nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒09‒14
27 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Labor Market Effects of COVID-19 in Sweden and Its Neighbors: Evidence from Novel Administrative Data By Steffen Juranek; Jörg Paetzold; Hannes Winner; Floris Zoutman
  2. Wage Determination and the Bite of Collective Contracts in Italy and Spain: Evidence from the Metalworking Industry By Adamopoulou, Effrosyni; Villanueva, Ernesto
  3. Self-Selection in Physical and Mental Health among Older Intra-European Migrants By Constant, Amelie F.; Milewski, Nadja
  4. Welfare while working: How does the life satisfaction approach help to explain job search behavior? By Wolf, Tobias
  5. Self-selection in physical and mental health among older intra-European migrants By Constant, Amelie F.; Milewski, Nadja
  6. Does gender matter for promotion in science? Evidence from physicists in France By Mairesse, Jacques; Pezzoni, Michele; Visentin, Fabiana
  7. The Effects of Air Pollution on COVID-19 Related Mortality in Northern Italy By Coker Eric; Cavalli Laura; Fabrizi Enrico; Guastella Gianni; Lippo Enrico; Parisi Maria Laura; Pontarollo Nicola; Rizzati Massimiliano; Varacca Alessandro; Vergalli Sergio
  8. Native-Immigrant Differences in the Effect of Children on the Gender Pay Gap By Nieto Castro Adrian
  9. Television and the Labour Supply: Evidence from the Digital Television Transition in the UK By Nieto Castro Adrian
  10. Family Spillovers in Field of Study By Gordon B. Dahl; Dan-Olof Rooth; Anders Stenberg
  11. Environmental Incentives and Parental Investments By Renske Stans
  12. Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering By Lavinia Piemontese
  13. Division of Labor in R&D? Firm Size and Specialization in Corporate Research By Annette Becker; Hanna Hottenrott; Anwesha Mukherjee
  14. Parental Well-Being in Times of COVID-19 in Germany By Huebener, Mathias; Waights, Sevrin; Spiess, C. Katharina; Siegel, Nico A.; Wagner, Gert G.
  15. The cross-occupational effects of immigration on native wages in the UK By Marco Alfano; Ross McKenzie; Graeme Roy
  16. Borrowing constraints, own labour and homeownership: Does it pay to paint your walls? By Peter Lindner; Thomas Y. Mathä; Giuseppe Pulina; Michael Ziegelmeyer
  17. The survey on "Family Models in Germany" (FAMOD): A description of the data By Steinbach, Anja; Brocker, Sven A.; Augustijn, Lara
  18. COVID-19 mortality and health expenditures across European countries: the positive correlation puzzle By Serge Blondel; Radu Vranceanu
  19. Are Estimates of Non-Standard Employment Wage Penalties Robust to Different Wage Measures? The Case of Zero Hours Contracts in the UK By Farina, Egidio; Green, Colin P.; McVicar, Duncan
  20. Populism and social polarization in European democracies By GINSBURGH Victor,; PERELMAN Sergio,; PESTIEAU Pierre,
  21. Labour Markets in the Time of Coronavirus: Measuring Excess By Wadsworth, Jonathan
  22. Some regrettable grading scale effects under different versions of evaluative voting By Antoinette Baujard; Herrade Igersheim; Isabelle Lebon
  23. The Effects of the EU Cohesion Policy on Regional Economic Growth: Using Structural Equation Modelling for Impact Assessment By Stefan Jestl; Ambre Maucorps; Roman Römisch
  24. Designing Disability Insurance Reforms: Tightening Eligibility Rules or Reducing Benefits? By Andreas Haller, Stefan Staubli, Josef Zweimüller
  25. Labour market power and between-firm wage (in)equality By Mertens, Matthias
  26. Institutional Fragmentation and Urbanisation in the EU Cities By Federica Cappelli; Gianni Guastella; Stefano Pareglio
  27. Pension Information and Women's Awareness By Angelici, Marta; Del Boca, Daniela; Oggero, Noemi; Profeta, Paola; Rossi, Maria Cristina; Villosio, Claudia

  1. By: Steffen Juranek; Jörg Paetzold; Hannes Winner; Floris Zoutman
    Abstract: This paper studies the labor market effects of non-pharmaceutical interventions (NPIs) to combat the COVID-19 pandemic. We focus on the Nordic countries which showed one of the highest variations in NPIs despite having similar community spread of COVID-19 at the onset of the pandemic: While Denmark, Finland and Norway imposed strict measures (‘lockdowns’), Sweden decided for much lighter restrictions. Empirically, we use novel administrative data on weekly new unemployment and furlough spells from all 56 regions of the Nordic countries to compare the labor market outcomes of Sweden with the ones of its neighbors. Our evidence suggests that the labor markets of all countries were severely hit by the pandemic, although Sweden performed slightly better than its neighbors. Specifically, we find the worsening of the Swedish labor market to occur around 2 to 3 weeks later than in the other Nordic countries, and that its cumulative sum of new unemployment and furlough spells remained significantly lower during the time period of our study (up to week 21 of 2020).
    Keywords: COVID-19 pandemic, lockdown, labor market effects
    JEL: I18 J64
    Date: 2020
  2. By: Adamopoulou, Effrosyni (University of Mannheim); Villanueva, Ernesto (Bank of Spain)
    Abstract: In several OECD countries employer federations and unions fix skill-specific wage floors for all workers in an industry. One view of those "explicit" contracts argues that the prevailing wage structure reflects the labor market conditions back at the time when those contracts were bargained, with little space for renegotiation. An alternative view stresses that only workers close to the minima are affected by wage floors and that the wage structure reacts to current labor market conditions. We disentangle both models using a novel dataset that combines more than 1,000 signature dates and 15,000 wage floors set in the metalworking industry with labor market histories of metalworkers drawn from Social Security records in Italy and Spain. An increase in the contemporaneous local unemployment rate of 1 p.p. diminished contemporaneous mean wages by about 0.45 p.p. between 2005 and 2013 in both countries. Instead, a 1 p.p. higher unemployment rate back at the time of contract renewal reduced wages by 0.07 p.p., an impact driven by wages close to the negotiated wage floors. Even though the evidence for earlier periods is mixed in Italy, the results do not support the view that the wage structure reflects labor market conditions at the time of bargaining. The response of wages to local unemployment was driven by reductions in complements and employee churning, although the elasticity falls short of the prediction of an off-the-shelf bargaining model.
    Keywords: minimum wages, collective contracts, Social Security data, spot market, explicit contracts, wage cyclicality
    JEL: J31 J38 J52
    Date: 2020–07
  3. By: Constant, Amelie F.; Milewski, Nadja
    Abstract: The Healthy Immigrant Paradox found in the literature by comparing the health of immigrants to that of natives in the host country, may suffer from serious cultural biases. Our study evades such biases by utilizing a destination-origin framework, in which we compare the health of emigrants to that of their compatriots who stay in the country of origin. Isolating cultural effects can best gauge self-selection and host country effects on the health of emigrants with longer time abroad. We study both the physical and mental dimensions of health among European-born emigrants over 50, who originate from seven European countries and now live elsewhere in Europe. We use the Survey of Health, Ageing and Retirement in Europe and apply multi-level modeling. Regarding the physical health we find positive self-selection, beneficial adaptation effects, and effects from other observables for some but not all countries. With the notable exception of the German émigrés, we cannot confirm selection in mental health, while additional years abroad have only weak effects. Overall, living abroad has some favorable effects on the health of older emigrants. The economic similarity of countries and the free intra-European mobility mitigate the need for initial self-selection in health and facilitate the migration experience abroad.
    Keywords: panel data,physical health,mental health,older population,emigrants,multi-level models,Europe
    JEL: C23 F22 J11 J14 J15 J61 I12 I14 O52
    Date: 2020
  4. By: Wolf, Tobias
    Abstract: This paper examines the role of life satisfactioninthe labor market behavior of workers receiving welfare benefits while working. Welfare stigma and other hard-to-observe factors may affect outcomes as on-the-job search and the duration until leaving welfare status. We utilize life satisfaction to track such factors. The German PASS-ADIAB dataset combines administrative process data with individual survey data offering a rich database that allows conditioning on changes in household income, time-stable individual traits, employment biographies and local labor market effects.Given a broad set of further covariates, we find that life satisfaction of in-work benefit recipientsis negatively associated with job search, whereas the duration until the exit from welfare is hardly affected. Focusing on heterogeneity among workers suggests that life satisfactions' role for choice depends on the institutional setting, rendering marginally employed workers specifically prone to life satisfaction.
    Keywords: life satisfaction,job search,in-work benefits,welfare stigma
    JEL: J60 J62 I31 I38
    Date: 2020
  5. By: Constant, Amelie F. (UNU-MERIT, Maastricht University, GLO, and Princeton University); Milewski, Nadja (University of Rostock, GLO)
    Abstract: The Healthy Immigrant Paradox found in the literature by comparing the health of immigrants to that of natives in the host country, may suffer from serious cultural biases. Our study evades such biases by utilizing a destination-origin framework, in which we compare the health of emigrants to that of their compatriots who stay in the country of origin. Isolating cultural effects can best gauge self-selection and host country effects on the health of emigrants with longer time abroad. We study both the physical and mental dimensions of health among European-born emigrants over 50, who originate from seven European countries and now live elsewhere in Europe. We use the Survey of Health, Ageing and Retirement in Europe and apply multi-level modeling. Regarding the physical health we find positive self-selection, beneficial adaptation effects, and effects from other observables for some but not all countries. With the notable exception of the German émigrés, we cannot confirm selection in mental health, while additional years abroad have only weak effects. Overall, living abroad has some favorable effects on the health of older emigrants. The economic similarity of countries and the free intra-European mobility mitigate the need for initial self-selection in health and facilitate the migration experience abroad.
    Keywords: panel data, physical health, mental health, older population, emigrants, multi-level models, Europe
    JEL: C23 F22 J11 J14 J15 J61 I12 I14 O15 O52
    Date: 2020–08–27
  6. By: Mairesse, Jacques (UNU-MERIT, Maastricht University, EHESS and NBER); Pezzoni, Michele (GREDEG, CNRS, Université Côte d’Azur, OST, HCERES, and ICRIOS, Bocconi University); Visentin, Fabiana (UNU-MERIT, Maastricht University)
    Abstract: In this study, we investigate what are the factors of the promotion of female and male scientists at the French Institute of Physics (INP) at CNRS, one of the largest European public research organisations. We construct a long panel of INP physicists combining various data sources on their research activities and careers. Using event history analysis, we find that female and male physicists have the same rate of promotion from junior to senior positions when controlling for research productivity and a variety of other promotion factors. Our results also suggest that promotion factors such as family characteristics, mentoring, professional network, research responsibilities have different impacts on female and male researchers.
    Keywords: Gender disparity, Promotion, Research productivity, Family characteristics, Research Responsibilities, Mentoring activities, Panel Data, Event history analysis
    JEL: I23 J16 O15 O34
    Date: 2020–09–03
  7. By: Coker Eric (College of Public Health and Health Professions, University of Florida); Cavalli Laura (Fondazione Eni Enrico Mattei); Fabrizi Enrico (Department of Economics and Social Sciences, Università Cattolica del Sacro Cuore); Guastella Gianni (Fondazione Eni Enrico Mattei and Department of Mathematics and Physics, Università Cattolica del Sacro Cuore); Lippo Enrico (Fondazione Eni Enrico Mattei); Parisi Maria Laura (Department of Economics and Management, Università degli studi di Brescia); Pontarollo Nicola (Department of Economics and Management, Università degli studi di Brescia); Rizzati Massimiliano (Fondazione Eni Enrico Mattei); Varacca Alessandro (Department of Agricultural Economics, Università Cattolica del Sacro Cuore); Vergalli Sergio (Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli studi di Brescia)
    Abstract: Long-term exposure to ambient air pollutant concentrations is known to cause chronic lung inflammation, a condition that may promote increased severity of COVID-19 syndrome caused by the novel coronavirus (SARS-CoV-2). In this paper, we empirically investigate the ecologic association between long-term concentrations of area-level fine particulate matter (PM2.5) and excess deaths in the first quarter of 2020 in municipalities of Northern Italy. The study accounts for potentially spatial confounding factors related to urbanization that may have influenced the spreading of SARS-CoV-2 and related COVID-19 mortality. Our epidemiological analysis uses geographical information (e.g., municipalities) and negative binomial regression to assess whether both ambient PM2.5 concentration and excess mortality have a similar spatial distribution. Our analysis suggests a positive association of ambient PM2.5 concentration on excess mortality in Northern Italy related to the COVID-19 epidemic. Our estimates suggest that a one-unit increase in PM2.5 concentration (μg/m3) is associated with a 9% (95% confidence interval: 6% - 12%) increase in COVID-19 related mortality.
    Keywords: COVID-19, Mortality, Pollution, Italy, Municipalities
    JEL: Q53 I18 J11
    Date: 2020–08
  8. By: Nieto Castro Adrian
    Abstract: This paper explores gender differences in the career paths of immigrant and native parents before and after childbirth using Spanish administrative data and an event study specification. I find an important gender pay gap emerging after childbirth for both immigrants and natives, but immigrants suffer from a higher loss in earnings than natives. I show important native-immigrant differences in potential drivers behind the gender pay gap. After childbirth, mothers reduce their labour participation and are more often unemployed, part-time and temporary employed than fathers. The gender gaps in labour participation and part-time work are higher for natives, while the gender gaps in unemployment and permanent employment for immigrants. Finally, I investigate whether the deterioration of mothers' career originates from workers' or employers' decisions. After childbirth, mothers quit their job less, but temporarily stop working and are dismissed more than fathers. The gender gap in temporary leaves is higher for natives, while the gender gap in dismissals for immigrants.
    Keywords: immigrant; native; gender gap; inequality; children
    JEL: J13 J15 J16 J31 J61 J70
    Date: 2020–06
  9. By: Nieto Castro Adrian
    Abstract: This paper exploits exogenous variation in the date of transition from analogue to digital television signal in the UK across more than 40,000 geographical units to investigate the causal impact of television on employment probabilities and potential mechanisms. Using a large individual panel survey dataset and a difference-in-differences model that compares the outcomes of adults living in regions where the switchover occurred in different years, I find that the digital transition increases employment probabilities. The impact is driven by mothers and is due to an increase in part-time and self-employment. The effect increases with the number of children in a household and when the parent does not cohabit with a partner. A possible explanation for these results is that television keeps children busy, reducing the amount of housework that parents need to do and allowing them to focus on their careers. I test whether the digital transition reduces the time that individuals dedicate to housework and show that this is the case for mothers but not for fathers and non-parents. I find no effect on time allocation other than via housework.
    Keywords: labour supply; housework; leisure; gender equality; digital transition; television
    JEL: J01 J16 J22
    Date: 2020–04
  10. By: Gordon B. Dahl; Dan-Olof Rooth; Anders Stenberg
    Abstract: This paper estimates peer effects both from older to younger siblings and from parents to children in academic fields of study. Our setting is secondary school in Sweden, where admissions to oversubscribed fields is determined based on a student's GPA. Using an RD design, we find strong spillovers in field choices that depend on the gender mix of siblings and whether the field is gender conforming. There are also large intergenerational effects from fathers and mothers to sons, except in female-dominated fields, but little effect for daughters. These spillovers have long-term consequences for occupational segregation and wage gaps by gender.
    JEL: I21 J24
    Date: 2020–07
  11. By: Renske Stans
    Abstract: This paper analyses how a family's economic environment influences parental investments in children's development. Worsening economic conditions can incentivize parental investments by raising the importance of human capital accumulation in ensuring later-life success. Using a large representative German survey, in a regional and time- fixed e ffects setting, I estimate the causal impact of the local unemployment rate on parental investment measures. I find that a rise in the unemployment rate increases measures of maternal support, academic interest and homework assistance. Furthermore, heterogeneity analysis suggests that the responsiveness of parenting behavior on economic incentives di ffers by parental and child background characteristics such as parental locus of control and secondary school track.
    Keywords: parenting, human capital, regional labor market
    JEL: J13 J24 R23
    Date: 2020–08
  12. By: Lavinia Piemontese (Univ Lyon, ENS de Lyon, GATE UMR 5824, F-69342 Lyon, France)
    Abstract: This paper proposes a new approach for quantifying the economic cost of hidden economies. I specifically apply the method to the case of mafia racketeering in Northern Italy, and in so doing, provide the first explicit estimate of the economic cost of mafia spread in this area. I show both theoretically and empirically that acts of extortion imposed on certain firms are linked to resource misallocation. I quantify the share of output that the mafia extorts from firms, which ranges between 0.5 and 5 percent of firm-level output for the taxed firms. I then consider what these estimates imply and find that between 2000 and 2012, the Northern Italian economy suffered an aggregate loss of approximately 2.5 billion Euros. Quite remarkably, only one-fourth of this cost consists of the aggregate transfer to the mafia. The remaining three-fourths corresponds to the contraction of production due to misallocation.
    Keywords: Organized crime, Extortion Racketeering, Resource Misallocation, Welfare Loss, within-industry OP covariance
    JEL: K42 O17 D61 O4 C5
    Date: 2020
  13. By: Annette Becker (Technical University of Munich, TUM School of Management, Dept. of Economics & Policy); Hanna Hottenrott (Technical University of Munich, TUM School of Management, Dept. of Economics & Policy; K.U.Leuven, Dept. of Managerial Economics, Strategy and Innovation; Centre for European Economic Research (ZEW)); Anwesha Mukherjee (Technical University of Munich, TUM School of Management, Dept. of Economics & Policy)
    Abstract: Corporate research and development constitutes one of the main sources of innovation. Recent research, however, discusses a decline in corporate research and its implications for technological progress. The contribution of this study is to model research & development (R&D) decisions in an R&D investment model that allows the analysis of firms’ engagement in research (R) as compared to development (D) activities. The model predicts higher investments in both activities for larger firms, but it also shows that research intensity, i.e. the R-share in R&D, declines with firm size. We test these propositions using data of R&D-active firms over the period from 2000 to 2015. Results from panel model estimations that account for unobserved heterogeneity across firms show that larger firms invest indeed more in both research and development whereas the relative focus on research decreases with firm size. In addition, the empirical results suggest that, since the returns to research decline with firm size, specialization maximizes productivity. We discuss policy implications based on these findings.
    Keywords: Corporate Research, R&D, Firm Size, Comparative Advantage, Productivity, Innovation Policy
    JEL: C14 C30 O31 O38
    Date: 2020–09
  14. By: Huebener, Mathias (DIW Berlin); Waights, Sevrin (DIW Berlin); Spiess, C. Katharina (DIW Berlin); Siegel, Nico A. (Infratest Dimap); Wagner, Gert G. (Max Planck Institute for Human Development)
    Abstract: We examine the differential effects of Covid-19 and related restrictions on individuals with dependent children in Germany. We specifically focus on the role of school and day care center closures, which may be regarded as a "disruptive exogenous shock" to family life. We make use of a novel representative survey of parental well-being collected in May and June 2020 in Germany, when schools and day care centers were closed but while other measures had been relaxed and new infections were low. In our descriptive analysis, we compare well-being during this period with a pre-crisis period for different groups. In a difference-in-differences design, we compare the change for individuals with children to the change for individuals without children, accounting for unrelated trends as well as potential survey mode and context effects. We find that the crisis lowered the relative well-being of individuals with children, especially for individuals with young children, for women, and for persons with lower secondary schooling qualifications. Our results suggest that public policy measures taken to contain Covid-19 can have large effects on family well-being, with implications for child development and parental labor market outcomes.
    Keywords: well-being, COVID-19, Corona Virus, day care closures, school closures, COMPASS, SOEP
    JEL: D1 H12 H75 I2
    Date: 2020–07
  15. By: Marco Alfano (Department of Economics, University of Strathclyde); Ross McKenzie (Department of Economics, University of Strathclyde); Graeme Roy (Department of Economics, University of Strathclyde)
    Abstract: This paper estimates the effect of immigration into an occupation on the wages of natives working in other, better paid occupations. Using Annual Population Survey data from the UK we rank occupations by real hourly wage and _find that increasesin the migrant/native ratio raise average wages of natives working in the next higher paid occupation by around 0.13 percent. We find that these effects operate through migrants' higher educational attainments raising workplace productivity more broadly and supporting specialization in tasks. Our findings have important implications for policy and public discourse. They suggest that debates over the economic impacts of migration often ignore the potential spill-over benefits that a migrant can bring to the outcomes for native workers elsewhere in the wage distribution, particularly in lower wage occupations.
    Keywords: immigration, impact, wage distribution
    JEL: J21 J31 J61
    Date: 2020–08
  16. By: Peter Lindner; Thomas Y. Mathä; Giuseppe Pulina; Michael Ziegelmeyer
    Abstract: Using a dedicated set of questions in the 2014 Luxembourg Household Finance and Consumption Survey (LU-HFCS), we show that a substantial share of households contributes their own labour to the acquisition of their main residence. These contributions help households faced with credit constraints, since they reduce the need for external financing. We develop a simple theoretical model and show that own labour contributions decrease with the level of financial resources available, while they increase with the mortgage interest rate. These theoretical results are supported by empirical analysis, which also shows that own labour contributions vary by household characteristics (age, gender, profession) and by type of dwelling (house, apartment).
    Keywords: Borrowing constraints, down payment, own labour, sweat equity, homeownership, household, survey.
    JEL: D14 E43 G21 R2
    Date: 2020–08
  17. By: Steinbach, Anja; Brocker, Sven A.; Augustijn, Lara
    Abstract: The FAMOD project, which is funded by the German Research Foundation (DFG), investigates the diversity of existing family Models after separation or divorce in Germany. The project's aim is to provide detailed information about the living conditions of mothers, fathers, and children in different post-separation family configurations, namely in sole physical custody (SPC) and in joint physical custody (JPC) arrangements. Employing a multi-actor design, the survey closely examines the well-being of the Individual family members in order to identify the potentials and challenges within a specific physical custody care arrangement. Because JPC families are still extremely rare in Germany (less than 1% of all families with minor children), this project is the first to collect data from a sufficient number of JPC families for detailed statistical analyses. Based on a quota sample, FAMOD provides data of 1,554 families in Germany (nuclear, SPC, and JPC families). This working paper contains a description of the sampling procedure, details about the process of data collection, and a benchmarking of selected core sociodemographic variables against the results from other German surveys.
    Keywords: data quality,FAMOD,joint physical custody,sampling,sole physical custody
    Date: 2020
  18. By: Serge Blondel (GRANEM - Groupe de Recherche Angevin en Economie et Management - Institut National de l'Horticulture et du Paysage - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UA - Université d'Angers, LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPD5 - Université Paris Descartes - Paris 5); Radu Vranceanu (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université, ESSEC Business School - Essec Business School)
    Abstract: The positive correlation between health share expenditures and COVID-19 case fatalities in a cross-section of 31 European countries is puzzling. The positive relationships is also detected in weighted OLS and IV models that control for many usual suspects of the COVID-19 mortality: (1) health indicators (personal risk factors, medical resources), (2) virus ease of circulation, (3) macroeconomic variables related to the economic development and social orientation of the country. COVID-19 case fatalities are lower in countries with significant resources dedicated to health care (hospital beds and medical doctors); the contribution of virus circulation factors is less significant. Policy implications follow.
    Keywords: COVID-19,health care systems,Europe,efficiency,mortality,health policy
    Date: 2020–08–24
  19. By: Farina, Egidio (Queen's University Belfast); Green, Colin P. (Norwegian University of Science and Technology (NTNU)); McVicar, Duncan (Queen's University Belfast)
    Abstract: A range of evidence suggests that non-standard jobs, including fixed-term and other temporary jobs such as casual jobs, pay lower wages than more standard, permanent jobs, even after controlling for differences in worker and job characteristics. A recent literature suggests this is also the case for zero hours contracts (ZHCs), a growing form of non-standard employment in several developed countries, including the UK. These studies typically rely on derived wage variables – derived from survey responses to questions on earnings and hours data – which are prone to various forms of measurement error, some of which may be correlated with employment contract. Many relevant surveys, however, also include stated-rate hourly wage questions which, although also likely measured with error, are not subject to the same measurement issues. This suggests potential for sensitivity in non-standard employment wage penalty estimates depending on the wage measure used. Using the example of ZHCs in the UK, we first use derived wages to replicate the ballpark conditional ZHC wage penalty typical of existing studies. We then show that there is no conditional ZHC wage penalty, on average, when using the stated-rate hourly wage measure. This also holds for other non-standard employment types, including casual and fixed-term employment. Further, whereas the derived wage measure suggests, in line with existing literature, that the ZHC wage penalty is largest at the bottom of the wage distribution, we show the opposite to be the case when using the stated-rate wage measure. We discuss implications for policy, our understanding of labour market behaviour, and also for the wider literature on non-standard work wage penalties.
    Keywords: zero hours contracts, casual jobs, non-standard employment, precarious employment, atypical employment, wages
    JEL: J21 J48 M55
    Date: 2020–07
  20. By: GINSBURGH Victor, (ECARES, Université libre de Bruxelles); PERELMAN Sergio, (Université de Liège); PESTIEAU Pierre, (Université de Liège)
    Abstract: The objective of this paper is to explain populist attitudes that are prevailing in a number of European democraties. Populist attitudes expectedly lead to social protests and populist votes. We capture the populist wave by relying not on voting behavior but rather on values that are traditionally viewed as populist values, such as distrust of institutions and neighbors, rejection of migrations and strong preferences for law and order. Our study covers the period 2004 to 2018 and 25 European countries for which we match aggregated indicators of populist values and social polarization computed from ESS and SILC survey micro-data, respectively. We find that social polarization, along with other factors, can explain populist attitudes. We also observe that both populist attitudes and polarization vary across countries much more than over time, with the exception of authoritarian values which appear positively correlated with social polarization, particularly among baby-boomers and younger cohorts.
    Keywords: populism, polarization, social divide
    JEL: D63 I30
    Date: 2020–07–01
  21. By: Wadsworth, Jonathan (Royal Holloway, University of London)
    Abstract: No matter the cause, recessions are usually accompanied by some combination of job loss, hiring freezes, wage cuts or hours reductions. In a rapidly evolving economic crisis there is a need for timely information to assess labour market performance and develop strategies to address the problems that emerge. Household labour force surveys are not point-in-time data, but do offer the opportunity to analyse a broader range of outcomes not readily available in administrative data. They can also be utilised at higher frequencies than is normally associated with them. In what follows, the weekly information contained in the UK Labour Force Survey is tracked for several labour market outcomes from the first week of 2020 and onward as the Covid-19 crisis developed in spring 2020. The indicators are presented in "excess" form to gauge how far the 2020 incidence of a particular outcome differs from its weekly norm. It seems that the most common metrics of labour market performance, like unemployment or wage rates, show little departure from recent norms over the first few months of the crisis. The initial margins of adjustment were instead some cumulative 50 million more weekly workplace absences than usual during lockdown, notable hours reductions of up to 25% among the majority who carried on working, together equivalent to around 3 weeks of lost working for the whole workforce, allied to a notable stalling of hiring that had already begun several weeks before lockdown.
    Keywords: COVID-19, unemployment, hours, wages, hiring
    JEL: J0 J3 J6
    Date: 2020–07
  22. By: Antoinette Baujard (Université Jean Monnet, Université de Lyon, GATE Lyon Saint-Etienne UMR 5824, 42023 Saint-Etienne Cedex 2, France); Herrade Igersheim (CNRS and BETA, University of Strasbourg, 61 avenue de la Forêt Noire, 67085 Strasbourg, France); Isabelle Lebon (Normandie Université, Unicaen, CREM, UMR CNRS 6211, France. Email: , corresponding author: Esplanade de la Paix, 14000 Caen, France.)
    Abstract: Many voters seem to appreciate the greater freedom of expression afforded by alternative voting rules; in evaluative voting, for example, longer grading scales and/or negative grades seem desirable in so far as, all other things being equal, they allow greater expressivity. The paper studies to what extent the behavior of voters, and the outcomes of elections, are sensitive to the grading scale employed in evaluative (or “range”) voting. To this end, we use voting data from an experiment conducted in parallel with the 2017 French presidential election, which aimed to scrutinize the negative grade effect and the length effect in grading scales. First, this paper confirms that the introduction of a negative grade disfavors “polarizing” candidates, those whose political discourse provokes divisive debate, but more generally we establish that it disfavors major candidates and favors minor candidates. Second, under non-negative scales, polarizing candidates may be relatively disfavored by longer scales, especially compared with candidates who attract only infrequent media coverage and who are little known among voters. Third, longer scales assign different weights to the votes of otherwise equal voters, depending on their propensity to vote strategically. Overall, we observe that the benefits of the expressivity provided by longer scales or negative grades need to be balanced against the controversial advantage these give to minor candidates, and their tendency to undermine the principle that each vote should count equally in the outcome of the election.
    Keywords: Evaluative Voting, Approval Voting, In Situ Experiment, Voting Scale Design, Behavioral Bias
    JEL: D72 C93
    Date: 2020
  23. By: Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Ambre Maucorps (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses the effects of the EU Cohesion Policy (CP) on the economic growth of 276 European NUTS-2 regions between 2008 and 2016. Using a structural equation model (SEM) consisting of both a measurement component (with two latent variables) and a structural component, we estimate the impact of CP funding on the growth of GDP per capita across EU regions. The estimation also enables us to predict changes in the growth of GDP per capita based on a scenario of CP funding reallocation between member states. Overcoming the limitations of traditional linear regression, SEM modelling proves to be a promising method for impact evaluation, also allowing for the inclusion of indirect causal paths and feedback loops to depict, for example, cross-border economic spillover effects.
    Keywords: Cohesion Policy, regional economic growth, structural equation modelling
    JEL: C38 C39 R11 R12 R58
    Date: 2020–08
  24. By: Andreas Haller, Stefan Staubli, Josef Zweimüller
    Abstract: We study the welfare effects of disability insurance (DI) and derive social-optimality conditions for the two main DI policy parameters: (i) DI eligibility rules and (ii) DI benefits. Causal evidence from two DI reforms in Austria generate fiscal multipliers (total over mechanical cost reductions) of 2.0-2.5 for stricter DI eligibility rules and of 1.3-1.4 for lower DI benefits. Stricter DI eligibility rules generate lower income losses (earnings + transfers), particularly at the lower end of the income distribution. Our analysis suggests that the welfare cost of rolling back the Austrian DI program is lower through tightening eligibility rules than through lowering benefits. Applying our framework to the US DI system suggests that both loosening eligibility rules, and increasing benefits, would be welfare increasing.
    Keywords: Disability insurance, screening, benefits, policy reform
    JEL: H53 H55 J14 J21 J65
    Date: 2020
  25. By: Mertens, Matthias
    Abstract: This study investigates how labour market power shapes between-firm wage differences using German manufacturing sector data from 1995 to 2016. Over time, firm- and employee-side labour market power, defined as the difference between wages and marginal revenue products of labour (MRPL), increasingly moderated rising between-firm wage inequality. This is because small, low-wage, low-MRPL firms possess no labour market power and pay wages equal to or even above their MRPL, whereas large, high-wage, high-MRPL firms possess high labour market power and pay wages below their MRPL. These wage-MRPL differences grow over time and compress the firm wage distribution compared to the counterfactualcompetitive labour market scenario. Particularly for the largest, highest-paying, and highest-MRPL firms, wage-MRPL differences strongly increase over time. This allows these firms to generate increasingly large labour market rents while being active on competitive product markets, providing novel insights on why such "superstar firms' are profitable and successful.
    Keywords: inequality,labour market power,monopsony,rent-sharing,large firms
    JEL: J31 J42 L10 L60
    Date: 2020
  26. By: Federica Cappelli (Roma Tre University); Gianni Guastella (Università Cattolica del Sacro Cuore and Fondazione Eni Enrico Mattei); Stefano Pareglio (Università Cattolica del Sacro Cuore and Fondazione Eni Enrico Mattei)
    Abstract: This article examines the relationship between institutional fragmentation and the spatial extent of cities in Europe’s Functional Urban Areas. European Union planning regulations vary across member states, but in most cases, local authorities determine land use within the more general regulatory frameworks set by national or subnational authorities. More decentralised and fragmented settings may favour urban sprawl, allowing developers to avoid land-use restrictions in one municipality by moving to adjacent ones and providing incentives for municipalities to adopt less strict land-conversion regulations to attract households and workers. The empirical results fully support this hypothesis and unveil significant differences between small and large cities, the effect of governance fragmentation being a substantial factor in the latter case.
    Keywords: Urban Sprawl, Institutional Fragmentation, Threshold Regression
    JEL: R52 R58 C24
    Date: 2020–08
  27. By: Angelici, Marta (University of Milan Bicocca); Del Boca, Daniela (University of Turin); Oggero, Noemi (University of Turin); Profeta, Paola (Bocconi University); Rossi, Maria Cristina (University of Turin); Villosio, Claudia (Collegio Carlo Alberto)
    Abstract: We explore the role of financial and pension information in increasing women's knowledge and awareness of their future pension status, and consequently, in reducing the gender pension gap. A representative sample of 1249 Italian working women were interviewed to assess their knowledge about pensions and financial issues and about their own savings and personal wealth planned for retirement. The responses showed that their knowledge and awareness of retirement planning was limited. We then ran a randomized experiment to evaluate the effect of increased information regarding pensions on women's awareness, knowledge, and behaviors. Women in the treated group were provided information in the form of three short online tutorials. A follow-up survey shows that these women became more interested and aware of pension schemes and retirement options after completing the tutorials and were more likely to be better informed and keen to obtain further information. When looking at changes in behavior, we find that treated women who are closer to retirement are more likely to believe that they would make different work-life decisions if they received specific pension information in a timely fashion. They are also more likely to have a supplementary pension fund if they are concerned about their standard of living after retirement.
    Keywords: women, pension, savings, financial education
    JEL: H31 J22
    Date: 2020–08

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