nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒06‒22
35 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Local governments’ efficiency and educational results: empirical evidence from Italian primary schools By Simona Ferraro; Tommaso Agasisti; Francesco Porcelli; Mara Soncin
  2. Intergenerational Income Mobility in Sweden: A look at the spatial disparities across cities By Alessandra Michelangeli; John Östh; Umut Türk
  3. Social capital and the spread of Covid-19: Insights from European countries By Bartscher, Alina Kristin; Seitz, Sebastian; Slotwinski, Michaela; Wehrhöfer, Nils; Siegloch, Sebastian
  4. The integration of young workers into the labour market in France By Stephen Bazen; Khalid Maman Waziri
  5. Housing and voting in Germany: Multi-level evidence for the association between house prices and housing tenure and party outcomes, 1980-2017 By Beckmann, Paul; Fulda, Barbara; Kohl, Sebastian
  6. Exposure to Transit Migration, Public Attitudes and Entrepreneurship By Ajzenman, Nicolas; Aksoy, Cevat Giray; Guriev, Sergei
  7. The heterogenous regional effects of minimum wages in Poland By Maciej Albinowski; Piotr Lewandowski
  8. The earnings effects of occupational segregation in Europe: The role of gender and migration status By Amaia Palencia-Esteban; Coral del RiÌ o
  9. Exploring the relation between income mobility and inequality at the regional level using EU-SILC microdata By Zbigniew Mogila; Patricia C. Melo; José M. Gaspar
  10. Partial Lockdown and the Spread of Covid-19: Lessons from the Italian Case By Edoardo Di Porto; Paolo Naticchioni; Vincenzo Scrutinio
  11. Lost in lockdown? COVID-19, social distancing, and mental health in Germany By Armbruster, Stephanie; Klotzbücher, Valentin
  12. The Gender Gap in Involuntary Part-time Employment: The Case of Spain By DENIA, ALFONSA; Guilló, María Dolores
  13. Exploring the puzzle of human reproduction: Register data based evidence from France and Germany By Lipowski, Cäcilia; Wilke, Ralf A.; Koebel, Bertrand M.
  14. Do lockdowns work? A counterfactual for Sweden By Born, Benjamin; Dietrich, Alexander; Müller, Gernot
  15. Determinants of firms’ efficiency: do innovations and finance constraints matter? The case of European SMEs By Ferrando, Annalisa; Rossi, Stefania P. S.; Bonanno, Graziella
  16. The Prices of Residential Land in German Counties By Stefanie Braun; Gabriel S. Lee
  17. The Gender Gap in Involuntary Part-time Employment: The Case of Spain By Alfonsa Denia; María Dolores Guillú
  18. The gender dimension of occupational exposure to contagion in Europe By Piotr Lewandowski; Katarzyna Lipowska; Iga Magda
  19. A Natural Experiment on Job Insecurity and Fertility in France By Andrew E. Clark; Anthony Lepinteur
  20. Employment effects of payroll tax subsidies By Matthias Collischon; Kamila Cygan-Rehm; Regina T. Riphahn
  21. The COVID-19 pandemic and its impact on inequality of opportunity in psychological distress in the UK By Davillas, A.; Jones, A.M.
  22. Family Ownership During the Covid-19 Pandemic By Amore, Mario Daniele; Pelucco, Valerio; Quarato, Fabio
  23. Compulsory face mask policies do not affect community mobility in Germany By Kovacs, Roxanne; Dunaiski, Maurice; Janne, Tukiainen
  24. Face Masks Considerably Reduce Covid-19 Cases in Germany By Timo Mitze; Reinhold Kosfeld; Johannes Rode; Klaus Wälde
  25. Dying to Work: Effects of Unemployment Insurance on Health By Alexander Ahammer; Analisa Packham
  26. City Skew and Homeowner Subsidy Removal By Alexander Daminger; Kristof Dascher
  27. Order Matters: Eliciting Maternal Beliefs on Educational Choices By Pablo Brañas-Garza; Riccardo Ciacci; Ericka Rascón Ramírez
  28. The causal effect of early tracking in German schools on the intergenerational transmission of education By Dominique Sulzmaier
  29. Measuring inequality of opportunity across EU-SILC countries: national and urban-rural perspectives By Zbigniew Mogila; Patricia C. Melo; José M. Gaspar
  30. Green production as a factor of survival for innovative startups. Evidence from Italy By Riccardo Gianluigi Serio; Maria Michela Dickson; Diego Giuliani; Giuseppe Espa
  32. Job-to-Job Flows and Wage Dynamics in France and Italy By Clémence Berson; Marta de Philippis; Eliana Viviano
  33. Housing and inequality: The case of Luxembourg and its cross-border workers By Guillaume Claveres; Thomas Y. Mathä; Giuseppe Pulina; Jan Stráský; Nicolas Woloszko; Michael Ziegelmeyer
  34. The Covid-19 crisis response helps the poor: the distributional and budgetary consequences of the UK lock-down By Bronka, Patryk; Collado, Diego; Richiardi, Matteo
  35. Employment effects of investment subsidies by German Regional Policy By Bade, Franz-Josef; Alm, Bastian; Weins, Sebastian

  1. By: Simona Ferraro (Tallinn University of Technology); Tommaso Agasisti (Politecnico di Milano School of Management); Francesco Porcelli (Università di Bari); Mara Soncin (Politecnico di Milano School of Management)
    Abstract: In Italy, the provision of educational ancillary services (like meals and school transportation) is in charge of the municipalities. We investigate whether municipalities differ in their efficiency when providing these services and whether such heterogeneity explains some portion of the variability observed in pupils’ test scores. The paper is the first application of a nonparametric order-m model and a two-stage multilevel regression to a unique administrative dataset, made of the entire population of Italian pupils tested in reading and mathematics at grade 5 (academic years 2012/2013 and 2014/2015). Results demonstrate that local governments have different efficiency levels in providing services to schools. The test scores’ variability among pupils, however, is not explained by different efficiency levels of local government in producing ancillary services.
    Keywords: ancillary services, order-m, multilevel modelling, efficiency
    JEL: I21 H52
    Date: 2020–06
  2. By: Alessandra Michelangeli; John Östh; Umut Türk
    Abstract: This paper provides a comprehensive overview of intergenerational income mobility in Sweden. Intergenerational income mobility is considered in both relative and absolute terms, and the analysis is carried out at the individual and municipality-level. We use multilevel models to explore the correlation between upward mobility and social, economic and demographic characteristics of cities. The analyses is carried out on three subpopulations: offspring who live in a different municipality than their parents (mobile population); offspring who live in the municipality where they grew up (immobile population); offspring belonging to visible minority groups. Our results confirm those of previous studies showing a relatively high intergenerational mobility in Sweden compared to other European and North American countries. Substantial differences are observed across municipalities meaning that the particular combination of municipality attributes contributes to shaping the chance of status attainment among young generations. Highly mobile municipalities have more significant human capital, more residential segregation by income, more income inequality, and greater accessibility to jobs.
    Keywords: Intergenerational social mobility; multilevel models; cities.
    JEL: J62 R11 R12
    Date: 2020–05
  3. By: Bartscher, Alina Kristin; Seitz, Sebastian; Slotwinski, Michaela; Wehrhöfer, Nils; Siegloch, Sebastian
    Abstract: We explore the role of social capital in the spread of the recent Covid-19 pan­demic in independent analyses for Austria, Germany, Italy, the Netherlands, Swe­den, Switzerland and the UK. We exploit within-country variation in social capital and Covid-19 cases to show that high-social-capital areas accumulated between 12% and 32% fewer Covid-19 cases per capita from mid-March until mid-May. Using Italy as a case study, we find that high-social-capital areas exhibit lower excess mortality and a decline in mobility. Our results have important implications for the design of local containment policies in future waves of the pandemic.
    Keywords: Covid-19,social capital,collective action,health costs,Europe
    JEL: D04 A13 D91 H11 H12 I10 I18
    Date: 2020
  4. By: Stephen Bazen (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); Khalid Maman Waziri (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)
    Abstract: Purpose Using a representative survey of young persons having left full-time education in France in 1998 and interviewed in 2001 and 2005, the purpose of this paper is to examine the process of their integration into normal employment (a stable job with a standard employment contract) and the extent to which job matches are inefficient in the sense that the pay in a job is below an individual's potential earnings. The latter are determined principally by diploma level and educational specialisation, although other forms of training and labour market experience are relevant. Design/methodology/approach A stochastic earnings frontier approach is used in order to examine workers' ability to capture their full potential earnings in labour markets where there is inefficient job matching (due to the lack of information, discrimination, over-education or the process of integration). Findings The results suggest that young workers manage to obtain on average about 82 per cent of their potential earnings three years after leaving full-time education and earnings inefficiency had disappeared four years later. The results are robust to the treatment of selectivity arising from the exclusion of the unemployed in the estimation of the frontier. Originality/value The stochastic earnings frontier is a useful and appropriate tool for modelling the process of labour market integration of certain groups (young persons, migrants and the long-term unemployed) where over-education due to inefficient initial job matches occurs. Over time this situation tends to be rectified as job mobility leads to improved matching and less inefficiency.
    Keywords: Qualifications,Integration,Labour market,Pay,Stochastic frontier,Youth
    Date: 2020–03
  5. By: Beckmann, Paul; Fulda, Barbara; Kohl, Sebastian
    Abstract: Traditional predictors of election outcomes in Germany are increasingly losing their explanatory power. Rather than new cultural divides, this paper introduces the idea of housing cleavages, i.e., homeownership versus tenancy and high-price versus low-price areas, drawing on macro data for electoral districts and urban neighborhoods from the last three elections (2009-2017) in combination with Immoscout24 ad price data and microdata from the ALLBUS survey (1980-2016). Although, due to its low homeownership rate and conservative house price development, Germany represents a least-likely case for housing to be of importance, we find housing effects beyond traditional predictors. Generally, we find that high house prices, house price increases, and homeownership are positively associated with voting for center-right parties and voter turnout, while social tenancy is associated with votes for the left, but these effects weaken over time due to embourgeoisement effects. Beyond this expected left-right distinction between tenants and wealthier homeowners, we also find outliers along two other dimensions. First, there are center-periphery effects that housing can better capture than simple geographical divisions; second, house prices contain a populist dimension, for example when skyrocketing rents increase votes for the urban left or regions where house prices lag behind benefit the AfD. The paper argues against the more causal self-interest and socialization theories of the influence of housing on voting and instead suggests considering housing as an important socioeconomic proxy to explain political outcomes.
    Keywords: ALLBUS,Germany,homeownership,voter turnout,voting,Deutschland,Wahlbeteiligung,Wählen,Wohneigentum
    Date: 2020
  6. By: Ajzenman, Nicolas; Aksoy, Cevat Giray; Guriev, Sergei
    Abstract: Does exposure to mass migration affect economic behavior, attitudes and beliefs of natives in transit countries? In order to answer this question, we use a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey and data on the main land routes taken by migrants in 18 European countries during the refugee crisis in 2015. To capture the exogenous variation in natives' exposure to transit migration, we construct an instrument that is based on the distance of each locality to the optimal routes that minimize travelling time between the main origin and destination cities. We first show that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass transit migration, compared to those located further away. We then explore the mechanisms and find that our results are likely to be explained by a decrease in the willingness to take risks as well as in the confidence in institutions. We also document an increase in the anti-migrant sentiment while attitudes towards other minorities remained unchanged. We rule out the possibility of out-migration of natives or of trade-related shocks (potentially confounded with the mass-transit migration) affecting our results. Using locality-level luminosity data, we also rule out any effect driven by changes in economic activity. Finally, we find no statistically significant effects on other labor market outcomes, such as unemployment or labor force participation.
    Keywords: entrepreneurship; migration; refugee crisis
    JEL: D91 F22 L26 O10 O15
    Date: 2020–04
  7. By: Maciej Albinowski; Piotr Lewandowski
    Abstract: Since 2008, Poland has been among the EU countries that have increased their minimum wage levels the most, following period in the mid-2000s during which the country’s minimum wage was barely raised. We evaluate the impact of these minimum wage hikes on employment and wage growth in Poland between 2004 and 2018. We estimate panel data models utilising the considerable variation in wage levels, and in minimum wage bites, across 73 Polish NUTS 3 regions. We find that minimum wage hikes had a significant positive effect on wage growth and a significant negative effect on employment growth only in regions of Poland that were in the first tercile of the regional wage distribution in 2007. These effects were moderate in size, and appear to be more relevant for wages. Specifically, we show that if the ratio of minimum wage to average wage had remained constant after 2007, by 2018, the average wages in these regions would have been 3.4% lower, while employment would have been 1.2% higher. On the other hand, in the remaining two-thirds of Polish regions, we find no significant effects of minimum wage hikes on average wages or on employment. We also find indicative evidence that the effects on employment growth differ between groups of workers: i.e., that they are negative for men and for workers in industry, but they are positive for women and for workers in services.
    Keywords: minimum wage, spatial heterogeneity, panel data
    JEL: J21 J23 J38
    Date: 2020–06
  8. By: Amaia Palencia-Esteban (Universidade de Vigo); Coral del RiÌ o (Universidade de Vigo)
    Abstract: The concentration of different social groups in certain occupations creates and perpetuates inequalities inside and outside the labor market. This paper quantifies the economic and well-being consequences of occupational segregation by gender and migration status in 12 European countries. The effects are negative for most foreign workers, especially for women, who always derive larger welfare losses than men. In general, these losses are remarkably high in southeast Europe and smaller in the northwest, whereas immigrant men derive very small gains in Portugal and the UK. Female natives are also deprived in most countries. However, immigrants’ characteristics, particularly education, explain a significant part of these geographical disparities. In fact, while the UK is in a somewhat better position thanks to its immigrants' higher educational levels, the counterfactual analysis reinforces Portugal's good position, reflecting higher levels of labor market integration among its immigrant population.
    Keywords: Occupational segregation, welfare, gender, immigration, Europe.
    JEL: D63 F22 J10
    Date: 2020–05
  9. By: Zbigniew Mogila; Patricia C. Melo; José M. Gaspar
    Abstract: This paper investigates empirically the impact of labour-related income inequality on income mobility in French and Spanish NUTS2 regions. We explore whether the negative relation between income inequality and mobility - known as the Great Gatsby Curve - is also present in the short and medium run. Using longitudinal microdata from the EU-SILC, we construct NUTS2-level measures of relative income mobility from transition matrices between income deciles for 2-year and 4-year income trajectories and measures of income inequality based on the Gini index and inter-decile ratios. We then combine these measures with other regional-level factors and implement regression models to test the relation between income inequality and income mobility. The regional perspective allows us to investigate the extent to which territorial heterogeneity may also affect income mobility. The findings from the regression analyses do not provide evidence of a significant relationship between income mobility and income inequality,at least when considering mobility over the short-to-medium term (i.e. up to 4 years).
    Keywords: income inequality, income mobility, territorial heterogeneity, the Great Gatsby Curve
    JEL: D31 J62
    Date: 2020–05
  10. By: Edoardo Di Porto (Università di Napoli, INPS and CSEF.); Paolo Naticchioni (Università di Roma Tre, INPS, AIEL and IZA); Vincenzo Scrutinio (Centre for Economic Performance, IZA and Università di Bologna)
    Abstract: This paper investigates the effect of the lockdown on COVID-19 infections. After the 22nd of March 2020, the Italian government shut down many economic activities to limit the contagion. Sectors deemed essentials for the economy were, however, allowed to remain active. We exploit the distribution of the density of essential workers across provinces and rich administrative data in a difference in difference framework. We find that a standard deviation increase in essential workers per square kilometre leads to an additional daily registered case per 100,000 inhabitants. This is a sizeable impact, and it represents about 18% of the daily increase in COVID-19 cases after the 22nd of March. Back of envelope computations suggest that the about one third of the cases considered could be attributed to the less stringent lockdown for essential sectors, with an additional 107 million Euros in direct expenditure. Although this assessment should be taken with caution, this suggests that the less stringent lockdown came at moderate public health related economic costs. In addition, we find that these effects are heterogeneous across sectors, with services having a much larger impact than Manufacturing, while there are only small differences across geographic areas. These results are stable across a wide range of specifications and robustness check.
    Keywords: COVID-19, lockdown, essential sectors
    JEL: J18 I18
    Date: 2020–06–12
  11. By: Armbruster, Stephanie; Klotzbücher, Valentin
    Abstract: The COVID-19 pandemic and social-distancing and stay-at-home orders can directly affect mental health and quality of life. In this ongoing project, we analyze rich data from Telefonseelsorge, the largest German helpline service, to better understand the effect of the pandemic and of local lockdown measures on mental health-related helpline contacts. First, looking at Germany-wide changes, we find that overall helpline contacts increase by around 20% in the first week of the lockdown and slowly decrease again after the third lockdown week. Our results suggest that the increase is not driven by financial worries or fear of the virus itself, but reflects heightened loneliness, anxiety, and suicidal ideation. Second, we exploit spatial variation in policies among German federal states to assess whether the effect depends on the stringency of local measures. Preliminary evidence suggests that the average effect is more pronounced in states that implemented stricter measures.
    Keywords: COVID-19,Stay-at-Home Orders,Mental Health
    JEL: I12 I3
    Date: 2020
  12. By: DENIA, ALFONSA (University of Alicante); Guilló, María Dolores (University of Alicante, D. Quantitative Methods and Economic Theory)
    Abstract: The high incidence of non-desired part-time jobs and temporary contracts after the Great Recession has become one of the most important drivers of the outstanding rise in income inequality in Spain during the last decade. We explore the determinants of involuntary part-time work in Spain over the period 2006-2014 and find that gender has a large, significant and robust positive effect on having that employment status, even after controlling for the type and duration of contracts, type of activity or occupation. A female worker is about 7.4 - 8.3 percent more likely to have a non-desired part-time job than a male worker with the same characteristics. Moreover, working in the Public Administration or having a temporary contract increases this probability over 10 percentage points. The results highlight the persistent precauriousness of the employment recovery in Spain and the need of a careful reflection on the next labor market reform.
    Keywords: Gender; Involuntary part-time; Temporary contracts; non-standard employment; Great Recession.
    JEL: C10 C25 J10 J20 J70
    Date: 2020–06–09
  13. By: Lipowski, Cäcilia; Wilke, Ralf A.; Koebel, Bertrand M.
    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 counterpartsin 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
  14. By: Born, Benjamin; Dietrich, Alexander; Müller, Gernot
    Abstract: Is a lockdown an effective means to limit the spread of the COVID-19 pandemic? We study the case of Sweden---one of the few countries without a lockdown---and use synthetic control techniques to develop a counterfactual lockdown scenario. First, we use a "donor pool" of European countries to construct a doppelganger that behaves just like Sweden in terms of infections before the lockdown. Second, we find that infection dynamics in the doppelganger since the lockdown do not systematically differ from the actual dynamics in Sweden. Third, we study Google mobility data and find that Swedes adjusted their activities in similar ways as in the doppelganger, although to a somewhat lesser extent.
    Keywords: counterfactual; COVID-19; doppelganger; Google mobility reports; infections; lockdown; social restraint; synthetic control
    JEL: E60
    Date: 2020–05
  15. By: Ferrando, Annalisa; Rossi, Stefania P. S.; Bonanno, Graziella
    Abstract: This paper aims at investigating the relationship between firms’ profit efficiency, access to finance and innovation activities. We enrich our understanding on firms’ performance by adopting the stochastic frontier approach (SFA), which allows us to estimate profit functions and to obtain efficiency scores for a large sample of European firms. We pioneer the use of a novel dataset that merges survey-based data derived from the ECB Survey on access to finance for enterprises (SAFE) with balance sheet information. Our evidence documents that credit constrained firms display an incentive to improve their efficiency in order to increase profitability. Among firms that have embarked in product innovation, those in the industry and high-tech sectors see their effort translated in higher profit efficiency. From a policy perspective, our results could help to better understand the link between innovation, financial constraints and efficiency, which goes beyond the idea that easier access to finance is the panacea to get higher profit efficiency. JEL Classification: D22, D24, L23, O31, C33
    Keywords: access to finance, innovation, stochastic frontier approach, survey data
    Date: 2020–06
  16. By: Stefanie Braun; Gabriel S. Lee
    Abstract: We estimate changes in the value and price of residential land for 379 German counties (”Landkreise”) from 2014 to 2017 using a total of 42,685 observations. We use the two-step residual method that decomposes the value of a home into the value of the structure and land value. Despite the short time series, we show that the price of residential land has become relatively more expensive in the majority of German counties. More speci?cally, we show that the cumulative change in land values varies between 9% and 171% (excluding Berlin with exorbitant high increases of 668% and Saarland with a decrease of 18%) from 2014 to 2017. On average, the home values increased by 30% and 15% for West and East Germany respectively, whereas the land values increased by 108% and 91% for West and East Germany. Our ?ndings imply that cycles in the German land values are more likely to a?ect the evolution of house prices more in the future than they did in the past. Moreover, our estimated land prices vary signi?cantly to the current land price valuation by one of the German state governments (Hessen).
    Keywords: German Land prices; Land values; German Housing prices; Housing values; Construction costs; Replacement costs
    JEL: R0 R11 R14 R21 R31
    Date: 2020–04
  17. By: Alfonsa Denia; María Dolores Guillú
    Abstract: The high incidence of non-desired part-time jobs and temporary contracts after the Great Recession has become one of the most im- portant drivers of the outstanding rise in income inequality in Spain during the last decade. We explore the determinants of involuntary part-time work in Spain over the period 2006-2014 and find that gender has a large, significant and robust positive e§ect on having that employment status, even after controlling for the type and duration of contracts, type of activity or occupation. A female worker is about 7.4 - 8.3 percent more likely to have a non-desired part-time job than a male worker with the same characteristics. Moreover, working in the Public Administration or having a temporary contract increases this probability over 10 percentage points. The results highlight the per-sistent precauriousness of the employment recovery in Spain and the need of a careful reáection on the next labor market reform.
    Date: 2020–06
  18. By: Piotr Lewandowski; Katarzyna Lipowska; Iga Magda
    Abstract: We study the gender dimension of occupational exposure to contagious diseases spread by the respiratory or close-contact route. We show that in Europe, women are more exposed to contagion, as they are more likely than men to work in occupations that require contact with diseases, frequent contact with clients, and high levels of physical proximity at work. Women are also more likely than men to be unable to work from home, which contributes to their increased exposure. Gender is a more important factor in workers’ exposure to contagion than their education or age. This gender difference in exposure can be largely attributed to patterns of sectoral segregation, and to the segregation of women within sectors into occupations that require more interpersonal interactions. While workers in Southern European countries are the most exposed to contagion, the gender differences in exposure are greatest in the Nordic and Continental European countries.
    Keywords: COVID-19, contagion, exposure to disease, gender, occupations, working from home
    JEL: I10 J01 J44
    Date: 2020–06
  19. By: Andrew E. Clark (Paris School of Economics and CNRS); Anthony Lepinteur (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: 2020–06
  20. By: Matthias Collischon; Kamila Cygan-Rehm; Regina T. Riphahn
    Abstract: This paper exploits several reforms of wage subsidies in the framework of the German Minijob program to investigate substitution and complementarity relationships between subsidized and non-subsidized labor demand. We apply an instrumental variables approach and use administrative data on German establishments for the period 1999-2014. Particularly in small establishments (0-9 employees), subsidized Minijob employment comprises large shares of the work force, on average over 40 percent. For these establishments, robust evidence shows that increasing the subsidization of Minijob employment crowds out non-subsidized employment. Our results imply that Minijob employment in 2014 may have eliminated more than 0.5 million unsubsidized employment relationships just in small establishments. This represents an unintended and harmful consequence of the Minijob subsidy.
    Keywords: wage subsidy, Minijob, labor demand, substitution effect, crowding out effect, displacement effect, employment, payroll tax
    JEL: J21 J23 J38 C26
    Date: 2020–03
  21. By: Davillas, A.; Jones, A.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.
    Keywords: COVID-19; inequality of opportunity; GHQ; mental health; psychological distress;
    JEL: C1 D63 I12 I14
    Date: 2020–06
  22. By: Amore, Mario Daniele; Pelucco, Valerio; Quarato, Fabio
    Abstract: Prompted by the shakeup of Covid-19 on financial markets, scholars have begun to explore the corporate traits that can make firms more resilient to a pandemic. In this paper, we test how the involvement of families in ownership and governance positions influences the financial performance of Italian listed firms during the spread of Covid-19. Our results indicate that firms with controlling family shareholders fared significantly better than other firms in the pandemic period. This effect is particularly pronounced among firms in which a family is both the controlling shareholder and holds the CEO position. Collectively, our results expand existing knowledge on the determinants of organizational resilience in the wake of adverse events.
    Keywords: CEOs; COVID-19; Family Business; Financial Performance
    JEL: D10 G34
    Date: 2020–05
  23. By: Kovacs, Roxanne; Dunaiski, Maurice; Janne, Tukiainen
    Abstract: There is currently a heated debate about whether to introduce policies requiring the general public to wear protective face masks to contain COVID-19. A key concern is that compulsory face mask policies will make the public feel safer (due to risk compensation), and may consequently undermine the most important public-health advice to contain COVID-19 – which is to reduce mobility and maintain social distancing. This study provides first evidence on the impact of compulsory face mask policies on community mobility. We use a difference-in-differences design, which exploits the staggered implementation of compulsory face mask policies by German states. We use anonymised GPS data from Google's Location History feature to measure daily mobility in public spaces (groceries and pharmacies, transport hubs and workplaces). We find no evidence that compulsory face mask policies affect community mobility in public spaces in Germany. The evidence provided in this paper makes a crucial contribution to ongoing debates about how to best manage the COVID-19 pandemic.
    Date: 2020–06–05
  24. By: Timo Mitze (University of Southern Denmark); Reinhold Kosfeld (University of Kassel); Johannes Rode (Technical University (TU) of Darmstadt); Klaus Wälde (Johannes Gutenberg University)
    Abstract: We use the synthetic control method to analyze the effect of face masks on the spread of Covid-19 in Germany. Our identification approach exploits regional variation in the point in time when face masks became compulsory. Depending on the region we analyse, we find that face masks reduced the cumulative number of registered Covid-19 cases between 2.3% and 13% over a period of 10 days after they became compulsory. Assessing the credibility of the various estimates, we conclude that face masks reduce the daily growth rate of reported infections by around 40%.
    JEL: I18 C23
    Date: 2020–06–03
  25. By: Alexander Ahammer; Analisa Packham (Economics Department at Vanderbilt University)
    Abstract: Using administrative data for Upper Austrian workers from 2003–2013, we show that an extension in unemployment insurance (UI) duration increases unemployment length and impacts worker physical and mental health. These effects vary by gender. Specifically, we find that women eligible for an additional 9 weeks of UI benefits fill fewer opioid and antidepressant prescriptions and experience a lower likelihood of filing a disability claim, as compared to non-eligible unemployed women. Moreover, estimates indicate within-household spillovers for young children. For men, we find that extending UI benefit duration increases the likelihood of a cardiac event and eventual disability retirement filing.
    Keywords: I38, I18, J18
    Date: 2020–06
  26. By: Alexander Daminger; Kristof Dascher
    Abstract: Manycountriessubsidizehomeownership, andGermanyisnoexception. However, for an interlude of 12 years Germany also paused its subsidy. Over these twelveyearsmostofthecountry’s100largestcitiessawtheircentralcitypopulation expand. We explore subsidy removal’s role in center revival. We assemble a large data set of population strata for a ?ne partition of city rings. Then we exploit the design of the subsidy (which bene?ted more a?ordable places more, and also which never bene?ted the young) to identify its e?ects on urban spatial structure. We will ?nd that homeowner subsidy removal has strongly driven the skew of the distribution of commuting distance up. In doing so subsidy removal has also, so we will suggest, contributed to strong recent growth in both, urban rent and female labor force participation.
    Keywords: Commuting Distribution, Skewness, Homeownership Subsidy, Reurbanization
    JEL: R12 D72 R52
    Date: 2020–05
  27. By: Pablo Brañas-Garza; Riccardo Ciacci; Ericka Rascón Ramírez
    Abstract: Subjective expectation data on education has been increasingly used by social scientists to better understand current investments in human capital. Despite its recognised value by scholars, there is little evidence about how the elicitation of such data might be sensitive to questionnaire design. Using a 2x2 between-subjects experimental design, we analyse how sensitive the elicitation of subjective expectation data on educational outcome is to question order. Our design allows us to explore whether collecting data on parental education before the elicitation of parental beliefs on their children’s educational outcomes anchors the elicitation of the latter; and whether parental expectations on their older offsprings anchors their expectations on their younger children. We find that mothers (main respondents) who have been exposed to the non-anchored treatment results in more optimistic parental expectations. When splitting our sample into households with low and high educated mothers, we observe that low educated mothers are more susceptible to anchoring effects. Using a conservative projection of observed years of schooling of young adults on young cohorts, we find that the double-anchored beliefs better predicts this projection than the rest of the treatments. Our findings inform to what extent the collection of subjective expectations data is subject to anchoring and which type of populations might be more sensitive to such phenomenon.
    Keywords: Expectations on education; Survey design; Order effects; Anchoring
    JEL: C9 D8 I29
    Date: 2020
  28. By: Dominique Sulzmaier
    Abstract: Numerous studies have found a high intergenerational transmission of education in Germany which might be caused by the relatively early age at which the German school system tracks students into differentschool types. This study contributes to the scarce literatureontheeffectofachangeintheageoftrackingearlyintheschoolingcareeronthe intergenerational transmission of education and reveals new evidence on the heterogeneity of the effect. The identi?cation strategy exploits a recent reform in one German state, whichchangedthetimeoftrackingfromaftergradesixtoaftergradefour.Theresultsof adifference-in-differencesapproachwithdatafromtheGermanMicrocensussuggestthat earlier tracking increases intergenerational transmission of both, low and high education. Male students and students in rural areas appear to drive the effect.
    Keywords: intergenerationaltransmissionofeducation,tracking,schoolattainment,Germany, difference-in-differences
    JEL: I21 I24 C54
    Date: 2020–01
  29. By: Zbigniew Mogila; Patricia C. Melo; José M. Gaspar
    Abstract: Inequality in individuals’ outcomes resulting from unequal access to opportunities due to differences in individual circumstances, such as family background and/or race, are generally considered to be unfair and ethically unacceptable. Since wealthier individuals and their families tend to live in more affluent areas and mingle with similar more affluent peers, the territorial distribution of inequality of opportunity may partially be viewed as a measure of the extent of spatial (in)justice. One of the ways governments can use to mitigate inequality of opportunity is to improve access to socially valued resources, e.g. education, health. If the spatial distribution of these resources is not equitable, or prevents equitable access to them, persistent or even growing differences in inequality of opportunity may arise. Improving the spatial distribution of socially valued resources can help individuals enhance their socioeconomic prospects, while also increasing the full utilization of territorial capital and, consequently, contribute to greater socioeconomic cohesion. This paper measures the extent of inequality of opportunity at the national level and by degree of urbanization for the countries covered in the survey European Union Statistics on Income and Living Conditions (EU-SILC). Emphasis on the degree of urbanization allows exploring whether large(r) cities can act as social elevators compared to smaller urban and rural areas. Using the EUSILC data, we implement regression models to measure the percentage of the variation in individual’s labour income that is due to family background, namely, the education, occupation and activity status of parents, and household financial situation. Our results indicate substantial variation in inequality of opportunity ranging from 4% (Iceland) to 25% (Luxemburg). In addition, the distinction between more liberal economies and the rest of the countries is seen with the former more income unequal, however, with the smaller impact of family-related factors on individual’s income. Moreover, the findings suggest that cities, especially larger ones,do not seem to work as social elevators and may in fact benefit individuals with a better family background.
    Keywords: income inequality, inequality of opportunity, EU-SILC microdata
    JEL: D31 I24 D63 J62
    Date: 2020–05
  30. By: Riccardo Gianluigi Serio; Maria Michela Dickson; Diego Giuliani; Giuseppe Espa
    Abstract: Many studies have analyzed empirically the determinants of survival for innovative startup companies using data about the characteristics of entrepreneurs and management or focusing on firm- and industry-specific variables. However, no attempts have been made so far to assess the role of the environmental sustainability of the production process. Based on data describing the characteristics of the Italian innovative startups in the period 2009-2018, this article studies the differences in survival between green and non-green companies. We show that, while controlling for other confounding factors, startups characterized by a green production process tend to survive longer than their counterparts. In particular, we estimate that a green innovative startup is more than twice as likely to survive than a non-green one. This evidence may support the idea that environment sustainability can help economic development.
    Date: 2020–05
  31. By: James H. Love; Stephen Roper; Priit Vahter
    Abstract: Abandoned and failed innovations can be regarded as a part of the natural process of experimentation by firms, which can lead to important lessons being learned. Although the literature suggests some benefit from failure or abandoned innovation activities, prior studies using relatively large firm-level datasets to test the nature of this link are often unable to deal explicitly with the time dimension of learning. We contribute to the literature by showing the dynamic and causal nature of the linkage between abandoned innovation and subsequent innovation outcomes at firms. We demonstrate based on balanced panel data of Spanish manufacturing firms from 2008-2016 that innovation failure not only leads to more successful innovation, but that there is an explicit time dimension to this. We demonstrate that firms which have experienced ‘failure’ (as evidenced by abandoned innovation activities) in the past will have stronger positive effects of recent abandoned innovation activities on innovation output. This is a strong test of the ‘learning-from-failure’ hypothesis. In addition, we find evidence that in addition to enabling cumulative learning processes, abandoning innovation may also act as a dynamic corrective mechanism preventing firms carrying weaker innovation portfolios through from one period to the next.
    Keywords: innovation failure, abandoning innovation activities, learning effects, innovation performance
    Date: 2020
  32. By: Clémence Berson; Marta de Philippis; Eliana Viviano
    Abstract: Some recent literature about the U.S. shows that wage dynamics are more influenced by jobto-job flows than by flows into or out of employment. In this paper, we evaluate whether this result holds also for France and Italy, characterized by a different structure of the labor market. Using comparable administrative data we find that, as in the U.S., in both France and Italy realized job-to-job contribute positively to wage growth. However, since these flows are smaller and display much lower cyclicality than in the U.S., their contribution to aggregate wage dynamics is low, while the contribution of flows into and out of employment remains sizeable. We then look closely at the heterogeneity in the probability of changing job and in the associated wage premium by types of workers and firms. We find that job-to-job flows and the associated gain tend to be larger in high-skilled occupations and for permanent workers. Moreover, as in the U.S., individuals are more likely to move to younger firms, which intensively poach workers from other firms.
    Keywords: : Wage Dynamics, Job-to-Job Flows, Transition Probabilities, Phillips Curve.
    JEL: E24 E32 J63
    Date: 2020
  33. By: Guillaume Claveres; Thomas Y. Mathä; Giuseppe Pulina; Jan Stráský; Nicolas Woloszko; Michael Ziegelmeyer
    Abstract: The rate of homeownership is close to the OECD average in Luxembourg. However, strong house price increases, mainly driven by population growth and limited housing supply, led to a deterioration in affordability of housing, in particular for the young and added to the wealth gap between homeowners and renters.
    Keywords: cross-border workers, homeownership, household survey, inequality, Luxembourg, wealth distribution
    JEL: D31 R21 R23 R31
    Date: 2020–06–19
  34. By: Bronka, Patryk; Collado, Diego; Richiardi, Matteo
    Abstract: We nowcast the economic effects of the Covid-19 pandemic and related lock-down measures in the UK and then analyse the distributional and budgetary effects of the estimated individual income shocks, distinguishing between the effects of automatic stabilisers and those of the emergency policy responses. Under conservative assumptions about the exit strategy and recovery phase, we predict that the rescue package will increase the cost of the crisis for the public budget by an additional £26 billion, totalling over £60 billion. However, it will allow to contain the reduction in the average household disposable income to 1 percentage point, and will reduce poverty rate by 1.1 percentage points (at a constant poverty line), with respect to the pre-Covid situation. We also show that this progressive effect is due to the increased generosity of Universal Credit, which accounts for only 20% of the cost of the rescue package.
    Date: 2020–06–09
  35. By: Bade, Franz-Josef; Alm, Bastian; Weins, Sebastian
    Abstract: This study investigates the employment impact of investment subsidies in Germany. With 45 billion Euro for about 100,000 firms since the German reunification, these capital grants are the central element of regional policy for strengthening employment in economically weaker regions. The effects of investment grants are analysed by comparing the employment growth of assisted firms with their counterfactual outcome. The hypothetical growth without grant is estimated with panel data from 1999 to 2009 for each German firm in the social security records which are linked with the official records of investment grants. The control group are selected out of total non-assisted firms by combining covariate and propensity score matching methods. The employment effect is determined by cross-section estimators. The assisted firms show a significantly stronger employment growth than their control group. This result is quite robust. Even if the control group is restricted to those non-assisted firms which have had a similar employment growth before the year of allowance, the differences in the growth after the allowance persist. Further heterogeneity tests do not reveal significant hidden influences. All subgroups analysed show nearly the same growth difference between assisted and non-assisted firms.
    JEL: B41 C14 C21 C81 H71 R00 R11 R28 R58
    Date: 2020

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