nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒09‒21
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. In Times of Trouble: Innovative Drivers of External Competitiveness for Small Businesses during the Great Recession By Brancati, Emanuele; Brancati, Raffaele; Guarascio, Dario; Zanfei, Antonello
  2. Dismissal protection and long-term sickness absence: First evidence from Germany By Gürtzgen, Nicole; Hiesinger, Karolin
  3. The incidence of VAT reforms in electricity markets: Evidence from Belgium By HINDRIKS Jean,; SERSE Valerio,
  4. Fee Equalization and Appropriate Health Care By Emilia Barili; Paola Bertoli; Veronica Grembi
  5. Marriage and Divorce: The Role of Labor Market Institutions By Bastian Schulz; Fabian Siuda
  6. Wind of Change? Experimental Survey Evidence on the COVID-19 Shock and Socio-Political Attitudes in Europe By Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger
  7. Parental Well-Being in Times of Covid-19 in Germany By Mathias Huebener; Sevrin Waights; C. Katharina Spiess; Nico A. Siegel; Gert G. Wagner
  8. Moving towards fairer regional minimum income schemes in Spain By Hernández, Adrián; Picos, Fidel; Riscado, Sara
  9. As long as they are cheap. Experimental evidence on the demand for migrant workers By Mauro Caselli; Paolo Falco
  10. Pandemic Meets Pollution: Poor Air Quality Increases Deaths by COVID-19 By Ingo E. Isphording; Nico Pestel
  11. A Setback Set Right? Unfortunate Timing of Family Distress and Educational Outcomes By Renske Stans
  12. Educational differences in cohort fertility across sub-national regions in Europe By Nisén, Jessica; Klüsener, Sebastian; Dahlberg, Johan; Dommermuth, Lars; Jasilioniene, Aiva; Kreyenfeld, Michaela; Lappegård, Trude; Li, Peng; Martikainen, Pekka; Neels, Karel; Riederer, Bernhard; te Riele, Saskia; Szabó, Laura; Trimarchi, Alessandra; Viciana, Francisco; Wilson, Ben; Myrskylä, Mikko
  13. How Do Firms Form Expectations of Aggregate Growth? New Evidence from a Large-scale Business Survey By Dovern, Jonas; Müller, Lena Sophia; Wohlrabe, Klaus
  14. Employment Subsidies for Long-Term Welfare Benefits Recipients: Reconciling Programmes Goals with Needs of Diverging Population Groups By Nivorozhkin, Anton; Promberger, Markus
  15. Exposure and vulnerability estimation for modelling flood losses to commercial assets in Europe By Paprotny, Dominik; Kreibich, Heidi; Morales-Nápoles, Oswaldo; Castellarin, Attilio; Carisi3, Francesca; Schröter, Kai
  16. Building ‘implicit partnerships’? Financial long-term care entitlements in Europe By Costa-Font, Joan; Zigante, Valentina
  17. Subsidizing Domestic Services as a Tool to Fight Unemployment: Effectiveness and Hidden Costs By Leduc, Elisabeth; Tojerow, Ilan
  18. Optimal Tax-Transfer Rules under Equilibrium and New Labour Demand Scenarios By Colombino, Ugo; Islam, Nizamul
  19. Capital incentive policies in the age of cloud computing: An empirical case study By Andres, Raphaela; DeStefano, Timothy; Niebel, Thomas; Viete, Steffen
  20. Face Masks Considerably Reduce Covid-19 Cases in Germany - A Synthetic Control Method Approach By Timo Mitze; Reinhold Kosfeld; Johannes Rode; Klaus Wälde
  21. Neighborhoods, Networks, and Delivery Methods By Emilia Barili; Paola Bertoli; Veronica Grembi
  22. Termination of Employment Contracts by Mutual Consent and Labor Market Fluidity By Cyprien Batut; Eric Maurin
  23. Parental divorce homogamy and its effect on separation from cohabitation and marriage By Flagship, INVEST; Kailaheimo-Lönnqvist, Sanna; Fasang, Anette; Jalovaara, Marika; Struffolino, Emanuela

  1. By: Brancati, Emanuele; Brancati, Raffaele; Guarascio, Dario; Zanfei, Antonello
    Abstract: This paper analyzes the main drivers of external competitiveness in times of crisis for small and medium enterprises (SMEs). We focus on the Italian experience in the midst of the financial and sovereign-debt crisis, and present robust evidence based on a comprehensive survey of Italian companies in the manufacturing and production service sectors (the MET dataset). Overall, our results confirm the high degree of heterogeneity of the Italian system and the differences between internationalized and domestic companies in terms of performance as well as structural and behavioral dimensions. In particular, data highlight not only the strict correlation between internationalization and innovative activities but also a positive change of attitude of Italian firms towards these strategies. Our analysis shows that, whilst structural factors play a key role for external competitiveness, other critical firm-level aspects trigger superior performances, especially strategic profiles, technological capabilities, and proactive behaviors such as innovativeness and R&D investment. Importantly, we document disproportionate effects of innovation for smaller and less productive companies. This points at dynamic strategies as a potential tool to fill the gap between larger/more productive companies and the set of less structured firms, a segment representing an ideal target for policy measures.
    Keywords: SME,external competitiveness,Great Recession
    JEL: M20 L23 L25
    Date: 2020
  2. By: Gürtzgen, Nicole; Hiesinger, Karolin
    Abstract: This paper analyses the causal effects of weaker dismissal protection on the incidence of long-term sickness (> six weeks). We exploit a German policy change, which shifted the threshold exempting small establishments from dismissal protection from five to ten workers. Using administrative data, we find a significantly negative reform effect on transitions into long-term sickness in the second year after a worker has entered an establishment. This response is due to a behavioural, rather than a compositional effect and is particularly pronounced among medium-skilled males. Our results further indicate that the reform did not alter the probability of involuntary unemployment after sickness.
    Keywords: dismissal protection,long-term sickness,involuntary unemployment,difference-in-differences,administrative data,small establishments
    JEL: D02 I12 J28 J38 J88 J63 K31
    Date: 2020
  3. By: HINDRIKS Jean, (Université catholique de Louvain, CORE, Belgium); SERSE Valerio, (Université catholique de Louvain, CORE, Belgium)
    Abstract: In April 2014, the Belgian government reduced the VAT rate on the electricity price from 21% to 6%. In September 2015, however, this tax cut was repealed, and the VAT rate was reinstated to 21%. This paper investigates the impact of such temporary exogenous VAT reform on the Belgian electricity market. We study both the pass-through of the VAT reform to electricity prices and the effect of this (exogenous) price change on electricity consumption. We estimate the VAT pass-through by a difference-in-differences approach using business electricity prices (not subject to VAT) as a control group. To estimate the impact of the VAT change on demand, we perform an event study on the electricity flowed monthly over the grid at the network operator level. Our findings reveal that both the tax cut and the tax hike were entirely shifted to the electricity price (i.e., 100%). Exploiting different sources of price variation, our results reveal a price elasticity of residential demand for electricity between -0.09 and -0.17. Interestingly, we also find that consumption reacted quickly and symmetrically to the VAT cut and the subsequent VAT hike.
    Keywords: tax incidence, VAT reform, demand elasticity, electricity markets
    JEL: H21 H22 H23 Q41 Q48
    Date: 2020–02–11
  4. By: Emilia Barili; Paola Bertoli; Veronica Grembi
    Abstract: Fee equalization in health care brings under a unique tariff several medical treatments, coded under different Diagnosis Related Groups (DRGs). The aim is to improve healthcare quality and efficiency by discouraging unnecessary, but better-paid, treatments. We evaluate its effectiveness on childbirth procedures to reduce overuse of c-sections by equalizing the DRGs for vaginal and cesarean deliveries. Using data from Italy and a difference-in-differences approach, we show that setting an equal fee decreased c-sections by 2.5%. This improved the appropriateness of medical decisions, with more low-risk mothers delivering naturally and no significant changes in the incidence of complications for vaginal deliveries. Our analysis supports the effectiveness of fee equalization in avoiding c-sections, but highlights the marginal role of financial incentives in driving c-section overuse. The observed drop was only temporary and in about a year the use of C-section went back to the initial level. We found a greater reduction in lower quality, more capacity-constrained hospitals. Moreover, the effect is driven by districts where the availability of Ob-Gyn specialists is higher and where women are predominant in the gender composition of Ob-Gyn specialists.
    Keywords: fee equalization, Cesarean sections, difference in differences;
    JEL: K13 K32 I13
    Date: 2020–08
  5. By: Bastian Schulz; Fabian Siuda
    Abstract: Marriage and divorce decisions are influenced by the institutional environment they are made in. One example is the social insurance system, which acts as a substitute for within-household insurance against economic shocks. In this paper, we quantify the importance of household-level insurance for marriage and divorce by exploiting an exogenous increase in the need for risk sharing: in January 2003, a German labor market reform sharply reduced means-testing exemptions in the unemployment insurance system and thereby increased the extent to which spouses have to insure each other against unemployment. Using social security register data, we show that the extent to which (potential) spouses were affected by this reform varies with nationality. We them follow a differences-in-differences identification strategy and use data on all marriages and divorces in Germany between 1997 and 2013 to show that increased means testing made the formation of interethnic marriages significantly less attractive. At the same time, the reform increased the stability of newly-formed interethnic marriages.
    Keywords: marriage, divorce, interethnic marriage, risk sharing, unemployment insurance, labor market reforms, EU expansion
    JEL: J10 J12 J15 J64 J65
    Date: 2020
  6. By: Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger
    Abstract: This paper investigates whether the COVID-19 crisis has affected the way we think about (political) institutions, as well as our broader (policy) attitudes and values. We fielded large online survey experiments in Italy, Spain, Germany and the Netherlands, well into the first wave of the epidemic (May-June), and included outcome questions on trust, voting intentions, policies & taxation, and identity & values. With a randomised survey ow we vary whether respondents are given COVID-19 priming questions first, before answering the outcome questions. With this treatment design we can also disentangle the health and economic effects of the crisis, as well as a potential “rally around the ag” component. We find that the crisis has brought about severe drops in interpersonal and institutional trust, as well as lower support for the EU and social welfare spending financed by taxes. This is largely due to economic insecurity, but also because of health concerns. A rallying effect around (scientific) expertise combined with populist policies losing ground forms the other side of this coin, and suggests a rising demand for competent leadership.
    Keywords: COVID-19, social trust, institutional trust, survey experiment, European Union, welfare, health, taxation, accountability, populism, values
    JEL: D72 H51 H53 H55 O52 P52
    Date: 2020
  7. By: Mathias Huebener; Sevrin Waights; C. Katharina Spiess; Nico A. Siegel; Gert G. Wagner
    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: D10 H12 H75 I20
    Date: 2020
  8. By: Hernández, Adrián; Picos, Fidel; Riscado, Sara
    Abstract: Minimum income schemes are set to provide citizens with a minimum living standard. In Spain, these schemes consist of a heterogeneous and complex collection of regional benefits designed and implemented by the Autonomous Communities. This generates important regional discrepancies among the poorest individuals, undermining equal access, adequate social assistance and ultimately the fairness of these last resort safety nets. Following the recent initiative by the central government to introduce a national minimum income scheme complementing the regional ones, a better understanding of the performance of the existing regional minimum income schemes, in terms of their coverage and adequacy, is of the essence. We assess the budgetary, distributional and poverty effects of the current Spanish regional minimum income schemes, as well as the impact of increasing both coverage rates and adequacy levels. Using the European microsimulation model EUROMOD together with microdata from the European Union Statistics on Income and Living Conditions, we simulate a sequence of theoretical scenarios with different combinations of coverage and adequacy levels using national and regional poverty lines as references. Our results suggest that increasing adequacy would have a higher impact on poverty rates than increasing coverage, but would be less effective to reduce poverty intensity. Importantly, all scenarios imply significant expenditure increases, the more so for larger decreases in poverty intensity, as would be expected. Noticeably, results greatly differ among regions, and are sensitive to measuring poverty under a national or a regional criterion, reflecting Spanish regional disparities in terms of poverty.
    Date: 2020–07–31
  9. By: Mauro Caselli (School of International Studies & Department of Economics and Management, University of Trento); Paolo Falco (Department of Economics, University of Copenhagen, Denmark)
    Abstract: How does demand for migrant vs native workers change with price? We conduct an experiment with 56,000 Danish households (over 2 percent of all households in the country), who receive an advertisement from a cleaning company whose operators vary randomly across areas but meet the same quality standards and have equal customer ratings. When the operator has a migrant background, we find that demand is significantly lower than when the operator is a native. The gap, however, is highly sensitive to price, with demand for the migrant increasing steeply as the price falls. For an hourly pay close to the 25th percentile of the earnings distribution in similar occupations (24 USD per hour), demand for the migrant is one-fifth of the demand for the native. A 25 percent reduction in the price makes the gap in demand disappear.
    Keywords: Migrants, discrimination, experiment, labour market integration, consumer preferences
    JEL: C93 J23 J61 J71
    Date: 2020–09
  10. By: Ingo E. Isphording; Nico Pestel
    Abstract: We study the impact of short-term exposure to ambient air pollution on the spread and severity of COVID-19 in Germany. We combine data on county-by-day level on confirmed cases and deaths with information on local air quality and weather conditions and exploit short-term variation in the concentration of particulate matter (PM10) and ozone (O3). We apply fixed effects regressions controlling for global time-varying confounding factors and regional time-invariant confounding factors on the county level, as well as potentially confounding weather conditions and the regional stage of the pandemic. We find significant positive effects of PM10 concentration after the onset of the illness on COVID-19 deaths specifically for elderly patients (80+ years): higher levels of air pollution by one standard deviation 3 to 12 days after developing symptoms increase deaths by 30 percent (males) and 35 percent (females) of the mean. In addition, air pollution raises the number of confirmed cases of COVID-19. The timing of results supports mechanisms of air pollution affecting the severity of already realized infections. Air pollution appears not to affect the probability of infection itself.
    Keywords: COVID-19, health, air pollution, Germany
    JEL: I12 I18 Q53
    Date: 2020
  11. By: Renske Stans
    Abstract: In this paper I present causal evidence that a relatively mild event of family distress can have lasting negative consequences in a context with high-stakes standardized testing. I investigate how children's educational outcomes are a ected by experiencing a common form of family distress - the death of a grandparent - shortly before taking a test that co-determines secondary school track placement. I employ administrative registers from the Netherlands that allow me to obtain causal estimates by exploiting the quasi-random timing of death with respect to the track placement test. The ndings show that grandparental loss at an unfortunate time leads to reduced test performance, and consequently an increased likelihood of attending or graduating from the lowest track of secondary education. These negative e ects on secondary school outcomes are further aggravated by the subjective teacher recommendation, as children who lost a grandparent receive a lower track recommendation. The possibility to participate in a makeup test and switch tracks later-on mitigates part of the negative e ects, although it is not able to fully o set the initial setback. The ndings underline the importance of understanding the interaction between the educational setup and family distress for ensuring educational equality of opportunity.
    Keywords: education system, equality of opportunity, family distress
    JEL: I21 I24 I31 J13
    Date: 2020–08
  12. By: Nisén, Jessica; Klüsener, Sebastian; Dahlberg, Johan; Dommermuth, Lars; Jasilioniene, Aiva; Kreyenfeld, Michaela; Lappegård, Trude; Li, Peng; Martikainen, Pekka; Neels, Karel; Riederer, Bernhard; te Riele, Saskia; Szabó, Laura; Trimarchi, Alessandra; Viciana, Francisco; Wilson, Ben; Myrskylä, Mikko
    Abstract: Educational differences in female cohort fertility vary strongly across high-income countries and over time, but knowledge about how educational fertility differentials play out at the sub-national regional level is limited. Examining these sub-national regional patterns might improve our understanding of national patterns, as regionally varying contextual conditions may affect fertility. This study provides for the first time for a large number of European countries a comprehensive account of educational differences in the cohort fertility rate (CFR) at the sub-national regional level. We harmonise data from population registers, censuses, and large-sample surveys for 15 countries to measure women’s completed fertility by educational level and region of residence at the end of the reproductive lifespan. In order to explore associations between educational differences in CFRs and levels of economic development, we link our data to regional GDP per capita. Empirical Bayesian estimation is used to reduce uncertainty in the regional fertility estimates. We document an overall negative gradient between the CFR and level of education, and notable regional variation in the gradient. The steepness of the gradient is inversely related to the economic development level. It is steepest in the least developed regions and close to zero in the most developed regions. This tendency is observed within countries as well as across all regions of all countries. Our findings underline the variability of educational gradients in women’s fertility, suggest that higher levels of development may be associated with less negative gradients, and call for more in-depth sub-national-level fertility analyses by education.
    Keywords: cohort fertility; education; empirical Bayesian; Europe; fertility rate; sub-national region; 336475 (COSTPOST)
    JEL: J1
    Date: 2020–08–10
  13. By: Dovern, Jonas; Müller, Lena Sophia; Wohlrabe, Klaus
    Abstract: Expectations are highly relevant for macroeconomic dynamics. Yet, the empirical evidence about properties of corporate macroeconomic expectations is scarce. Using new survey data on quantitative growth expectations of firms in Germany, we show that expectations are highly dispersed. The degree of dispersion depends on firm size and on how important the general economy is for the business of firms, supporting theories of rational inattention. Firms seem to extrapolate from local economic conditions and business experiences to aggregate growth expectations. Differences in growth expectations are associated with di erences in firms' Investment and labor demand.
    Keywords: GDP expectations,expectation heterogeneity,firm,ifo business tendency survey
    JEL: D84 E32
    Date: 2020
  14. By: Nivorozhkin, Anton (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Promberger, Markus (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "We discuss the design and examine the inflow of participants in two new subsidised employment programmes (§ 16 e/i German Social Code II) that aim to help long-term welfare recipients in Germany to find a job and increase their social participation. We describe the programmes in terms of goals and eligibility criteria and proceed to analyse recent inflows into the programmes using Latent Class (Cluster) Analysis in an exploratory manner. Our findings provide evidences on the considerable heterogeneity in the programmes' inflows. The resulting typology does not only connect individual biographical and socioeconomic characteristics with greater sociohistorical processes, but give strong hints towards different needs of the various participant groups which could be treated differently in the programmes. Keeping up and improving social integration through subsidized labour is a high priority treatment to be considered for some participant groups, while others should be considered more for improvements of education and professional training, even if their biographies so far show most distance to both. Our results provide first guidance on how to adjust programme's design to the needs and capabilities of heterogeneous groups of long-term unemployed and welfare benefit recipients." (Author's abstract, IAB-Doku) ((en))
    JEL: C38 J08
  15. By: Paprotny, Dominik (GFZ German Research Centre for Geosciences); Kreibich, Heidi; Morales-Nápoles, Oswaldo; Castellarin, Attilio; Carisi3, Francesca; Schröter, Kai
    Abstract: Commercial assets comprise buildings, machinery and equipment, which are susceptible to floods. Existing damage models and exposure estimation methods for this sector have limited transferability between flood events. In this study we introduce two methodologies aiming at broader applicability: (1) disaggregation of economic statistics to obtain detailed building-level estimates of replacement costs of commercial assets; (2) a Bayesian Network-based (BN) damage model to estimate relative losses to the aforementioned assets. The BN model is based primarily on six post-disaster company surveys carried out in Germany after flood events that had occurred between 2002 and 2013, which is a unique source of microdata on commercial losses. The model is probabilistic and provides probability distributions of estimated losses, and as such quantitative uncertainty information. The BN shows good accuracy of predictions of building losses, though overestimates machinery/equipment loss. To test its suitability for pan-European flood modelling, the BN was applied to validation case studies, comprising a coastal flood in France (2010) and fluvial floods in Saxony (2013) and Italy (2014) are presented as well. Overall difference between modelled and reported average loss per company was only 2–19% depending on the case study. Additionally, the BN model achieved better results than six alternative damage models in those (except for one model in the Italian case study). Further, our exposure estimates mostly resulted in better predictions of the damage models compared to previously published pan-European exposure data, which tend to overestimate exposure. All in all, the methods allow easy modelling of commercial flood losses in the whole of Europe, since they are applicable even if only publicly-available datasets are obtainable. The methods achieve a higher accuracy than alternative approaches, and inherently provide uncertainty information, which is particularly valuable for decision making under high uncertainty.
    Date: 2020–06–26
  16. By: Costa-Font, Joan; Zigante, Valentina
    Abstract: The design of public subsidies for long-term care (LTC) programmes to support frail, elderly individuals in Europe is subject to both tight budget constraints and increasing demand preassures for care. However, what helps overcoming the constraints that modify LTC entitlements? We provide a unifying explanation of the conditions that facilitate the modifcation of public fnancial entitlements to LTC. We build on the concept of ‘implicit partnerships’, an implicit (or ‘silent’) agreement, encompassing the fnancial co-participation of both public funders, and families either by both allocating time and/or fnancial resources to caregiving. Next, we provide suggestive evidence of policy reforms modifying public entitlements in seven European countries which can be classifed as either ‘implicit user partnerships’ or ‘implicit caregiver partnerships’. Finally, we show that taxpayers attitudes mirror the specifc type of implicit partnership each country has adopted. Hence, we conclude that the modifcation of long-term care entitlements require the formation of some type of ‘implicit partnership’.
    Keywords: implicit partnership; user partnership; caregiver partnership; partial insurance; cost sharing; long-term care; financial sustainability; family; Europe; Springer
    JEL: E6
    Date: 2020–09–07
  17. By: Leduc, Elisabeth (Free University of Brussels); Tojerow, Ilan (Free University of Brussels)
    Abstract: European countries have increasingly adopted wage subsidies for the sector of domestic services to reduce low-skilled unemployment. Yet, empirical evidence on their effectiveness is scarce. In this paper, we use Belgian administrative data to estimate how participation in the subsidized domestic services sector impacts the labour market outcomes of program participants. Our identification strategy rests on a dynamic event study difference-in-differences model combined with coarsened exact matching. Our findings indicate that such subsidies can be effective in reducing unemployment and inactivity, but only by increasing employment within the subsidized domestic services sector. We also find that program participation deteriorates physical health, thus increasing the worker's probability of claiming disability insurance benefits.
    Keywords: wage subsidies, low-skilled workers, unemployment, disability, domestic services, personal and household services, female employment
    JEL: J08 J24 J28 J38
    Date: 2020–07
  18. By: Colombino, Ugo (University of Turin); Islam, Nizamul (LISER (CEPS/INSTEAD))
    Abstract: We present an extension of the numerical approach to empirical optimal taxation allowed by a peculiar structure of a microeconometric model of labour supply that includes a representation of the demand side. This makes it possible to identify optimal tax-transfer rules while accounting for equilibrium constraints and to evaluate the effects of exogenous labour demand shocks. We provide illustrative examples using the 2015 EU-SILC data set for Italy.
    Keywords: empirical optimal taxation, microsimulation, microeconometrics, evaluation of tax-transfer rules, equilibrium, labour demand shocks
    JEL: H21 C18
    Date: 2020–07
  19. By: Andres, Raphaela; DeStefano, Timothy; Niebel, Thomas; Viete, Steffen
    Abstract: The following paper assesses whether current policy environments are appropriate for the emergence of cloud computing technology. In particular, this research uses firm-level data for Germany and the UK to examine the impact of capital incentive programmes (a common policy present in most OECD countries) on cloud adoption. The design for many of these policies target investments in physical capital while excluding digital services like the cloud. Firms view digital investments and digital services as substitutes, therefore narrowly define dincentive programmes may actually discourage the use of emerging tools like cloud computing, which are found to enable the growth and performance of young entrants. Overall, the results find that while capital incentive policies encourage firm investments in ICT and other forms of capital, they actually reduce the probability of cloud adoption. Policy makers may therefore need to reconsider the design of capital incentive programmes within their jurisdictions.
    Keywords: Cloud Computing,Investment Scheme,ICT Adoption,Technology Diffusion,Policy Evaluation
    JEL: L22 O33
    Date: 2020
  20. By: Timo Mitze; Reinhold Kosfeld; Johannes Rode; Klaus Wälde
    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 wearing of face masks became mandatory in public transport and sales shops. Depending on the region we consider, we find that face masks reduced the number of newly registered SARS‐CoV‐2 infections between 15% and 75% over a period of 20 days after their mandatory introduction. Assessing the credibility of the various estimates, we conclude that face masks reduce the daily growth rate of reported infections by around 47%.
    Keywords: Covid-19, public health measures, face masks, synthetic control method
    Date: 2020
  21. By: Emilia Barili; Paola Bertoli; Veronica Grembi
    Abstract: We investigate potential mechanisms of information transmission among patients when explaining territorial variations in the use of cesarean sections. Defining networks as mothers living in the same Italian municipality (average size approximately 10,000 residents), we show that a one standard deviation increase of the incidence of cesarean sections for the 12 months before the delivery date in the future mother’s municipality of residence increases the probability of her receiving the treatment by 3%. This result captures mainly network effects for Italian mothers, while it captures both network and neighborhood effects for foreign mothers. Both groups adjust for the transmission of complementary information, such as the incidence of complications due to cesarean sections. The selection of mothers across hospitals does not uniquely explain our results, which are robust to alternative sample selections.
    Keywords: cesarean sections; networks; neighborhood effects;
    JEL: I1 I12
    Date: 2020–09
  22. By: Cyprien Batut (Paris School of Economics); Eric Maurin (Paris School of Economics)
    Abstract: In many countries, the termination of employment contracts has to be either on employer initiative or on employee initiative. In 2008, the French government introduced a change in doctrine: it became possible to terminate employment contracts by mutual consent at a lower cost. We show that the reform was followed by a very significant increase of about 20% in outflow of permanent workers as well as by the replacement of around 10% of dismissals for cause by terminations by mutual consent. By promoting terminations by mutual consent, the reform has improved labor market fluidity and reduced the risks of labor disputes.
    Keywords: employment termination, dismissal, quit, labor litigation, severance payment
    JEL: J23 J52 J63
    Date: 2020–05
  23. By: Flagship, INVEST; Kailaheimo-Lönnqvist, Sanna; Fasang, Anette; Jalovaara, Marika; Struffolino, Emanuela
    Abstract: Numerous studies have shown that parental divorce increases children’s divorce risk. We extend this literature by assessing how parental divorce on both sides of a (potential) couple affects their partnering dynamics. Specifically, we explore 1) whether there is parental divorce homogamy and whether the parental divorce of both partners adds to the dissolution of both 2) cohabiting and 3) married unions. Our analyses use event history models on high-quality Finnish Census Panel data covering 28,021 cohabiting and marital partnerships between ages 18 and 45. We found substantial parental divorce homogamy in that children who experienced parental divorce are 13% more likely to cohabit with and 17% more likely to marry a fellow child of divorce. Moreover, contrary to evidence from the United States and Norway, our findings for Finland support an additive, not a multiplicative, effect. Here, both partners’ parental divorce increases their offspring’s dissolution risk by 20% for cohabitation and 70% for marriage compared to couples where neither of their parents are divorced. We conclude that parental divorce on both sides of a couple affects family formation processes at multiple stages. In Finland, these effects are notably less than previously found in the United States. This is likely because cohabitation and separation are wide-spread and socially accepted in Finland and an expansive welfare state buffers the socio-economic consequences of divorce.
    Date: 2020–08–21

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