nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒06‒29
twenty-six papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Mapping fuel poverty risk at the municipal level: A Small-Scale Analysis of Italian Energy Performance Certificate, Census and Survey data By Riccardo Camboni; Alberto Corsini; Raffaele Miniaci; Paola Valbonesi
  2. Cash-For-Care, or Caring for Cash? The Effects of a Home Care Subsidy on Maternal Employment, Childcare Choices, and Children's Development By Collischon, Matthias; Kühnle, Daniel; Oberfichtner, Michael
  3. What drives employment-unemployment transitions? Evidence from Italian task-based data By Cassandro, Nicola; Centra, Marco; Esposito, Piero; Guarascio, Dario
  4. Do Generous Parental Leave Policies Help Top Female Earners? By Corekcioglu, Gozde; Francesconi, Marco; Kunze, Astrid
  5. EU Jobs at Highest Risk of COVID-19 Social Distancing: Will the Pandemic Exacerbate Labour Market Divide? By Pouliakas, Konstantinos; Branka, Jiri
  6. Entrepreneurship and Regional Windfall Gains: Evidence from the Spanish Christmas Lottery By Bermejo, Vicente; Ferreira, Miguel; Wolfenzon, Daniel; Zambrana, Rafael
  7. Subsidizing Innovation Over the Business Cycle. By Jorge Andrés Vélez-Ospina; Isabel Busom Piquer
  8. Do segregated housing markets have a spillover effect on housing prices in nearby residential areas? By Ismail, Mohammad; Warsame, Abukar; Wilhelmsson, Mats
  9. Air Pollution Exposure and Covid-19 By Matthew A Cole; Ceren Ozgen; Eric Strobl
  10. 25 Years of European Merger Control By Affeldt, Pauline; Duso, Tomaso; Szücs, Florian
  11. Compulsory face mask policies do not affect community mobility in Germany By Kovacs, Roxanne; Dunaiski, Maurice; Tukiainen, Janne
  12. Robot Imports and Firm-Level Outcomes By Bonfiglioli, Alessandra; Crinò, Rosario; Fadinger, Harald; Gancia, Gino
  13. A Natural Experiment on Job Insecurity and Fertility in France By Andrew E. Clark; Anthony Lepinteur
  14. The benefits of remoteness: Digital mobility data, regional road infrastructure, and COVID-19 infections By Krenz, Astrid; Strulik, Holger
  15. Innovating in Krugman’s Footsteps – Where and How Innovation Differs in Europe: Static Innovation Indicators for Identifying Regional Policy Leverages By Rhoden, Imke
  16. The COVID-19 pandemic and its impact on inequality of opportunity in psychological distress in the UK By Davillas, Apostolos; Jones, Andrew M.
  17. Management Practices, Worker Commitment, and Workplace Representation By Addison, John T.; Teixeira, Paulino
  18. The eï¬?ect of self-ï¬ nanced property buyers on local house prices By Fischer, Andreas M; Zachmann, Lucca
  19. Safety at Work and Immigration By Bellés-Obrero, Cristina; Martin Bassols, Nicolau; Vall Castello, Judit
  20. The Gender Dimension of Occupational Exposure to Contagion in Europe By Lewandowski, Piotr; Lipowska, Katarzyna; Magda, Iga
  21. The Impact of Automatic Enrolment on the Mental Health Gap in Pension Participation: Evidence from the UK By Karen Arulsamy; Liam Delaney
  22. The Effect of Business Cycle Expectations on the German Apprenticeship Market: Estimating the Impact of COVID-19 By Mühlemann, Samuel; Pfeifer, Harald; Wittek, Bernhard
  23. Gender gaps in competition: new experimental evidence from UK By Sophie Clot; Marina Della Giusta; Giovanni Razzu
  24. Corrective Tax Design and Market Power By O'Connell, Martin; Smith, Kate
  25. The Value of Firm Networks: A Natural Experiment on Board Connections By Faia, Ester; Mayer, Max; Pezone, Vincenzo
  26. The impact of protecting EU Geographical Indications in trade agreements By Huysmans, Martijn; Curzi, Daniele

  1. By: Riccardo Camboni (Department of Economics and Management - University of Padova and OIPE); Alberto Corsini (Université Côte d’Azur - CNRS, GREDEG and OIPE); Raffaele Miniaci (Department of Economics and Management - University of Brescia and OIPE); Paola Valbonesi (Department of Economics and Management - University of Padova and OIPE)
    Abstract: We use the nearest neighbour propensity score matching to link dwellings holding Energy Performance Certificates (EPCs) in the Italian province of Treviso with information on the socio-economic characteristics of households most likely to inhabit them. We construct a database of 17,405 dwellings for which information on standardized energy needs is matched to data on (potential) inhabitants and their imputed income, based respectively on census records and survey data. Our analysis shows that EPC registers can be exploited to investigate how income and housing conditions affect fuel poverty and to identify municipal areas with higher fuel poverty risk. Our findings highlight that when designing interventions to reduce fuel poverty, policymakers should target households based not only on their income but also on type of heating fuel, and on efficiency and the size of their accommodation.
    Keywords: Fuel Poverty, Energy Performance Certificates (EPCs), Building and dwelling Efficiency, Energy: Government Residential Policy
    JEL: C21 I32 Q48
    Date: 2020–06
  2. By: Collischon, Matthias (University of Erlangen-Nuremberg); Kühnle, Daniel (University of Duisburg-Essen); Oberfichtner, Michael (Institute for Employment Research (IAB), Nuremberg)
    Abstract: How parents respond to changes in the price of childcare is an important, though not fully understood, public policy question. Our paper provides new comprehensive evidence on how a home care subsidy jointly affects maternal labour market outcomes, childcare choices, and children's development. We examine a German reform from 2013 which introduced a home care subsidy of initially 100 Euros per month for families who do not use subsidised childcare. Exploiting a date-of-birth cut-off in eligibility and using administrative data on employment and child development alongside survey data on childcare usage, we show that the reform reduced mothers' likelihood to return to work within three years by only 1.4 percentage points, but decreased childcare enrolment for one- and two-year olds by 5 percentage points. We find no effect on children's skill development at age six. Our findings imply that the subsidy accrued almost completely as windfall gains to families who would not have used formal childcare anyway.
    Keywords: childcare choices, maternal labour supply, cash-for-care, home care subsidy, children's development, windfalls gains
    JEL: J13 J18 J22
    Date: 2020–05
  3. By: Cassandro, Nicola; Centra, Marco; Esposito, Piero; Guarascio, Dario
    Abstract: Relying on a unique longitudinal integrated database supplying micro-level information on labor market transitions (concerning the 2011-2017 period) and occupation task characteristics (e.g. routine-task intensity), this paper provides fresh evidence of the determinants of unemployment risk in Italy. We find that workers employed in routine-intensive occupations (measured with the RTI proposed by Acemoglu and Autor, 2011) do not display – on average - higher unemployment risks than the rest of the workforce. However, on distinguishing between cognitive and manual tasks, it turns out that workers employed in occupations entailing a large proportion of routine cognitive tasks (such as workers employed in service occupations as cashiers or call-center operators) are in fact exposed to a relatively higher risk of becoming unemployed. By contrast, a rather lower risk seems to be faced by workers employed in occupations entailing a large proportion of routine-manual tasks. Finally, the distribution of unemployment risk and its relation with routine-task intensity varies significantly across sectors – with higher risk in manufacturing and construction - confirming the importance of industry-level economic, technological and institutional heterogeneities.
    Keywords: unemployment,routine-task,worker-level data
    JEL: J24 J31 R23
    Date: 2020
  4. By: Corekcioglu, Gozde (Kadir Has University); Francesconi, Marco (University of Essex); Kunze, Astrid (Norwegian School of Economics)
    Abstract: Generous government-mandated parental leave is generally viewed as an effective policy to support women's careers around childbirth. But does it help women to reach top positions in the upper pay echelon of their firms? Using longitudinal employer-employee matched data for the entire Norwegian population, we address this question exploiting a series of reforms that expanded paid leave from 30 weeks in 1989 to 52 weeks in 1993. The representation of women in top positions has only moderately increased over time, and career profiles of female top earners within firms are significantly different from those of their male counterparts. The reforms did not affect, and possibly decreased, the probability for women to be at the top over their life cycle. We discuss some implications of this result to put into perspective the design of new family-friendly policy interventions.
    Keywords: top earners, parental leave, women, regression discontinuity
    JEL: J18 J21 J22 J24 M14
    Date: 2020–05
  5. By: Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Branka, Jiri (European Centre for the Development of Vocational Training (Cedefop))
    Abstract: This paper employs a skills-based approach to identify individual and job factors most likely to be impacted by social distancing measures and practices due to the Covid-19 pandemic. Using data from the Cedefop European skills and jobs survey, a Covid-19 social distancing risk index (COV19R) is created based on skills descriptors that categorise jobs by their level of physical proximity to others and their digital intensity. It is conservatively estimated that about 45 million jobs in the EU-27 labour market (23% of total EU-27 employment) are faced with a very high risk of Covid-19 disruption and another 22% of the EU workforce – mostly medium- to lower-skilled service provision – is exposed to some significant risk. The burden of the Covid-19 social distancing risk falls disproportionately on vulnerable workforce groups, such as women, older employees, non-natives, the lower-educated, those working longer hours and employed in micro-sized workplaces. The findings call for immediate and targeted policy responses to prevent ongoing job losses and widening of labour market and social inequalities due to the pandemic.
    Keywords: COVID-19, social distancing, risk, skills, EU
    JEL: C21 J01 J24 J28
    Date: 2020–05
  6. By: Bermejo, Vicente; Ferreira, Miguel; Wolfenzon, Daniel; Zambrana, Rafael
    Abstract: The Spanish Christmas Lottery is the largest lottery worldwide. We exploit local windfall gains arising from lottery prizes to estimate the effect of income on entrepreneurship. We find higher firm creation and greater self-employment in winning provinces. Our estimates imply that 46 firms are created for every â?¬1,000 increase in disposable income per capita. The effect occurs in both non-tradable and tradable industries, and is more pronounced in regions with poorer access to finance. Firms created in winning provinces are larger, create more value-added, and are more likely to survive. These results suggest that local income and financial development are important drivers of entrepreneurship.
    Keywords: Aggregate income; entrepreneurship; Financial Development; firm creation; Local demand; public policy; Self-employment
    JEL: D14 L26
    Date: 2020–04
  7. By: Jorge Andrés Vélez-Ospina (Departament d'Empresa, Universitat Autonoma de Barcelona); Isabel Busom Piquer (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: We investigate whether the impact of direct support for business investment in R&D and innovation varies over the business cycle. We address several questions: whether firms that obtain public support in a recession differ from firms that obtain it during expansions; whether the impact of support is smaller in recessions than in expansions, and whether effects vary with the treatment pattern. Using firm-level data from Spain during the period 2005 to 2014, we combine propensity score matching and difference-in-differences methods to estimate firms’ response to direct support in different phases of the cycle. Two findings stand out. First, while the impact of support on monetary investment in innovation is pro-cyclical, it is countercyclical in terms of the employee-time allocation to innovation activities. Second, the additionality of a one-year treatment is smaller than that of longer treatments, or repeate program participation. Firms receiving public support during the recession have assigned more employee time to innovation activities than a matched control group, preventing a decline of knowledge capital during the big recession.
    JEL: O25 O38 C14 C21 D22 L29 L53 H50
    Date: 2020–03
  8. By: Ismail, Mohammad (Department of Real Estate and Construction Management, Royal Institute of Technology); Warsame, Abukar (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: From an international perspective, housing segregation in Sweden is considered relatively low. However, in recent years the issue has been raised and problematized. For example, some studies show that ethnic housing segregation increased in 199 of Sweden's 285 municipalities during the years 2005- 2015. The purpose of this project is to analyze the trends regarding housing segregation over the past 10-20 years, and whether housing segregation has a spillover effect on neighboring housing areas. Namely, does proximity to a specific type of segregated housing market has a negative impact, while another type of segregation has a positive impact, on nearby housing markets. The results indicate that segregation measured as income sorting has increased over time in some of the housing markets. Its effects on housing values in neighboring housing areas are significant and statistically significant.
    Keywords: segregation; spillover effect; housing values
    JEL: R20 R23 R30
    Date: 2020–06–05
  9. By: Matthew A Cole (University of Birmingham); Ceren Ozgen (University of Birmingham); Eric Strobl (University of Bern)
    Abstract: In light of the existing preliminary evidence of a link between Covid-19 and poor air quality, which is largely based upon correlations, we estimate the relationship between long term air pollution exposure and Covid-19 in 355 municipalities in the Netherlands. Using detailed secondary and administrative data we find compelling evidence of a positive relationship between air pollution, and particularly PM2:5 concentrations, and Covid-19 cases, hospital admissions and deaths. This relationship persists after controlling for a wide range of explanatory variables. Our results indicate that a 1 ug/m3 increase in PM2:5 concentrations is associated with 9.4 more Covid-19 cases, 3.0 more hospital admissions, and 2.3 more deaths. The relationship between Covid-19 and air pollution withstands a number of sensitivity and robustness exercises including instrumenting pollution to mitigate potential endogeneity and modelling spatial spillovers using spatial econometric techniques.
    Keywords: Covid-19, air pollution, Netherlands, spatial spillovers
    JEL: I21 I23 Q53
    Date: 2020–06
  10. By: Affeldt, Pauline; Duso, Tomaso; Szücs, Florian
    Abstract: We study the evolution of EC merger decisions over the first 25 years of common European merger policy. Using a novel dataset at the level of the relevant antitrust markets and containing all merger cases scrutinized by the Commission over the 1990-2014 period, we evaluate how consistently arguments related to structural market parameters â?? dominance, concentration, barriers to entry, and foreclosure â?? were applied over time and across different dimensions such as the geographic market definition and the complexity of the merger. Simple, linear probability models as usually applied in the literature overestimate on average the effects of the structural indicators. Using non-parametric machine learning techniques, we find that dominance is positively correlated with competitive concerns, especially in concentrated markets and in complex mergers. Yet, its importance has decreased over time and significantly following the 2004 merger policy reform. The Commission's competitive concerns are also correlated with concentration and the more so, the higher the entry barriers and the risks of foreclosure. These patterns are not changing over time. The role of the structural indicators in explaining competitive concerns does not change depending on the geographic market definition.
    Keywords: causal forests; Concentration; Dominance; Entry Barriers; EU Commission; foreclosure; Merger Policy
    JEL: K21 L40
    Date: 2020–04
  11. By: Kovacs, Roxanne; Dunaiski, Maurice; Tukiainen, Janne
    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.
    Keywords: COVID-19,face masks,social distancing,community mobility
    JEL: D9 H12 I12 I18
    Date: 2020
  12. By: Bonfiglioli, Alessandra; Crinò, Rosario; Fadinger, Harald; Gancia, Gino
    Abstract: We use French data over the period 1994-2013 to study how imports of industrial robots affect firm-level outcomes. Compared to other firms operating in the same 5-digit sector, robot importers are larger, more productive, and employ a higher share of managers and engineers. Over time, robot import occurs after periods of expansion in firm size, and is followed by improvements in efficiency and a fall in demand for labor. Guided by a simple model, we then develop various empirical strategies to identify the causal effects of robot adoption. Our results suggest that, while demand shocks generate a positive correlation between robot imports and employment, exogenous changes in automation lead to job losses. We also find that robot imports increase sales per worker and the employment share of high-skill professions, but have a weak effect on total sales. The latter result suggests that productivity gains from automation may not be entirely passed on to consumers in the form of lower prices.
    Keywords: automation; Displacement; firms; robots
    JEL: D22 J23 J24 O33
    Date: 2020–04
  13. By: Andrew E. Clark (Paris School of Economics - CNRS); Anthony Lepinteur (Université du 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
  14. By: Krenz, Astrid; Strulik, Holger
    Abstract: We investigate the regional distribution of the COVID-19 outbreak in Germany. We use a novel digital mobility dataset, that traces the undertaken trips on Easter Sunday 2020 and instrument them with regional accessibility as measured by the regional road infrastructure of Germany's 401 NUTS III regions. We identify a robust negative association between the number of infected cases per capita and accessibility by road infrastructure, measured by the average travel time to the next major urban center. What has been a hinderance for economic performance in good economic times, appears to be a benevolent factor in the COVID-19 pandemic: bad road infrastructure. Using road infrastructure as an instrument for mobility reductions we assess the causal effect of mobility reduction on infections. The study shows that keeping mobility of people low is a main factor to reduce infections. Aggregating over all regions, our results suggest that there would have been about 63,000 infections less on May 5th, 2020, if mobility at the onset of the disease were 10 percent lower.
    Keywords: Digital technology,Mobility data,Regional road infrastructure,Germany,COVID-19
    JEL: R11 R12 I18
    Date: 2020
  15. By: Rhoden, Imke
    Abstract: This paper introduces two indicators for innovation, showing the allocation of innovation and its inherent diversity. Both indicators can give insights for regional innovation policy conception. The first indicator measures the share of patents in research and development expenditure, proposing a locational innovation output indicator. It can show that innovation in Europe differs strongly among NUTS2-level regions, which points to regionally specific, place-based policies as a result of a strong dispersion in European innovation activity. The second measure, the innovation diversity indicator, shows the diversification of innovation in a region and is built upon Krugman’s locational Gini coefficients. Here, the share of patents belonging to a particular IPC class is related to the dispersion of all patents in a region. Possible implications for policy are the construction of place-based, technology-specific programs, on either national or subnational (NUTS2-) level, where each country or region has to be considered carefully. Analyses underline that innovation in Europe is a highly regionally and technically diversified concept.
    Keywords: Innovation Indicator,Innovation Gini,Regional Dispersion,Research and Development Allocation,Patent Data
    JEL: R12 O33 O38
    Date: 2020
  16. 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.
    Keywords: COVID-19,inequality of opportunity,GHQ,mental health,psychological distress
    JEL: C1 D63 I12 I14
    Date: 2020
  17. By: Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra)
    Abstract: Using multilevel mixed effects ordered logistic models, this paper conducts an original investigation of the new management as a technology approach for all EU nations in a framework that explicitly recognizes worker representation while incorporating the notion of affective commitment. It is reported that that low worker commitment is unlikely to be found in establishments with better management practices and that, controlling for management practices and worker representation, the hypothesis that financial and productivity performance is superior in establishments without worker representation is not rejected by the data. For establishments with worker representation, the works council-only variant is seemingly the most favorable regime for financial performance, although this does not carry over to the labor productivity outcome. On net, however, the evidence suggests that the selected management practices are likely to be favorable to performance in plants with and without formal workplace representation. Greater worker commitment is strongly associated with improved labor productivity. Moreover, in this case there is seemingly no difference between works council-only representation and no representation at all. Overall, although the results for workplace representation and the financial situation are mixed, it is the case that greater commitment trumps any negative influence of worker representation type.
    Keywords: management as a technology, human resource management, worker commitment, worker representation, labor productivity, financial performance
    JEL: D22 J53 J50 L20 M54
    Date: 2020–05
  18. By: Fischer, Andreas M; Zachmann, Lucca
    Abstract: This paper tests the hypothesis whether self-ï¬ nanced property buyers, such as insurance and pension funds, have a larger eï¬?ect on local house prices than bank-ï¬ nanced property buyers, such as homeowners. Self-ï¬ nanced property buyers of new residential housing are not dependent on mortgage credit and operate independently of the macro-prudential environment. This is not so for bank-ï¬ nanced property buyers. We examine the response of Swiss house prices to new housing investments by self- and bank-ï¬ nanced property buyers at the municipality level between 2008 and 2015: a period when interest rates were at the zero lower bound and macro-prudential regulation became more restrictive. Despite being a small investor class for new residential housing, self-ï¬ nanced property buyers have a disproportionate eï¬?ect on local house prices.
    Keywords: macro-prudential regulation; self-ï¬ nanced investors; zero lower bound
    JEL: E59 G20 G21 G28
    Date: 2020–04
  19. By: Bellés-Obrero, Cristina; Martin Bassols, Nicolau; Vall Castello, Judit
    Abstract: This paper examines the effect of immigration on workplace safety, a new and previously unexplored outcome in the literature. We use a novel administrative dataset of the universe of workplace accidents reported in Spain from 2003 to 2015 and follow an IV strategy based on the distribution of early migrants settlements across provinces. Our results show that the massive inflow of immigrants between 2003 and 2009 reduced the number of workplace accidents by 10,980 for native workers (7% of the overall reduction during that period). This is driven by Spanish-born workers shifting away from manual occupations to those involving more interpersonal interactions. Immigrant flows during the economic crisis (2010-2015) had no impact on natives’ workplace safety. The scarcity of jobs during that period could have prevented shifts between occupations. Finally, we find no effects of immigration on the workplace safety of immigrants. These results add a previously unexplored dimension to the immigration debate that should be taken into account when evaluating the costs and benefits of migration flows.
    Keywords: Immigration,Workplace Accidents,Safety at Work
    JEL: J61 J28 I1
    Date: 2020
  20. By: Lewandowski, Piotr (Institute for Structural Research (IBS)); Lipowska, Katarzyna (Institute for Structural Research (IBS)); Magda, Iga (Warsaw School of Economics)
    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: J01 I10 J44
    Date: 2020–06
  21. By: Karen Arulsamy (School of Economics & Geary Institute for Public Policy, University College Dublin); Liam Delaney (School of Economics & Geary Institute for Public Policy, University College Dublin)
    Abstract: A large body of evidence shows that individuals with poor mental health have lower income over the lifespan but a dearth of evidence exists on how poor mental health affects savings behaviour. In this paper, we provide novel evidence of a mental health gap in pension participation in the UK using nationally representative longitudinal data from Understanding Society (UKHLS). Beginning in 2012, the UK government introduced automatic enrolment enabling us to assess the impact of one of the largest pension policy reforms in the world on this mental health gap. We measure mental health using the General Health Questionnaire (GHQ-12) which is a commonly used tool for measuring psychological distress. Prior to automatic enrolment, we find that male private sector employees with poor mental health are 3.2 percentage points less likely to participate in a workplace pension scheme while female private sector employees with poor mental health are 2.6 percentage points less likely to participate in a workplace pension scheme after controlling for key observables including age, education, race, marital status, number of children, occupation type, industry type, presence of a physical health condition and cognitive ability. The implementation of automatic enrolment completely removes the mental health gap in pension participation. By documenting the impact of automatic enrolment on the mental health gap in pension participation, we provide additional support for automatic enrolment policies which have already been shown to reduce gaps in pension participation among female and low income employees.
    Keywords: Mental health; psychological distress; pensions; savings; automatic enrolment; financial security; longitudinal studies
    JEL: J32 D91
    Date: 2020–06–05
  22. By: Mühlemann, Samuel (University of Munich); Pfeifer, Harald (BIBB); Wittek, Bernhard (LMU Munich)
    Abstract: A firm's expectation about the future business cycle is an important determinant of the decision to train apprentices. As 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 business cycle expectations of German firms. To the extent that the training decision of a firm depends on its perception of the business cycle, we expect a downward shift in the firm's demand for apprentices and consequently also a decrease in the equilibrium number of apprenticeship contracts. We analyze German data on the apprenticeship from 2007 to 2019 and apply firstdifferences regressions to account for unobserved heterogeneity across states and occupations, allowing us to identify the association between changes in two popular measures of business cycle expectations (the ifo Business Climate Index and the ifo Employment Barometer) and subsequent changes in the demand for apprentices, the number of new apprenticeship contracts, unfilled vacancies and unsuccessful applicants. Taking into account the most recent data on business cycle expectations up to May 2020, we estimate that the coronavirus-related decrease in firms' expectations about the business cycle can be associated with a predicted 9% decrease in firm demand for apprentices and an almost 7% 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 expectations
    JEL: J23 J24 M53
    Date: 2020–06
  23. By: Sophie Clot (Department of Economics, University of Reading); Marina Della Giusta (Department of Economics, University of Reading); Giovanni Razzu (Department of Economics, University of Reading)
    Abstract: We use a controlled experiment widely adopted in the literature to assess the extent of gender differences in attitudes towards competition in a sample of UK professionals working in two different companies. We find no gender differences in attitudes towards competition nor in performance under a competitive reward scheme. This results qualifies the findings of a large number of experimental studies that show that women are more likely than men to shy away from competition. We also find that, in our sample of professionals, women’s performance under competitive schemes does not decline. We conclude that it is important to avoid generalisations on the presence of gender gaps in attitudes towards competition. This being the first field study with professional workers in relatively competitive sectors, we think more needs to be carried out.
    Keywords: Gender, competition, field experiment
    JEL: C93 J16 J71
    Date: 2020–06–15
  24. By: O'Connell, Martin; Smith, Kate
    Abstract: We study the design of taxes aimed at limiting externalities in markets characterized by differentiated products and imperfect competition. In such settings policy must balance distortions from externalities with those associated with the exercise of market power; the optimal tax rate depends on the nature of external harms, how the degree of market power among externality generating products compares with non-taxed alternatives, and how consumers switch across these products. We apply the framework to taxation of sugar sweetened beverages. We use detailed data on the UK market for drinks to estimate consumer demand and oligopoly pricing for the differentiated products in the market. We show the welfare maximizing tax rate leads to welfare improvements over 2.5 times as large as that associated with policy that ignores distortions associated with the exercise of market power.
    Keywords: corrective tax; externality; market power; oligopoly
    JEL: D12 D43 D62 H21 H23 L13
    Date: 2020–04
  25. By: Faia, Ester; Mayer, Max; Pezone, Vincenzo
    Abstract: This paper presents causal evidence of the effects of boardroom networks on firm value and compensation policies. We exploit exogenous variation in network centrality arising from a ban on interlocking directorates of Italian financial and insurance companies. We leverage this shock to show that firms whose centrality in the network rises after the reform experience positive abnormal returns around the announcement date and are better hedged against shocks. Information dissemination plays a central role: results are driven by firms that have higher idiosyncratic volatility, low analyst coverage, and more uncertainty surrounding their earnings forecasts. Firms benefit more from boardroom centrality when they are more central in the input-output network, hence more susceptible to upstream shocks, when they are less central in the cross-ownership network, or when they have low profitability or low growth opportunities. Network centrality also results in higher directors' compensation, due to rent sharing and improved executives' outside option, and more similar compensation policies between connected firms.
    Keywords: executives' compensation; firms networks; Natural Experiment
    JEL: D57 G14 G32 L14
    Date: 2020–04
  26. By: Huysmans, Martijn; Curzi, Daniele
    Abstract: To protect distinctive regional foods, the European Union (EU) has a legal scheme covering over 1,000 Geographical Indications (GIs) for food items such as Parma ham and Gouda Holland. Using Eurostat Comext export data 2004-2018 for cheeses at the CN8 level, this paper tests whether past protection of GIs through 11 Free Trade Agreements (FTAs) has increased trade in them. The answer matters for trade policy, since the protection of at least some GIs has been a red line in EU FTA negotiations. The analysis is set in a standard gravity-model framework, using a pseudo-Poisson maximum likelihood (PPML) approach to account for the issue of zero-trade flows. We find that legal protection of GIs in FTAs does not significantly increase trade in them. Our main suggested policy implication is that the EU should focus on external promotion of its GIs rather than asking trading partners for stronger legal protection.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2020–04

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