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on Microeconomic European Issues |
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Issue of 2020‒05‒18
28 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Bracke, Philippe; Tenreyro, Silvana |
| Abstract: | Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing mar- kets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring. |
| Keywords: | Housing market; Fluctuations; down-payment effects; Reference dependence; Anchoring; Loss aversion |
| JEL: | N0 |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103079&r=all |
| By: | Marie Le Mouel; Alexander Schiersch |
| Abstract: | Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long-term economic prosperity. This paper is the first to provide evidence that investment in Knowledge-Based Capital (KBC), despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the aggregate level, by accentuating divergence between a group of “frontier” firms and the rest of the economy. Using detailed firm-level administrative data for Germany, we find evidence that the effect of KBC on productivity is heterogeneous across firms within industries: this effect is 3 times larger for firms in the top quintile of the KBC distribution compared to firms in the bottom quintile of the KBC distribution. We document the existence of divergence in productivity growth between top KBC users and the rest of firms at the industry level, and find that industries where this gap is larger are also those industries where the heterogeneity in the effect of KBC is highest and where average productivity growth was lower. The evidence hence supports the view that the use of KBC plays a role in explaining weak productivity growth, by accentuating differences between firms. |
| Keywords: | Knowledge-Based Capital, firm dynamics, productivity divergence |
| JEL: | D24 L25 O14 O30 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1868&r=all |
| By: | Alessandra Colombelli (DIGEP, Politecnico di Torino); Elena Grinza (LUISS University); Valentina Meliciani (Department of Management, University of Turin); Mariacristina Rossi (Collegio Carlo Alberto) |
| Abstract: | In this paper, we examine whether the existing stock of migrant firms induces more new firms of the same co-ethnic group in the same sector and province. We do so by analyzing the number of new firms created each year by country of origin, sector, and province, drawing on administrative data of the population of individual entrepreneurs observed over the period 2002-2013. We find support for a strong attractiveness (pulling) effect. We also find that this effect significantly differs by gender: female migrant entrepreneurs show lower reactiveness to the existing stock of firms compared to their male counterparts. We finally show that such gender differences are stronger for migrants coming from more gender-unequal countries. On the contrary, the degree of gender inequality in the region of destination does not matter. |
| Keywords: | Migrant entrepreneurship, pulling effect, gender differences, gender inequality, country of origin, region of destination |
| JEL: | L26 J15 J16 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2020-05&r=all |
| By: | Jan Stede; Nils May |
| Abstract: | Several countries and regions have introduced mandatory minimum distances of wind turbines to nearby residential areas, in order to increase public acceptance of wind power. Germany’s largest federal state Bavaria introduced such separation distances of ten times the height of new wind turbines in 2014. Here, we provide a novel monthly district-level dataset of construction permits for wind turbines constructed in Germany between 2010 and 2018. We use this dataset to evaluate the causal effect of introducing the Bavarian minimum distance regulation on the issuance of construction permits for wind turbines. We find that permits decreased by up to 90 percent. This decrease is in the same order of magnitude as the reduction of land area available for wind turbines. The results are in line with findings indicating that minimum distances do not increase the public acceptance of wind power, but harm the expansion of onshore wind power. |
| Keywords: | Onshore wind power, minimum distance, separation distance, energy transition, acceptance, panel data, difference-in-differences, causal inference, event study |
| JEL: | C21 Q42 R14 R15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1867&r=all |
| By: | Mihaescu, Oana (Institute of Retail Economics (Handelns Forskningsinstitut)); Korpi, Martin (Ratio); Öner, Özge (University of Cambridge) |
| Abstract: | We investigate to which extent shopping centers are drivers of economic development by studying how distance to newly established shopping centers affects the performance of incumbent firms located in the suburbs of the three Swedish major metropolitan areas (Stockholm, Gothenburg, and Malmö) between 2000 and 2016. We use a regression setup with 27,000 firm-year observations and explore the possible heterogeneity imposed on the results from two main elements of spatial economics theory: the size of the new retail area and the distance from the new retail area to the analyzed incumbents. We observe a clear difference in the direction of the effects of large versus small shopping centers. While competition forces are much stronger when large shopping centers make entry, yielding an average negative effect of 5% on incumbent firm revenue and 3% on firm employment, results indicate an opposite pattern for smaller shopping centers, with firm revenue and firm employment increasing by 4 and 3%, respectively. Moreover, we also observe that both agglomeration and competition effects attenuate sharply with distance from the new entrant, confirming one of the central premises of retail location theory. Finally, the results indicate that the geographical scope of the effects is much wider in the case of larger shopping centers, with the estimates becoming insignificant at about 9-10 km from the new entry, as compared to 3-4 km in the case of smaller retail centers. |
| Keywords: | Shopping centers; firm performance; retail location; agglomeration effects; competition; attenuation of effects |
| JEL: | D22 L25 P25 R11 R12 |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hfiwps:0009&r=all |
| By: | Fanny A. Kluge (Max Planck Institute for Demographic Research, Rostock, Germany); Tobias C. Vogt (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In this paper, we study the relationship between income and old age survival via the indirect pathway of private transfers. Our analysis focuses on intergenerational transfers in the family as an important, but so far less investigated, link between income and improved old age survival. We use an agent based model to simulate an exchange relationship between two generations in a family and incorporate realistic demographic, economic and time use data for Germany. We find that older parents transfer increasing shares of their pensions to their offspring and receive informal care or emotional support in return. This exchange motive is mutually beneficial as younger generations are in greater need for financial subsidies and older ones for contact and care. Our inductive approach adds to our understanding how income is spread in the family and how older family members can benefit from an exchange of money for care. |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-021&r=all |
| By: | Clark, Andrew E. (Paris School of Economics); Lepinteur, Anthony (University of Luxembourg) |
| Abstract: | Job insecurity can have wide-ranging consequences outside of the labour market. We here argue that it reduces fertility amongst the employed. The 1999 rise in the French Delalande tax, paid by large private firms when they laid off workers aged over 50, produced an exogenous rise in job insecurity for younger workers in these firms. A difference-in-differences analysis of French ECHP data reveals that this greater job insecurity for these under-50s significantly reduced their probability of having a new child by 3.9 percentage points. Reduced fertility is only found at the intensive margin: job insecurity reduces family size but not the probability of parenthood itself. Our results also suggest negative selection into parenthood, as this fertility effect does not appear for low-income and less-educated workers. |
| Keywords: | employment protection, layoff tax, perceived job security, difference-in-differences, fertility |
| JEL: | I38 J13 J18 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13144&r=all |
| By: | Simon Briole (PSE - Paris School of Economics); Héléne 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 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:hal-02504021&r=all |
| By: | Prati, Alberto (Aix-Marseille University); Senik, Claudia (Paris School of Economics) |
| Abstract: | Can people remember correctly their past well-being? We study three national surveys of the British, German and French population, where more than 50,000 European citizens were asked questions about their current and past life satisfaction. We uncover systematic biases in recalled subjective well- being: on average, people tend to overstate the improvement in their well-being over time and to understate their past happiness. But this aggregate figure hides a deep asymmetry: while happy people recall the evolution of their life to be better than it was, unhappy ones tend to exaggerate its worsening. It thus seems that feeling happy today implies feeling better than yesterday. These results offer an explanation of why happy people are more optimistic, perceive risks to be lower and are more open to new experiences. |
| Keywords: | memory biases, remembered utility, life satisfaction, intra-personal comparisons |
| JEL: | I31 D91 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13166&r=all |
| By: | Gregori, Wildmer (European Commission – JRC); Nardo, Michela (European Commission – JRC) |
| Abstract: | This study sheds light on the effect of restrictive policies, such as screening mechanisms, on mergers and acquisitions (M&A) flows into EU Member States in the period 2011-2018, by implementing an augmented gravity model. The results show that different restrictive measures affect cross-border investments unequally, and that the presence of screening mechanisms per se does not negatively affect cross-border investments. When we perform the analysis by sector, results suggest that cross-border investments in manufacturing and non-financial services are negatively influenced by restrictive measures, such as restrictions on foreign personnel being employed in key positions, or restriction on the establishment of branches, land acquisition or profit and capital repatriations. |
| Keywords: | cross-border investment, M&A, EU, FDI, statutory restrictions, gravity model |
| JEL: | F15 F21 G34 K20 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:201915&r=all |
| By: | Kristoffer Balle Hvidberg (CEBI, Department of Economics, University of Copenhagen) |
| Abstract: | This paper presents new evidence on the effect of education on financial behavior. In particular, I investigate whether obtaining a degree from a study program with a mathematical or economic curriculum affects individuals future loan default probability. I identify the causal effects of different types of education on financial behavior by exploiting the GPA admission thresholds to higher education programs in a fuzzy regression discontinuity design. I compare people who have applied for the same fields of study but who are quasi-randomly allocated to different different fields of study due to small differences in their GPA from upper secondary school. I estimate the effects using a unique combination of administrative data on admissions to post-secondary education and third party reported data on the universe of personal loans. I find that completing a mathematical or economic field of study decreases the probability of default post graduation for the applicants who did not have one of these fields as their most preferred field of study. |
| Keywords: | Financial Behavior, Education, Regression Discontinuity |
| JEL: | I2 |
| Date: | 2019–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:1912&r=all |
| By: | Sonia Benito-Hernandez (Universidad Politecnica de Madrid); Cristina Lopez-Cozar Navarro (Universidad Politecnica de Madrid); Gracia Rubio Martin (Universidad Complutense de Madrid) |
| Abstract: | This paper provides empirical evidence of efforts to enable Spanish manufacturing companies to boost their economic profitability rates through the development of Corporate Social Responsibility (CSR) policies. This study aims to develop new approaches and sensibilities towards work from an ethical, values (virtues) and CSR perspective, showing how internal and externaldimensions of CSR -such as those related to relationships with employees, relationship with the community and responsibility in process quality management -contribute to improve the economic profitability of the company (ROA) in addition to improving society. The results of a sample of 6,186 businesses show that, in general, the implementation of collaboration policies have increased relationships with the community. Alliances with competitors, institutions and suppliers had a significant positive effecton increased ROA. Nevertheless, as we anticipated, cooperation with customers had a negative impact on ROA. In addition, to improve relationships with employees, the implementation of quality policies had a positive and relevant impact on the ROA. |
| Keywords: | Economic Profitability, Policies of CSR, Employees’ Relations, Responsibility in Quality Management, Community Relations |
| JEL: | M14 L20 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ana:wpaper:20002&r=all |
| By: | Anikó Bíró (Health and Population Lendület Research Group, Centre for Economic and Regional); Tamás Hajdu (Health and Population Lendület Research Group (Institute of Economics, Centre for Economic and Regional Studies)); Gábor Kertesi (Health and Population Lendület Research Group (Institute of Economics, Centre for Economic and Regional Studies)); Dániel Prinz (Harvard University) |
| Abstract: | Using mortality registers and administrative data on incomes and population, we develop new evidence on the magnitudes and sources of life expectancy inequality in Hungary. We document considerable inequality across geographies and income groups, and show that inequality has increased between 1991-2016. We show that avoidable deaths play a large role in life expectancy inequality. Income-related geographic inequalities in health behaviors, access to care, and healthcare use are all strongly correlated with the inequality in life expectancy. |
| Keywords: | life expectancy; income inequality; administrative data; time trend |
| JEL: | I14 I12 J10 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2019&r=all |
| By: | Sina Otten |
| Abstract: | Using longitudinal data from the German Socio-Economic Panel (SOEP), this article examines whether gender wage differentials occur due to differences in prototypical personality traits of women and men and provides the first application of a gender wage gap decomposition on the basis of a correlated random effects model. Main results show that agreeableness and openness are the most important personality traits in explaining wages and wage differentials. Openness has a positive effect and agreeableness has a negative effect on earnings for men, while the opposite effects are found for women. Concerning the gender wage gap, analyses show that although gender differences in openness and agreeableness explain small parts of the gap, gender differences in the returns of agreeableness and openness are larger. |
| Keywords: | Gender Wage Gap, Correlated Random Effects, SOEP, Big Five Personality Traits, Panel Data |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1078&r=all |
| By: | Bergemann, Annette (University of Bristol); Riphahn, Regina T. (Friedrich-Alexander University) |
| Abstract: | We study the short, medium, and long run employment effects of a substantial change in the parental leave benefit program in Germany. In 2007, a means-tested parental leave transfer program, which had paid benefits for up to two years, was replaced by an earnings related transfer, which paid benefits for up to one year. The reform generated winners and losers with heterogeneous response incentives. We find that the reform sped up the labor market return of all mothers after benefit expiration. Likely pathways for this substantial reform effect are changes in social norms and mothers' preferences for economic independence |
| Keywords: | female labor supply; maternal labor supply; parental leave; parental leave benefit; child-rearing benefit |
| JEL: | J13 J21 |
| Date: | 2020–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_006&r=all |
| By: | Perugini, Cristiano (University of Perugia); Vladisavljevic, Marko (Institute of Economic Sciences, Belgrade) |
| Abstract: | The public health measures implemented by governments to limit the spread of the COVID-19 pandemic will produce significant economic consequences that are likely to exacerbate social and economic inequalities. In this paper we provide a framework to analyse how income inequality, besides other structural and policy-related features, shapes the trade-off between economic lockdown and contagion. We then supply empirical evidence, by means of simulation analysis, on the distributive effects of the lockdown for 31 European countries. Our results confirm that the lockdown is likely to significantly increase inequality and poverty and that the magnitude of the change is larger in more unequal countries. Such a cumulative process shapes a serious challenge for social and economic stability in the most vulnerable countries, which needs adequate policy response. However, the magnitude of the compensating measures is likely to be financially unsustainable, forcing them to lift necessary public health measures prematurely in order to avoid social collapse. This is likely to increase the risk of a new spread of the pandemic that might easily spill over to other countries. A supranational, coordinated health and fiscal policy effort is therefore in the interest of all economies willing to be part of a globalised economy. |
| Keywords: | COVID-19, pandemic, lockdown, inequality, social stability, supranational policy coordination |
| JEL: | D31 E61 H31 I30 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13249&r=all |
| By: | Marta Palczyñska |
| Abstract: | This article investigates the role of personality traits and cognitive skills as potential determinants of overeducation and in explaining overeducation wage penalty. Using a representative survey of the Polish working-age population, with well-established measures of cognitive skills and personality traits, I find that accounting for personality and cognitive skills does not change the size and the statistical significance of overeducation wage penalty estimates. My results also demonstrate that personality is one of the contributors to the risk of being overeducated among workers aged 18 to 29 but not among people aged 30 to 68. Among younger workers agreeable individuals are more likely to be overeducated while conscientious ones are less likely. Moreover, lower cognitive skills are associated with the probability of being overeducated. |
| Keywords: | overeducation, educational mismatch, wages, personality traits, cognitive skills, numeracy |
| JEL: | D91 I26 J24 J31 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp032020&r=all |
| By: | Bonacini, Luca; Gallo, Giovanni; Patriarca, Fabrizio |
| Abstract: | Feedback control-based mitigation strategies for COVID-19 are threatened by the time span occurring before an infection is detected in official data. Such a delay also depends on behavioral, technological and procedural issues other than the incubation period. We provide a machine learning procedure to identify structural breaks in detected positive cases dynamics using territorial level panel data. In our case study, Italy, three structural breaks are found and they can be related to the three different national level restrictive measures: the school closure, the main lockdown and the shutdown of non-essential economic activities. This allows assessing the detection delays and their relevant variability among the different measures adopted and the relative effectiveness of each of them. Accordingly we draw some policy suggestions to support feedback control based mitigation policies as to decrease their risk of failure, including the further role that wide swap campaigns may play in reducing the detection delay. Finally, by exploiting the huge heterogeneity among Italian provinces features, we stress some drawbacks of the restrictive measures specific features and of their sequence of adoption, among which, the side effects of the main lockdown on social and economic inequalities. |
| Keywords: | Covid-19,coronavirus,lockdown,feedback control,mitigation strategies |
| JEL: | C63 I14 I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:534&r=all |
| By: | Anne-Laure Delatte; Amélie Guillin; Vincent Vicard |
| Abstract: | Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are `abnormal' – unexplained – stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away. |
| Keywords: | Cross-Border Investments;Capital Openness;Tax Havens;Gravity Equation |
| JEL: | F23 G21 H22 H32 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2020-07&r=all |
| By: | Cahuc, Pierre (Sciences Po, Paris); Hervelin, Jeremy (CREST (ENSAE)) |
| Abstract: | In France, two years after school completion and getting the same diploma, the employment rate of apprentices is about 15 percentage points higher than that of vocational students. Despite this difference, this paper shows that there is almost no difference between the probability of getting a callback from employers for unemployed youth formerly either apprentices or vocational students. This result indicates that the higher employment rate of apprentices does not rely, in the French context, on better job access of those who do not remain in their training firms. The estimation of a job search and matching model shows that the expansion of apprenticeship has very limited effects on youth unemployment if this is not accompanied by an increase in the retention of apprentices in their training firm. |
| Keywords: | field experiment, school-to-work transitions, apprenticeship |
| JEL: | J24 M53 M51 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13154&r=all |
| By: | Tim Sawert; Julia Tuppat |
| Abstract: | The paper addresses the impact of digital health technologies on social inequalities in health. We set focus on mobile health technologies (mHealth) and analyse whether (a) usage of such technologies differs by educational level and (b) whether their usage moderate social inequalities in health satisfaction. We first develop a theoretical model in order to establish potential associations between social inequality, mHealth usage and health satisfaction. Assuming that mHealth technologies might positively affect health behaviour, they might particularly benefit groups with low health literacy and thus, have the potential to decrease the social gap in health behaviours, that was consistently reported in previous research. On the other hand, drawing on theories in the field of the digital divide, mHealth technologies might in contrast even exacerbate existing inequalities, if groups with a higher socio-economic status use them more often (2nd level digital divide) and/or particularly benefit from using them (3rd level digital divide). Using data of the Innovation Sample of the Germany Socio-Economic Panel Study (N=5,075), we find evidence for a 2nd level digital divide in mHealth usage: Among smartphone users, higher educated respondents are more likely to use health/fitness apps. However, our results do not support the existence of a 3rd level divide: There is no difference in the benefit of usage on respondents’ subjective health satisfaction by educational level. Further research is needed in order to analyse the proposed associations more in depth. |
| Keywords: | mHealth; health inequality; digital divide; health behaviour; health literacy |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1079&r=all |
| By: | Buchmueller, Gerda (Lancaster University); Walker, Ian (Lancaster University) |
| Abstract: | Estimates of the graduate earnings premium typically do not allow for the effect of non-cognitive skills. Since such skills are unobservable in most datasets there is a concern that existing estimates of the graduate premium are contaminated by selection on such unobservables. We use data on a young cohort of individuals that allows us to control for the effects of non-cognitive skills. We find that the inclusion of non-cognitive skills, themselves jointly significantly positive reduces the estimated returns by an insignificant 1-2 percentage points from an average of 10-12%. Our second contribution is motivated by the greater reliance on administrative datasets in recent research that has focused on annual earnings rather than hourly wages and our results show that the graduate earnings differential is significantly greater than the wage differential. Since we use estimation methods that are NOT robust to selection on unobservables, we adopt Oster (2016) tests to show that it would take an implausible degree of selection on unobservables to drive our estimated wage and earings returns to zero, and that a plausible lower bound to returns is around one-quarter to one-third below the OLS returns. We further find heterogeneous returns by broad major group and elite university, and we find large degree class differentials. |
| Keywords: | returns to higher education, non-cognitive skills |
| JEL: | I23 I26 J24 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13248&r=all |
| By: | van den Berg, Gerard J. (University of Bristol); Siflinger, Bettina M. (University of Bristol) |
| Abstract: | This paper studies the effects of day care exposure on behavioral problems and mental health as well as on various aspects of physical health, at various ages during childhood. We draw on a unique set of comprehensive individual-level out-patient and inpatient health care register data from Sweden over the period 1999-2008 merged with other population register data. By exploiting variation in daycare exposure by age generated by a major day care policy reform, we estimate cumulative and instantaneous effects on child health at different ages. We find beneficial cumulative impacts on behavioral and mental health at primary school ages, and substitution of the incidence of infections from primary school ages to low ages. The evidence suggests that the behavioral effects are mostly driven by children from low socio-economic households. Day care usage affects health care utilization and leads to a moderate reduction in health care costs |
| Keywords: | Health; day care |
| JEL: | I10 |
| Date: | 2020–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_005&r=all |
| By: | Oscar Claveria (AQR–IREA, Department of Econometrics, Statistics and Applied Economics, University of Barcelona, Diagonal 690, 08034 Barcelona, Spain.); Enric Monte (Department of Signal Theory and Communications, Polytechnic University of Catalunya (UPC)); Salvador Torra (Riskcenter–IREA, Department of Econometrics, Statistics and Applied Economics, University of Barcelona (UB)) |
| Abstract: | The main objective of this study is two-fold. First, we aim to detect the underlying existing periodicities in business and consumer survey data. With this objective, we conduct a spectral analysis of all survey indicators. Second, we aim to provide researchers with a filter especially designed for business and consumer survey data that circumvents the a priori assumptions of other filtering methods. To this end, we design a low-pass filter that allows extracting the components with periodicities similar to those that can be found in the dynamics of economic activity. The European Commission (EC) conducts monthly business and consumer tendency surveys in which respondents are asked whether they expect a set of variables to rise, fall or remain unchanged. We apply the Welch method for the detection of periodic components in each of the response options of all monthly survey indicators. This approach allows us to extract the harmonic components that correspond to the cyclic and seasonal patterns of the series. Unlike other methods for spectral density estimation, the Welch algorithm provides smoother estimates of the periodicities. We find remarkable differences between the periodicities detected in the industry survey and the consumer survey. While business survey indicators show a common cyclical component of low frequency that corresponds to about four years, for most consumer survey indicators we do not detect any relevant cyclic components, and the obtained lower frequency periodicities show a very irregular pattern across questions and reply options. Most methods for seasonal adjustment are based on a priori assumptions about the structure of the components and do not depend on the features of the specific series. In order to overcome this limitation, we design a low-pass filter for survey indicators. We opt for a Butterworth filter and apply a zero-phase filtering process to preserve the time alignment of the time series. This procedure allows us to reject the frequency components of the survey indicators that do not have a counterpart in the dynamics of economic activity. We use the filtered series to compute diffusion indexes known as balances, and compare them to the seasonally-adjusted balances published by the EC. Although both series are highly correlated, filtered balances tend to be smoother for the consumer survey indicators. |
| Keywords: | Business and consumer surveys, Spectral analysis, Seasonality, Signal processing, Low-pass filter JEL classification: C65, C82 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:202006&r=all |
| By: | Avdic, Daniel; de New, Sonja C.; Kamhöfer, Daniel A. |
| Abstract: | We study the impact of the business cycle on mental wellbeing by linking rich German survey data to over a decade of detailed gross domestic product information. Endogeneity concerns are tackled using a shift-share instrumental variables approach in which exposure to macroeconomic fluctuations is estimated from regional variations in historical industry sector composition. Estimation results reveal strong negative effects of economic downturns on both life satisfaction and a multidimensional measure of mental health. We provide evidence that these effects are mediated by fear of job loss and income reductions, while actual unemployment effects are negligible. A case study of the impact of the global financial crisis reveals that adverse effects on mental wellbeing are persistent and remained even after the economy recovered. |
| Keywords: | business cycle,mental health,life satisfaction,global financial crisis,shift-share instrument |
| JEL: | C36 E32 I15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:337&r=all |
| By: | Buchheim, Lukas (University of Munich); Dovern, Jonas (University of Erlangen-Nuremberg); Krolage, Carla (Ifo Institute for Economic Research); Link, Sebastian (Ifo Institute for Economic Research) |
| Abstract: | This paper studies the determinants of firms' business outlook and managerial mitigation strategies in the wake of the COVID-19 crisis using a representative panel of German firms. We first demonstrate that the crisis amplifies pre-crisis weaknesses: Firms that appear relatively weak before the crisis are harder hit initially, and, on top of the initial impact, expect more difficulties for their businesses going forward. Consequently, such firms are first to cut employment and investment. Second, our results highlight that expectations regarding the duration of the shutdown—which, at this point of the crisis, exhibit plausibly random variation—are an important determinant of the chosen mitigation strategies: Firms that expect the shutdown to last longer are more likely to lay off workers and to cancel or postpone investment projects. |
| Keywords: | expectations, firm behavior, COVID-19, shutdown, employment, investment |
| JEL: | D22 D84 E23 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13253&r=all |
| By: | Qingqing Cao (Michigan State University); Paolo Giordani (LUISS University); Raoul Minetti (Michigan State University); Pierluigi Murro (LUISS University) |
| Abstract: | Credit frequently flows to the business sector through information-intensive bank-firm relationships. This paper studies the impact of relationship banking on firm entry. Exploiting Italian data, we document that relationship-oriented local credit markets feature lower entry, larger size at entry, and relatively more spin-offs than de novo entrepreneurs' entries. Information spillovers from credit relationships to entrants contribute to these effects. A dynamic general equilibrium model calibrated to the Italian data can match these effects when information spillovers are allowed for. Relationship banks' information on incumbents is transferable to incumbents' spin-offs but crowds out information acquisition on de novo entrants. The buildup of incumbents' business wealth during credit relationships can outweigh the aggregate output effect of reduced entry. |
| Keywords: | Credit Relationships, Firm Entry, Information Spillovers, Spin-offs |
| JEL: | E44 G21 O16 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:lui:casmef:2003&r=all |
| By: | Saxell, Tanja; Nurminen, Mikko |
| Abstract: | We consider the effects of mergers and acquisitions for private physicians, who compete for patients on price. To estimate the effects, we use nationwide administrative data on private physicians and the organization of their practice over 10 years in Finland. We show that acquisitions can reduce competition among physicians, leading to higher prices. We estimate the strongest price increase to be in gynecology, in which switching costs and inertia in physician choice may decrease physician competition, at least locally (within a health care unit). The reduction in the number of physicians in a target unit is the key mechanism behind the estimated effect. |
| Keywords: | physicians, mergers and acquisitions, market power, private health care, independent contractors, Local public finance and provision of public services, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:130&r=all |