|
on Microeconomic European Issues |
|
Issue of 2020‒03‒30
24 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Soroush, Golnoush (Department of Management, Politecnico di Torino, Italy); Cambini, Carlo (Department of Management, Politecnico di Torino, Italy); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School) |
| Abstract: | It is generally accepted that institutions are important for economic development. However, whether the performance of regulated utilities within a country is affected by the quality of institutions is yet to be investigated thoroughly. We analyse how the quality of regional institutions impact performance of Italian electricity distribution utilities. We use a stochastic frontier analysis approach to estimate cost functions and examine the performance of 108 electricity distribution utilities from 2011 to 2015. This unique dataset was constructed with the help of the Italian Regulator for Energy, Networks, and Environment. In addition, we use a recent dataset on regional institutional quality in Italy. We present evidence that utilities in regions with better government effectiveness, responsiveness towards citizens, control of corruption, and rule of law, also tend to be more cost efficient. The results suggest that national regulators should take regional institutional diversity into account in incentive regulation and efficiency benchmarking of utilities. |
| Keywords: | institutional quality; stochastic frontier analysis; electricity distribution in Italy; cost efficiency; inefficiency determinants |
| JEL: | D22 L51 L94 O43 |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2020_004&r=all |
| By: | Jussila Hammes, Johanna (Swedish National Road & Transport Research Institute (VTI)) |
| Abstract: | This paper describes so-called city growth agreements and city environmental agreements in Norway and Sweden, respectively. We do case studies of two regions in Norway and two cities in Sweden. While the general aim of the agreements is similar in the two countries, namely for the central government to influence municipal infrastructure building in a more environmentally sustainable direction, the agreements differ in many respects. While the Norwegian agreements consist of several projects concerning the construction of roads and railroads, and infrastructure for public transport, pedestrians, and cycling, the Swedish agreements only concern one (type of) project at a time. Moreover, Norway emphasizes city planning more; even though the building of new housing is important also in Sweden, location and densification are less so. The Swedish projects are municipality driven, while the Norwegian system is based on reciprocal negotiations between the municipalities, the county, and the state. The Norwegian model fits better into a theoretical fiscal federalism-based framework than the Swedish one, with the state internalizing spatial spillovers arising from infrastructure projects. In Sweden, the agreements are better to be seen as means for institutionalized lobbying by municipalities |
| Keywords: | Co-financing; Cycling; Sustainable cities; Public transport; Infrastructure investment; State-local cooperation; City planning |
| JEL: | D70 H54 H71 Q54 R11 R42 |
| Date: | 2020–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2020_004&r=all |
| By: | Hesse, Kolja (University of Bremen) |
| Abstract: | Recently, the outstanding potential of radical innovations has been acknowledged to foster the economic development of countries and regions. However, due to market imperfection, economic actors do not engage in radical innovation to a socially desirable degree. Hence, governments have established measures to compensate the under-investment in private R&D. For instance, in Germany and on the European level innovation agencies have been established to support innovations that move the technological frontier. In the light of this development, this study aims to answer the question whether direct funding of R&D projects in general and collaborative R&D grants in particular can support the emergence of radical innovations. Furthermore, this study scrutinises on the effect of policy-induced cross-innovation activities on radical innovation processes. Although many scholars advise policy makers to support activities inducing cross-fertilisation in order to enhance radical innovation, we lack evidence whether the funding of such research projects actually has an effect. The results can be of interest for scholars as well as policy makers aiming to support this type of innovation. |
| Keywords: | R&D subsidies; R&D collaboration; cross-innovation activities; radical innovation; treatment effects |
| JEL: | C30 H20 O31 O38 |
| Date: | 2020–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2020_005&r=all |
| By: | Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Paola Cardamone (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Lidia Mannarino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Valeria Pupo (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria) |
| Abstract: | This article focuses on the relationship between external research and development (R&D) and firm innovation output. Using a sample of Italian manufacturing firms in the period of 2007-2009, the role played by external R&D is evaluated, investigating differences between family and non-family firms. Results show that the R&D acquired from external sources has a positive impact, especially on family firms, suggesting that family companies have a greater capacity to translate external R&D into tangible economic benefits. This result is consistent with those obtained when we consider the combination of internal and external R&D, as well as the family involvement in governance and management. |
| Keywords: | Family firms, R&D investment, Innovative sales, Italian manufacturing industry |
| JEL: | O32 G34 C24 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:202002&r=all |
| By: | Amamou, Raschid; Gereben, Áron; Wolski, Marcin |
| Abstract: | We look at the impact of intermediated funding provided by the European Investment Bank (EIB) on the performance of small and medium-sized enterprises (SMEs) in the 28 member countries of the European Union between 2008 and 2014. We use a combination of propensity score matching and difference-in-differences to evaluate the impact of EIB lending on corporate performance using firm-level data. We find that EIB lending had a positive effect on employment, firm size, investment and innovation capacity, and it also increased firms' leverage. We also find that the positive impact of EIB funding is higher in the countries of Central and East Europe and also in South Europe, while somewhat smaller, yet still significant, in West and North Europe. All in all, our results indicate that EIB-supported funding made a significant and positive difference to the economic and financial performance of the beneficiary SMEs. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202004&r=all |
| By: | Kashnitsky, Ilya (Netherlands Interdisciplinary Demographic Institute); Aburto, José Manuel |
| Abstract: | In the map NUTS-3 regions of Europe are colored according to the deviation from European pooled estimate of the proportion of population at risk of death due to COVID-19. These estimates assume age-specific case-fatality ratio the same as in Italy for the 3047 first registered COVID-19 deaths (19 March 2020) and 2/3 of the total population infected. Such an estimate for the total European population is 2.2%. Please note, this estimate is very rough and unlikely to hold true due to multiple biases of the data for the unfolding pandemic; in contrast, the population age structures data are of good quality. Thus, whatever the total infected population is and the absolute values of age-specific case-fatality ratios, the relative differences between regions would hold as long as the age-specific profile of case-fatality ratios stays proportional. This map reflects the unequal population age structures rather than the precise figures on COVID-19 fatality. It's a demographic perspective. |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:abx7s&r=all |
| By: | Elif Kara; Mirco Tonin; Michael Vlassopoulos |
| Abstract: | In recent years, many countries have experienced a significant expansion of higher education enrolment. There is a particular interest among policy makers for further growth in STEM subjects, which could lead to larger classes in these fields. This study estimates the effect of class size on academic performance of university students, distinguishing between STEM and non-STEM fields. Using administrative data from a large UK higher education institution, we consider a sample of 25,000 students and a total of more than 190,000 observations, spanning six cohorts of first-year undergraduate students across all disciplines. Our identification of the class size effects rests on within student-across course variation. Overall, we find that larger classes are associated with significantly lower grades (effect size of -0.04) and the effect varies across academic fields, with no effect in non-STEM fields, and a large effect in STEM fields (-0.08). We further explore the heterogeneity of the effect along the dimensions of students’ socio-economic status, ability, and gender, finding that in STEM disciplines smaller classes appear to be particularly beneficial for students from a low socio-economic background, with higher attainment in A-levels and to male students. |
| Keywords: | class size, higher education, student academic performance, STEM |
| JEL: | I21 I23 I28 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8135&r=all |
| By: | Engerstam, Sviatlana (Department of Real Estate and Construction Management, Royal Institute of Technology) |
| Abstract: | We study the long-term effects of macroeconomic fundamentals on apartment prices in major urban areas in Sweden and Germany. The panel cointegration analysis was chosen as the primary approach due to the limited availability of data for a more extended period and frequency. The dataset consists of 2 countries – Germany and Sweden. The Swedish dataset includes three major cities and a period of 23 years, while the German dataset includes 7 “Big cities” for 29 years. Pooling the observations allows overcoming data restrictions in econometric analysis of long-term time series such as spatial heterogeneity, cross-sectional dependence and non-stationary, but cointegrated data. The results lie in line with previous studies and also allow comparison of single city estimations in an integrated equilibrium framework. The empirical results indicate that apartment prices react much stronger on changes in fundamentals in major Swedish cities than in German ones despite quite similar underlying fundamentals. Comparative analysis of regulations on the rental market, bank lending policies, and approaches to valuation for mortgage purposes in these two countries provide evidence that this overreaction arises due to institutional differences in form bank lending policies, mortgage valuation practices, and regulations on the rental market. Application of the more sustainable value concept such as mortgage lending value in mortgage valuations could make lending for housing less procyclical and stabilize house prices over the long run. Moreover, it will help to keep house prices away from overreaction on changes in macroeconomic fundamentals. |
| Keywords: | Housing market; macro economy; price determinants; panel cointegration; dymanic OLS |
| JEL: | C33 C51 R15 R30 |
| Date: | 2020–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthrec:2020_002&r=all |
| By: | Keloharju, Matti (Aalto University School of Business); Knüpfer, Samuli (BI Norwegian Business School); Tåg, Joacim (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Boards hire and fire CEOs based on imperfect information. Using comprehensive data on 28 cohorts in Sweden, we analyze the role of a potentially important unobserved attribute—CEO health—in corporate governance. We find CEOs are significantly healthier than the population and other highskill professionals, in particular in mental health. Health at appointment predicts turnover, suggesting boards respond to health problems and correct mismatches that occurred at the time of appointment. Health-related corporate governance appears to work imperfectly, however, as we find CEO health also associates with firm policies requiring an active CEO role. |
| Keywords: | CEOs; Corporate Governance; Executives; Mental Health; Physical Health |
| JEL: | G34 I12 J24 J31 |
| Date: | 2020–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1326&r=all |
| By: | Tobias Schlegel; Curdin Pfister; Uschi Backes-Gellner |
| Abstract: | Previous economic research shows that tertiary education expansions lead to various positive first order effects, such as more patents, higher productivity or newly founded firms. However, less is known on the second order effects of tertiary education expansions, for example, the impact on regional firm development. We evaluate the impact of a tertiary education expansion on regional firm development——as measured by average profits per firm——by using administrative tax data at a geographically disaggregated level (i.e. municipalities). A policy change in Switzerland, leading to a quasi-random establishment of universities of applied sciences (UAS)-bachelor-granting three year-colleges teaching and conducting applied research-thereby serves as our case study. Depending on our regression model, we find that average profits per firm in treated municipalities, i.e., near a UAS, are between 15% to 24% higher than in non-treated municipalities after the establishment of UASs. Analyzing the dynamics of this second order effects shows that profits start to increase significantly three years after the UAS establishment and persist even in the long run. |
| Keywords: | Higher Education and Research Institution, Innovation, Regional Firm Development |
| JEL: | I23 I26 O18 O30 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0166&r=all |
| By: | Simon Briole (PSE - Paris School of Economics); Hélène Le Forner (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Anthony Lepinteur (University of Luxembourg [Luxembourg]) |
| Abstract: | Although it is widely acknowledged that non-cognitive skills matter for adult outcomes, little is known about the role played by family environment in the formation of these skills. We use a longitudinal survey of children born in the UK in 2000-2001, the Millennium Cohort Study by the Centre for Longitudinal Studies, to estimate the effect of family size on socio-emotional skills, measured by the Strengths and Difficulties Questionnaire. To account for the endogeneity of fertility decisions, we use a well-known instrumental approach that exploits parents' preference for children's gender diversity. We show that the birth of a third child negatively affects the socio-emotional skills of the first two children in a persistent manner. However, we show that this negative effect is entirely driven by girls. We provide evidence that this gender effect is partly driven by an unequal response of parents' time investment in favour of boys and, to a lesser extent, by an unequal demand for household chores. |
| Keywords: | Non-cognitive skills,Family size,Birth order,Child development |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02503920&r=all |
| By: | Grönqvist, Erik (Uppsala University); Hensvik, Lena (Uppsala University); Thoresson, Anna (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | We study the effects of introducing a performance-based promotion program for teachers in Sweden. The program intended to make the teaching profession more attractive by raising wages for skilled teachers and taking advantage of teachers' professional competence. Our results show that: (i) high-wage, high ability teachers are more likely to be promoted; (ii) the stipulated wage increase has full pass-through onto wages for promoted teachers; (iii) schools with promotions have lower teacher separations and an improved pool of teachers; (iv)the promotion program improved student performance. These results suggest that performance-based promotions could be an important tool for raising school quality. |
| Keywords: | Career opportunities; Teacher labor market; Student performance |
| JEL: | I21 I28 J31 J45 |
| Date: | 2020–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_002&r=all |
| By: | Paola Bertoli (University of Economics, Prague); Veronica Grembi (Center for Health and Wellbeing, Princeton University, University of Milan); The Linh Bao Nguyen (University of Maryland) |
| Abstract: | We challenge the use of traditional measures of ethnic density| e.g., the incidence of an ethnic group on the resident population of a specific area| when testing the correlation between stronger ethnic networks and health at birth (i.e., birth weight). Using unique data from Italy on the main 44 ethnicities residing across almost 4,500 municipalities, we propose more insightful measures, as the distribution of immigrant associations or the incidence of ethnicities sharing the same language. We prove that, once fixed effects for the municipality of residence and the ethnic group are included, the correlation between ethnic density and health at birth is not statistically different from zero. However, ethnic density does channel positive effect on health at birth when a negative shock, as the 2008 Great Recession, struck the labor market. Exploiting a quasi-randomized diffusion of the recession, we find that its average negative impact on immigrant newborns was mitigated by stronger ethnic networks. We show that this can be explained by through sorting of the healthier and more fertile ethnic groups, which experienced also lower levels of in utero selection. |
| Keywords: | Ethnic networks, Ethnic density, Great recession, Immigrants, Low birth weight, Premature babies |
| JEL: | I1 I12 J15 J60 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1909&r=all |
| By: | Flagmeier, Vanessa; Gawehn, Vanessa |
| Abstract: | We assess the investor reaction to a potential introduction of public country-by-country reporting (CbCR) into the European Capital Requirements Directive IV. Estimating cumulative abnormal returns with the help of a multivariate regression model, we find weak significant evidence around our event date (February 20th, 2013) that investors perceive the introduction of CbCR as beneficial. In additional tests, we assess investor perceptions relative to different control groups (domestic institutions and non-EU institutions) and in the cross-section (splitting across size, systemically relevant, pre-event level of GAAP ETR and pre-event level of geographic disclosure). The only significant outcome is a negative reaction for large international EU institutions. |
| Keywords: | Country-by-country reporting,CbCR,financial institutions,investor reactions,eventstudy,multivariate regression model |
| JEL: | H25 H26 G21 G28 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:254&r=all |
| By: | Cambini, Carlo (Department of Management, Politecnico di Torino, Italy); Congiu, Raffaele (Department of Management, Politecnico di Torino, Italy); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Soroush, Golnoush (Department of Management, Politecnico di Torino, Italy) |
| Abstract: | Energy Systems Integration (ESI) is an emerging paradigm and at the centre of the EU energy debate. ESI takes a holistic view of the electricity, gas and heat sectors to deliver a clean, reliable and affordable energy system. By identifying and exploiting the synergies within and between the sectors, ESI aims to increase flexibility in the energy system, maximize the integration of renewable energy and distributed generation, and reduce environmental impact. While ESI-enabling technologies have been studied from a technical perspective, the economic, regulatory and policy dimensions of ESI are yet to be analysed. This paper discusses ESI in a multi-step approach. We first focus on the economics of ESI-enabling technologies. We briefly discuss how the EU national regulators incentivise their adoption. We identify major economic and policy barriers to ESI and propose policy solutions to overcome these barriers. We conclude that current regulatory frameworks in the EU do not stimulate sufficient ESI investments and only through proper design of incentives the ESI paradigm could be achieved. |
| Keywords: | energy systems integration; sector coupling; regulation; innovation; research and development; economic and policy barriers |
| JEL: | L51 L94 Q40 |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2020_002&r=all |
| By: | Jensen, Søren (VIVE - The Danish Centre for Applied Social Science); Pedersen, Peder J. (Aarhus University) |
| Abstract: | The hypothesis tested in this paper is whether the increasing inequality in recent years has had a significant impact on well-being among the population in Denmark. After a survey of the literature we use attitude variables from the European Social Survey in a pseudo-panel setting covering the years 2002 – 2014. We cover respondents from Denmark and supplement the survey data with variables from administrative registers. We find a significant effect from the increasing Gini coefficient since 2002. |
| Keywords: | pseudo-panel, well-being, inequality |
| JEL: | D31 H53 I31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12972&r=all |
| By: | Clément Carbonnier (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po, Centre de recherche de la Banque de France - Banque de France); Clément Malgouyres (IPP - Institut des politiques publiques - PSE - Paris School of Economics, 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); Loriane Py (Centre de recherche de la Banque de France - Banque de France, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Camille Urvoy (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po) |
| Abstract: | Do workers gain from lower business taxes, and why? We estimate how a large French corporate income tax credit is passed on to wages and explore the firm- and employee-level underlying mechanisms. The amount of tax credit firms get depends on their payroll share of workers paid less than a wage threshold. Exposure to the policy thus varies both across workers depending on their wage and across firms depending on their wage structure. Using exhaustive employer-employee data, we find that half of the surplus generated by the reform falls onto workers. Wage gains load on incumbents in high-skill occupations. The wage earnings of low-skill workers -- nearly all individually eligible -- do not change. This heterogeneous wage incidence is unlikely to be driven by scale effects or skill complementarities. We find that the groups of workers benefiting from wage gains are also more likely to continue working for the same firm. Further, we show that firms do not change their wage-setting behavior in response to the individual eligibility status of workers as there is no bunching in the distribution of entrants' wages. Overall, our results suggest that the wage incidence of firm taxation operates collectively through rent-sharing and benefits workers most costly to replace. |
| Keywords: | business taxation,tax incentives,wage incidence,rent sharing |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02495652&r=all |
| By: | Clément Carbonnier (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po, Centre de recherche de la Banque de France - Banque de France); Clément Malgouyres (IPP - Institut des politiques publiques - PSE - Paris School of Economics, 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); Loriane Py (Centre de recherche de la Banque de France - Banque de France, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Camille Urvoy (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques [Sciences Po] - Sciences Po - Sciences Po) |
| Abstract: | Do workers gain from lower business taxes, and why? We estimate how a large French corporate income tax credit is passed on to wages and explore the firm- and employee-level underlying mechanisms. The amount of tax credit firms get depends on their payroll share of workers paid less than a wage threshold. Exposure to the policy thus varies both across workers depending on their wage and across firms depending on their wage structure. Using exhaustive employer-employee data, we find that half of the surplus generated by the reform falls onto workers. Wage gains load on incumbents in high-skill occupations. The wage earnings of low-skill workers -- nearly all individually eligible -- do not change. This heterogeneous wage incidence is unlikely to be driven by scale effects or skill complementarities. We find that the groups of workers benefiting from wage gains are also more likely to continue working for the same firm. Further, we show that firms do not change their wage-setting behavior in response to the individual eligibility status of workers as there is no bunching in the distribution of entrants' wages. Overall, our results suggest that the wage incidence of firm taxation operates collectively through rent-sharing and benefits workers most costly to replace. |
| Keywords: | business taxation,tax incentives,wage incidence,rent sharing |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02495652&r=all |
| By: | Andrea Bonoldi; Chiara Dalle Nogare; Martin Mosler; Niklas Potrafke |
| Abstract: | We examine the relationship between inheritance rules and voter turnout. Inheritance rules are measured by entailed farms in South Tyrol: land properties whose inheritance is regulated by a law similar to the right of primogeniture. Using data for municipalities between 1998 and 2010, we show that voter turnout is high in municipalities with many entailed farms relative to population. The effect is based on local elections. If the number of entailed farms per 100 inhabitants increases by one standard deviation, voting turnout in municipal and provincial elections increases by around 1.27 and 1.43 percentage points (around 25 and 35 percent of a standard deviation). Our results suggest that entailed farm owners themselves are more likely to vote, and that entailed farms owners encourage other citizens of their municipality to participate in local elections. |
| Keywords: | Entailed farms, voter turnout, inheritance rules, identity, civic duty |
| JEL: | D72 H70 K11 Q15 Z19 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_324&r=all |
| By: | Martins, Pedro S. |
| Abstract: | As work changes, firm-provided training may become more relevant for good economic and social outcomes. However, so far there is little or no causal evidence about the effects of training on firms. This paper studies a large training grants programme in Portugal, contrasting successful firms that received the grants and unsuccessful firms that did not. Combining several rich data sets, we compare a large number of potential outcomes of these firms, while following them over long periods of time before and after the grant decision. Our difference-in-differences models estimate significant positive effects on take up (training hours and expenditure), with limited deadweight; and that such additional training led to increased sales, value added, employment, productivity, and exports. These effects tend to be of at least 5% and, in some cases, 10% or more. |
| Keywords: | Training subsidies,Productivity,Counterfactual evaluation |
| JEL: | J24 H43 M53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:488&r=all |
| By: | Maurizio Bussolo (World Bank); Daniele Checchi (University of Milan); Vito Peragine (Unversity of Bari "Aldo Moro") |
| Abstract: | The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity (IOp) in the four largest European economies (France, Germany, Great Britain and Italy). Relative IOp represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs. For all the countries, relative IOp shows a stable or declining time trend. In addition to these descriptive findings, the paper proposes a theoretical framework identifying channels of transmission which may affect IOp. Using this framework, a decomposition focuses on the role of three variables: a) intergenerational persistence in educational attainment, b) return of education, and c) networking activity of parents. While the first two variables exhibit a declining trend in all countries, which as predicted by the model should produce a decline in IOp, the third one appears to be rising in some countries, counteracting the effects of the first twoKeywords: Inequality of Opportunity, Decomposition methods, Education mobility, Returns to Education, Family Networking, Cohort Analysis |
| JEL: | D31 D63 E24 I24 J62 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:series_wp_03-2020&r=all |
| By: | Janssen, Aljoscha (Singapore Management University) |
| Abstract: | This paper investigates price patterns of off-patent pharmaceuticals in Sweden. I show that price dynamics are dependent on the number of competitors in the market. The price patterns follow predictions from a model of dynamic price competition in which the demand for pharmaceuticals incorporates the known biases of consumers: habit persistence and brand preferences. Using the regulated market of Swedish pharmaceuticals, I show that price may help in identifying possible tacit collusion by manufacturers in markets where consumers experience behavioral frictions. |
| Keywords: | Pharmaceutical pricing; Dynamic oligopoly; State dependence; Price cycles |
| JEL: | D43 I11 L13 L40 |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1325&r=all |
| By: | Schleich, Joachim; Faure, Corinne; Guetlein, Marie-Charlotte; Tu, Gengyang |
| Abstract: | This paper employs identical demographically representative discrete choice experiments (DCEs) on new heating systems with owner-occupier households in Poland, Sweden, and the United Kingdom (UK) to estimate respondent will-ingness-to-pay (WTP) for rebates, heating cost savings, installation time (re-flecting "hassle costs") and warranty length. The results from estimating coun-try-specific mixed logit models suggest that participants generally value rebates for new heating systems, but valuation differs substantially across countries and was found to be highest for Poland. For Sweden (but not for Poland or the UK), rebates appeared more effective if offered by a public rather than a private fund-ing source. Because higher income households in the UK value rebates more than lower income households, rebates may be regressive. The results for heat-ing cost savings in the three countries imply static payback times of ten to fif-teen years for more energy-efficient heating systems. We further find that re-spondents have a strong dislike for longer installation time and a high WTP for longer warranty times. |
| Keywords: | energy efficiency,energy efficiency obligations,heating systems,hassle costs,energy efficiency paradox,choice experiment |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s052020&r=all |
| By: | Arellano-Bover, Jaime (Yale University) |
| Abstract: | I study the long-term effects of landing a first job at a large firm versus a small one using Spanish social security data. Size could be a relevant employer attribute for inexperienced workers since large firms are associated with greater training, higher wages, and enhanced productivity. The key empirical challenge is selection into first jobs – for instance, more able people may land jobs at large firms. I address this challenge developing an instrumental-variables approach that, while keeping business-cycle conditions fixed, leverages variation in the composition of labor demand that labor-market entrants face. I find that initially matching with a larger firm substantially improves long-term outcomes such as lifetime income, and that these benefits persist through subsequent jobs. Additional results point to mechanisms related to search frictions and better skill-development at large firms. Together, these findings shed light on how heterogeneous firms persistently impact young workers' trajectories. |
| Keywords: | first job, employer size, firm heterogeneity, young workers, lifetime income, on-the-job skills |
| JEL: | E24 J23 J24 J31 J62 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12969&r=all |