nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒02‒03
27 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Heterogeneous Effects of Temporary Employment on Productivity and Wages in the Italian Business Firms By Andrea Ricci
  2. Exploring the Determinants of Productivity Growth in Italian Regions: a Kaldorian Perspective By Matteo Deleidi; Walter Paternesi Meloni; Luigi Salvati; Francesca Tosi
  3. Comparing Wage Levels and Developments in Europe: Mind the Data Source By Joris M. Schröder; Monika Schwarzhappel
  4. Entitled to Leave: the impact of Unenployment Insurance Eligibility on Employment Duration and Job Quality By Khoury, Laura; Briole, Simon; Brébion , Clément
  5. Deregulation of the Finnish Long-distance Bus Market By Valmari, Nelli
  6. Equilibrium and convergence in personal income distribution? How European countries performed during a phase of huge economic turbulence (2004-2017) By Guo, Yanling; Sell, Friedrich L.
  7. School Choice Priorities and School Segregation: Evidence from Madrid By Gortázar, Lucas; Mayor, David; Montalbán, José
  8. Results of SME Investment Activities: A Comparative Analysis among Enterprises Using and Not Using EU Subsidies in Poland By Piątkowski, Marcin J.
  9. Do tax incentives reduce investment quality? By Eichfelder, Sebastian; Jacob, Martin; Schneider, Kerstin
  10. Do robots really destroy jobs? Evidence from Europe By David Klenert; Enrique Fernandez-Macias; Jose-Ignacio Anton
  11. Employment Fluctuations, Job Polarization and Non-Standard Work: Evidence from France and the US By Olivier Charlot; Idriss Fontaine; Thepthida Sopraseuth
  12. Regularization of Immigrants and Fertility in Italy By Lanari, Donatella; Pieroni, Luca; Salmasi, Luca
  13. Career paths of PhD graduates in eastern and western Germany: Same qualification, same labor market outcomes? By Rehs, Andreas; Fuchs, Michaela
  14. The quality-weighted matching function: Did the German labour market reforms trade of efficiency against job quality? By Gartner, Hermann; Rothe, Thomas; Weber, Enzo
  15. The future incidence, prevalence and costs of stroke in the UK By Wittenberg, Raphael; King, Derek
  16. Subsidized to change? The impact of R&D policy on regional technological diversification By Lars Mewes; Tom Broekel
  17. Neighbourhood Deprivation, Life Satisfaction and Earnings: Comparative Analyses of Neighbourhood Effects at Bespoke Scales By Knies, Gundi; Melo, Patricia C.; Zhang, Min
  18. Euroscepticism in France: An analysis of actors and causes By Likaj, Xhulia; Rieble, Lena; Theuer, Laura
  19. "Fine...I'll do it myself": Lessons from self-employment grants in a long recession period By Stjepan Srhoj; Ivan Zilic
  20. Financial constraints and intangible investments. Do innovative and non-innovative firms differ? By Sandro Montresor; Antonio Vezzani
  21. Competitively Elected Women as Policy Makers By Thushyanthan Baskaran; Zohal Hessami;
  22. Sick of my parents? Consequences of parental ill health on adult children By Norén, Anna
  23. “Tax me, but don’t drown me in regulations: Understanding differences in corruption across the countries of Europe" By Germà Bel
  24. The role of R&D-intensive clusters for regional competitiveness By Reinhold Kosfeld; Timo Mitze
  25. Lifting the banking veil: credit standards’ harmonization through lending transparency By Kang, Jung Koo; Loumioti, Maria; Wittenberg-Moerman, Regina
  26. Do informational nudges alter firms' hiring behavior of older workers? By Homrighausen, Pia; Lang, Julia
  27. Military Service and Political Behavior: Evidence from France By Etienne Fize; Charles Louis-Sidois

  1. By: Andrea Ricci
    Abstract: What is the link between flexible employment, labour productivity and wages? Taking advantage of an original firm level database combining information from Rilevazione Imprese e Lavoro (RIL) conducted by INAPP on a representative sample of Italian firms with the AIDA archive, we explore the nexus between temporary employment, labour productivity and wages along the distributions of labour productivity and wages. By applying conditional quantile technique with additive fixed effects, we detect a strong negative relationship between the use of fixed-term contracts and both labour productivity and wages. The effect of temporary employment on firms’ labour productivity and wages is heterogeneous along the distributions. Low-productive firms - recurring more to temporary contracts - are also more affected by an incremental use of short-term work arrangements risking to be trapped in a vicious cycle of low-productivity and low-wages.
    Keywords: Labour productivity, Wages, Temporary employment, Firm-level analysis
    JEL: J2 J24 J31 L25
    Date: 2020–01
  2. By: Matteo Deleidi; Walter Paternesi Meloni; Luigi Salvati; Francesca Tosi
    Abstract: The promotion of regional convergence is at the heart of the European cohesion policy,although how to stimulate it still is a debated question in the economic theory. Endorsing a Kaldorian perspective, we investigate the determinants of labour productivity in Italian regions by applying Panel Structural VAR modelling to 1981-2013 data. By esplicitly considering the endogeneity among the studied variables, we find that labour productivity is stimulated by output growth and capital accumulation. Our findings bear important implications in terms of policy advice, leading to the conclusion that considerable public investment is necessary to stimulate economic growth and productivity especially in economically depressed areas, like the Italian Mezzogiorno.
    Keywords: Labour productivity; Technical progress; Investment; Regional differentials; Panel SVAR
    JEL: C33 O18 O47 R11
    Date: 2020–01
  3. By: Joris M. Schröder; Monika Schwarzhappel (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Wages directly affect the wellbeing and living conditions of the working population, household consumption and domestic demand, but also a country’s competitiveness. However, methodological differences across multiple data sources mean that it is a complex matter to make an accurate assessment of wage levels, their developments and differentials across European countries. Consequently, this paper seeks to compare the available data sources regarding coverage, concepts and the measurements used. First, we look at the most frequently used data sources for information on individual wages (national accounts data, Labour Cost Survey, Structure of Earnings Survey and administrative data) in terms of coverage, the various definitions applied (labour cost, compensation, wages and salaries, gross earnings) and measurement issues (employees, full-time equivalents (FTEs)). To underpin this research, a comprehensive database has been set up, encompassing data from these sources. In this report, we present selected results to illustrate how a comparison of data sources and concepts regarding wage developments can improve our assessment of wage levels and wage developments across European countries. These results also provide some insight into the impact of applying various conversion rates (exchange rates, purchasing power parity (PPP), price deflators such as the Consumer Price Index (CPI)) to wage data. Disclaimer Funding from the Austrian Federal Ministry of Labour, Social Affairs, Health and Consumer Protection is gratefully acknowledged.
    Keywords: labour cost, compensation, wages and salaries, earnings, living conditions, competitiveness
    JEL: J30 J31 C82 C83
    Date: 2020–01
  4. By: Khoury, Laura (Dept. of Economics, Norwegian School of Economics and Business Administration); Briole, Simon (Paris School of Economics and JPAL Europe); Brébion , Clément (CEET-CNAM and Paris School of Economics)
    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 eligibility 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: Unemployment; Employment duration; Behavioural response; Entitlement conditions; Job quality
    JEL: H31 J08 J65 J68
    Date: 2020–01–13
  5. By: Valmari, Nelli
    Abstract: Abstract A new law on public transport came into effect in Finland in December 2009. According to the new law, regulators are not allowed to restrict competition between bus companies, unless it is necessary for ensuring adequate quantity and quality of transport services. Until 2009 bus companies had to apply for and be granted a licence for operating any given connection, which restricted competition between bus companies. In this brief I look at how the Finnish long-distance bus market has changed from 2006 to 2017. The changes indicate that deregulating entry into the long-distance bus market has benefitted consumers. The supply of long-distance bus connections has increased and, on average, bus ticket fares have ceased to increase. These changes are to a large extent due to the deregulation of the long-distance bus market. Along with the new law, bus companies have become able to enter new routes and increase the number of connections where demand is high. As a result, the number of passengers has increased substantially.
    Keywords: Market entry, Regulation, Deregulation, Competition, Long-distance bus service
    JEL: L52 L92 R40
    Date: 2019–08–30
  6. By: Guo, Yanling; Sell, Friedrich L.
    Abstract: The authors set up a political economy equilibrium framework for personal income distribution. Located in status theory, their concept is able to explain what justifies a certain or optimal degree of inequality in the society. The authors present an empirical analysis of personal income distribution in 23 European countries. The time period covers the years before, during and after the great recession (2004-2017). Linear regressions, which make use of ex-post Gini coefficients, show that the hypothesis of the existence of an equilibrium value for the Gini-coefficient can be weakly confirmed, after controlling for a possible impact from the great recession as well as from EU membership.
    Keywords: Political Economy,Personal Income Distribution,Equilibrium,Convergence,Redistributive Policies,Great Recession,EU Membership
    JEL: D31 D60 D63 D71 D72 E62 H23
    Date: 2020
  7. By: Gortázar, Lucas (The World Bank Group); Mayor, David (Compass Lexecon); Montalbán, José (Swedish Institute for Social Research, Stockholm University)
    Abstract: We test how government-determined school choice priorities affect families’ choices and pupil sorting across schools in the context of the Boston Mechanism. We use two large-scale school choice reforms in the school choice priority structure undertaken in the region of Madrid (Spain) in 2012 and 2013 as a source of variation. In 2012, low-income priorities to the top- ranked school were reduced, and points to alumni family members of the top-ranked school were granted. In 2013, an inter-district school choice reform widely expanded families’ choice set of schools. We combine an event study first difference across cohorts and a Difference- in-Difference design to identify the impact of the reforms, using unique administrative data on parents’ applications to schools. We show that reducing low-income priorities to the top-ranked school and granting points to alumni family members of the top-ranked school increases school segregation by parental education and immigrant status on 3 and 13 percent, respectively. Families reacted to the 2013’s inter-district reform exerting higher interdistrict choice and applying to schools located further away from home than before the reform. We find heterogeneous effects, showing potential information gaps and dynamic learning process across immigrant status groups throughout time. Moreover, the inter-district school choice reform marginally reduced school segregation by parental education and largely increased school segregation by immigrant status, but both effects fade out when controlling for residential stratification. Results suggest that priority structures need to be carefully designed to achieve diversity objectives and that abolishing school choice proximity points does not seem an effective public policy for reducing school segregation under the Boston Mechanism.
    Keywords: Education and Inequality; Education Policy; School Choice; School Segregation
    JEL: I24 I28
    Date: 2020–01–27
  8. By: Piątkowski, Marcin J.
    Abstract: The need to pay some attention to the issues of investment processes undertaken in enterprises and explore this topic is a direct result of the important role that enterprises play in the economy — with particular emphasis on the SMEs. From the company’s point of view, it is crucial to obtain economic effects as a result of the implemented investment. The aim of the study was to analyze the results of tangible investments in enterprises in Małopolska province in Poland, in two groups of entities — those that implemented investments using EU subsidies and those that financed investments from other sources without using EU aid. This is a unique research in the field of analysis and presentation of investment data in enterprises, especially in relation to companies using EU funds. There is no comparative assessment of investments in enterprises on this topic in the scientific literature (concerning EU subsidies). For this reason, comparing the effects of investment activities between the two groups of enterprises studied — using and not using EU subsidies — fills the research gap in this regard. The study was based on the critical analysis of domestic and foreign literature, and quantitative and qualitative analyses of the results of a survey among 160 enterprises using the CSAQ method, additionally extended by interviews with selected respondents. Data presentation uses a descriptive approach in combination with statistical analysis. A multiple linear regression model (MLR) was also used to verify hypotheses. Research results show that undertaking investment activities contributes to obtaining favorable results in enterprises, regardless of the source of investment financing. The source of financing the investment is not important for the results achieved in the enterprise. However, representatives of companies who received EU subsidies assess their market position higher after investment relative to companies that used other sources of financing for this purpose. Entities that have received EU subsidies have a stronger perception of investment as an important factor determining the company’s development. In addition, variables were identified using the MLR model that affect the assessment of the financial position of enterprises in both groups of entities. This article supplements the knowledge on the economic effects of investments implemented by enterprises in the SME sector in Poland in a situation where these entities used and did not benefit from EU subsidies during 2007–2015.
    Keywords: investments; enterprises; SMEs; subsidies for SMEs; EU aid; European funds; investment financing; economic effects; projects; Małopolska region; Poland; multiple linear regression model (MLR)
    JEL: C01 C12 C14 C30 L0 L2 L21 L26 M0 M1 M10 M11 M12 M14 M15 M16 M20
    Date: 2020
  9. By: Eichfelder, Sebastian; Jacob, Martin; Schneider, Kerstin
    Abstract: This paper examines the effect of tax incentives in the form of bonus depreciation on the quality of investment. Using the expiration of tax incentives via bonus depreciation in East Germany and a representative panel of West German establishments, we show that bonus depreciation significantly lowers the quality of investment. The average quality of investments, measured by the responsiveness of future sales to current investment, reduces by 22.6-34.6%. This adverse effect of tax subsidies is greater for jurisdictions with higher tax rates as well as for large or high-productivity firms. Overall, while increasing investment quantity, as shown by prior literature, tax incentives such as bonus depreciation substantially reduce the quality of investments.
    Keywords: bonus depreciation,tax incentive,investment incentive,investment quality
    JEL: G11 H25 H32 M41
    Date: 2020
  10. By: David Klenert (European Commission – JRC); Enrique Fernandez-Macias (European Commission - JRC); Jose-Ignacio Anton (University of Salamanca, Spain)
    Abstract: While citizen opinion polls reveal that Europeans are concerned about the labour market consequences of technological progress, the understanding of the actual significance of this relationship is still imperfect. This paper assesses the impact of robot adoption on employment in Europe. Combining industry-level data on employment by skill-type with data on robot adoption and using different sets of fixed-effects techniques, we find that robot use is linked to an increase in aggregate employment. Contrary to some previous studies, we do not find evidence of robots reducing the share of low-skill workers across Europe. Since the overwhelming majority of industrial robots is used in manufacturing, our findings should not be interpreted outside of the manufacturing context. However, the results still hold when including non-manufacturing sectors and they are robust across a wide range of assumptions and econometric specifications.
    Keywords: Robots, jobs, employment, low-skilled workers, inequality, European Union, economic activities
    Date: 2020–01
  11. By: Olivier Charlot (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique); Idriss Fontaine (CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion); Thepthida Sopraseuth (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using annual and quarterly labor market data from the US and France, we study the relationship between the extensive and intensive margins of labor adjustment, job polarization and non-standard work along the business cycle. We derive four stylized facts. First, changes in aggregate hours are mainly driven by fluctuations in per-capita employment rather than hours worked per worker. Second, recessionary drops observed in aggregate hours are, to a large extent, due to the disappearance of routine work. In the US, the fall in routine standard employment accounts for most of the decline in aggregate hours, whereas in France, routine jobs losses in both standard and non-standard work matter. Third, the dynamics of routine standard employment are driven by flows from and into unemployment in both countries. Fourth, the dynamics of routine non-standard work differ across countries. In the US, fluctuations in routine non-standard employment is driven by inflows from routine standard work, while, in France, changes in routine non-standard work are accounted for by ins and outs from unemployment. Our findings support the view that within-employment reallocation, through the use of non-standard work, is an alternative margin of adjustment in the US. This is not the case in France and flexibility is achieved by adjusting hiring and separations of standard and non-standard work. In bad times, reduced stepping stones contribute to the fall in routine standard employment.
    Date: 2020–01–15
  12. By: Lanari, Donatella; Pieroni, Luca; Salmasi, Luca
    Abstract: In this paper, we examined whether the regularization law approved in Italy in 2002 led to changes in the fertility of immigrant women. We used the Birth Sample Survey, published by the Italian Institute of Statistics, to show that the Italian regularization increased the probability of having the first child by approximately 6 percentage points, whereas point estimates of the probability of having additional children beyond the first were negative, but not significant. By exploring alternative specifications, focusing on individuals eligible to receive the status of regular immigrant through employment, we find evidence of a stronger effect with respect to our baseline results. Robustness analyses confirmed our main findings.
    Keywords: fertility, immigrant regularization, propensity score matching, difference-in-differences
    JEL: J13 J15 J18
    Date: 2020–01–20
  13. By: Rehs, Andreas; Fuchs, Michaela (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper investigates the extent to which the returns to gaining a PhD degree depend upon the region of birth, the region where the degree was earned, and the place of work. Eastern Germany serves as an interesting showcase in light of the ongoing debate surrounding the underrepresentation of eastern Germans in top positions in Germany. We examine the career paths of eastern and western German PhD graduates who completed their dissertations between 1995 and 2010. We estimate the returns with regard to obtaining a job suited to their skill level and with high wages. Our data set combines information on PhD graduates and their place of birth collected from data on PhD dissertations in Germany with data from administrative social security records. This record linkage approach provides a unique source of individual employment and wage biographies of eastern and western German PhD graduates. Our findings show that labor market success is affected neither by being born in eastern Germany nor by earning a PhD at an eastern German university. However, the place of work does matter, suggesting that the stark differences between the two parts of Germany with regard to labor market conditions is the main reason for the differences in the labor market prospects of PhD graduates from eastern and western Germany." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bildungsertrag, regionale Herkunft, Promotion, Lohnhöhe, adäquate Beschäftigung, regionale Disparität, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland
    JEL: I23 I26 J24 J31 P20
  14. By: Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Rothe, Thomas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "We evaluate the quantity-quality trade-off on the labor market by estimating an augmented matching functionweighting the matches by quality measures. We use the approach to evaluate the German labor market reforms conducted between 2003 and 2005. Indeed, we find a significant quantity-quality trade-off. However, even after controlling for job quality, a good half of the positive effect of reforms on the matchingefficiency remains." (Author's abstract, IAB-Doku) ((en))
    Keywords: Hartz-Reform - Auswirkungen, Beschäftigungseffekte, Matching, IAB-Stellenerhebung, Arbeitsmarktgleichgewicht, Personaleinstellung, Qualität der Arbeit
    JEL: J11 E02 J65
  15. By: Wittenberg, Raphael; King, Derek
    Abstract: Background: We project incidence and prevalence of stroke in the UK and associated costs to society to 2035. We include future costs of health care, social care, unpaid care and lost productivity, drawing on recent estimates that there are almost one million people living with stroke and the current cost of their care is £26 billion. Methods: We developed a model to produce projections, building on earlier work to estimate the costs of stroke care by age, gender and other characteristics. Our cell-based simulation model uses the 2014-based Office for National Statistics population projections; future trends in incidence and prevalence rates of stroke derived from an expert consultation exercise; and data from the Office for Budget Responsibility on expected future changes in productivity and average earnings. Results: Between 2015 and 2035, the number of strokes in the UK per year is projected to increase by 60% and the number of stroke survivors is projected to more than double. Under current patterns of care, the societal cost is projected to almost treble in constant prices over the period. The greatest increase is projected to be in social care costs – both public and private – which we anticipate will rise by as much as 250% between 2015 and 2035. Conclusion: The costs of stroke care in the UK are expected to rise rapidly over the next two decades unless measures to prevent strokes and to reduce the disabling effects of strokes can be successfully developed and implemented.
    Keywords: Stroke; Projections; Incidence; Prevalence; Costs
    JEL: E6
    Date: 2020–01–20
  16. By: Lars Mewes; Tom Broekel
    Abstract: Previous research shows ample evidence that regional diversification is strongly path-dependent, as regions are more likely to diversify into related than unrelated activities. In this paper, we ask whether contemporary innovation policy in form of R&D subsidies intervenes in the process of regional diversification. We focus on R&D subsidies and assess if they cement existing path-dependent developments, or if they help in breaking these by facilitating unrelated diversification. To investigate the role of R&D policy in the process of regional technological diversification, we link information on R&D subsidies with patent data and analyze the diversification of 141 German labor-market regions into new technology classes between 1991 and 2010. Our findings suggest that R&D subsidies positively influence regional technological diversification. In addition, we find significant differences between types of subsidy. Subsidized joint R&D projects have a larger effect on the entry probabilities of technologies than subsidized R&D projects conducted by single organizations. To some extent, collaborative R&D can even compensate for missing relatedness by facilitating diversification into unrelated technologies.
    Keywords: regional technological diversification, relatedness, innovation, policy, R&D subsidies
    JEL: O31 O33 O38
    Date: 2020–01
  17. By: Knies, Gundi; Melo, Patricia C.; Zhang, Min
    Abstract: We investigate the effect of neighbourhood deprivation on individual subjective and objective wellbeing for England and Wales. Our identification strategy combines rich longitudinal information on individual characteristics, family background and initial job conditions with panel data estimators and sample restrictions, which address residential sorting bias and neighbourhood-specific confounding effects. Our findings suggest that the effect of neighbourhood deprivation on life satisfaction and wages is not a genuine causal effect, but largely explained by strong spatial sorting mechanisms. We also find that the results overall do not vary by the bespoke spatial scale used to operationalize neighbourhoods.
    Date: 2020–01–28
  18. By: Likaj, Xhulia; Rieble, Lena; Theuer, Laura
    Abstract: This paper discusses the development of Euroscepticism in France and the underlying actors and causes. First, the literature review presents a selection of distinct classifications, actors and sources for the analysis. Thus, the distinction between hard and soft Euroscepticism as well as diffuse and specific support for European integration guides the interpretation of Eurobarometer data, which show that there has been an actual increase of French discontent towards the European project since the early 1990s. The Front National represents the main actor within the Eurosceptic landscape. A socio-demographic analysis of the electorate describes the average frontiste likely to be a male, belonging to a household with lower levels of income and education, and besides immigration and security, ranking identity and national sovereignty very highly on their list of concerns. Eventually, the sources for rising Euroscepticism in France are examined in light of socio-economic, cultural and institutional factors. Once more, Eurobarometer data reveal that while economic concerns tend to fuel EU-critical positions rather than fundamental opposition, cultural aspects like national identity, immigration and national security should also be deemed as a crucial source of Euroscepticism. Institutional dissatisfaction at the national and European level -particularly related to the mismanagement of the financial and sovereign debt crisis as well as the migration crisis - has also contributed to the amplification of EU-critical attitudes.
    Keywords: Euroscepticism,France,Front National,Rassemblement National,Euro Crisis,Migration Crisis
    Date: 2020
  19. By: Stjepan Srhoj (University of Dubrovnik); Ivan Zilic (The Institute of Economics, Zagreb)
    Abstract: This paper evaluates the effect of a self-employment grant scheme for unemployed individuals-designed to ease the first 12 months of business operation-on firm growth, survival, and labor market re-integration in Croatia in the 2010-2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies, but accounted for 10% of new firms opened throughout the years. We use the universe of unemployment episodes and the universe of unlimited and limited liability firms to document the effect of self-employment grants both causally and descriptively. Exploiting longitudinal structure of unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. Also, we find that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms-even though a sizable portion of them closes after a required 12-month grant period-have a more favorable survival profile. While these results are in line with the rest of the empirical literature on the self-employment grants, we also find that the effectiveness of these grants has increased throughout the years, indicating towards the direction of institutional learning.
    Keywords: self-employment grant, evaluation, unemployment, firm performance
    JEL: J68 M13 H25 H43
    Date: 2020–01
  20. By: Sandro Montresor (School of Advanced Studies, Gran Sasso Science Institute); Antonio Vezzani (Roma Tre University)
    Abstract: We investigate the extent to which financial constraints hamper the firms’ investment in intangibles. Drawing on the extant literature, we maintain that a distinction should be kept between innovators and non-innovators. Moreover, we argue that such a distinction should be investigated along the whole spectrum of intangibles firms invest and by addressing the risks of reverse causality and simultaneity bias in the relationship. Through an original quasi-panel extension of a recent European Innobarometer survey, we estimate two sets of recursive bivariate probit models – for innovative and non-innovative firms’ investments – from which interesting results emerge. Financial barriers hamper the investment of both kinds of firms only for R&D, design, and organisation and business processes. With respect to other intangibles, instead, financial barriers act only on innovators (or non-innovators) or are even absent. Furthermore, the hampering role of financial barriers distributes differently across different intangibles between innovators and non-innovators.
    Keywords: &D, intangibles, innovation, financial barriers.
    JEL: O30 O32 O33
    Date: 2019–12
  21. By: Thushyanthan Baskaran; Zohal Hessami;
    Abstract: While still far from parity, female representation in politics has continuously increased over the last two decades worldwide. In light of this development, we analyze whether higher female representation has substantive effects on policy choices using the example of child care – a public good arguably valued by women. We hand-collect micro-data for 224,448 candidates running in the local council elections of 2002, 2008 and 2014 across 1,632 municipalities in the German state of Bavaria. Exploiting an open-list electoral system, we run RDD regressions centered around mixed-gender races for the last council seat that accrues to a party. We find that a female victory in a mixed-gender race accelerates the expansion of public child care provision by 40%. Our main strategy to explore mechanisms uses information from hand-collected minutes of 7,721 monthly council meetings. We show that an additional woman changes “the conversation”: female councilors speak up more often and child care is discussed more frequently in the council.
    Keywords: female politicians, gender, political selection, child care provision, local councils
    JEL: D72 D78 H70 J13 J16
    Date: 2019
  22. By: Norén, Anna (Uppsala University)
    Abstract: I study the consequences for labor market outcomes and sick leave of having an elderly parent in need of care. Using Swedish register data I compare the labor market outcome trajectories of adult children before and after their parent suffers a health shock. I find that employment and income of adult children are slightly reduced in the years leading up to the demise of their parent, but that the size of the impact is largest in the year, and the year after, parental demise. I also find that daughter’s sick leave absence increases in the year that the parent dies. No effects on labor market outcomes are found from having a parent suffering stroke. Furthermore, I find no clear gender differences between sons and daugh-ters in the impact of having a parent with increased care demand. Taken together, the results suggest that the opportunity costs of parental care need in the form of adverse labor market impacts are small.
    Keywords: Formal and Informal care; Elderly; Labor supply
    JEL: J14 J22
    Date: 2020–01–24
  23. By: Germà Bel (Department of Econometrics & Riskcenter-IREA, Universidad de Barcelona, (Barcelona, Spain))
    Abstract: Differences in corruption perception across the countries of Europe are marked and persistent over time. This study seeks to explain these differences in the countries of both the European Union and the European Free Trade Association during 2007–2017. The core hypothesis is that the style of government intervention in the economy –rather than the size of government– is the main explanatory factor for the differences. To test this hypothesis, the empirical analysis disentangles the effects of the two main government tools for intervention in the economy: taxation and regulation. The main result is that the fiscal burden does not consistently present a significant relationship with corruption. In contrast, the regulatory burden associated with excessive red tape is a strong driver of corruption, because a consistent and significant positive association is found. Furthermore, differences in legal origins, history, democratic experience and several economic factors contribute to explaining differences between European countries
    Keywords: Corruption, Regulation, Taxation, Europe JEL classification: D73, H29, L51, N44, O52
    Date: 2019–12
  24. By: Reinhold Kosfeld (University of Kassel); Timo Mitze (Southern University of Denmark)
    Abstract: Modern cluster theory provides reasons for positive external effects that accrue from the interaction of spatially proximate firms operating in common and related fields of economic activity. In this paper, we examine the impact of R&D-intensive clusters as a key factor of regional competitiveness on productivity and innovation growth. In analogy to the industry-oriented concepts of related and unrelated variety (Frenken, Van Oort, Verburg 2007), we differentiate between effects of cluster specialisation and diversity. The identification of R&D-intensive clusters is based on a hybrid approach of qualitative input-output analysis and spatial scanning (Kosfeld and Titze 2017). Our empirical study is conducted for a panel of German NUTS-3 regions in 2001-2011. To comprehensive account for specialisation and diversity effects of clustering we adopt a spatial econometric approach, which allows us to identify these effects beyond the geographical boundaries of a single region. After controlling for regional characteristics and unobserved heterogeneity, a robust ‘cluster strength’ effect (i.e. specialization) on productivity growth is found within the context of conditional convergence across German regions. With regard to the underlying mechanisms, we find that the presence of a limited number of R&D-intensive clusters in specific technological fields is most strongly linked to higher levels of regional productivity growth. While we also observe a positive effect of cluster strength on innovation growth once we account for spatial spillovers, no significant effects of ‘cluster diversity’ can be identified. This indicates that some but not all cluster-based regional development strategies are promising policy tools to foster regional growth processes.
    Keywords: Industry clusters, regional competitiveness, cluster specialisation, cluster diversity, correlated random effects model
    JEL: L16 R11 R15
    Date: 2020
  25. By: Kang, Jung Koo; Loumioti, Maria; Wittenberg-Moerman, Regina
    Abstract: We explore whether the transparency in banks’ lending activities enhances the harmonization of credit terms that a bank offers across its different geographic regions. We take advantage of a novel loan-level reporting initiative by the European Central Bank, which requires repo borrowing banks that pledge their asset-backed securities as collateral to disclose granular information on loan characteristics and performance. We find that loans originated under the transparency regime share more similar interest rate, loan-to-collateral-value ratio and maturity compared to same-purpose loans issued by the same bank in different regions. Underperforming regional branches and those with less easily accessible peer-branches experience greater convergence in their credit terms, suggesting that transparency facilitates learning across a bank’s different geographic regions. Additionally, banks that face stronger regulatory scrutiny are more likely to alleviate credit term disparities under the transparency regime. Overall, our findings suggest that transparency enhances the within-bank harmonization of lending practices. JEL Classification: M41, G21, D83
    Keywords: credit market, harmonization, learning, regulatory scrutiny, transparency
    Date: 2020–01
  26. By: Homrighausen, Pia (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lang, Julia (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper analyses a local marketing campaign in Germany that provided information about unproven agerelated stereotypes and the value of older workers. The campaign was designed to increase the hiring rate of older workers. Using comprehensive register data, we find that the information provided by the campaign (via banners, interviews, job fairs and information brochures) did change firms' employment behavior. The cheap and mild intervention increased the employment rate of older workers on average by 3 percentage points. This increase, however, is attributable to an increase in job stability rather than to an increase in the hiring of older workers." (Author's abstract, IAB-Doku) ((en))
    Keywords: Informationsangebot - Auswirkungen, Personaleinstellung, ältere Arbeitnehmer, Arbeitslose, Beschäftigerverhalten, Beschäftigungseffekte, Stereotyp, Arbeitsagenturen, Integrierte Erwerbsbiografien, Potsdam, Brandenburg, Bundesrepublik Deutschland
    JEL: D83 J21 J23 J64 J78
  27. By: Etienne Fize (Département d'économie); Charles Louis-Sidois (Universität Mannheim)
    Abstract: We investigate the impact of compulsory military service on turnout and political preferences. Exploiting the suspension of mandatory conscription for French men, we observe a significant and positive impact of military service on turnout. We estimate that the service increases turnout by approximately 7 percentage points. We also investigate the impact of conscription on political preferences. When we control for selection into the military service, we observe no support for a change in preferences of former conscripts.
    Keywords: Voting; Turnout; Political Behaviour; Military Service
    JEL: D72 F52
    Date: 2020–02

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