nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒04‒13
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Managing Power Supply Interruptions: A Bottom-Up Spatial (Frontier) Model with an Application to a Spanish Electricity Network By Argüelles, Pablo; Orea, Luis
  2. The Wealth Decumulation Behavior of the Retired Elderly in Italy: The Importance of Bequest Motives and Precautionary Saving By Luigi Ventura; Charles Yuji Horioka
  3. Buy Flexible, Pay More: The Role of Temporary Contracts on Wage Inequality By Albanese, Andrea; Gallo, Giovanni
  4. The EU vs US corporate R&D intensity gap: Investigating key sectors and firms By Pietro Moncada-Paterno-Castello; Nicola Grassano
  5. Higher Parental Socioeconomic Status Accelerates Sexual Debut in Italy By Raffaele Guetto; Daniele Vignoli; Alessio Lachi
  6. Firm-level total factor productivity convergence in German electricity and gas industry By Claudiu Albulescu; Serban Miclea
  7. Changes in Assortative Matching and Inequality in Income: Evidence for the UK By Pierre-Andre Chiappori; Monica Costa Dias; Sam Crossman; Costas Meghir
  8. Financing Constraints and Employers' Investment in Training By Brunello, Giorgio; Gereben, Áron; Weiss, Christoph T.; Wruuck, Patricia
  9. What drives university-industry collaboration: Research excellence or firm collaboration strategy? By Kwadwo Atta-Owusu; Rune Dahl Fitjar; Andrés Rodríguez-Pose
  10. Mismatch between Demand and Supply among higher education graduates in the EU By BIAGI Federico; CASTANO MUNOZ Jonatan; DI PIETRO Giorgio
  11. The Impact of the Third Sector of R&D on the Innovative Performance of Entrepreneurial Firms By Link, Albert; Morris, Cody; van Hasselt, Martijn
  12. Technology Policy and Market Structure: Evidence from the Power Sector By Moritz Bohland; Sebastian Schwenen
  13. Employment Effects of Payroll Tax Subsidies By Collischon, Matthias; Cygan-Rehm, Kamila; Riphahn, Regina T.
  14. Benefit Duration, Job Search Behavior and Re-Employment By Andreas Lichter; Amelie Schiprowski
  15. How People React to Pension Risk By Salamanca, Nicolás; de Grip, Andries; Sleijpen, Olaf
  16. Income Segregation and Social Housing in France By Kévin Beaubrun-Diant; Tristan-Pierre Maury
  17. Economic and social effects of money laundering: the UK case By Barnes, Paul
  18. Immigration History, Entry Jobs, and the Labor Market Integration of Immigrants By Ansala, Laura; Aslund, Olof; Sarvimäki, Matti
  19. Intergenerational Transmission of Unemployment: Causal Evidence from Austria By Grübl, Dominik; Lackner, Mario; Winter-Ebmer, Rudolf
  20. International Patent Protection and Trade: Transaction-Level Evidence By Gaetan de Rassenfosse; Marco Grazzi; Daniele Moschella; Gabriele Pellegrino
  21. Gender bias in the Erasmus students network By Luca De Benedictis; Silvia Leoni
  22. Mothers Working during Preschool Years and Child Skills. Does Income Compensate? By Nicoletti, Cheti; Salvanes, Kjell G.; Tominey, Emma
  23. Economic Complexity and Fertility. Insights from a Low Fertility Country By Niccolò Innocenti; Daniele Vignoli; Luciana Lazzeretti

  1. By: Argüelles, Pablo (EDP España and University of Oviedo); Orea, Luis (University of Oviedo and Oviedo Efficiency Group)
    Abstract: In December 2013 a new electricity law was approved in Spain as part of an electricity market reform including a new remuneration scheme for distribution companies. This remuneration scheme was updated in December 2019 and the new regulatory framework introduced a series of relevant modifications that aim to encourage the regulated firms to reduce their power supply interruptions using a benchmarking approach. While some managerial decisions can prevent electricity power supply interruptions, other managerial decisions are more oriented to mitigate the consequences of these interruptions. This paper examines the second type of decisions using a unique dataset on the power supply interruptions of a Spanish distribution company network between 2013 and 2019. We focus on the effect of grid automatization on the restoration times, the relative efficiency of the maintenance staff, and the importance of its location. We combine a bottom-up spatial model and a stochastic frontier model to examine respectively external and internal power supply interruptions at municipal level. This model resembles the conventional spatial autoregressive models but differs from them in several important aspects.
    Keywords: Electricity distribution; Power supply interruptions; Spatial econometrics; Frontier models
    JEL: H54 L97 L98
    Date: 2020–03–26
  2. By: Luigi Ventura (Department of Economics and Law, Sapienza University of Rome); Charles Yuji Horioka (Research Institute for Economics and Business Administration, Kobe University, Osaka University, Asian Growth Research Institute, and National Bureau of Economic Research)
    Abstract: In this paper, we analyze the wealth accumulation and saving behavior of the retired elderly in Italy using micro data from the "Survey of Italian Households' Income and Wealth," a panel survey of households conducted every two years by the Bank of Italy. We find that, on average, the retired elderly in Italy are decumulating their wealth (dissaving) but that their wealth decumulation rates are much slower than expected. Moreover, we also find that more than 40 percent of the retired elderly in Italy are continuing to accumulate wealth and that more than 80 percent are doing positive amounts of saving. Thus, the Wealth Decumulation Puzzle (the tendency of the retired elderly to decumulate their wealth more slowly than expected) appears to apply in the case of Italy, as it does in most other countries, before as well as after the Global Financial Crisis. Moreover, our regression analysis of the determinants of the wealth accumulation and saving behavior of the retired elderly in Italy suggests that the lower than expected wealth decumulation rates and dissaving of the retired elderly in Italy is due largely to bequest motives and saving for precautionary purposes, especially the former.
    Keywords: Aged; Bequests; Bequest intentions; Bequest motive; Elderly; Household saving; Italy; Inheritances; Intergenerational transfers; Life cycle hypothesis; Life cycle model; Precautionary saving; Retired elderly; Saving; Wealth; Wealth accumulation; Wealth decumulation; Wealth decumulation puzzle
    JEL: D12 D14 D64 E21 J14
    Date: 2020–04
  3. By: Albanese, Andrea (LISER); Gallo, Giovanni (INAPP – Institute for Public Policy Analysis)
    Abstract: We investigate the role of temporary contracts in shaping wage inequality in a dual labour market. Based on Italian individual-level administrative data, our analysis focuses on new hires in temporary and open-ended contracts for the period of 2005–2015. To estimate the presence of differentials over the daily wage distribution, we follow Firpo (2007) and implement an inverse probability estimator, which allows us to control for labour market history, including lagged outcomes, over the last 16 years. Our results show the existence of a premium for temporary contracts over the full distribution of daily remuneration at entry, confirming the economic theory of equalizing differences. The wage premium is greater when permanent contracts are more valuable, such as for 'marginalised' categories like female, young, and low-paid temporary workers, and during the years of the economic crisis. The gap remains substantial after taking into account differences in working hours between workers.
    Keywords: temporary work, wage inequality, unconditional quantile treatment effect, inverse probability weighting
    JEL: J31 J41 C31 J21
    Date: 2020–02
  4. By: Pietro Moncada-Paterno-Castello (European Commission - JRC); Nicola Grassano (European Commission - JRC)
    Abstract: This paper contributes to the literature on corporate research and development (R&D) intensity decomposition by examining the effects of several parameters on R&D intensity. It draws on a longitudinal company-level micro-dataset, built using four editions of the EU R&D Scoreboard, and confirms the structural nature of the EU R&D intensity gap with the US, which has widened in the last decade. As a novel contribution to the literature, this paper uncovers the differences between the EU and the US by inspecting which sectors and firms are more accountable for the aggregate R&D intensity performance of these two economies. Furthermore, the study shows that a large share of R&D investment by the EU sample is mostly conducted in sectors with medium or low R&D intensity, and that there is a high concentration of R&D in a few sectors and firms. Interestingly, the investigation finds a high heterogeneity in firms' R&D intensity within sectors, indicating the coexistence of firms with different R&D investment strategies and efficiencies. Finally, the study reveals that the EU holds a much lower number of both larger and smaller R&D investors than the USA, in the four high-tech sectors that are key to the aggregate EU R&D intensity gap vis-Ã -vis the USA.
    Keywords: Corporate R&D, R&D intensity decomposition, EU vs US R&D intensity gap, R&D distribution; comparative performance; top world R&D firms.
    JEL: O30 O32 O38 O57
    Date: 2020–03
  5. By: Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Alessio Lachi
    Abstract: The onset of the transition to adulthood starts with first sexual experiences. In this paper we analyzed how Italian university students’ timing and type (protected or unprotected) of sexual debut are influenced by parental socioeconomic status. By applying event-history techniques to unique data from the two releases of the Sexual and Emotional Life of Youths survey (2000 and 2017), we found a clear accelerating effect of higher parental SES on the sexual debut of their children. These results hold controlling for Second Demographic Transition-related characteristics of the family of origin. Our results contradict the well-established, North American- and Anglo-Saxon-driven finding that children with higher parental SES postpone their sexual debut. We argue and prove that the overall positive effect of parental education on children’s risk of sexual debut in Italy is due to the limited diffusion of unprotected sexual relations during adolescence and young adulthood compared to North American and other Anglo-Saxon settings.
    Keywords: Social origins; Parental SES; Sexuaity; Sexual debut; Second Demographic Transition; Italy
    JEL: J13 J12 C33 I14
    Date: 2020–04
  6. By: Claudiu Albulescu (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers); Serban Miclea
    Abstract: This paper investigates the degree of total factor productivity convergence for the German electricity and gas firms. We use different approaches to compute the productivity level and several old and new panel unit root tests from the second generation to check the existence of a convergence process. For robustness purpose we compare the convergence between small and medium-sized enterprises and large companies. Our findings show the existence of the convergence process in terms of total factor productivity, result confirmed by all categories of tests we use. Therefore, an innovation transfer is recorded between German electricity and gas firms, transfer that is slightly higher for small and medium-sized enterprises. JEL codes: D24, O33
    Keywords: total factor productivity,convergence,panel unit root tests,firm-level data,German electricity and gas industry
    Date: 2020–03–20
  7. By: Pierre-Andre Chiappori (Dept. of Economics, Columbia University); Monica Costa Dias (Institute for Fiscal Studies); Sam Crossman (Institute for Fiscal Studies); Costas Meghir (Cowles Foundation, Yale University)
    Abstract: The extent to which like-with like marry is important for inequality as well as for the outcomes of children that result from the union. In this paper we present evidence on changes in assortative mating and its implications for household inequality in the UK. Our approach contrasts with others in the literature in that it is consistent with an underlying model of the marriage market. We argue that a key advantage of this approach is that it creates a direct connection between changes in assortativeness in marriage and changes in the value of marriage for the various possible matches by education group. Our empirical results do not show a clear direction in the change in assortativeness in the UK, between the birth cohorts of 1945-54 and 1965-74. We ï¬ nd that changes in assortativeness pushed income inequality up slightly, but that the strong changes in education attainment across the two cohorts contributed to scale down inequality.
    Keywords: Marital sorting, Income inequality
    JEL: D31 J12
    Date: 2020–03
  8. By: Brunello, Giorgio (University of Padova); Gereben, Áron (European Investment Bank); Weiss, Christoph T. (European Investment Bank); Wruuck, Patricia (European Investment Bank)
    Abstract: Using a representative sample of European firms, we study whether and to what extent financing constraints affect employers' decision to invest in employee training. We combine survey data on investment activities with administrative data on financial statements to develop an index of financing constraints. We estimate that a 10 percent increase in this index reduces investment in training as a share of fixed assets by 2.9 to 4.5 percent and investment in training per employee by 1.8 to 2.5 percent. We document that lower investment in training reduces productivity, and show that firms facing tighter financing constraints cut back the investment in training and tangible assets less than the investment in R&D and software and data.
    Keywords: training, financing constraints, Europe
    JEL: J24
    Date: 2020–03
  9. By: Kwadwo Atta-Owusu; Rune Dahl Fitjar; Andrés Rodríguez-Pose
    Abstract: Research and innovation policy aims to boost research output and university-industry collaboration (UIC) at least in part to allow firms access to leading scientific knowledge. As part of their mission, universities are expected to contribute to innovation in their regions. However, the relationship between research output and UIC is unclear: research-intensive universities can produce frontier research, which is attractive to firms, but may also suffer from a gap between the research produced and the needs of local firms, as well as mission overload. This may hinder local firms’ ability to cooperate with universities altogether or force them to look beyond the region for other suitable universities to interact with. This paper investigates the relationship between the research output of local universities and firms’ participation in UICs across different geographical scales. It uses Community Innovation Survey (CIS) data for Norwegian firms and Scopus data on Norwegian universities’ research output across various disciplines. The results demonstrate that local university research intensity and quality are negatively associated with firm participation in UICs at the local level. Firm characteristics, in particular the firm’s general strategy towards cooperation and its geography, turn out to be much more important than university characteristics in explaining UICs. Notably, firms’ cooperation with other external partners at the same scale is a strong predictor of UICs.
    Keywords: research, universities, firms, university-industry collaboration, Norway
    JEL: O31 O32 O33
    Date: 2020–03
  10. By: BIAGI Federico (European Commission - JRC); CASTANO MUNOZ Jonatan (European Commission - JRC); DI PIETRO Giorgio (European Commission - JRC)
    Abstract: The misalignment between demand and supply contributes to the labour market problems experienced by many recent graduates in Europe. Not only does the growth in the number of recent university graduates differ from the growth in job vacancies potentially available for them, but also a large number of individuals end up completing their tertiary degree in subjects for which there is little demand or for which there is an excess of supply relative to demand. In an attempt to investigate whether the EU is expected to generate the appropriate number and type of graduates, this study compares projections on forecasted graduate labour market development tendencies made by Cedefop between 2016 and 2030 with estimated trends in the supply of tertiary graduates during the same period. The analysis predicts that, while a rough balance between graduate demand and supply is likely to emerge at aggregate level, there will be a small surplus of graduates in the fields of ICT and a more relevant one in Science and Engineering. Results, however, significantly differ across individual EU Member States.
    Keywords: Mismatch, demand and supply of graduates
    Date: 2020–03
  11. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Morris, Cody (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Entrepreneurial firms that rely on public research institutes, the third sector of R&D, are also firms that are more innovative in terms of introducing new or significantly improved goods or services to the market. This finding is based on an analysis of 4,004 knowledge-intensive entrepreneurial (KIE) firms located in ten European Union countries. We interpret our findings as suggestive evidence of the importance of policy makers continuing to support financially public research institutions.
    Keywords: Research institute; third sector of R&D; innovation; entrepreneurship; KIE firms;
    JEL: L26 O31 O32 O38
    Date: 2020–04–07
  12. By: Moritz Bohland; Sebastian Schwenen
    Abstract: We show how policies to trigger clean technologies change price competition and market structure. We present evidence from electricity markets, where regulators have implemented different policies to subsidize clean energy. Building on a multi-unit auction model, we show that currently applied subsidy designs either foster or attenuate competition. Fixed, price-independent output subsidies decrease firms’ mark-ups. In contrast, designs that subsidize clean output via a regulatory premium on the market price lead to higher mark-ups. We confirm this finding empirically using auction data from the Spanish power market. Our empirical results show that the design choice for technology subsidies significantly impacts pricing behavior of firms and policy costs for consumers
    Keywords: Subsidies, Clean Energy, Pricing, Electricity
    JEL: D22 D44 D47
    Date: 2020
  13. By: Collischon, Matthias (University of Erlangen-Nuremberg); Cygan-Rehm, Kamila (University of Erlangen-Nuremberg); Riphahn, Regina T. (University of Erlangen-Nuremberg)
    Abstract: This paper exploits several reforms of wage subsidies in the framework of the German Minijob program to investigate substitution and complementarity relationships between subsidized and non-subsidized labor demand. We apply an instrumental variables approach and use administrative data on German establishments for the period 1999-2014. Particularly in small establishments (0-9 employees), subsidized Minijob employment comprises large shares of the work force, on average over 40 percent. For these establishments, robust evidence shows that increasing the subsidization of Minijob employment crowds out non-subsidized employment. Our results imply that Minijob employment in 2014 may have eliminated more than 0.5 million unsubsidized employment relationships just in small establishments. This represents an unintended and harmful consequence of the Minijob subsidy.
    Keywords: wage subsidy, Minijob, labor demand, substitution effect, crowding out effect, displacement effect, employment, payroll tax
    JEL: J21 J23 J38 C26
    Date: 2020–03
  14. By: Andreas Lichter; Amelie Schiprowski
    Abstract: This paper studies how the potential duration of unemployment benefits affects individuals' job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance scheme in 2008, which increased the potential benefit duration from 12 to 15 months for recipients of age 50 to 54. Based on detailed survey data and difference-in-differences techniques, we estimate that one additional month of benefits reduces the number of filed applications by around 10% on average over the first two months of unemployment. Treatment effects on the reservation wage are positive but statistically insignificant. In a complementary analysis, we use social security data to investigate how the reform affected re-employment outcomes. The difference-in-differences estimates yield an elasticity of 0.24 (0.1) additional months in unemployment (nonemployment) per additional month of potential benefits. A cautious back-of-the-envelope calculation reveals substantial returns to early search effort.
    Keywords: Unemployment Insurance, Job Search, Re-Employment Outcomes, Natural Experiment
    JEL: D83 I38 J64 J68
    Date: 2020–03
  15. By: Salamanca, Nicolás (Melbourne Institute of Applied Economic and Social Research); de Grip, Andries (ROA, Maastricht University); Sleijpen, Olaf (Maastricht University)
    Abstract: We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people's future pension benefits to their pension funds' funding ratio—a measure of the fund's financial health—making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and pension-age non-retirees, and for wealthier people. The funding ratio does not affect investments in a pre-reform period, nor does it affect bequest intentions, (expected) retirement, or the motivations for saving.
    Keywords: individual portfolio choice, background risk, retirement planning, pension reform, The Netherlands
    JEL: D14 J22
    Date: 2020–03
  16. By: Kévin Beaubrun-Diant (LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL); Tristan-Pierre Maury (EDHEC - EDHEC Business School - Edhec)
    Abstract: This article provides a geographical analysis of the contribution of social housing to income segregation in France from 1999 to 2015 at very detailed spatial scale. During this period, a law required some French municipalities (with more than 3500 inhabitants in large conurbations) to build more social housing to reduce segregation. Surprisingly, it appears that while home tenure (social vs private housing) segregation has been decreasing, income segregation has been rising. With segregation decomposition techniques, we provide evidence that this is a side-e¤ect of the legal framework: decreasing income segregation in the geographical scope of the law but a ‡ight e¤ect of middle and upper class households out of it.
    Date: 2020–03–31
  17. By: Barnes, Paul
    Abstract: Money laundering is one of the largest economic problems of the 21st century with huge social implications and effects. It enables the richest and most powerful in society to take advantage of globalisation and differences across countries. It is only for less well-off money laundering regulations in the UK are stringent and enforced. Money laundering is not a ‘victimless crime’. The individual(s) or the country (and inhabitants) from which the money is stolen are, by definition, the victims/losers, whilst the money is used in the recipient country to support the criminal’s lifestyle or other activities such as drug importation, child sexual exploitation, human trafficking and terrorism and so on, alternatively, invested in property until a profitable opportunity arises. This paper examines the problem both generally and the UK in particular. It describes the main forms and types of money laundering and the devices used. This is followed by sections on its effects on an economy and contains an empirical study of this as it affects London property prices, the actions taken by UK regulators against money launderers, their advisers and agents. The final section discusses some recent initiates and recommendations as to what can and should be done.
    Keywords: money laundering shell companies financial crime
    JEL: G38 K22
    Date: 2020–03–09
  18. By: Ansala, Laura (City of Helsinki); Aslund, Olof (IFAU); Sarvimäki, Matti (Aalto University)
    Abstract: This paper studies the relationship between past immigration experiences of the host country and the way new immigrants enter the labor market. We focus on two countries—Finland and Sweden—that have similar formal institutions but starkly different immigration histories. In both countries, immigrants tend to find their first jobs in low-paying establishments, where the manager and colleagues share their ethnic background. The associations between background characteristics, time to first job, other entry job characteristics, earnings dynamics and job stability are also remarkably similar. These results are consistent with the hypothesis that the host country's immigration history plays a limited role in shaping the integration process.
    Keywords: immigration, labor market integration, ethnic segregation, entry jobs
    JEL: J61 J62
    Date: 2020–03
  19. By: Grübl, Dominik (University of Linz); Lackner, Mario (University of Linz); Winter-Ebmer, Rudolf (University of Linz)
    Abstract: We estimate the causal effect of parents' unemployment on unemployment among their children in their own adulthood. We use administrative data for Austrian children born between 1974 and 1984 and apply an instrumental variables (IV) identification strategy using parents' job loss during a mass layoff as the instrument. We find evidence of unemployment inheritance in the next generation. An additional day of unemployment during childhood causally raises the average unemployment days of the adult child by 1 to 2%. The greatest effects are observed for unmarried parents, young children, children of low-education parents, and in families living in capital cities. We also explore various channels of intergenerational unemployment, such as education, income, and job matching by parents.
    Keywords: intergenerational transmission, mass layoff, unemployment duration, instrumental variable
    JEL: J62 J64
    Date: 2020–03
  20. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Marco Grazzi (Department of Economic Policy, Università Cattolica del Sacro Cuore); Daniele Moschella (Institute of Economics & EMbeDS, Scuola Superiore Sant’Anna); Gabriele Pellegrino (Ecole polytechnique federale de Lausanne)
    Abstract: This paper investigates the extent to which international trade hinges on patents. We analyze the export and patenting activities of the universe of French exporting firms over the period 2002–2011. The noticeable feature of our study is that we observe export and patenting activities worldwide and at the product level. We exploit how heterogeneity of patent coverage across (and within) product-country relates to exports. We find a patent premium of at least 10 percent, which is mainly associated with a quantity effect. A modest price effect emerges in specific sectors, notably pharmaceuticals.
    Keywords: export, international trade, patent, product
    JEL: F14 O34
    Date: 2020–03
  21. By: Luca De Benedictis; Silvia Leoni
    Abstract: The Erasmus Program (EuRopean community Action Scheme for the Mobility of University Students), the most important student exchange program in the world, financed by the European Union and started in 1987, is characterized by a strong gender bias. Girls participate to the program more than boys. This work quantifies the gender bias in the Erasmus program between 2008 and 2013, using novel data at the university level. It describes the structure of the program in great details, carrying out the analysis across fields of study, and identifies key universities as senders and receivers. In addition, it tests the difference in the degree distribution of the Erasmus network along time and between genders, giving evidence of a greater density in the female Erasmus network with respect to the one of the male Erasmus network.
    Date: 2020–03
  22. By: Nicoletti, Cheti (University of York); Salvanes, Kjell G. (Norwegian School of Economics); Tominey, Emma (University of York)
    Abstract: Increasing mothers' labour supply in a child's preschool years can cause a reduction in time investments that lead to a negative direct effect on mid-childhood and teenage outcomes. But as mothers' work hours increase, income will rise. We ask whether income can compensate for the negative effect of hours by adopting a novel mediation analysis that exploits exogenous variation in both mothers' hours and family income in pre-school years. As expected we find a negative direct effect of an increase in mother's work hours on child test scores at age 11 and 15. However, income fully compensates for this negative direct effect. This is true for the full sample of children, for boys and girls and for children in households whose mother has a low and high level of education.
    Keywords: child development, test scores, parental investments
    JEL: I22 I24
    Date: 2020–03
  23. By: Niccolò Innocenti (Università di Firenze); Daniele Vignoli (Università di Firenze); Luciana Lazzeretti (Università di Firenze)
    Abstract: This paper analyses the relationship between a new indicator of economic context, economic complexity (EC), and fertility change in Italian provinces for the period 2006–2015. We hypothesise that the level of EC is associated with fertility because it captures the capacity of a territory to innovate, grow, and create job options. The results illustrate a clear positive association between EC and fertility change across Italian provinces for the period considered, net of traditional fertility predictors. Those areas that stand at the frontiers of EC are also more likely to dominate and adapt to the negative consequences of globalisation.
    JEL: F60 J13 R11
    Date: 2020–03

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