nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒02‒10
twenty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Gender pay gap: a route from the North to the South of Italy By Maria Elena Filippin
  2. Individual dismissals for personal and economic reasons in French firms: One or two models? By Camille Signoretto; Julie Valentin
  3. Inequality of opportunity in tertiary education in Europe By Flaviana Palmisano; Vito Peragine; Federico Biagi
  4. The impact of consumer protection in the digital age: Evidence from the European Union By Rösner, Anja; Haucap, Justus; Heimeshoff, Ulrich
  5. Does Highway Accessibility Influence Local Tax Factors? Evidence from German Municipalities By Luisa Dörr; Stefanie Gäbler
  6. Industry 4.0 investments in manufacturing firms and internationalization By Marco Bettiol; Mauro Capestro; Valentina De Marchi; Eleonora Di Maria
  8. Tax Compliance in the RentalHousing Market: Evidence from aField Experiment By Essi Eerola; Tuomas Kosonen; Kaisa Kotakorpi; Teemu Lyytikäinen
  9. Policies for a more efficient and inclusive housing market in Luxembourg By Jan Stráský
  10. Innovation and Self-Employment By Ciarli, Tommaso; Di Ubaldo, Mattia; Savona, Maria
  11. European gasoline markets: price transmission asymmetries in mean and variance By Escribano, Álvaro; Torrado, María
  12. The impact of works council membership on wages in Germany: a case of strategic discrimination? By Clément Brébion
  13. The joint effects of energy prices and carbon taxes on environmental and economic performance: Evidence from the French sector By Damien Dussaux
  14. Gender norms and income misreporting within households By Roth, Anja; Slotwinski, Michaela
  15. Gendered economic determinants of couple formation over 50 in France By C. BONNET; F. GODET; A. SOLAZ
  16. The Italian Startup Act: Empirical evidence of policy effects By Francesco Biancalani; Dirk Czarnitzki; Massimo Riccaboni
  17. Nominal Wage Adjustments and the Composition of Pay: New Evidence from Payroll Data By Daniel Schaefer; Carl Singleton
  18. Informal caregiving and quality of life among older adults: Prospective analyses from the Swedish Longitudinal Occupational Survey of Health (SLOSH) By Sacco, Lawrence B; König, Stefanie; Westerlund, Hugo; Platts, Loretta G.
  19. Short-term health effects of public transport disruptions: air pollution and viral spread channels By A. GODZINSKI; M. SUAREZ CASTILLO
  20. Caught between Cultures: Unintended Consequences of Improving Opportunity for Immigrant Girls By Gordon B. Dahl; Cristina Felfe; Paul Frijters; Helmut Rainer
  21. Automation and labor demand in European countries: A task-based approach to wage bill decomposition By Martin Labaj; Materj Vitalos
  22. Rising Concentration and Wage Inequality By Guido Matias Cortes; Jeanne Tschopp
  23. Imputation of the Portuguese Household Finance and Consumption Survey By Luís Martins
  24. How New Airport Infrastructure Promotes Tourism: Evidence from a Synthetic Control Approach in German Regions By Luisa Dörr; Florian Dorn; Stefanie Gäbler; Niklas Potrafke
  25. Who voted for a No Deal Brexit? A Composition Model of Great Britains 2019 European Parliamentary Elections By Stephen Clark
  26. Parental Leave Reform and Long-run Earnings of Mothers By Corinna Frodermann; Katharina Wrohlich; Aline Zucco

  1. By: Maria Elena Filippin (University of Pavia)
    Abstract: This paper analyzes the gender pay gap across different regions in Italy, using the Oaxaca-Blinder decomposition method. We expect regional heterogeneity, both in terms of the gender pay gap and in its determinants. Our results show that, on a regional basis, the retribution gap widely varies, as its percentages of the explained and unexplained parts. Workers’ observable characteristics, related to both labor and personal features, that justify the explained part at a national level are confirmed by the regional data. Furthermore, data on the activity rate show that both at a national and regional level, female participation to the labor market, although it has been improving in recent years, is still profoundly lower than the male one. Therefore, we implement the Heckman correction, which reveals that women’s model coefficients are overestimated, at a national level and in half of the Italian regions. This result suggests that, although female participation in the labor market is lower than the male one, the fewer women participating in the labor market, on average, have higher productivity than men.
    Keywords: Gender Pay Gap, Oaxaca-Blinder, Italian regions
    JEL: J16 J21 J31 O15 R1
    Date: 2019–12
  2. By: Camille Signoretto (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, 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); Julie Valentin (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Most OECD countries divide dismissals into different types, depending on their grounds, as either disciplinary or economic. Restricted to individual dismissals, this article seeks to better understand how the differences between these two grounds with regard to statutory provisions result in the dismissal behavior of employers. Do employers choose this designation to minimize termination costs (severance payment and damages)? Using an original database of French establishments from 1999 to 2009, this article aims to analyze the factors influencing employers' use of economic and personal dismissals, providing insights into the enforcement capability of legal dismissal rules and the part played by strategic behavior. In our view, strategic behaviors should be reflected in the factors influencing both types of dismissal decisions identically, whereas compliance with legal provisions induces contrasting influences. Thus, the hypothesis tested-called the uniqueness of the model of dismissal-is the absence of specificity of the determinants, especially regarding the economic conditions of the firm and related human resource management characteristics, between the two types of dismissal. The results highlight the existence of two quite different models of dismissal even though the personal dismissal determinants are not orthogonal to the economic conditions of the firm. Economic dismissals are essentially explained by the economic conditions of firms, whereas personal dismissals are linked to the propensity of human resource management to retain employees.
    Date: 2019–10
  3. By: Flaviana Palmisano; Vito Peragine; Federico Biagi (European Commission - JRC)
    Abstract: This report provides comparable estimates of inequality of opportunity for tertiary education for about 30 countries in Europe, exploiting the two EU-SILC waves for which information on family background is available (2005 and 2011). It exploits the two point-in-time observations available for most of the countries to analyze the relationship between many institutional dimensions and inequality of opportunity in tertiary education. Although inequality of opportunity in tertiary education varies a lot across countries, parental education and occupation seem to be the most relevant circumstances for almost all of them. We also find evidence of positive correlation between inequality of opportunity for tertiary education and different features of the educational system.
    Keywords: Equality of opportunity, Fairness
    Date: 2019–12
  4. By: Rösner, Anja; Haucap, Justus; Heimeshoff, Ulrich
    Abstract: We investigate the effect of an EU-wide consumer protection regulation on consumer trust as well as consumer behavior. The Unfair Commercial Practice Directive (UCPD) was implemented by EU member states between 2007 and 2010. We utilize data from the Special and Flash Eurobarometer for the years between 2006 and 2014 and experts' evaluation on consumer protection levels before the introduction of the regulation. This rich data set allows us to apply a difference-in-difference estimator with multiple time periods. We find a significant relationship between the introduction of the UCPD and consumer trust and cross-border purchases for countries with a low consumer protection level before the introduction of the UCPD. The relationship increases over time and stays then relatively constant.
    Keywords: Consumer Protection,UCPD,B2C,E-Commerce,Consumer Trust,Cross-border Purchase
    JEL: D18 K20 L50 L51
    Date: 2020
  5. By: Luisa Dörr; Stefanie Gäbler
    Abstract: We examine how highway accessibility influences tax policy. We exploit the stagewise expansion of the “Baltic Sea highway” in the East German state Mecklenburg-Western Pomerania as the largest contiguous highway construction project in Germany since 1945. For non-agglomeration municipalities that lie on a convenient route between two larger cities the access and opening year are close to random. Results from difference-in-differences estimations and an event study approach show that highway access influences local tax setting in municipalities within 5 to 10 km road distance. Improved accessibility increases property tax factors persistently by roughly 6 percentage points. Our effects are driven by peripheral municipalities, while we do not find an influence on core municipalities. Additionally, improved accessibility gives rise to a shift of population and economic activity from the periphery to the core.
    Keywords: Highway, infrastructure, accessibility, tax factors, municipalities, local governments
    JEL: H54 H71 O18
    Date: 2020
  6. By: Marco Bettiol (DSEA, University of Padova); Mauro Capestro (DSEA, University of Padova); Valentina De Marchi (DSEA, University of Padova); Eleonora Di Maria (DSEA, University of Padova)
    Abstract: There is a growing attention on the relationship between investments in industry 4.0 technologies – specifically 3D printing – and internationalization processes. Such technologies can modify the scale and the organization of manufacturing processes, potentially pushing firms in the redefinition of their activities worldwide. At the same time, firms with manufacturing activities located in high-cost countries can benefit from industry 4.0 investments for increasing productivity. Although these relevant implications, limited attention is given to explore how manufacturing firms adopt industry 4.0 technologies in relation to their degree of internationalization. Based on an original dataset of about 1,400 Italian manufacturing firms, the paper analyzes the technological investments strategies of 200 Industry 4.0 adopters in terms of intensity of technological adoption, differences in the technological solutions used and related motivations, taking into account the location of their manufacturing activities as well as export. Results suggest that the adoption of 4.0 technologies per se is independent from the level of internationalization, while internationalized and domestic firms invest in different technologies. Among the four groups of firms identified (global/domestic sourcing – export/domestic market) differences in motivations arise as well as in the steps of value chains where technologies have been implemented.
    Keywords: industry 4.0, internationalization, manufacturing, global sourcing, high-cost countries, 3D printing, automation
    Date: 2020–01
  7. By: Andrea Garnero; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: In this paper, we explore the relationship between non-compliance with bargained minimum wages and employment. We illustrate the role of labour courts with respect to the Constitutional provision of “fair” wage and sketch a model in which firms choose their desired levels of employment and non-compliance. We show that when employers internalize the expected costs of non-compliance, the effect of deviating from the bargained minimum wages on employment levels are modest, or null. Using data from the Italian LFS, we find evidence of a positive, but small, trade-off between non-compliance and employment. We discuss the policy implications of these findings for wage bargaining, also considering the costs that “turning a blind eye” to non-compliance implies for the Italian system of industrial relations.
    Keywords: collective bargaining, sectoral minimum wages, compliance.
    JEL: J08 J31 J52 J83
    Date: 2020–01
  8. By: Essi Eerola (VATT Institute for Economic Research and CESifo); Tuomas Kosonen (Labour Institute for Economic Research and CESifo); Kaisa Kotakorpi (VATT, University of Turku and CESifo); Teemu Lyytikäinen (VATT)
    Abstract: We study rental income tax compliance using a large-scale randomizedfield experiment and register data with third-party information on theownership of apartments. We analyze the responses of potential land-lords to treatment letters notifying them of stricter tax enforcement. Wealso study spillover effects of tax enforcement within the household andbetween landlords within local rental markets. We find an increase inreported income after an enforcement letter is sent to landlords. We alsofind positive reporting spillovers between spouses, as well as betweenlandlords in a subgroup of more likely evaders.
    Keywords: tax compliance, tax enforcement, field experiment, rental housing markets
    JEL: H26 H83 R31
    Date: 2019–05
  9. By: Jan Stráský
    Abstract: Housing prices have been growing strongly in Luxembourg, stoked by population growth, a high rate of household formation and limited use of land available for construction. Increases in price-to-income ratio mainly reflect high valuations of residential real estate, which rise faster than incomes, leading to increasing financial risks related to household indebtedness. Housing affordability has been deteriorating in particular for low-income households who do not profit from highly subsidised social housing. A mix of policies addressing supply-side restrictions, such as land hoarding and resistance to densification, together with policies to increase housing tenure neutrality and better targeted fiscal support will be needed to make the housing market more efficient and inclusive. Measures increasing the opportunity costs of unused land in urbanised areas and unoccupied dwellings could be combined with further reform of land-use planning, including measures involving municipalities in selectively increasing residential density in areas well-connected to the transport network. Housing tenure neutrality could be supported by removing or at least reducing mortgage interest deductibility and other fiscal instruments supporting homeownership and by developing the recurrent taxation of immovable property into a more important fiscal resource based on up-to-date real estate valuations. The supply of social rental housing should be stepped up and access to it made conditional on recurrent means testing ensuring better targeting to those most in need. Private rental sector could be expanded by relaxing the rules on renting parts of housing units and conversion of existing dwellings into rental housing.This Working Paper relates to the 2019 OECD Economic Survey of Luxembourg. uxembourg-economic-snapshot/
    Keywords: housing affordability, housing construction, housing tenure neutrality, land-use planning, Luxembourg, municipalities
    JEL: H11 H24 R21 R31
    Date: 2020–02–03
  10. By: Ciarli, Tommaso; Di Ubaldo, Mattia; Savona, Maria
    Abstract: The paper adds to the literature on innovation and employment by looking at the relationship between R&D investments and the rise of alternative work arrangements, particularly selfemployment (SE). A literature review on the determinants of the emergence of non-standard work, alternative work arrangements and self-employment if offered first. The contributions that have looked at SE in relation to innovation strategies is surprisingly limited. General trends of SE in Europe are considered. The empirical contribution is focused on the analysis of local labour markets in the UK (Travel-To-Work-Areas, TTWAs), where their initial concentration of routinized and non-routinized jobs is considered. The probability that an individual shifts from paid employment to either unemployment or self-employment over the period 2001-13, as linked to changes in R&D investments in the TTWA is empirically accounted for. Results show that overall R&D has negligible effects on the probability of workers to become self-employed. R&D increases the probability of moving from unemployment to paid employment, especially in routinized areas, and reduces the permeability between routinised and nonroutinised workers. Also, a non-negligible increase in the probability that a routinized worker becomes SE as a result of R&D increase is found in low routinised local labour markets, but not in highly routinised areas. The paper sheds new lights on the effect of R&D on employment and self-employment in areas with different degrees of routinization, and adds to the discussion on the more general raise of alternative work arrangements in Europe by disentangling the characteristics of self-employment as resulting from R&D investments.
    Keywords: R&D,employment,unemployment,self-employment,routinized local labour markets
    JEL: J6 O3 O32
    Date: 2020
  11. By: Escribano, Álvaro; Torrado, María
    Abstract: The main objective of this paper is to analyse the different sources of asymmetric price transmissions in the fuel market for France, Germany and Spain. During the last decades,the EU has carried out several common energy policies to achieve more efficient and competitive markets. However, given the specific characteristics of each country, the question we want to address is if fuel prices across EU members behave differently in response to different market structures. Oil operators have been targeted by competition authorities for conducting non-competitive practices. To figure out whether the common complaint that gasoline prices adjust differently to positive or negative input price changes, dynamic asymmetric models for the mean and variance are developed for each country. Several asymmetric specifications for the mean and variance are considered and the best specification combines double threshold error correction models (DT-ECM) for the mean with asymmetric EGARCH plus dummy variables for the conditional variance. We show that French gasoline prices behave more competitively, adjusting quicker to the long-run equilibrium and with higher price volatility. This outcome is consistent with the strong presence of hypermarkets following low-cost pricing strategies in France.
    Keywords: Log-GARCH; GJR-GARCH; EGARCH; GARCH; Nonlinear error correction; Rockets and feathers; Gasoline price asymmetries; Competition
    JEL: L71 L13 D43 C52 C24 B23
    Date: 2020–01–30
  12. By: Clément Brébion (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper provides new insight into the quality of cooperation between employers and workers in Germany by estimating the impact of works council membership on wages between 2001 and 2015. It falls within a stream of research on collective organisations that has shifted focus away from the perspective of covered firms and their average worker to concentrate on the actors leading the negotiations. To my knowledge, this is the first economic analysis of a non-unionised form of representation to adopt this orientation. The main model of identification is an OLS with time and individual fixed effects conducted on a subsample of the German Socio-Economic Panel. I find that for individuals switching status without changing firm, being a works councilor increases the hourly gross wage by 4.5% in the manufacturing sector, while a penalty of 4% is evidenced in the service sector. I present several types of evidence showing that the impact is causal. Finally, I show that politically active representatives receive most of the (negative or positive) premium. Turning back to the context, I explain why this is likely to reflect a strategic behaviour of employers and a decline in the quality of cooperation in the country.
    Date: 2020–01
  13. By: Damien Dussaux
    Abstract: The paper estimates the effect of energy prices and carbon taxation on firms’ environmental and economic performance. The analysis uses data on 8 000 firms that are representative of the French manufacturing sector and observed during 2001-2016. The paper shows that (i) even though a 10% increase in energy prices causes a decline in energy use by 6% at the firm level, this increment has no effect on net employment at the industry level, but it motivates a reallocation of production and workers from energy-intensive to energy-efficient firms. Simulations shows also that (ii) the current carbon tax rate reduced manufacturing CO2 emissions in 2018 by 5% or 3.6 Mt of CO2 compared to a no-tax scenario, and that (iii) a further increase of carbon tax in France from its current rate of 45€ to 86€ per tonne of CO2 would induce a reduction in carbon emissions by 8.7% or 6.2 Mt of CO2 and a job reallocation for 0.24% of the workforce in the manufacturing sector. Our conclusion calls for complementary labour market policies that minimise costs on affected workers and ease between-firms adjustments in employment.
    Date: 2020–02–04
  14. By: Roth, Anja; Slotwinski, Michaela
    Abstract: We show that the discontinuity in the distribution of surveyed female income shares at the margin where a woman would outearn her partner is primarily driven by norm induced misreporting in surveys. We draw on unique Swiss data combining survey and administrative information for the same individual and their partner. We demonstrate that individuals misreport incomes in surveys to comply with the male breadwinner norm. The male breadwinner norm does, however, not affect real labor market decisions around this margin. The resulting survey bias leads to a considerable overestimation of policy relevant measures like the gender wage gap.
    Keywords: gender norms,female income shares,combination survey and administrative data,income misreporting,gender earnings gap
    JEL: D10 J01 J16
    Date: 2020
  15. By: C. BONNET (Ined); F. GODET (Insee); A. SOLAZ (Ined)
    Abstract: Couple formation over 50 has been largely unexplored until now. The lack of literature on this topic especially in France lies in the low number of events for this age group, even if it is increasing. From the Fideli 2016 two-year panel which combines comprehensive income and housing tax returns, we study the determinants of the union between women and men after 50 years (logistic regression), the type of union chosen: marriage, PACS or common-law union (multinomial regression), and the degree of homogamy within these new couples. The probability to form an union is higher for men than for women but sharply decreases with age for both. Previous marital status and income play different roles depending on the sex. Compared to never-married men, widowers are more likely to form a new couple. It is the opposite for women. Divorced men and women more often form a new union than others. While a high income increases the chances of repartnering for men, it decreases them for women. However, the effects of supply (less opportunity on the marriage market) cannot be disentangled from the effects of demand (less willingness and need to form a couple). For low income, forming a couple is one way to increase one's standard of living, at ages when it is difficult to increase the labor market participation. The type of union chosen also differs according to previous marital status and income. Over 50, the ex-spouses are more likely to marry, except for the widows who are the least likely to marry. Income plays positively on the fact of contracting an union for men. For women, the probability to contractualize theirs unions is highest at both ends of the income distribution. Over 50, men enter new unions with younger women and women who have similar levels of income. Women form new partnership with men who earn more than them.
    Keywords: Union formation ; elderly ; retired ; economic resources ; socioeconomic characteristics ; gender ; marital status ; repartnering ; mariage ; Pacs ; cohabitation
    JEL: J12 J14 J16
    Date: 2019
  16. By: Francesco Biancalani; Dirk Czarnitzki; Massimo Riccaboni
    Abstract: Using a difference-in-difference approach this paper analyses the impact of the Italian Startup Act entered into force in December 2012. This law provides special benefits (e.g. tax incentives, public loan guarantees, tailor-made labor law, cuts to red tape and fees) for firms registered as “innovative startups” in Italy. This special legislation has been implemented by the Italian government to increase innovativeness of small and young enterprises by facilitating improved access to external capital and (high-skilled) labor. Consequently, our goal is to assess the impact of the policy on equity, debt and employment. Overall, we find that the Italian startup policy has met its primary objectives. The treated firms operating under this program show more capacity to collect equity and debt, and also achieve higher levels of employment than untreated, comparable firms.
    Keywords: start up, innovation policy, firm subsidies, small firms
    Date: 2020–01–17
  17. By: Daniel Schaefer (Institut für Volkswirtschaftslehre, Johannes-Kepler-Universität Linz); Carl Singleton (Department of Economics, University of Reading)
    Abstract: We use representative employer payroll data from Great Britain and the period 2006-2018 to document novel facts about nominal wage adjustments, focusing on workers who stay in the same firm and job from one year to the next. The richness of these data allows us to analyse separately basic pay and the other components of earnings, such as overtime and incentive pay, while controlling for hours worked. Weekly and hourly basic pay show signs of downward nominal rigidity, but non-basic pay components adjust more commonly. Unusually, these payroll-based data also report the pay rates of hourly-paid employees. A quarter of these workers, who stay in the same job between years, typically see no change in their rate of pay, and very few experience wage cuts. Finally, we exploit the employer-employee link in our data and find some evidence that wage setting is state-dependent rather than time-dependent.
    Keywords: downward nominal wage rigidity, payroll records, components of pay, hourly pay
    JEL: E24 J31 J33
    Date: 2020–01–28
  18. By: Sacco, Lawrence B (Stockholm University); König, Stefanie; Westerlund, Hugo; Platts, Loretta G. (Stockholm University)
    Abstract: Providing unpaid informal care to someone who is ill or disabled is a common experience in later life. While a supportive and potentially rewarding role, informal care can become a time and emotionally demanding activity, which may hinder older adults’ quality of life. In a context of rising demand for informal carers, we investigated how caregiving states and transitions are linked to overall levels and changes in quality of life, and how the relationship varies according to care intensity and burden. We used fixed effects and change analyses to examine six-wave panel data (2008–2018) from the Swedish Longitudinal Occupational Survey of Health (SLOSH, n=5076; ages 50–74). The CASP-19 scale is used to assess both positive and negative aspects of older adults’ quality of life. Caregiving was related with lower levels of quality of life in a graded manner, with those providing more weekly hours and reporting greater burden experiencing larger declines. Two-year transitions corresponding to starting, ceasing and continuing care provision were associated with lower levels of quality of life, compared to continuously not caregiving. Starting and ceasing caregiving were associated with negative and positive changes in quality of life score, respectively, suggesting that cessation of care leads to improvements despite persistent lower overall levels of quality of life. Measures to reduce care burden or time spent providing informal care are likely to improve the quality of life of older people.
    Date: 2020–02–03
  19. By: A. GODZINSKI (Insee); M. SUAREZ CASTILLO (Insee)
    Abstract: When public transport supply decreases, urban population health may be strongly affected. First, as ambient air pollution increases, respiratory diseases may be exacerbated during a few days. Second, reduced interpersonal contacts may lead to a slower viral spread, and therefore, after a few incubation days, lower morbidity. We evidence these two channels, using a difference-in-differences strategy, considering public transport strikes in the ten most populated French cities over the 2010-2015 period. On the two days following the strike, we find less emergency hospital admissions for influenza and gastroenteritis. In spite of the existence of this contagion channel, which tends to mitigate the increase of admissions for respiratory diseases, we also evidence a substantial air pollution channel. On the strike day, we find more admissions for acute diseases of the upper respiratory system, while on the following day of the strike, more abnormalities of breathing. Our results suggest that urban population daily transportation choices do matter as they engender dynamic spillovers on health.
    Keywords: Dynamic health effects, transport strike, air pollution, contagion, difference-in-differences
    JEL: I12 I18 C23 L91 Q53 R41
    Date: 2019
  20. By: Gordon B. Dahl; Cristina Felfe; Paul Frijters; Helmut Rainer
    Abstract: What happens when immigrant girls are given increased opportunities to integrate into the workplace and society, but their parents value more traditional cultural outcomes? Building on Akerlof and Kranton's identity framework (2000), we construct a simple game-theoretic model which shows how expanding opportunities for immigrant girls can have the unintended consequence of reducing their well-being, since identity-concerned parents will constrain their daughter's choices. The model can explain the otherwise puzzling findings from a reform which granted automatic birthright citizenship to eligible immigrant children born in Germany after January 1, 2000. Using survey data we collected in 57 schools in Germany and comparing those born in the months before versus after the reform, we find that birthright citizenship lowers measures of life satisfaction and self-esteem for immigrant girls. This is especially true for Muslims, where traditional cultural identity is particularly salient. Birthright citizenship results in disillusionment where immigrant Muslim girls believe their chances of achieving their educational goals are lower and the perceived odds of having to forgo a career for family rise. Consistent with the model, immigrant Muslim parents invest less in their daughters' schooling and have a lower probability of speaking German with their daughters if they are born after the reform. We further find that immigrant Muslim girls granted birthright citizenship are less likely to self-identify as German, are more socially isolated, and are less likely to believe foreigners can have a good life in Germany. In contrast, immigrant boys experience, if anything, an improvement in well-being and little effect on other outcomes. Taken together, the findings point towards immigrant girls being pushed by parents to conform to a role within traditional culture, whereas boys are allowed to take advantage of the opportunities that come with citizenship. Alternative models can explain some of the findings in isolation, but are not consistent more generally.
    JEL: J15 J16 Z1
    Date: 2020–01
  21. By: Martin Labaj; Materj Vitalos
    Abstract: To understand the effects of automation and other types of technological changes on European labor demand, we use an empirical decomposition of observed changes in the total wage bill in the economy developed by Acemoglu and Restrepo (2019). The decomposition is derived from a task-based model that allows us to study the effects of different technologies on labor demand. At the center of this framework is the task content of production|measuring the allocation of tasks to factors of production. Automation, by creating a displacement effect, shifts the task content of production against labor, while the introduction of new tasks in which labor has a comparative advantage improves it via the reinstatement effect. Overall effects are country- and time-specific and call for an empirical exploration. We apply the decomposition to 15 European countries with good data coverage in the EU KLEMS database.
    Keywords: automation, displacement effect, labor demand, productivity, reinstatement effect, technology, wage share
    JEL: J23 J24
    Date: 2019–12–28
  22. By: Guido Matias Cortes (Department of Economics, York University, Canada; Rimini Centre for Economic Analysis); Jeanne Tschopp (Department of Economics, University of Bern, Switzerland)
    Abstract: Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in “superstar” firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that shocks that increase concentration, such as an increase in consumers’ price sensitivity, will also lead to an increase in wage dispersion between firms. Empirically, we use industry-level data from 14 European countries over the period 1999–2016 and show robust evidence of a positive and statistically significant correlation between concentration and the dispersion of firm-level wages.
    Date: 2020–01
  23. By: Luís Martins
    Abstract: For the most important variables in the Portuguese Household Finance and Consumption Survey (ISFF), missing data is imputed using a stochastic multiple imputation algorithm, as agreed in the Household Finance and Consumption Network of the Eurosystem (HFCN). This paper describes the implementation of this methodology in the ISFF. The objective is to get interested readers, namely data users and other producers of survey data, acquainted with one of the most complex and time-consuming stages of the data preparation.
    JEL: C15 C81 D10
    Date: 2020
  24. By: Luisa Dörr; Florian Dorn; Stefanie Gäbler; Niklas Potrafke
    Abstract: We examine how new airport infrastructure influences regional tourism. Identification is based on the conversion of a military air base into a regional commercial airport in the German state of Bavaria. The new airport opened in 2007 and promotes travelling to the touristic region Allgäu in the Bavarian Alps. We use a synthetic control approach and show that the new commercial airport increased tourism in the Allgäu region over the period 2008-2016. The positive effect is especially pronounced in the county where the airport is located. Our results suggest that new transportation infrastructure promotes regional economic development.
    Keywords: airports, tourism, regional development, transportation infrastructure, synthetic control method
    JEL: O18 Z38 L93
    Date: 2019
  25. By: Stephen Clark
    Abstract: The purpose of this paper is to use the votes cast at the 2019 European elections held in United Kingdom to re-visit the analysis conducted subsequent to its 2016 European Union referendum vote. This exercise provides a staging post on public opinion as the United Kingdom moves to leave the European Union during 2020. A composition data analysis in a seemingly unrelated regression framework is adopted that respects the compositional nature of the vote outcome; each outcome is a share that adds up to 100% and each outcome is related to the alternatives. Contemporary explanatory data for each counting area is sourced from the themes of socio-demographics, employment, life satisfaction and place. The study find that there are still strong and stark divisions in the United Kingdom, defined by age, qualifications, employment and place. The use of a compositional analysis approach produces challenges in regards to the interpretation of these models, but marginal plots are seen to aid the interpretation somewhat.
    Date: 2020–01
  26. By: Corinna Frodermann (Institute for Employment Research, Nuremberg, Germany); Katharina Wrohlich (DIW Berlin); Aline Zucco (DIW Berlin)
    Abstract: Paid parental leave schemes have been shown to increase women’s employment rates but decrease their wages in case of extended leave durations. In view of these potential trade-offs, many countries are discussing the optimal design of parental leave policies. We analyze the impact of a major parental leave reform on mothers’ long-term earnings. The 2007 German parental leave reform replaced a means-tested benefit with a more generous earnings-related benefit that is granted for a shorter period of time. Additionally, a “daddy quota” of two months was introduced. To identify the causal effect of this policy on long-run earnings of mothers, we use a difference-in-difference approach that compares labor market outcomes of mothers who gave birth just before and right after the reform and nets out seasonal effects by including the year before. Using administrative social security data, we confirm previous findings and show that the average duration of employment interruptions increased for high-income mothers. Nevertheless, we find a positive long-run effect on earnings for mothers in this group. This effect cannot be explained by changes in working hours, observed characteristics, changes in employer stability or fertility patterns. Descriptive evidence suggests that the stronger involvement of fathers, incentivized by the “daddy months”, could have facilitated mothers’ re-entry into the labor market and thereby increased earnings. For mothers with low prior-to-birth earnings, however, we do not find any beneficial labor market effects of this parental leave reform.
    Keywords: parental leave, wages, labor supply
    JEL: H31 J13 J22 J24 J31
    Date: 2020–01

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