure generates markedly slower expected expenditure growth for the health and long-term care costs than using age-specific costs or the method developed and used by the European Commission and the Finnish Ministry of Finance. In addition, the sensitivity of the expenditure projections to demographic risks is lower. The differences in the outcomes of the different approaches are largest in long-term care costs, which are in any case growing faster in Finland than the health care expenditure because on population ageing. |
| Keywords: | Population ageing, Demographic uncertainty, Health care costs, Long-term care costs |
| JEL: | H55 H68 J11 |
| Date: | 2019–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:74&r=all |
| By: | Piasna, Agnieszka; Burchell, Brendan; Sehnbruch, Kirsten |
| Abstract: | This article analyses the development and use of the concept ‘job quality’ in European Union (EU) employment policy. Using a set of complementary public policy theories, it examines how both political and conceptual factors contributed to the failure to achieve any significant progress in articulating job quality in the EU’s policy objectives and guidelines. Conceptual clarity in defining what job quality is (and what it is not), from whose perspective it should be considered, and which direction of change indicates improvement, are vital prerequisites for an effective integration of job quality into the EU’s employment strategy and into the elaboration of any successful social indicator. A constant political struggle between different stakeholders at EU level, and a need to reconcile the often-contradictory views of the social partners, has precluded the completion of this first step. Instead, attempts to include job quality into the policy formulation process were made without simultaneously adapting the overall narrative, which continued to give prominence to flexibility and deregulation. The outcome has been a rather cursory and inconsistent effort to implement policies and actions aimed at boosting job quality. |
| Keywords: | European employment policy; European Employment Strategy; European Semester; flexicurity; Job quality; Pillar of Social Rights; quality of employment |
| JEL: | N0 R14 J01 |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102888&r=all |
| By: | Maria Alejandra Cattaneo; Philipp Lergetporer; Guido Schwerdt; Katharina Werner; Ludger Woessmann; Stefan C. Wolter |
| 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: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0163&r=all |
| By: | Anne Lambert; Laurent Gobillon |
| Abstract: | This article examines the role of assisted loans in accessing homeownership and in the residential segregation of low-income households in France. During the 1996-2006 period, no-interest loans (NILs) affected 1.4 million households and were the main policy tool that favored homeownership. We rely on French housing surveys and the administrative records on NILs to compare the position of social groups in the housing market before and after implementing NILs. We show that in a context of increasing housing prices, NILs have limited the exclusion of lower- and middle-class households from the new-build housing market outside the Paris region. Nevertheless, households with NILs tend to relocate to peripheral areas that are characterized not only by a lower proportion of professionals and managers than central areas, but also by lower access to public services and collective amenities. Moreover, in-depth interviews suggest that low-income households had no clear perception of the social and physical disconnections they would experience when they purchased their new homes. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:idg:wpaper:awuiitxexmqcvuzmnbg9&r=all |
| By: | Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic); Miroslav Palansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic) |
| Abstract: | While financial secrecy has recently risen on the agenda of policy makers and scholars alike, much remains unknown about its development since the global financial crisis. To show how financial secrecy evolved over time on average, by category, and across countries, we combine the five Financial Secrecy Index editions from 2009 to 2018 to create a financial secrecy panel data set. We present four main findings. First, financial secrecy has decreased on average – i.e. that financial transparency has improved – by at least 2–9% between 2011 and 2018. Second, most of the observed improvement comes from international standards and cooperation, one of four key financial secrecy areas recognized by the Financial Secrecy Index. Third, we observe a convergence across countries between 2011 and 2018 – many of the most secretive have become less so while the opposite is true of some formerly less secretive countries. For example, the Seychelles are now only slightly more secretive than the Netherlands. Fourth, we find that changes in contributions to global financial secrecy over time are not tied to geographical regions and that it is thus worth studying changes at the individual country-level. For example, we find that the United Arab Emirates, the Netherlands and Malta have become substantially more important providers of financial secrecy, though they are still less important than the current leaders, i.e. Switzerland, the United States and the Cayman Islands. Having documented changes in financial secrecy over the past decade, we conclude with how the data set may be used as a tool for studying and perhaps even curbing financial secrecy – a policy objective which has thus far been only moderately met. |
| Keywords: | Offshore finance; financial transparency; financial secrecy; secrecy jurisdictions; tax havens |
| JEL: | F36 F65 G28 H26 H87 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2019_41&r=all |
| By: | Erminia Florio (University of Rome "Tor Vergata") |
| Abstract: | I analyze the effect of historical emigration on today’s attitudes towards immigration in Italy. To do so, I collect data on Italian emigrants by municipality from the Ellis Island archives in the period 1892-1924. I estimate, then, the causal effect of emigration on a series of outcomes used to measure attitudes towards immigrants through an IV strategy, by exploiting exogenous variation in proximity to train stations active during years 1892-1924 and in the timing of construction of stations to historical emigration. I find that emigration has a negative and significant long-run effect on attitudes towards immigration. In particular, a one-standard deviation increase in the share of past emigrants reduces the propensity to have a SPRAR in municipalities by roughly 9%. A higher historical emigration also reduces social expenditures, share of votes for center-left parties and non-profit organizations, while increasing the share of votes for center-right parties. |
| Keywords: | Italian Emigration; Attitudes towards Immigration; Age of Mass Migration. |
| JEL: | J15 N32 N34 Z1 |
| Date: | 2019–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:478&r=all |
| By: | Einiö, Elias |
| Abstract: | This study exploits a large-scale natural experiment in Finnish conscription to study how exposure to peers from different family backgrounds affects education, earnings, employment, and hourly wage. Our research design is based on the alphabetic rule in assigning conscripts to dorms, which induces credible exogenous variation in peer family backgrounds. Being exposed to a dormmate from a high-income family has a positive long-term effect on earnings. The effects are the largest for individuals who come from high-income families. Exposure to peers with one standard deviation higher average parent income raises their earnings at age 28-42 by 2.6%. The results suggest beneficial labor market networks as a key mechanism. Exposure to peers from high-income families has little impact on earnings and hourly wages of individuals who come from low-income families, but it increases their educational attainment in the long run. The findings imply that social stratification reinforces economic and educational inequality between rich and poor families. |
| Keywords: | earnings, employment, education, wages, peer effects, family background, Labour markets and education, J24, J31, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:128&r=all |
| By: | Cummins, Neil |
| Abstract: | Sharp declines in wealth-concentration occurred across Europe and the US during the 20th century. But this stylized fact is based on declared wealth. It is possible that today the richest are not less rich but rather that they are hiding much of their wealth. This paper proposes a method to measure this hidden wealth, in any form. In England, 1920-1992, elites are concealing 20-32% of their wealth. Among dynasties, hidden wealth, independent of declared wealth, predicts appearance in the Offshore Leaks Database of 2013-6, house values in 1999, and Oxbridge attendance, 1990-2016. Accounting for hidden wealth eliminates one-third of the observed decline of top 10% wealth-share over the past century |
| Keywords: | hidden wealth; inequality; economic history; big data; tax evasion |
| JEL: | N00 N33 N34 D31 H26 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102830&r=all |
| By: | Giovanni Mandras (European Commission - JRC); Andrea Conte (European Commission - JRC); Simone Salotti (European Commission - JRC) |
| Abstract: | Coal accounts for nearly a quarter of the total electricity production in the EU and provides jobs to around 240,000 people in mines and power plants. The European Commission is working in order to ensure a smooth transition to cleaner forms of energy production and to implement innovative technologies such as carbon capture and storage to meet the commitment to reduce CO2 emissions by at least 40% by 2030. There are currently around 200 coal-fired power plants in more than 100 NUTS-2 EU regions and over 120 mines in 41 regions employing almost 240,000 workers in total. In 2017, the Platform for Coal Regions in Transition was launched to minimise the economic and social impact of decarbonisation. Reliable data are key for the management of the transition and estimates of the number of jobs indirectly related to coal activities are needed. This Policy Insight presents the indirect jobs estimated using the input-output (IO) data of the RHOMOLO-IO modelling framework. The estimates suggest that 215,000 additional jobs can be potentially affected by the shift away from coal towards a low-carbon economy. |
| Keywords: | region, growth, rhomolo, indirect jobs, coal, input-output analysis |
| JEL: | C67 C82 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc118641&r=all |