nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒10‒05
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Endogenous Emission Caps Always Produce a Green Paradox By Gerlagh, Reyer; Hejimans, Roweno J. R. K.; Rosendahl, Knut Einar
  2. Determinants of smart energy tracking application use at the city level: Evidence from France By Amel Attour; Marco Baudino; Jackie Krafft; Nathalie Lazaric
  3. The Evolution of First-Generation Immigrants' Political Preferences in Western Europe By Gonnot, Jérôme
  4. Public officials’ treatment of minority clients By Adman, Per; Larsson Taghizadeh, Jonas
  5. Employment Reallocation over the Business Cycle: Evidence from Danish Data By Bertheau, Antoine; Bunzel, Henning; Vejlin, Rune Majlund
  6. Europe Beyond Coal – An Economic and Climate Impact Assessment By Böhringer, Christoph; Rosendahl, Knut Einar
  7. Drop-out decisions in a cohort of Italian university students By M. Delogu; D. Paolini; G. Atzeni; LG Deidda
  8. Recruiting Intensity and Hiring Practices: Cross-Sectional and Time-Series Evidence By Lochner, Benjamin; Merkl, Christian; Stüber, Heiko; Gürtzgen, Nicole
  9. Flexible Work Arrangements in Low Wage Jobs: Evidence from Job Vacancy Data By Adams-Prassl, Abigail; Balgova, Maria; Qian, Matthias
  10. Fear and Employment During the COVID Pandemic: Evidence from Search Behaviour in the EU By VAN DER WIELEN Wouter; BARRIOS Salvador
  11. Interactions in Public Policies: Spousal Responses and Program Spillovers of Welfare Reforms By Johnsen, Julian Vedeler; Willén, Alexander; Vaage, Kjell
  12. The Expected (Signaling) Value of Higher Education By Laura Ehrmantraut; Pia Pinger; Renske Stans
  13. Do girls choose science when exposed to female science teachers? By Aalto, Aino-Maija
  14. School disruption and pupil academic outcomes – evidence from the 2001 foot and mouth disease epidemic in England By Cook, Will
  15. The Dutch Labour Market Early on in the COVID-19 Outbreak: Regional Coronavirus Hotspots and the National Lockdown By Hassink, Wolter; Kalb, Guyonne; Meekes, Jordy
  16. Industrial Robots, Workers' Safety, and Health By Gihleb, Rania; Giuntella, Osea; Stella, Luca; Wang, Tianyi
  17. Socioeconomic Integration through Language: Evidence from the European Union By Daniel Reiter
  18. Corporate Profit Misalignment: Evidence from German Headquarter Companies and Their Foreign Affiliates By Petr Jansky; Sarah Godar
  19. The Long-Term Consequences of a Golden Nest By Angelini, Viola; Bertoni, Marco; Weber, Guglielmo
  20. Hartz and Minds: Happiness Effects of Reforming an Employment Agency By Max Deter
  21. Automation, trade and multinational activity: Micro evidence from Spain By Katherine Stapleton; Michael Webb
  22. Tuition Fees and Educational Attainment By Jan Bietenbeck; Jan Marcus; Felix Weinhardt
  23. Trends in Absolute Income Mobility in North America and Europe By Manduca, Robert; Hell, Maximilian; Adermon, Adrian; Blanden, Jo; Bratberg, Espen; Gielen, Anne C.; van Kipepersluis, Hans; Lee, Keun Bok; Machin, Stephen; Munk, Martin D.; Nybom, Martin; Ostrovsky, Yuri; Rahman, Sumaiya; Sirniö, Outi

  1. By: Gerlagh, Reyer (Department of Economics, Tilburg University); Hejimans, Roweno J. R. K. (Department of Economics, Tilburg University); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists an allowances-demand reducing policy that increases aggregate supply and thus cumulative emissions. We establish this green paradox in a general model and apply the insights to the Market Stability Reserve (MSR) in the EU ETS, implemented in 2018. We show that demand-reducing policies announced in early periods but realized in the future, such as decisions to phase out coal power, can be inverted by the new rules: they may increase cumulative emissions. We provide quantitative evidence of our result for a model disciplined on the price rise in the EU ETS that followed the introduction of the MSR. Our results point to the need for better coordination between different policies in the "European Green Deal" proposed by the European Commission late 2019.
    Keywords: Emissions trading; Green paradox; EU ETS; environmental policy; dynamic modeling
    JEL: D59 E61 H23 Q50 Q54 Q58
    Date: 2020–05–08
  2. By: Amel Attour (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique); Marco Baudino (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique); Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the determinants of smart energy tracking app usage by citizens residing in French cities. Our framework is inspired by the extant strands of literature on smart cities and smart home technology adoption, but also contributing to them as smart energy applications reveal specificities that need to be incorporated; the latter include, for instance, the distinction between adoption and frequency of use, or the consideration of additional determinants such as privacy or environmental concerns. For our study, we build an original survey and rely upon citizen-level data, testing a Zero-Inflated Ordered Probit (ZIOP) model which allows to differentiate between adoption of the smart energy app and its frequency of utilisation. Our empirical findings reveal how the drivers related to smart city characteristics mainly affect the decision of adoption of energy tracking apps. Conversely, the more individual characteristics related to the perceived benefits of using energy tracking apps, dwelling type, and privacy concerns, primarily affect the frequency of utilisation. Our results bear policy implications on the issue of privacy, premising additional research on energy challenges in the utilization of energy apps in smart versus non-smart environments.
    Date: 2020–12
  3. By: Gonnot, Jérôme
    Abstract: This paper documents the evolution of a range of political preferences among first-generation immigrants in Western Europe. The overall aim is to study to what extent and at what pace immigrants adapt to the political norms that prevail in their host countries. I use a cross-national research strategy to compare and analyze attitudes of foreign-born individuals in 16 European countries and nd strong empirical support for assimilation over time: On average, the opinion gap between natives and immigrants' political preferences on redistribution, gay rights, EU unification, immigration policies, and trust level in national governments is reduced by 40% after 20 years of residence in the destination country. I also provide evidence that most of this assimilation is driven by immigrants from non-developed countries, and that convergence in political preferences varies significantly across immigrants' economic and cultural background as well as with the size of the immigrant group from their country of origin. Finally, I show that a substantial part of assimilation on gay rights, immigration and political trust is driven by acculturation at the national level where immigrants with longer tenure tend to adapt more to the political preferences of natives in their destination country. These findings shed new light on the timing and magnitude of the political assimilation of first-generation immigrants, with potentially important implications for the political economy of immigration policy.
    Date: 2020–09–14
  4. By: Adman, Per (Department of Government, Uppsala University,); Larsson Taghizadeh, Jonas (Department of Government, Uppsala University,)
    Abstract: The aim of this paper is to investigate the occurrence of discrimination based on ethnicity in public officials’ treatment of welfare clients. Previous research has confirmed the existence of ethnic discrimination, but we argue that further investigations are needed. Field experiments in the form of correspondence tests, as we use here, are in many ways appropriate for discovering discrimination. However, an ethnic minority background is often perceived to be associated with low socioeconomic status (SES), which most previous field experiments have not paid attention to. Hence, ethnic discrimination may have been confused with socioeconomic discrimination. Our research design provides possibilities to take this problem into consideration. Furthermore, the research design allows investigation of whether ethnic discrimination occurs primarily among individuals with certain SES levels, which is currently an open question in the literature. Discrimination is assessed through a field experiment in which one administrator at each Swedish municipality is randomly contacted by an individual with an Arabic-sounding or a Swedish-sounding name who is interested in moving to the municipality. We find no statistically significant signs of ethnic discrimination. Admittedly, this may be due to the limited sample size and not only to our efforts of separating ethnic and socioeconomic dimensions. Furthermore, no signs of ethnic discrimination occurring at any particular SES level are discovered.
    Keywords: ethnic discrimination; field experiment; Sweden; socioeconomic discrimination; correspondence test
    JEL: C93 D63 D73 D91 I24
    Date: 2020–09–10
  5. By: Bertheau, Antoine (University of Copenhagen); Bunzel, Henning (Aarhus University); Vejlin, Rune Majlund (Aarhus University)
    Abstract: We present new evidence on how employment growth varies across firm types (size, productivity, and wage) and over the business cycle using Danish data covering almost 30 years. We decompose net employment growth into two recruitment margins: net hirings from/to employment (poaching) and net hirings from nonemployment. High-productivity firms are the most growing firms due to poaching. High wage firms poach almost as many workers, but shed an almost equal amount to non-employment. Large firms do not poach workers from smaller firms. In terms of employment cyclicality, we find that low-productive and low-wage firms shed proportionally more jobs in recessions. We relate our findings to recent models of employment fluctuations that jointly analyze worker and firm dynamics.
    Keywords: worker flows, firm heterogeneity, matched employer-employee data, business cycle, equilibrium search models
    JEL: E24 E32 J63
    Date: 2020–09
  6. By: Böhringer, Christoph (Department of Business Administration, Economics and Law, University of Oldenburg); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: Several European countries have decided to phase out coal power generation. Emissions from electricity generation are already regulated by the EU Emissions Trading System (ETS), and in some countries like Germany the phaseout of coal will be accompanied with cancellation of emissions allowances. In this paper we examine the consequences of phasing out coal, both for the broader economy, the electricity sector, and for CO2 emissions. We show analytically how the welfare impacts for a phaseout region depend on i) whether and how allowances are canceled, ii) whether other countries join phaseout policies, and iii) terms-of-trade effects in the ETS market. Based on numerical simulations with a computable general equilibrium model for the European economy, we quantify the economic and environmental impacts of alternative phaseout scenarios, considering both unilateral and multilateral phaseout. We find that terms-of-trade effects in the ETS market play an important role for the welfare effects across EU member states. For Germany, coal phaseout combined with unilateral cancellation of allowances is found to be welfare-improving if the German citizens value emissions reductions at 65 Euro per ton or more.
    Keywords: Coal phaseout; emissions trading; electricity market
    JEL: D61 F18 H23 Q54
    Date: 2020–06–30
  7. By: M. Delogu; D. Paolini; G. Atzeni; LG Deidda
    Abstract: We study the determinants of student drop-out decisions using data on a cohort of over 230000 students enrolled in the Italian university system. We find that students who leave their homes to enrol at university (off-site students) drop out significantly less than those who study in their home town. We provide significant evidence that off-site students are a self-selected sample of the total population. Accordingly, we use an instrumental variable (IV) approach to identify the causal relationship. The IV estimation finds that studying off-site negatively affects drop-out decisions and more so for students growing up in the south of Italy who typically study off-site in the centre-north of Italy.
    Keywords: location choice;Instrumental Variable;Higher Education;DropOut
    Date: 2020
  8. By: Lochner, Benjamin (Institute for Employment Research (IAB), Nuremberg); Merkl, Christian (University of Erlangen-Nuremberg); Stüber, Heiko (University of Erlangen-Nuremberg); Gürtzgen, Nicole (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Using the German IAB Job Vacancy Survey, we look into the black box of recruiting intensity and hiring practices from the employers' perspective. Our paper evaluates three important channels for hiring —namely vacancy posting, the selectivity of hiring (labor selection), and the number of search channels— through the lens of an undirected search model. Vacancy posting and labor selection show a U-shape over the employment growth distribution. The number of search channels is also upward sloping for growing establishments, but relatively flat for shrinking establishments. We argue that growing establishments react to positive establishment-specific productivity shocks by using all three channels more actively. Furthermore, we connect the fact that shrinking establishments post more vacancies and are less selective than those with a constant workforce to churn triggered by employment-to-employment transitions. In line with our theoretical framework, all three hiring margins are procyclical over the business cycle.
    Keywords: administrative data, survey data, labor selection, vacancies, recruiting intensity
    JEL: E24 J63
    Date: 2020–09
  9. By: Adams-Prassl, Abigail (University of Oxford); Balgova, Maria (IZA); Qian, Matthias (University of Oxford)
    Abstract: In this paper, we analyze firm demand for flexible jobs by exploiting the language used to describe work arrangements in job vacancies. We take a supervised machine learning approach to classify the work arrangements described in more than 46 million UK job vacancies. We highlight the existence of very different types of flexibility amongst low and high wage vacancies. Job flexibility at low wages is more likely to be offered alongside a wage-contract that exposes workers to earnings risk, while flexibility at higher wages and in more skilled occupations is more likely to be offered alongside a fixed salary that shields workers from earnings variation. We show that firm demand for flexible work arrangements is partly driven by a desire to reduce labor costs; we find that a large and unexpected change to the minimum wage led to a 7 percentage point increase in the proportion of flexible and non-salaried vacancies at low wages.
    Keywords: flexible jobs, minimum wage, labor demand
    JEL: J23 J31 J80
    Date: 2020–09
  10. By: VAN DER WIELEN Wouter (European Commission - JRC); BARRIOS Salvador (European Commission - JRC)
    Abstract: The COVID-19 pandemic has inflicted an economic hardship unprecedented for the modern age. In this paper, we show that the health crisis and ensuing Great Lockdown, came with an unseen level of economic uncertainty. First, using a European dataset on country-level and regional internet searches, we document a substantial increase in people’s economic anxiety in the months following the coronavirus outbreak. Moreover, we observe a significant, coinciding slowdown in labour markets and (durable) consumption. Second, our analysis shows that the ensuing fear was significantly more outspoken in those EU countries hit hardest in economic terms. Finally, we show that economic anxiety during the Great Lockdown is similar or higher than during the Great Recession of 2007-2009. Unprecedented policy actions, such as the short-term working schemes implemented or reformed at the onset of the COVID crisis, however, do not seem to have mitigated overall economic anxiety.
    Keywords: COVID-19, economic uncertainty, employment, expectations, Google Trends
    Date: 2020–09
  11. By: Johnsen, Julian Vedeler (Center for Applied Research); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration); Vaage, Kjell (University of Bergen)
    Abstract: Anticipating the labor market effects of welfare reforms is difficult due to public policy interactions across programs and among household members. Specifically, changes to one program may affect individual take-up of other programs, and individual participation in specific programs may generate labor market responses from other household members. This paper exploits an early retirement reform in Norway to provide new insights into these interactions. We first show that the reform had a substantial impact on the labor supply of those individuals who were directly affected by the reform, reducing the probability of employment by more than 30 percent. We then demonstrate that the increased take-up of early retirement had an offsetting effect on the take-up of alternative social security programs. Next, we reveal that the reform had a negative indirect impact on the labor supply of spouses of individuals directly affected by the reform, with an effect size of 5.5 percent. Finally, we show that the indirect effect on spousal labor force participation is accompanied by a significant increase in spousal take-up of disability insurance. We conclude that neglecting how public policies interact across both programs and household members can result in a miscalculation of the total impact of welfare reforms.
    Keywords: Public Policy; Welfare Reform; Early Retirement
    JEL: H55 J14 J18 J26
    Date: 2020–09–23
  12. By: Laura Ehrmantraut (University of Bonn); Pia Pinger (University of Cologne and briq); Renske Stans (Erasmus University)
    Abstract: This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We conducted a survey among a large and diverse sample of students at different stages of higher education to elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a degree certificate. Our findings indicate substantial perceived returns to higher education. Moreover, using within-individual fixed effects models, we document substantial expected labor market returns from signaling, whereas perceived productivity-enhancing (human capital) returns seem to be less pronounced. Over the expected course of career, we find lasting education premia as well as evidence consistent with employer learning.
    Keywords: higher education, returns to education, signaling, educational attainment, licensing
    JEL: I21 I23 I26 J24 J31 J44 J32
    Date: 2020–09
  13. By: Aalto, Aino-Maija (SOFI, Swedish Institute for Social Research, Stockholm University.)
    Abstract: Same-gender teachers may affect educational preferences by acting as role models for their students. I study the importance of the gender composition of teachers in mathematics and science in lower secondary schools on the likelihood of continuing on math-intensive tracks in the next levels of education. I use population wide register data from Sweden and control for family fixed effects to account for sorting into schools. According to my results, if the share of female science teachers is increased from none to all, there is, if at all, only a slight positive effect on the likelihood of girls completing a STEM track at upper secondary school, while the probability of completing a math-intensive degree at university increases by 26 percent. There is no positive impact on the performance of students by the higher share of female science teachers. As only the likelihood of choosing science is affected, these results suggest that the effects indeed arise because female teachers of these subjects serve as role models for female students. However, compared to earlier studies, the effects found are very modest.
    Keywords: Role models; gender segregation; human capital; STEM
    JEL: J16 J24
    Date: 2020–08–27
  14. By: Cook, Will
    Abstract: The Covid-19 crisis has led to disruption to schooling across the world. Though it is recognized that pupils are suffering immediate learning loss, there exists a lack of understanding as to how this disruption might affect longer-term educational outcomes. This study considers this issue by examining the effect of school disruption in England due to restrictions put in place to manage the Foot and Mouth Disease epidemic in cattle in 2001. Using a difference in difference approach, I analyze whether primary schools that had been significantly disrupted by the epidemic experienced lower performance in standardized tests in English, maths and science for 11 year olds in the year of the outbreak and in subsequent years. I find that primary schools that had been significantly disrupted by the measures to contain the epidemic exhibited achievement falls in the year immediately after the outbreak, driven by sizeable falls in maths performance. The negative effects weaken in subsequent years suggesting that the effects of school disruption may fade out as cohorts progress through schooling.
    Keywords: Covid, school disruption
    JEL: I21
    Date: 2020–07–22
  15. By: Hassink, Wolter (Utrecht University); Kalb, Guyonne (Melbourne Institute of Applied Economic and Social Research); Meekes, Jordy (University of Melbourne)
    Abstract: We explore the impact of COVID-19 hotspots and regional lockdowns on the Dutch labour market. Using weekly administrative panel microdata for 50 per cent of Dutch employees until the end of March 2020, we study whether individual labour market outcomes, as measured by employment, working hours and hourly wages, were more strongly affected in provinces where COVID-19 confirmed cases, hospitalizations and mortality were relatively high. We do not observe a region-specific impact of COVID-19 on labour market outcomes. The results suggest individual characteristics are more important, including the employee's age, type of contract and type of job. The evidence suggests that the decline of the labour market was all due to the impacts from the government-enforced lockdown and higher virus case numbers did not reinforce this decline. This suggests that preventive health measures should be at the regional level, isolating hotspots from low-risk areas.
    Keywords: COVID-19, coronavirus hotspots, lockdown, employment, working hours, wages
    JEL: I15 I18 J20 J30 J64
    Date: 2020–09
  16. By: Gihleb, Rania (University of Pittsburgh); Giuntella, Osea (University of Pittsburgh); Stella, Luca (Catholic University Milan); Wang, Tianyi (University of Copenhagen)
    Abstract: This study explores the relationship between the adoption of industrial robots and workplace injuries using data from the United States (US) and Germany. Our empirical analyses, based on establishment-level data for the US, suggest that a one standard deviation increase in robot exposure reduces work-related injuries by approximately 16%. These results are driven by manufacturing firms (-28%), while we detect no impact on sectors that were less exposed to industrial robots. We also show that the US counties that are more exposed to robot penetration experience a significant increase in drug- or alcohol-related deaths and mental health problems, consistent with the extant evidence of negative effects on labor market outcomes in the US. Employing individual longitudinal data from Germany, we exploit within-individual changes in robot exposure and document similar effects on job physical intensity (-4%) and disability (-5%), but no evidence of significant effects on mental health and work and life satisfaction, consistent with the lack of significant impacts of robot penetration on labor market outcomes in Germany.
    Keywords: work-related health risks, robot-exposure
    JEL: I10 J0
    Date: 2020–09
  17. By: Daniel Reiter (University of Graz, Austria)
    Abstract: In this paper, I explore the role of language for a sustainable socioeconomic integration of migrants in the European Union. Building upon insights concerning the emergence of shared mental models through social learning mechanisms, I argue that language is substantial, not only for simple communication, but also to effectively transmit and decrypt expectations, opinions and ideas. This is of considerable importance for integration processes, since shared mental models enables a common interpretation of reality, which facilitates any further social interaction. This works all the more smoothly if individuals originate from the same sociocultural background and share a common language. If not, as in case of migration, immigrants as well as natives face several issues. Some of this I demonstrate empirically with data from the European Union Labour Force Survey. I show that for first-generation male and female migrants within the EU, language problems significantly reduce the probability to be in paid work. Additionally, they increase the probability to be overqualified.
    Keywords: Shared mental models; Language skills; Migrants; Labour market participation; Overqualification.
    JEL: C36 J15 Z13
    Date: 2020–09
  18. By: Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic); Sarah Godar (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic; Berlin School of Economics and Law, Berlin)
    Abstract: Despite numerous data challenges, economists have established that the multinational corporations’ reported profits are not well aligned with their economic activity across countries. However, uncertainties remain about the extent and patterns of this misalignment. We fill in this gap for German-based multinational corporations and their foreign affiliates. We use the data collected by the Deutsche Bundesbank, which include confidential data on foreign direct investments and a combination of confidential and publicly available balance sheet data. We find that the world’s tax havens attract a considerably higher share of German multinational corporations’ profit than economic activity, while in Eastern European countries, most developing countries and some big European countries reported profits are much lower than economic activity would suggest. We also find that the most important tax haven is the Netherlands, followed by other EU tax havens of Cyprus, Ireland, Luxembourg and Malta.
    Keywords: multinational corporations; profit misalignment; tax havens; Germany
    JEL: F21 F23 H25
    Date: 2020–09
  19. By: Angelini, Viola (University of Groningen); Bertoni, Marco (University of Padova); Weber, Guglielmo (University of Padova)
    Abstract: We study the role played by the standard of living during childhood on nest leaving. Using data from SHARE, we show empirically that individuals who grew up in a golden nest leave the parental home later and that education only partially mediates this effect. This relationship holds across different cultures, for both males and females, urban and rural residents. We then use a 3-period lifecycle model to show that this behaviour is consistent with standard assumptions on preferences and resources if earnings increase with age, and that habit-forming preferences reinforce the delaying effect of a golden nest on nest leaving.
    Keywords: nest leaving, socio-economic status, habit-forming preferences, intergenerational mobility, SHARE
    JEL: J12 J13 J62
    Date: 2020–09
  20. By: Max Deter
    Abstract: Since the labor market reforms around 2005, known as the Hartz reforms, Germany has experienced declining unemployment rates. However, little is known about the reforms’ effect on individual life satisfaction of unemployed workers. This study applies difference-in-difference estimations and finds a decrease in life satisfaction after the reforms that is more pronounced for male unemployed in west Germany. The effect is driven by income and income satisfaction, but not by the unemployment rate. Also unemployed persons who exogenously lost their jobs are affected by the reforms. In line with the structure of the reforms, the effect is stronger on long-term and involuntarily unemployed persons.
    Keywords: Unemployment, Hartz reforms, happiness, SOEP
    JEL: E24 I31 J64
    Date: 2020
  21. By: Katherine Stapleton; Michael Webb
    Abstract: We use a rich dataset of Spanish manufacturing firms from 1990 to 2016 to shed new light on how automation in a high-income country affects trade and multinational activity involving lower-income countries. We exploit supply-side improvements in the capabilities of robots over time, as described in patents, that made it technically feasible to automate some specific tasks. We show that, contrary to the speculation that automation will cause reshoring, the use of robots in Spanish firms actually had a positive impact on their imports from, and number of affiliates in, lower-income countries. Robot adoption causes firms to expand production, increase productivity and makes them more likely to start importing from, or opening affiliates in, lower-income countries. The sequencing of automation and offshoring has important consequences for the impact of automation, however. For firms that had not already offshored to lower-income countries, robot adoption made them more likely to start doing so. By contrast, for firms that were already offshoring to lower-income countries, robot adoption had no effect on their value of imports from lower-income countries, but decreased their share of imports sourced from lower-income countries. We show that these findings can be explained in a framework that incorporates firm heterogeneity, the choice between automation, offshoring and performing tasks at home and where automation and offshoring both involve upfront fixed costs, such that their sequencing matters.
    Keywords: Automation; Robotics; Technology; Offshoring; Trade; Multinationals; Global supply chains; Heterogeneous firms; Labour share; Productivity
    JEL: F12 F16 J23 J24
    Date: 2020
  22. By: Jan Bietenbeck; Jan Marcus; Felix Weinhardt
    Abstract: Following a landmark ruling by the Constitutional Court in 2005, more than half of Germany’s universities started charging tuition fees, which also applied to incumbent students. We exploit this unusual lack of grandfathering together with register data covering the universe of students to show that tuition fees increased degree completion among incumbent students. Investigating mechanisms, we do not find that educational quality changed but that incumbent students raised their study effort. In line with previous international evidence, we also find that tuition fees decreased university enrollment among high school graduates. Combining our results, we show that tuition fees did not change overall educational attainment much because the positive effect on degree completion offset the negative effect on enrollment. We conclude by discussing policies to increase overall attainment, which take into account the opposing effects of fees around the zero-price margin.
    Keywords: tuition fees, higher education
    JEL: I23 I22 I28
    Date: 2020
  23. By: Manduca, Robert (Department of Sociology, University of Michigan); Hell, Maximilian (Department of Sociology, Stanford University); Adermon, Adrian (IFAU - Institute for Evaluation of Labour Market and Education Policy); Blanden, Jo (Department of Economics, University of Surrey); Bratberg, Espen (Department of Economics, University of Bergen); Gielen, Anne C. (Erasmus School of Economics); van Kipepersluis, Hans (Erasmus School of Economics); Lee, Keun Bok (California Center for Population Research,); Machin, Stephen (Department of Economics, London School of Economics); Munk, Martin D. (The Free University, Copenhagen); Nybom, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Ostrovsky, Yuri (Statistics Canada); Rahman, Sumaiya (Frontier Economics); Sirniö, Outi (Department of Sociology, University of Turku)
    Abstract: We compute rates of absolute upward income mobility for the 1960-1987 birth cohorts in eight countries in North America and Europe. Rates and trends in absolute mobility varied dramatically across countries during this period: the US and Canada saw upward mobility rates near 50% for recent cohorts, while countries like Norway and Finland saw sustained rates above 70%. Decomposition analysis suggests that differences in the marginal income distributions, especially the amount of cross-cohort income inequality, were the primary driver of differing mobility rates across countries. We also demonstrate that absolute mobility rates can be accurately estimated without linked parent-child data.
    Keywords: Intergenerational mobility; absolute mobility; inequality
    JEL: J62
    Date: 2020–09–01

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