nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒06‒08
35 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. COVID-19 and the Role of Economic Conditions in French Regional Departments By Glenn Magerman; Victor Ginsburgh; Ilaria Natali
  2. Retirement, Intergenerational Time Transfers, and Fertility By Peter Eibich; Thomas Siedler
  3. Title: Fees equalization and Appropriate Health Care By Barili, E;; Bertoli, P;; Grembi, V;
  4. 'More Than One Red Herring'? Heterogeneous Effects of Ageing on Healthcare Utilisation By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  5. Double trouble: The burden of child rearing and working on maternal mortality By Bucher-Koenen, Tabea; Farbmacher, Helmut; Guber, Raphael; Vikström, Johan
  6. Automation, workers’ skills and job satisfaction By Henrik Schwabe; Fulvio Castellacci
  7. Do Welfare State Taxes and Transfers Reduce Gender Income Inequality? Evidence from Eight European Countries By Avram, Silvia; Popova, Daria
  8. Still the lands of equality? On the heterogeneity of individual factor income shares in the Nordics By Roberto Iacono; Elisa Palagi
  9. Asocial Capital: Civic Culture and Social Distancing during COVID-19 By Ruben Durante; Luigi Guiso; Giorgio Gulino
  10. The information value of energy labels: Evidence from the Dutch residential housing market By Lu Zhang; Lennart Stangenberg; Sjors van Wickeren
  11. Commuting Time and the Gender Gap in Labor Market Participation By Farré, Lídia; Jofre-Monseny, Jordi; Torrecillas, Juan
  12. Loan supply and bank capital: A micro-macro linkage By Kick, Thomas; Malinkovich, Swetlana; Merkl, Christian
  13. Protecting Investors in Equity Crowdfunding: An Empirical Analysis of the Small Investor Protection Act By Maximilian Goethner; Lars Hornuf; Tobias Regner
  14. Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys By Adams-Prassl, Abi; Boneva, Teodora; Golin, Marta; Rauh, Christopher
  15. COVID-19 Is Not Affecting All Working People Equally By Carsten Schröder; Theresa Entringer; Jan Goebel; Markus M. Grabka; Daniel Graeber; Martin Kroh; Hannes Kröger; Simon Kühne; Stefan Liebig; Jürgen Schupp; Johannes Seebauer; Sabine Zinn
  16. The Regional Anatomy of School Dropouts in Spain: The Role of the Industry Structure of Local Labour Markets By Diaz-Serrano, Luis; Nilsson, William
  17. Service Exports and Public Funding By Ali-Yrkkö, Jyrki; Kuusi, Tero; Pajarinen, Mika; Wang, Maria
  18. Credit Supply, Firms, and Earnings Inequality By Moser, Christian; Saidi, Farzad; Wirth, Benjamin; Wolter, Stefanie
  19. Electoral Democracy at Work By Askenazy, Philippe; Breda, Thomas
  20. Tracking COVID-19 Spread in Italy with Mobility Data By Nuriye Melisa Bilgin
  21. Are Executives in Short Supply? Evidence from Deaths' Events By Julien Sauvagnat; Fabiano Schivardi
  22. Joint and individual savings within families: evidence from bank accounts By Merike Kukk; W. Fred van Raaij
  23. Prices and market power in mental health care: Evidence from a major policy change in the Netherlands By Rudy Douven; Chiara Brouns; Ron Kemp
  24. The effect of business cycle expectations on the German apprenticeship market: Estimating the impact of Covid-19 By Samuel Muehlemann; Harald Pfeifer; Bernhard Wittek
  25. The Perceived Well-Being and Health Costs of Exiting Self-Employment By Nikolova, Milena; Nikolaev, Boris; Popova, Olga
  26. Gender-Specific Duration of Parental Leave and Current Earnings By Gerst, Benedikt; Grund, Christian
  27. Persistence of commuting habits: Context effects in Germany By Jost, Ramona
  28. The Perceived Well-being and Health Costs of Exiting Self-Employment By Milena Nikolova; Boris Nikolaev; Olga Popova
  29. Employer Policies and the Immigrant-Native Earnings Gap By Dostie, Benoit; Li, Jiang; Card, David; Parent, Daniel
  30. Personality Dynamics over the Lifecourse By Miriam Gensowski; Mette Goertz; Stefanie Schurer
  31. The COVID-19 pandemic and its impact on inequality of opportunity in psychological distress in the UK By Davillas, Apostolos; Jones, Andrew M.
  32. Financial fragility across Europe and the US: The role of portfolio choices, household features and economic-institutional setup By Marianna Brunetti; Elena Giarda; Costanza Torricelli
  33. Impact of virus testing on COVID-19 case fatality rate: estimate using a fixed-effects model By Anthony Terriau; Arthur Poirier; Julien Albertini; Quentin Le Bastard
  34. Sexual Harassment and Gender Inequality in the Labor Market By Folke, Olle; Rickne, Johanna
  35. Risk attitude and air pollution: Evidence from chess* By Joris Klingen; Jos van Ommeren

  1. By: Glenn Magerman; Victor Ginsburgh; Ilaria Natali
    Abstract: The recent outbreak of Covid-19 has infected the world at an incredible speed. While there are many similarities across countries in terms of the characteristics of the epidemic spread, there are also large differences across regions. In this paper, we examine regional variation in the outbreak across continental France. We use information on the number of deaths and discharged patients from Covid-19 and socio-economic variables at the department level. Controlling for other factors, we corroborate existing evidence that, unfortunately, inequality kills: departments with more inequality face a higher incidence rate of the disease, expressed as the number of deaths and discharged (gravely ill) patients. Using covariance analysis combining both deaths and releases, we find no statistically differential relationship across factors that contribute to deaths or recoveries.
    Keywords: Covid-19; France; departmental effects on the pandemic
    JEL: I10 I14
    Date: 2020–05
  2. By: Peter Eibich; Thomas Siedler
    Abstract: Retired parents might invest time into their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on adult children’s fertility. We use representative panel data from Germany to link observations on parents and adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity design. The results show that parent’s early retirement significantly increases the probability of childbirth for adult children. However, parental retirement affects only the timing of adult children’s fertility, without having an effect on total fertility.
    Keywords: Retirement, fertility, intergenerational transfer, time use
    JEL: J13 J14 J22 J26
    Date: 2020
  3. By: Barili, E;; Bertoli, P;; Grembi, V;
    Abstract: Fees equalization in health care brings under a unique tariff several medical treatments, coded under different Diagnosis Related Groups (DRGs). The aim is to improve healthcare quality and efficiency by discouraging unnecessary, but better-paid,treatments. We evaluate its effectiveness on childbirth procedures to reduce c-section overuse by equalizing the DRGs for vaginal and cesarean deliveries. Using Italian data and a difference-in-differences approach, we show that setting an equal reimbursement decreased c-sections by 2.5%. This improved the appropriateness of medical decisions with more low-risk mothers delivering naturally and no significant changes in the incidence of complications for vaginal deliveries. Our analysis supports the effectiveness of fees equalization in averting c-sections, but highlights the marginal role of financial incentives in driving c-section overuse which went back to normal in the short run. We found a stronger reduction in low-quality, and more capacity constrained hospitals. Moreover, the effect is driven by districts where the availability of Ob-Gyn specialists is higher and where women are predominant in the gender composition of the specialty group.
    Keywords: Fees equalization; Cesarean Sections; Difference in Differences;
    JEL: K13 K32 I13
    Date: 2020–05
  4. By: Costa-Font, Joan (London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia)
    Abstract: We study the effect of ageing, defined an extra year of life, on health care utilisation. We disentangle the direct effect of ageing, from other alternative explanations such as the presence of comorbidities and endogenous time to death (TTD) that are argued to absorb the effect of ageing ( so-called 'red herring' hypothesis). We exploit individual level end of life data from several European countries that record the use of medicine, outpatient and inpatient care as well as long-term care. Consistently with a 'red herring hypothesis', we find that corrected TTD estimates are significantly different from uncorrected ones, and its effect size exceeds that of an extra year of life, which in turn is moderated by individual comorbidities. Corrected estimates suggest an overall attenuated effect of ageing, which does not influence outpatient care utilisation. These results suggest the presence of 'more than one red herring' depending on the type of health care examined.
    Keywords: endogeneous time to death (TTD), home help use and comorbidity, medicines use, hospital care, health care utilization, ageing, time to death, comorbidities
    JEL: I18 J13 H75
    Date: 2020–05
  5. By: Bucher-Koenen, Tabea (Munich Center for the Economics of Aging); Farbmacher, Helmut (Munich Center for the Economics of Aging); Guber, Raphael (Munich Center for the Economics of Aging); Vikström, Johan (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We document increased old-age mortality rates among Swedish twin mothers compared to non-twin mothers. Results are based on administrative data on mortality for the years 1990 to 2010. We argue that twins are an unplanned shock to fertility in the cohorts of older women considered. Deaths due to lung cancer, chronic obstructive pulmonary disease and heart attacks, which are associated with stress during life, are significantly increased. Stratifying the sample by education and pension income shows the highest increase in mortality rates among highly educated mothers and those with above-median pension income. These results are consistent with the existence of a double burden from child rearing and working on mothers’ health.
    Keywords: Mortality; maternal health; fertility; twins
    JEL: I10 J13 J20
    Date: 2020–05–19
  6. By: Henrik Schwabe (TIK, University of Oslo); Fulvio Castellacci (TIK, University of Oslo)
    Abstract: When industrial robots are adopted by firms in a local labor market, some workers are displaced and become unemployed. Other workers that are not directly affected by automation may however fear that these new technologies might replace their working tasks in the future. This fear of a possible future replacement is important because it negatively affects workers’ job satisfaction at present. This paper studies the extent to which automation affects workers’ job satisfaction, and whether this effect differs for high- versus low-skilled workers. The empirical analysis uses microdata for several thousand workers in Norway from the Working Life Barometer survey for the period 2016-2019, combined with information on the introduction of industrial robots in Norway from the International Federation of Robotics. Our identification strategy exploits variation in the pace of introduction of industrial robots in Norwegian regions and industries since 2007 to instrument workers’ fear of replacement. The results indicate that automation in industrial firms in recent years have induced 40% of the workers that are currently in employment to fear that their work might be replaced by a smart machine in the future. Such fear of future replacement does negatively affect workers’ job satisfaction at present. This negative effect is stronger for low-skilled workers, which are those carrying out routine-based tasks, and who are therefore more exposed to the risks of automation.
    Date: 2020–05
  7. By: Avram, Silvia; Popova, Daria
    Abstract: We complement the institutional literature on gender and the welfare state by examining how taxes and transfers affect the incomes of men and women. Using microsimulation and intra-household income splitting rules, we measure the differences in the level and composition of individual disposable incomes of men and women in eight European countries covering various welfare regime types. We quantify the extent to which taxes and transfers are able to close the gender gap in earnings, as well as which policy instruments contribute most to reducing the gap. We find that with the exception of old-age pensions, taxes and transfers – both contributory and means-tested – significantly reduce gender income inequality but cannot compensate for high gender earnings gaps. The equalizing effect of benefits is higher than that of taxes but varies significantly not only across countries but also across groups with different demographic characteristics.
    Date: 2020–05–28
  8. By: Roberto Iacono; Elisa Palagi
    Abstract: As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals' factor income shares. We highlight the structural change taking place in all the Nordic countries since the early 1990s, with rising inequality in composition of individual incomes due mostly to a shift in capital incomes towards the top of the distribution. We link this result to changes in taxation of factor incomes, by highlighting the role played by the introduction of Dual Income Taxation reforms in the 1990s throughout the Nordic countries. Our estimates of the degree of income composition inequality allow a descriptive analysis of the role of functional distribution as a determinant of personal income inequality in the Nordics. We show that for Denmark in the period 2009 - 2013, Finland 1990 - 2007, and Norway 1991 - 2005, rising capital shares of income contributed to changes in personal income inequality, whilst for Sweden the evidence leads to disregard the capital share as a determinant of income inequality.
    Keywords: Functional distribution; personal income distribution; income composition inequality; Nordic countries.
    Date: 2020–05–23
  9. By: Ruben Durante; Luigi Guiso; Giorgio Gulino
    Abstract: Social distancing can slow the spread of COVID-19 if citizens comply with it and internalize the cost of their mobility on others. We study how civic values mediate this process using data on mobility across Italian provinces between January and May 2020. We find robust evidence that after the virus outbreak mobility declined, but significantly more in areas with higher civic capital, both before and after a mandatory national lockdown. Simulating a SIR model calibrated on Italy, we estimate that if all provinces had the same civic capital as those in top-quartile, COVID-related deaths would have been ten times lower.
    Keywords: civic capital, Culture, Externalities, social distancing, COVID-19
    JEL: Z1 D91
    Date: 2020–05
  10. By: Lu Zhang (CPB Netherlands Bureau for Economic Policy Analysis); Lennart Stangenberg (RUG); Sjors van Wickeren (EUR)
    Abstract: Do energy labels contain extra information that buyers cannot observe themselves? Which labeling scheme is more effective: a voluntary or a mandatory one? In this paper we examine the information value of voluntary and mandatory energy labels using administrative data on all transactions in the Dutch residential housing market. Employing a combination of hedonic price models, matching and a sharp Regression Discontinuity Design (RDD), we show that voluntary labels introduced in the period 2008-2014 contain limited information value. The information value of mandatory labels that are adopted since 2015 is less clear-cut. We observe that better-labeled dwellings were transacted with significant price premiums before obtaining labels. This implies that at least part of the premiums cannot be attributed to mandatory labels.
    JEL: R38 R58
    Date: 2020–05
  11. By: Farré, Lídia (University of Barcelona); Jofre-Monseny, Jordi (University of Barcelona); Torrecillas, Juan (University of Barcelona)
    Abstract: This paper investigates the contribution of increasing travel times to the persistent gender gap in labor market participation. In doing so, we estimate the labor supply elasticity of commuting time from a sample of men and women in US cities using microdata from the Census for the last decades. To address endogeneity concerns, we adopt an instrumental variables approach that exploits the shape of cities as an exogenous source of variation for travel times. Our estimates indicate that a 10 minutes increase in commuting decreases the probability of married women to participate in the labor market by 4.6 percentage points. In contrast, the estimated effect on men is small and statistically insignificant. We also find that women with children and immigrant women originating from countries with more gendered social norms respond the most to commuting time variations. This evidence suggests that the higher burden of family responsibilities supported by women may magnify the negative effect of commuting on their labor supply. From our findings, we conclude that the increasing trend in travel times observed in the US and in many European countries during the last decades may have contributed to the persistence of gender disparities in labor market outcomes.
    Keywords: commuting time, labor supply, gender roles, family responsibilities, city shape
    JEL: R41 J01 J16 J22
    Date: 2020–05
  12. By: Kick, Thomas; Malinkovich, Swetlana; Merkl, Christian
    Abstract: In the presence of financial frictions, banks' capital position may constrain their ability to provide loans. The banking sector may thus have important feedback effects on the macroeconomy. To shed new light on this issue, we combine two approaches. First, we use microeconomic balance sheet data from Germany and estimate banks' loan supply response to capital changes. Second, we modify the model of Gertler and Karadi (2011) such that it can be calibrated to the estimated partial equilibrium elasticity of bank loan supply with respect to bank capital. Although the targeted elasticity is remarkably different from the one in the baseline model, banks continue to be an important originator and amplifier of macroeconomic shocks. Thus, combining microeconometric results with macroeconomic modeling provides evidence on the effects of the banking sector on the macroeconomy.
    Keywords: DSGE,Bank Capital,Loan Supply,Financial Frictions
    JEL: E24 E32 E44
    Date: 2020
  13. By: Maximilian Goethner (Friedrich Schiller University Jena); Lars Hornuf (University of Bremen, and Max Planck Institute for Innovation and Competition, Munich); Tobias Regner (Friedrich Schiller University Jena)
    Abstract: During the past decade, equity crowdfunding (ECF) has emerged as an alternative funding channel for startup firms. In Germany, the Small Investor Protection Act became binding in July 2015, with the legislative goal to protect investors engaging in this new asset class. Since then, investors pledging more than 1,000 EUR now must self-report their income and wealth. Investing more than 10,000 EUR in a single ECF issuer is only possible through a corporate entity. We examine how the Small Investor Protection Act has affected investor behavior at Companisto, Germany’s largest ECF portal for startup firms. The results show that after the new law became binding, sophisticated investors invest less on average while casual investors invest more. Moreover, the signaling capacity of large investments has disappeared.
    Keywords: Equity crowdfunding, Crowdinvesting, Investor protection
    JEL: E22 G18 G38 K22 L26
    Date: 2020–05–29
  14. By: Adams-Prassl, Abi (University of Oxford); Boneva, Teodora (University of Zurich); Golin, Marta (University of Oxford); Rauh, Christopher (University of Montreal)
    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, COVID-19
    JEL: J21 J22 J24 J33 J63
    Date: 2020–04
  15. By: Carsten Schröder; Theresa Entringer; Jan Goebel; Markus M. Grabka; Daniel Graeber; Martin Kroh; Hannes Kröger; Simon Kühne; Stefan Liebig; Jürgen Schupp; Johannes Seebauer; Sabine Zinn
    Abstract: The corona pandemic and the political measures undertaken to contain it are changing the working conditions of many people in Germany. Based on data from the first tranche of a supplementary survey (SOEP-Cov) to the German Socio-Economic Panel (SOEP), this study analyzes the effects of the corona crisis on Germany’s working population in 2019. In this paper, we investigate how severely people have been affected by the pandemic in three dimensions: individual level of education, gross individual earned income in 2019, and equivalent net household income in 2019. The key findings are that just under 20 percent of the working population are working reduced hours (on “short-time work”), and a good third are working partially or completely from home. Reported working hours have fallen by an average of four hours per week compared to the previous year. The extent to which working people have been affected by the corona crisis differs across the three dimensions. It is primarily those with higher incomes and a higher level of education who are using the opportunity to work from home, whereas those with a lower level of education are more likely to be on short-time work. Although most employees are not concerned about their own financial situation, they are concerned about the overall development of the German economy as of spring 2020.
    Keywords: SOEP-CoV, corona, labor market, concerns
    JEL: D19 D39 I39
    Date: 2020
  16. By: Diaz-Serrano, Luis (Universitat Rovira i Virgili); Nilsson, William (University of the Balearic Islands)
    Abstract: A number of studies have examined the impact of local labor market conditions on school dropout. However, none of them have considered the role of the industry structure. We construct data for a panel of Spanish regions and identify the effect of local labor markets using a variation of the share of employment by industry across regions and over time. In order to control for the huge structural and conjunctural heterogeneity across Spanish regions in the school dropout rate, we use a fixed-effects model with region specific slopes. We run separate regressions for boys and girls. We find a sizable impact of the industry structure and observe that in markets with a higher share low-skill employment the school dropout rate is significantly larger, though the industries affecting boys and girls are different. Our results suggest that the supply of skilled employment in the economy may allow to keep an important share of school dropouts in the school.
    Keywords: educational attainment, Spain, labour market, youth employment, skills
    JEL: J21 J24
    Date: 2020–05
  17. By: Ali-Yrkkö, Jyrki; Kuusi, Tero; Pajarinen, Mika; Wang, Maria
    Abstract: Abstract In this paper, we study service exports by Finnish companies, with a special focus on their EU trade. We use a register-based dataset of all Finnish service export firms. We find that service export growth has been fast. In 2010–2017, Finland’s service export volume grew by more than 50%, which exceeded the corresponding growth in service exports in Sweden, Denmark and Germany. 53% of Finnish service exports were directed to the EU. According to the results, the number of Finnish companies that engage in service trade to the EU has increased by around 55% since 2010. The share of exports by service industries has also increased dramatically and reached 65% of the total service trade to EU in 2017. Manufacturing accounts for almost 29% and other industries, such as utilities and construction, 6% of the total service exports to the EU. The study also yielded preliminary results on the impact of Business Finland’s activities on service exports. In these analyses, it was found that there was a significant degree of uncertainty in the estimates, and no statistically significant impact on the growth of service exports was found.
    Keywords: Service, Service exports, Subsidy, Financing, Impact
    JEL: F14 F60 L8 O38
    Date: 2020–05–18
  18. By: Moser, Christian; Saidi, Farzad; Wirth, Benjamin; Wolter, Stefanie
    Abstract: We study the distributional effects of a monetary policy-induced firm-level credit supply shock on individual wages and employment. To this end, we construct a novel dataset that links worker employment histories to firms' bank credit relationships in Germany. We document that firms in relationships with banks that were more exposed to negative monetary policy rates in 2014 see a relative reduction in credit supply. A negative credit supply shock in turn is associated with lower firm-level average wages and employment. These effects are concentrated among distinct worker groups within firms, with initially lower-paid workers more likely to be fired and initially higher-paid workers more likely to receive wage cuts. At the same time, wages decline by more at initially higher-paying firms. Consequently, wage inequality within and between firms decreases. Our results suggest that monetary policy has important distributional effects in the labor market.
    Keywords: Credit Supply, Monetary Policy, Negative Interest Rates, Bank Relationships, Worker and Firm Heterogeneity, Employment, Wages, Linked Employer-Employee Data, Earnings Inequality
    JEL: D22 G21 G31 G32 J31
    Date: 2020–05–12
  19. By: Askenazy, Philippe (CNRS); Breda, Thomas (Paris School of Economics)
    Abstract: We show that an institutional change designed expressly to heighten competition for the provision of union services can have a substantial effect on unionization and employment relations. We study a French reform of 2008 that introduced mandatory elections for representation of workers at firm, industry and national levels, putting an end to the oligopoly held until then by five historically established unions. Exploiting random variation in the reform's date of application in different private sector workplaces, we find that the reform increased union membership by around 8 percentage points and employers' trust in unions by 45 percent of a standard deviation. The reform also increased workers' trust in unions and the frequency of labor conflicts in manufacturing. Taken together, the results suggest that regular free elections can be an effective way to foster participation in unions and workers' ability to voice concerns, while at the same time making unions more legitimate bargaining partners for employers.
    Keywords: union representativeness, democracy, unionization, social capital
    JEL: J51 J52 J58
    Date: 2020–05
  20. By: Nuriye Melisa Bilgin (Koç University)
    Abstract: This paper provides insights for policymakers to evaluate the impact of staying at home and lockdown policies by investigating possible links between individual mobility and the spread of the COVID-19 virus in Italy. By relying on the daily data, the empirical evidence suggests that an increase in the number of visits to public spaces such as workspaces, parks, retail areas, and the use of public transportation is associated with an increase in the positive COVID-19 cases in a subsequent week. On the contrary, the increased intensity of staying in residential spaces is related to a decrease in the confirmed cases of COVID-19 significantly. Results are robust after controlling for the lockdown period. Empirical evidence underlines the importance of the lockdown decision. Further, there is substantial regional variation among the twenty regions of Italy. Individual presence in public vs. residential spaces has a more significant effect on the number of COVID-19 cases in the Lombardy region.
    Keywords: COVID-19, Coronavirus, Italy, Regional Heterogeneity, Mobility.
    JEL: I10 I18 I31
    Date: 2020–05
  21. By: Julien Sauvagnat (Bocconi University and CEPR); Fabiano Schivardi (Luiss University, EIEF and CEPR)
    Abstract: Using exhaustive administrative data on Italian social security records, we construct measures of local labor market tightness for executives that vary by industry and location. We then show that firm performance is negatively affected by executives death, but only in thin local labor markets. Death events are followed by an increase in the separation rate for the other executives, in particular for those with a college degree. Consistent with the hypothesis that the drop in performance is due to executives' short supply, we find that after a death event executives wages in other firms increase, but only in thin markets.
    Date: 2020
  22. By: Merike Kukk; W. Fred van Raaij
    Abstract: In this paper, we investigate the ownership of financial assets within families and how pooling affects the individual savings of the partners. We use anonymised monthly transactional data from ING Bank to observe the financial data of Dutch couples for 2014–2016. We find that savings are quite equally allocated in almost half of households but in one-fifth of households there is only one partner who owns an individual account. The estimations show that joint savings contribute to a more equal division of savings since they are held equally. However, we find larger differences in individual savings among partners who pool, suggesting that the use of joint savings does not lead to individual savings being more evenly distributed, but rather to the opposite. The pattern is more apparent for households in their 20s and for saving accounts. The results of the study highlight the need to understand how families make decisions about applying the sharing rule to joint and individual savings
    Keywords: household, savings, financial assets, financial management, allocation of resources in households, sharing rule, pooling, joint and separate/ individual assets, bank and savings accounts
    JEL: D13 D14 D31
    Date: 2020–05–18
  23. By: Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis); Chiara Brouns (Menzis); Ron Kemp (ACM, EUR)
    Abstract: In the Dutch health care system of managed competition, insurers and mental health providers negotiate on prices for mental health services. Contract prices are capped by a regulator who sets a maximum price for each mental health service. In 2013, the majority of the contract prices equaled these maximum prices. We study price setting after a major policy change in 2014.
    JEL: I11 I18 L11
    Date: 2020–05
  24. By: Samuel Muehlemann; Harald Pfeifer; Bernhard Wittek
    Abstract: A firm's expectation about the future business climate is an important determinant of the decision to train apprentices, because German firms typically train apprentices to either fill future skilled worker positions, or as a substitute for other types of labor. The current coronavirus crisis will have a strong and negative impact on the German economy according to the current estimates of the business climate in Germany (ifo Business Climate Index). To the extent that the training decision of a firm depends on its perception of the business climate, we expect a downward shift in the firm's demand for apprentices and consequently also a decrease in the equilibrium number of apprenticeship contracts. To assess the impact of changes in business climate expectations, we analyze German data on the apprenticeship market at the state-level and at the occupation-level within states from 2007 to 2019. We apply first-differences regressions to account for unobserved heterogeneity across states and occupations, allowing us to identify the association between changes in the ifo Business Climate Index and subsequent changes in the demand for apprentices, the number of new apprenticeship contracts, unfilled vacancies and unsuccessful applicants. We find that the favorable business climate in Germany in recent years led to a substantial increase in the number of unfilled vacancies. Thus, the apprenticeship market prior to the current crisis can be characterized by excess demand for apprentices (although there are matching problems in some states, with both a high share of unfilled vacancies and a high share of unsuccessful applicants). Taking into account the most recent business climate data up to May 2020, we estimate that the coronavirus-related decrease in firms' expectations about the business climate can be associated with a predicted 9.1% decrease in firm demand for apprentices and a 6.8% decrease in the number of new apprenticeship positions in Germany in 2020 (34,700 apprenticeship contracts; 95% confidence interval: +/- 8,800).
    Keywords: Apprenticeship market, Covid-19, coronavirus, business cycle
    JEL: J23 J24 M53
    Date: 2020–06
  25. By: Nikolova, Milena (University of Groningen); Nikolaev, Boris (Emory University); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS))
    Abstract: We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimation. Our findings suggest that while transitioning from self-employment to salaried employment (i.e., a voluntary self-employment exit) brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job (i.e., switching from salaried employment to unemployment). Meanwhile, leaving self-employment has no consequences for selfreported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are largely psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even two or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the costs of business failure.
    Keywords: entrepreneurship, self-employment, health, well-being, unemployment, job switches
    JEL: E24 I10 I31 J28 L26
    Date: 2020–04
  26. By: Gerst, Benedikt (RWTH Aachen University); Grund, Christian (RWTH Aachen University)
    Abstract: Although male employees are increasingly making use of parental leave, gender differences in both usage and duration of parental leave are still prevalent. In this contribution, we explore the role of gender for the relation between the incidence/duration of parental leave and earnings after returning to a job. We use data on middle managers in the German chemical industry and show that parental leave pay gaps are much more severe for males than they are for females.
    Keywords: compensation, gender, parental leave, stigma, wages
    JEL: M52 M12 J16 J31
    Date: 2020–05
  27. By: Jost, Ramona (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Based on the geo-referenced data, I analyse the commuting behaviour of employees in Germany. With the help of a behavioural economic approach, which is based on the investigation of Simonsohn (2006) for the US, I can show that it is not only the wage and the individual heterogeneity that shape commuting decisions. Instead, the commuting behaviour depends on the context individuals observe in the past. In particular, I demonstrate that the commuting behaviour is influenced by past-observed commutes: Worker choose longer commuting times in a region they just moved to, the longer the average commute was in the region they moved away. This effect applies especially for older employees, but is the same for men and women. Moreover, my robustness checks indicate that individual heterogeneity, selectivity or endogeneity issues do not drive this effect. In addition, I show if individuals stay in the new region, the effect of the previous region disappears, as workers adapt the commuting behaviour of the new region and move again within the new region. This is consistent with the prediction of behavioural economic theory, but refuses the assumption of stable taste differences." (Author's abstract, IAB-Doku) ((en))
    JEL: J60 R10 R19 R23
  28. By: Milena Nikolova (Institute of Labor Economics (IZA), Bonn, Germany. The Brookings Institution, Washington, DC, USA. Global Labor Organization (GLO).); Boris Nikolaev; Olga Popova
    Abstract: We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimation. Our findings suggest that while transitioning from self-employment to salaried employment (i.e., a voluntary selfemployment exit) brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job (i.e., switching from salaried employment to unemployment). Meanwhile, leaving self-employment has no consequences for self-reported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are largely psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even two or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the costs of business failure.
    Keywords: entrepreneurship, self-employment, health, well-being, unemployment, job switches
    JEL: E24 I10 I31 J28 L26
    Date: 2020–05
  29. By: Dostie, Benoit (HEC Montreal); Li, Jiang (Statistics Canada); Card, David (University of California, Berkeley); Parent, Daniel (HEC Montreal)
    Abstract: We use longitudinal data from the income tax system to study the impacts of firms' employment and wage-setting policies on the level and change in immigrant-native wage differences in Canada. We focus on immigrants who arrived in the early 2000s, distinguishing between those with and without a college degree from two broad groups of countries – the U.S., the U.K. and Northern Europe, and the rest of the world. Consistent with a growing literature based on the two-way fixed effects model of Abowd, Kramarz, and Margolis (1999), we find that firm-specific wage premiums explain a significant share of earnings inequality in Canada and contribute to the average earnings gap between immigrants and natives. In the decade after receiving permanent status, earnings of immigrants rise relative to those of natives. Compositional effects due to selective outmigration and changing participation play no role in this gain. About one-sixth is attributable to movements up the job ladder to employers that offer higher pay premiums for all groups, with particularly large gains for immigrants from the "rest of the world" countries.
    Keywords: wage differentials, immigrants, linked employer-employee data, firm effects
    JEL: J15 J31 J71
    Date: 2020–05
  30. By: Miriam Gensowski (CEBI, Department of Economics, University of Copenhagen and IZA); Mette Goertz (CEBI, Department of Economics, University of Copenhagen and IZA); Stefanie Schurer (University of Sydney, School of Economics and IZA)
    Abstract: This paper comprehensively describes how lifecycle dynamics of personality differ by sex and socio-economic background. We use survey-based measures of the Big-Five inventory on a large Danish population (age 18-75) and link it with registry data. Our most interesting findings are: (1) Women score significantly higher on each personality trait than men; (2) The sex-gap remains constant over the lifecycle for Conscientiousness, Extraversion, and Agreeableness, while the sex gradient in Openness to Experience emerges and widens from age 40 and the sex gap in Neuroticism, which is sizeable in young adulthood, narrows from mid age onward; (3) Education or income gaps in personality are already wide in late adolescence, but remain constant over the lifecycle. (4) We find no socioeconomic gradient in Conscientiousness, a trait associated with organization, productivity and responsibility; (5) Divergent patterns emerge for some of the facet-level traits. The benefits of our study are that we describe heterogeneity in the lifecycle profiles of personality over almost 60 years, measure socioeconomic status with high-precision data, estimate lifecycle profiles non-parametrically, and adjust for cohort and sample selection biases. The economic implications of our findings are discussed.
    Keywords: Personality traits, Big-Five facets, life cycle dynamics, heterogeneity by sex, education, and income; intergenerational transmission
    JEL: J24 I24 J62 I31 J16
    Date: 2020–05–15
  31. By: Davillas, Apostolos; Jones, Andrew M.
    Abstract: We use data from Wave 9 of UK Household Longitudinal Study (UKHLS) and the April 2020 Wave of the UKHLS COVID-19 survey to compare measures of ex ante inequality of opportunity (IOp) in psychological distress, as measured by the General Health Questionnaire (GHQ), before (Wave 9) and at the initial peak (April 2020) of the pandemic. Based on a Caseness measure, the prevalence of psychological distress increases from 18.3% to 28.3% between Wave 9 and April 2020. Also, there is a systematic increase in total inequality in the Likert GHQ-12 score. However, measures of IOp have not increased. Specifically, the proportion of total inequality attributed to circumstances has declined, consistent with the notion that the pandemic is, to some extent, a leveller as far as psychological distress is considered. A Shapley-Shorrocks decomposition analysis shows that in the pre-COVID-19 period the largest contributors to IOp were financial strain, employment status and housing conditions. In contrast, in April 2020, these factors decline in their shares and age and gender now account for a larger share. The contribution of working in an industry related to the COVID-19 response plays a small role at Wave 9, but more than triples its share in April 2020. Household composition and parental occupation also increase their shares during the pandemic.
    Date: 2020–06–02
  32. By: Marianna Brunetti; Elena Giarda; Costanza Torricelli
    Abstract: This paper investigates households’ financial fragility in twelve European countries and in the US by employing the first wave of the Household Finance and Consumption Survey (HFCS) and the 2010 Survey of Consumer Finances (SCF), respectively. Financial fragility is defined by taking into account both income constraints and portfolio composition (liquidity and indebtedness). Three main results emerge. First, the estimation of bivariate probit models reveals that in all countries holding an illiquid portfolio increases the likelihood of being financially fragile, while having a mortgage generally reduces it. Second, there are relevant differences among countries in their estimated average probability of financial fragility. Finally, decomposition of these differences by means of counterfactual methods provides evidence of a significant role of the country’s economic-institutional setup in providing a safety net against financial fragility. This is more true in Europe than in the US.
    Keywords: household financial fragility, portfolio liquidity, mortgage, HFCS, SCF
    Date: 2020–04
  33. By: Anthony Terriau (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université); Arthur Poirier (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université); Julien Albertini (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Quentin Le Bastard (MiHAR - Microbiotes, Hôtes, Antibiotiques et Résistances bactériennes (MiHAR) - UFR MEDECINE - Université de Nantes - UFR de Médecine et des Techniques Médicales - UN - Université de Nantes)
    Abstract: In response to the coronavirus disease (COVID-19) pandemic, governments have adopted a variety of public health measures. In this study, we aimed to evaluate the impact of testing on the fatality rate. We use data on inpatients across French geographic areas and propose a novel methodology that exploits policy discontinuities at region borders to estimate the effect of testing symptomatic individuals on the case-fatality rate in France. Our identification strategy is based on the fact that, in France, testing policies are determined regionally by the Regional Public Health Agencies. We compare all contiguous department pairs located on the opposite sides of a region border. Department pairs have different testing rates but share similar health trends. The heterogeneity in testing rate between department pairs together with the similarities in other dimensions allow us to mimic the existence of treatment and control groups and to identify the impact of testing on the mortality rate. We find that in France, the increase of one percentage point in the test rate is associated with a decrease of 0.001 percentage point in the death rate. Putting this number into perspective involves that for each additional 1000 tests, one person would have remained alive.
    Keywords: tests,Covid-19,Case-fatality rate,Fixed-effects model
    Date: 2020
  34. By: Folke, Olle (Uppsala University); Rickne, Johanna (Swedish Institute for Social Research, Stockholm University)
    Abstract: This paper offers a comprehensive empirical analysis of sexual harassment in the Swedish labormarket. First, we use nationally representative survey data linked with employer-employee datato describe rates of self-reported sexual harassment across occupations and workplaces. The riskof sexual harassment is clearly imbalanced across the sex segregated labor market. In gender-mixed and male-dominated occupations and workplaces, women have a higher risk than men,and men have a higher risk than women in female-dominated contexts. We use a hypotheticaljob-choice experiment with vignettes for sexual harassment to measure the disutility of sexualharassment risks. Both men and women have an equally high willingness to pay for avoidingworkplaces where sexual harassment has occurred. But the willingness to pay is conditional onthe sex of the fictional harassment victim. People reject workplaces where the victim is the samesex as themselves, but not where the victim is of the opposite sex. We return to the administrativedata to study employer compensation for the disutility of sexual harassment risks. Withinworkplaces, a high risk is associated with lower, not higher wages. People who self-report sexualharassment also have higher job dissatisfaction, more quit intentions, and more actual quits.Both these patterns indicate a lack of full compensation. We conclude that sexual harassmentshould be conceptualized as gender discrimination in workplace amenities, and that thisdiscrimination reinforces sex segregation and pay-inequalities in the labor market.
    Keywords: Gender Inequality; occupational gender segregation; Sexual harassment; workplace amenities
    JEL: J16 J24 J81
    Date: 2020–05–12
  35. By: Joris Klingen (Vrije Universiteit Amsterdam); Jos van Ommeren (Vrije Universiteit Amsterdam)
    Abstract: Medical research suggests that particulate matter (PM) increases stress hormones, therefore increasing the feeling of stress, which has been hypothesised to induce individuals to take less risk. To examine this, we study whether PM increases the probability of drawing in chess games using information from the Dutch club competition. We provide evidence of a reasonably strong effect: A 10μg increase in PM10 (33.6% of mean concentration) leads to a 5.8% increase in draws. Our results demonstrate that air pollution causes individuals to take less risk.
    Keywords: air pollution, particulate matter, cognitive ability, risk taking
    JEL: Q53 D81 I18
    Date: 2020–05–24

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