nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒05‒25
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Household level health and socio-economic vulnerabilities and the COVID-19 crisis: An analysis from the UK By Mikolai, Julia; Keenan, Katherine; Kulu, Hill
  2. Organised crime, captured politicians, and the allocation of public resources By Marco Di Cataldo; Nicola Mastrorocco
  3. Compliance with the EU Waste Hierarchy: It is a matter of stringency, enforcement … and time! By Egüez, Alejandro
  4. The Carbon 'Carprint' of Suburbanization: New Evidence from French Cities * By Camille Blaudin de Thé; Benjamin Carantino; Miren Lafourcade
  5. Are doctors better health ministers? By Pilny, Adam; Rösel, Felix
  6. Distributional National Accounts (DINA) with Household Survey Data: Methodology and Results for European Countries By Stefan Ederer; Stefan Humer; Stefan Jestl; Emanuel List
  7. Liquidity, Seasonality, and Distance to Universities: The case of UK rental markets By Okan Yilmaz; Oleksandr Talavera; Joy Jia
  8. Reviewing the Market Stability Reserve in light of more ambitious EU ETS emission targets By Osorio, Sebastian; Tietjen, Oliver; Pahle, Michael; Pietzcker, Robert; Edenhofer, Ottmar
  9. Public services and subjective well-being in a European city: The case of Strasbourg metropolitan area. By Jean-Alain Héraud; Phu Nguyen-Van; Thi Kim Cuong Pham
  10. Exploring the Puzzle of Human Reproduction: Register Data based Evidence from France and Germany. By Cäcilia Lipowski; Ralf A. Wilke; Bertrand Koebel
  11. The effect of retirement on social relationships: new evidence from SHARE. By Simona Lorena Comi; Elena Cottini; Claudio Lucifora
  12. Does Immigration Decrease Far-Right Popularity? Evidence from Finnish Municipalities By Lonsky, Jakub
  13. Hands on the Wheel, Eyes on the Phone: the Effect of Smart Phone Usage on Road Safety By Devi Brands; Joris Klingen; Francis Ostermeijer
  14. Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys By Abi Adams-Prassl; Teodora Boneva; Marta Golin; Christopher Rauh
  15. Recruitment strategies and match quality - New evidence from representative linked employer-employee data By Brändle, Tobias; Grunau, Philipp; Haylock, Michael; Kampkötter, Patrick
  16. Priority to unemployed immigrants? A causal machine learning evaluation of training in Belgium By Cockx, Bart; Lehner, Michael; Bollens, Joost
  17. No Country for Young People? The Rise of Anti-immigration Populism in Ageing Societies By Dotti, Valerio
  18. Electoral systems and female representation in politics: Evidence from a regression discontinuity By Kantorowicz, Jarosław; Köppl-Turyna, Monika
  19. Vacancies, Employment Outcomes and Firm Growth: Evidence from Denmark By Jesper Bagger; Francois Fontaine; Manolis Galenianos; Ija Trapeznikova
  20. Employment composition and labour earnings inequality within EU countries By David Martinez Turegano
  21. Buildings’ Energy Efficiency and the Probability of Mortgage Default: The Dutch Case By Monica Billio; Michele Costola; Loriana Pelizzon; Max Riedel
  22. Baby steps: The gender division of childcare during the COVID19 pandemic By Almudena Sevilla; Sarah Smith
  23. The life and death of zombies – evidence from government subsidies to firms By Nurmi, Satu; Vanhala, Juuso; Virén, Matti

  1. By: Mikolai, Julia; Keenan, Katherine; Kulu, Hill
    Abstract: Objectives. To investigate how COVID-19-related health and socio-economic vulnerabilities occur at the household level, and how they are distributed across household types and geographical areas in the United Kingdom. Design. Cross-sectional, nationally representative study. Setting. The United Kingdom. Participants. ~19,500 households. Main outcome measures. Using multiple household-level indicators and principal components analysis, we derive summary measures representing different dimensions of household vulnerabilities critical during the COVID-19 epidemic: health, employment, housing, financial and digital. Results. Our analysis highlights three key findings. First, although COVID-19 health risks are concentrated in retirement-age households, a substantial proportion of working age households also face these risks. Second, different types of households exhibit different vulnerabilities, with working-age households more likely to face financial, housing and employment precarities, and retirement-age households health and digital vulnerabilities. Third, there are area-level differences in the distribution of vulnerabilities across England and the constituent countries of the United Kingdom. Conclusions. The findings imply that the short- and long-term consequences of the COVID-19 crisis are likely to vary by household type. Policy measures that aim to mitigate the health and socio-economic consequences of the COVID-19 pandemic should consider how vulnerabilities cluster together across different household types, and how these may exacerbate already existing inequalities.
    Date: 2020–04–30
  2. By: Marco Di Cataldo (Department of Economics, University Of Venice Cà Foscari; London School of Economics); Nicola Mastrorocco (Trinity College Dublin)
    Abstract: What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on public spending, local revenues, and elected politicians at the municipality level. Difference-in-differences estimates reveal that infiltrated local governments spend more on average for construction and waste management, less for municipal police and public transport, and collect fewer taxes for waste and garbage. In addition, we uncover key elements of local elections associated with mafia-government collusion.
    Keywords: Organised crime, collusion, local public finance, municipalities, Italy
    JEL: K42 H72 D72
    Date: 2020
  3. By: Egüez, Alejandro (CERE - the Center for Environmental and Resource Economics)
    Abstract: This paper assesses whether and to what extent income and the stringency and enforcement (S&E) of environmental regulation influence compliance with the EU Waste Hierarchy (EWH), i.e., how EU member states treat waste. The EWH prioritizes waste prevention and re-use over recycling, which is ranked above waste to energy (WtE), while incineration and landfilling are the least preferred options. Biennial panel data for the period 2010–2016 is used to create a compliance index based on the waste treatment alternatives in the EWH. Waste (excluding major mineral waste) of 26 European Union countries is examined. This study is the first of its kind to regress an EWH compliance index on income, stringency and enforcement of environmental regulation, and other variables that are also expected to affect the relative benefits and costs of waste treatment like population density, heating demand, and electricity prices. In conjunction, the shares of landfilling, incineration, WtE, and recycling are also modeled to capture the effect of these variables in the waste treatment mix. Stringency and enforcement of environmental regulation have a positive effect on compliance with the EWH, which has increased over time.
    Keywords: EU waste hierarchy; waste treatment ladders; income; policy stringency; policy enforcement
    JEL: O44 Q53 R11
    Date: 2020–05–04
  4. By: Camille Blaudin de Thé (PSE - Paris School of Economics); Benjamin Carantino (PSE - Paris School of Economics); Miren Lafourcade (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, PSE - Paris School of Economics, RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11)
    Abstract: This paper investigates the impact of urban form on household fuel consumption and car emissions in France. We in particular analyze three features of cities commonly referred to as the "3 D's" (Cervero & Kockelman 1997): Density, Design and Diversity. Individual data allow us to identify the effects of urban form and the spatial sorting of households on emissions. We also use instrumental variables to control for other endogeneity issues. Our results suggest that, by choosing to live at the fringe of a metropolitan area instead of the city center, a representative household would consume approximately six extra tanks of fuel per year. More generally, doubling residential Density would result in an annual saving of approximately two tanks per household. However, larger gains would result from better urban Design (job-housing central-ization, improved rail/bus routes to central business districts, reduced pressure for road construction and a less fragmented built environment in urban areas) while improved Diversity (the concentration of various local amenities such as shops and public facilities) can also help lower fuel consumption. Another important finding is that the relationship between the metropolitan population and car emissions in France is bell-shaped, contrary to that in the US, suggesting that small cities do compensate for their lack of Density/Diversity by environmentally-friendly Design.
    Keywords: Sprawl,car emissions,CO 2 footprint,driving,public transport,smart cities
    Date: 2020–05
  5. By: Pilny, Adam; Rösel, Felix
    Abstract: Appointing or electing professionals to be public officials is a double-edged sword. Experts can use their rich knowledge to implement reforms, but they can also favor their own profession. In this study, we compare physician-trained state health ministers to ministers of other professions in Germany during 1955-2017. German state health ministers have great power to determine hospital capacities and infrastructure. Our results show that physician-trained health ministers increase hospital capacities, capital, and funding by the statutory health insurance (SHI). This prompts hospitals to hire more physicians, but with little impact on hospital outputs. As a result, total factor productivity (TFP) growth in hospital care slows down substantially under physician-ministers. At the same time, job satisfaction of hospital doctors tends to increase. We conclude that, in particular, the medical profession benefits from medical doctors in office.
    Keywords: Hospitals,health minister,productivity,TFP,favoritism,profession,technocracy
    JEL: D72 I11 I18 O47 P16
    Date: 2020
  6. By: Stefan Ederer; Stefan Humer; Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Emanuel List
    Abstract: The paper builds Distributional National Accounts (DINA) using household survey data. We present a transparent and reproducible methodology to construct DINA whenever administrative tax data are not available for research and apply it to various European countries. By doing so, we build synthetic microdata files which cover the entire distribution, include all income components individually aligned to national accounts, and preserve the detailed socioeconomic information available in the surveys. The methodology uses harmonized and publicly available data sources (SILC, HFCS) and provides highly comparable results. We discuss the methodological steps and their impact on the income distribution. In particular, we highlight the effects of imputations and the adjustment of the variables to national accounts totals. Furthermore, we compare different income concepts of both the DINA and EG-DNA approach of the OECD in a consistent way. Our results confirm that constructing DINA is crucial to get a better picture of the income distribution. Our methodology is well suited to build synthetic microdata files which can be used for policy evaluation like social impact analysis and microsimulation. Disclaimer This research has been conducted as a project at the Research Institute for Economics of Inequality (INEQ -- Vienna University for Economics and Business) and was supported by funds from the Oesterreichische Nationalbank (Oesterreichische Nationalbank anniversary fund, project 16728).
    Keywords: Distributional national accounts, survey data, income inequality
    JEL: C55 D31 E01
    Date: 2020–05
  7. By: Okan Yilmaz (Swansea University); Oleksandr Talavera (University of Birmingham); Joy Jia (Swansea University)
    Abstract: This paper explores how liquidity in UK rental markets reacts to variations in demand across time and space. We employ a survival analysis approach with a non-parametric hazard rate to investigate whether the probability of renting changes across calendar months. Our unique dataset comes from and contains 300,198 rental listings in 13 major UK university cities over the 2015-17 period. Our results suggest that the probability of renting is lower during the winter season compared to summer. This could be explained by students' higher housing demand at the start of the academic term. The results become more pronounced when the distance between marketed houses and university campuses is taken into account.
    Keywords: Big data; student housing; seasonality; survival analysis
    JEL: R21 R31 R32
    Date: 2020–05
  8. By: Osorio, Sebastian; Tietjen, Oliver; Pahle, Michael; Pietzcker, Robert; Edenhofer, Ottmar
    Abstract: The stringency of the EU’s Emission Trading System (ETS) is bound to be ratcheted-up to deliver on more ambitious goals as put forth in the EU’s Green Deal. Tightening the cap needs to consider the interactions with the Market Stability Reserve (MSR), which will be reviewed in 2021. Against that background, we employ the detailed model LIMES-EU to analyse options for the upcoming reforms. First, we examine how revising MSR parameters impacts allowance cancellations through the MSR. We find that under current regulation, the MSR cancels 5.1 Gt of allowances. Varying MSR parameters leads to cancellations in the range of 2.6 and 7.9 Gt, with the intake/outtake thresholds having the highest impact. Intake rates above 12% only have a limited effect but cause oscillatory intake behaviour. Second, we analyse how the 2030 targets can be achieved by adjusting the linear reduction factor (LRF). We find that the LRF increases MSR cancellations substantially (up to 10.0 Gt). This implies that increasing the LRF from currently 2.2% to 2.6% could already be consistent with the 55% EU-wide emission reduction target in 2030. However, we highlight that the number of MSR cancellations is subject to large uncertainty. Overall, the MSR increases the complexity of the market. In face of that, we suggest to develop the MSR into a Price Stability Reserve.
    Keywords: EU climate policy,EU ETS reform,linear reduction factor (LRF),Market Stability Reserve (MSR),EU ETS Phase IV
    JEL: L94 Q58
    Date: 2020
  9. By: Jean-Alain Héraud; Phu Nguyen-Van; Thi Kim Cuong Pham
    Abstract: This paper aims to analyze the determinants of individual well-being using a survey database from the Strasbourg metropolitan development council. We focus on the effects of externalities generated by public services (transport, culture and sport) as well as environmental quality and feelings of security in the Strasbourg metropolitan area (Eurométropole de Strasbourg, EMS). Results show that specificities of EMS (in terms of public services, environmental quality perceived as convenient for individual health, safety and security), as well as more individual features like opportunities to laugh or living with children influence significantly individual well-being. These findings are robust when using three subjective measures: feeling of well-being, environmental satisfaction and social life satisfaction. We also show that income may affect perceived well-being for individuals belonging to a low income group, while individuals belonging to a high income group tend to be unsatisfied with environmental quality, but satisfied with their social life. Besides, social comparison in terms of income does not really matter for individual well-being in the Strasbourg metropolitan area.
    Keywords: environmental satisfaction, externalities, feeling of well-being, public services, social life satisfaction, utility.
    JEL: H72
    Date: 2020
  10. By: Cäcilia Lipowski; Ralf A. Wilke; Bertrand Koebel
    Abstract: Birth rates differ strongly across European states, despite the deep economic harmonisation process related to European integration. This study uses large scale administrative data from France and Germany to analyse and directly compare fertility patterns in two major European economies over a period of 15 years. Strong evidence is found that opportunity costs play a role in fertility decisions, and for a positive income effect for females with high earnings. Females in Germany adapt their fertility behaviour more strongly in response to economic incentives than their counterparts in France. This is explained by pronounced differences in the national approaches to childcare support.
    Keywords: family policy, fertility behaviour, count data, panel data.
    JEL: J13 J11 C23 C25
    Date: 2020
  11. By: Simona Lorena Comi; Elena Cottini; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: We analyze the causal effect of retirement on the size, composition and intensity of social relationships using data from the Survey of Health, Ageing and Retirement in Europe for 11 European countries. Our empirical strategy exploits the different retirement eligibility ages as instruments for the endogenous individuals’ retirement decisions and controls for time invariant individual characteristics. We show that retirement changes the composition of the individual’s social network, increasing the share of family members, and decreasing the share of colleagues and friends, while there is no effect on the network’s absolute size. Changes in the social network’s composition are associated with a higher overall satisfaction and more intense relationships. We argue that retirement induces a substitution between weak (friends or colleagues) and strong ties (family), along with an increase in the intensity of the surviving ties. Interestingly this substitution has a gender dimension: females mainly reduce the share of friends while males that of colleagues.
    Keywords: retirement, social relationships, emotional closeness, ageing.
    JEL: J14 J26 C26
    Date: 2020–05
  12. By: Lonsky, Jakub
    Abstract: Across Europe, far-right parties have made significant electoral gains in recent years. Their anti-immigration stance is considered one of the main factors behind their success. Using data from Finland, this paper studies the effect of immigration on voting for the far-right Finns Party on a local level. Exploiting a convenient setup for a shift-share instrument, I find that one percentage point increase in the share of foreign citizens in municipality decreases Finns Party's vote share by 3.4 percentage points. Placebo tests using pre-period data confirm this effect is not driven by persistent trends at the municipality level. The far-right votes lost to immigration are captured by the two pro-immigration parties. Turning to potential mechanisms, immigration is found to increase voter turnout, potentially activating local pro-immigration voters. Moreover, the negative effect is only present in municipalities with high initial exposure to immigrants, consistent with the intergroup contact theory. Finally, I also provide some evidence for welfarestate channel as a plausible mechanism behind the main result.
    Keywords: Immigration,far-right,political economy,voting
    JEL: H71 J15 J61 P16
    Date: 2020
  13. By: Devi Brands (Vrije Universiteit Amsterdam); Joris Klingen (Vrije Universiteit Amsterdam); Francis Ostermeijer (Vrije Universiteit Amsterdam)
    Abstract: We provide novel evidence on the effect of smart phone use on road accidents. We exploit variation in phone usage fees in the Netherlands following a change in European Union (EU) roaming regulations implemented in 2017. The growth rate of mobile data roaming increased substantially after the change, which allows us to estimate a difference-in-differences model where non-Dutch drivers from the EU are treated, while Dutch drivers serve as control group. Our results suggest that around 10% of vehicles involved in accidents can be explained by the use of smart phones, and that these accidents mainly happen on urban roads.
    Keywords: road safety, accident risk, smart phones, urban roads
    JEL: K42 R41 I12
    Date: 2020–05–17
  14. By: Abi Adams-Prassl; Teodora Boneva; Marta Golin; Christopher Rauh
    Abstract: We present real time survey evidence from the UK, US and Germany showing that the labor market impacts of COVID-19 differ considerably across countries. Employees in Germany, which has a well-established short-time work scheme, are substantially less likely to be affected by the crisis. Within countries, the impacts are highly unequal and exacerbate existing inequalities. Workers in alternative work arrangements and in occupations in which only a small share of tasks can be done from home are more likely to have reduced their hours, lost their jobs and suffered falls in earnings. Less educated workers and women are more affected by the crisis.
    Keywords: recessions, inequality, labor market, unemployment, coronavirus
    JEL: J21 J22 J24 J33 J63
    Date: 2020
  15. By: Brändle, Tobias; Grunau, Philipp; Haylock, Michael; Kampkötter, Patrick
    Abstract: In economics, the recruitment process of firms is largely treated as a black box. To shed light on this process, we use new representative linked employer-employee data for German private-sector establishments to explore search, selection and screening activities over the years 2012-2018. We document longitudinal changes in hiring policies and address the heterogeneity across establishments relating to size, ownership, sector, and unobserved heterogeneity. Firms' recruitment strategies have sizeable effects on the composition of worker productivity, worker-firm match quality, the number of open vacancies, as well as expected staffing problems. Finally, we outline potential mechanisms and research gaps for future work, where there is room for more detailed and causal evidence.
    Keywords: Recruitment,Hiring Policies,Linked Employer-Employee Data,Worker Productivity,Vacancies,Match Quality
    JEL: J21 J63 M51
    Date: 2020
  16. By: Cockx, Bart; Lehner, Michael; Bollens, Joost
    Abstract: Based on administrative data of unemployed in Belgium, we estimate the labour market effects of three training programmes at various aggregation levels using Modified Causal Forests, a causal machine learning estimator. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity across programmes and unemployed. Simulations show that “black-box†rules that reassign unemployed to programmes that maximise estimated individual gains can considerably improve effectiveness: up to 20% more (less) time spent in (un)employment within a 30 months window. A shallow policy tree delivers a simple rule that realizes about 70% of this gain.
    JEL: J68
    Date: 2020–05–11
  17. By: Dotti, Valerio
    Abstract: Abstract We investigate the effects of (i) population ageing and (ii) rising income inequality on immigration policies using an overlapping-generations model of elections with endogenous political parties. In each period, young people work and pay taxes while old people receive social security payments. Immigrants are generally young, meaning they contribute significantly to financing the cost of public services and social security. Among natives, the elderly and the poor benefit the most from public spending. However, because these two types of voters do not fully internalize the positive fiscal effects of immigration, they have a common interest in coalescing around a populist party (or multiple) seeking to curb immigration and increase the tax burden on high-income individuals. Population ageing and rising income inequality increase the size and, in turn, the political power of such parties, resulting in more restrictive immigration policies, a larger public sector, higher tax rates, and lower societal well-being. Calibrating the model to UK data suggests that the magnitude of these effects is large. The implications of this model are shown to be consistent with patterns observed in UK attitudinal data.
    Keywords: Immigration, Ageing, Policy, Voting.
    JEL: C71 D72 H55 J61
    Date: 2020–04–14
  18. By: Kantorowicz, Jarosław; Köppl-Turyna, Monika
    Abstract: This work looks at the policies aimed at promoting female participation in local legislative bodies using a series of changes to electoral law in Poland. Using an exogenous population threshold dividing municipalities into ones with proportional and ones with majoritarian elections, we estimate the effect of the electoral system on female representation. Moreover, we use difference-in-discontinuities to look at the effect of an introduction of a female quota on female participation in local councils. Contrary to the literature for the national elections, we find that more females are elected to local councils in the majoritarian system. We link this observation to countering party bias in list placements and lower costs of electoral participation in the majoritarian system. We find that the female quota has a strong positive effect on the percentage of females in the local council. It increases the pool of female candidates and has a positive effect on their list placements. It does not, however, create spillovers to neighboring regions.
    Keywords: electoral rules,forms of government,female representation,regression discontinuity,difference in discontinuities
    JEL: D72 B52
    Date: 2020
  19. By: Jesper Bagger (Royal Holloway, University of London and Dale T. Mortensen Centre, Aarhus University); Francois Fontaine (Paris School of Economics, Universite Paris 1-Pantheon Sorbonne); Manolis Galenianos (Royal Holloway, University of London); Ija Trapeznikova (Royal Holloway, University of London)
    Abstract: We use a comprehensive dataset from Denmark that combines online job advertisements with a matched employer-employee dataset and a firm-level dataset with value added and revenue information to study the relationship between vacancy-posting and various firm outcomes. We find that posting a vacancy significantly increases a firm's hiring rate, and that two-third of the additional hiring occurs in the same quarter while one-third occurs with one quarter lag. The majority of the effect is accounted for by hiring from employment. Small and slow-growth firms show greater hiring responses and the hiring response of high-productivity firms takes longer to materialize. We find that separations that are likely associated with quits predict vacancy posting, consistent with replacement hiring and vacancy chains. Growth in value added and revenue has a strong positive effect on vacancy posting but only when shocks are permanent - transitory shocks do not affect vacancy posting.
    Keywords: Vacancies, hiring, separations, employment growth, firm growth, value added, revenue
    JEL: J23 J63
    Date: 2020–05–15
  20. By: David Martinez Turegano (European Commission - JRC)
    Abstract: This paper presents a novel methodology that combines different datasets to decompose estimated changes in labour earnings inequality into the contributions of a number of employment characteristics. Based on this approach, we provide empirical evidence for recent developments in 18 EU countries starting in 2000. We find that the common upward trend in inequality is related to shifts in the composition of employment within sectors, rather than to sectoral reallocation. In particular, we estimate that the expansion of part-time and fixed-term contracts, as well as the higher share of tertiary educated workers within sectors, have been the main contributors to the rise of earnings inequality. Cross-country differences are exacerbated when taking into account unemployed population due to divergent capacities to create jobs in face of successive economic crises and external competition. In policy terms, a specific concern deals with the possibility that a higher share of flexible contractual arrangements is masking the rise of underemployment. On a broader perspective, we deem that the overall growth and competitiveness strategies are essential within the fairness agenda, while the enhancement of education, social and income-redistribution tools is needed to face economic and technological challenges in the most inclusive way possible.
    Keywords: Inequality, Labour Market, Employment Structure, Economic Crisis, Structural Change.
    JEL: D31 E24 J21
    Date: 2020–04
  21. By: Monica Billio (Department of Economics, University Of Venice Cà Foscari); Michele Costola (Department of Economics, University Of Venice Cà Foscari); Loriana Pelizzon (Research Center SAFE, Goethe University Frankfurt); Max Riedel (Department of Economics, University Of Venice Cà Foscari; Research Center SAFE, Goethe University Frankfurt)
    Abstract: We investigate the relation between buildings’ energy efficiency and the probability of mortgage default. To this end, we construct a novel panel dataset by combining Dutch loan-level mortgage information with provisional building energy ratings that are provided by the Netherlands Enterprise Agency. By employing the logistic regression and the extended Cox model, we find that buildings’ energy efficiency is associated with lower likelihood of mortgage default. We also show that energy efficiency provides a further mitigation of default risk for borrowers with a lower income potentially because of the savings coming from lower utility bills, which have a major impact on the borrower with less disposable income. The results hold for a battery of robustness checks.
    Keywords: Mortgages, Energy Efficiency, Credit Risk
    JEL: G21
    Date: 2020
  22. By: Almudena Sevilla; Sarah Smith
    Abstract: The COVID19 pandemic has caused shocks to the demand for home childcare (with the closure of schools and nurseries) and the supply of home childcare (with many people not working). We collect real-time data on daily lives to document that UK families with young children have been doing the equivalent of a working week in childcare. Women have been doing the greater share, but overall, the gender childcare gap (the difference between the share of childcare done by women and the share done by men) for the additional, post-COVID19 hours is smaller than that for the allocation of pre-COVID19 childcare. However, the amount of additional childcare provided by men is very sensitive to their employment – the allocation has become more equal in households where men are working from home and where they have been furloughed/ lost their job. There are likely to be long-term implications from these changes – potentially negative for the careers of parents of young children; but also, more positively for some families, for sharing the burden of childcare more equally in the future.
    Date: 2020–05–22
  23. By: Nurmi, Satu; Vanhala, Juuso; Virén, Matti
    Abstract: We analyze the demographics of zombie firms and durations of zombie spells as well as their determinants, including an application on public subsidies using firm level population panel data from Finland. Firm-level analysis of firm demographics reveals that zombie-firms, as commonly defined in the literature, are often not truly distressed firms but rather companies with temporarily low revenues relative to interest payments. More importantly, we find that roughly a third of these firms are in fact growing companies and two thirds recover from the zombie status to become healthy firms. We also show that the increase of zombie firms over the past 15 years has mainly been driven by cyclical factors, as opposed to a secular trend. In our policy application on government subsidies to firms, estimation results strongly suggest that subsidy-receiving firms are less likely to die, regardless of the type of subsidy. However, with regard to recovery there is heterogeneity in the effects depending on the type of firm and the type of subsidy received. Thus, we do not find a robust positive association of subsidies with zombie recovery.
    JEL: D22 D24 G33 H25 L16 L25 O25
    Date: 2020–05–14

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