nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒11‒02
37 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Did the Bologna Process Challenge the German Apprenticeship System? Evidence from a Natural Experiment By Thomsen, Stephan L.; Trunzer, Johannes
  2. Long-Term Effects of Individual Placement and Support Services for Disability Benefits Recipients with Severe Mental Illnesses By De Graaf-Zijl, Marloes; Spijkerman, Marcel; Zwinkels, Wim
  3. The effect of childcare on parental earnings trajectories By Krapf, Matthias; Roth, Anja; Slotwinski, Michaela
  4. Robots and Worker Voice: An Empirical Exploration By Belloc, Filippo; Burdin, Gabriel; Landini, Fabio
  5. Transitions from lower track secondary schools into vocational training: Does a detour pay off? By Hillerich-Sigg, Annette
  6. Work less but stay longer. Mature worker response to a flexibility reform By Erik Hernæs; Zhiyang Jia; John Piggott; Trond Christian Vigtel
  7. Services Trade and Labour Market Outcomes: Evidence from Italian Firms By Omar Bamieh; Francesco Bripi; Matteo Fiorini
  8. No more visits. Informal care in nursing homes prior to the outbreak of Covid-19. By Lucas Jeanneau; Quitterie Roquebert; Marianne Tenand
  9. Robot adoption at German plants By Deng, Liuchun; Plümpe, Verena; Stegmaier, Jens
  10. Regional Differences in Retail Payment Habits in Italy By Guerino Ardizzi; Elisa Bonifacio; Cristina Demma; Laura Painelli
  11. Free Movement of Workers and Native Demand for Tertiary Education By Bächli, Mirjam; Teodora Tsankova
  12. Keep Working and Spend Less? Collective Childcare and Parental Earnings in France By P. PORA
  13. Convergence in road transport CO2 emissions in Europe By Ángel Marrero; Gustavo A. Marrero; Marina González; Jesús Rodríguez-López
  14. Congestion in highways when tolls and railroads matter: Evidence from European cities By Miquel-Àngel Garcia-López; Ilias Pasidis; Elisabet Viladecans-Marsal
  15. The determinants of service export behaviour in Italian non-financial firms By Alessandro Moro; Enrico Tosti
  16. Open data and data sharing: An economic analysis By Krotova, Alevtina; Mertens, Armin; Scheufen, Marc
  17. Data Sources on Migrants' Labour Market and Education Integration in Austria By Peter Huber; Marian Fink; Thomas Horvath
  18. Grandparents, Moms, or Dads? Why Children of Teen Mothers Do Worse in Life By Aizer, Anna; Devereux, Paul J.; Salvanes, Kjell G.
  19. Why Is Corporate Tax Revenue Stable While Tax Rates Fall? Evidence from Firm-Level Data By Clemens Fuest; Felix Hugger; Susanne Wildgruber
  20. microWELT: Socio-Demographic Parameters and Projections for Austria, Spain, Finland, and the UK By Martin Spielauer; Thomas Horvath; Walter Hyll; Marian Fink
  21. Internal digitalization and tax-efficient decision making By Klein, Daniel; Ludwig, Christopher A.; Nicolay, Katharina
  22. Occupational Licensing and the Gender Wage Gap By Koumenta, Maria; Pagliero, Mario; Rostam-Afschar, Davud
  23. Religion Predicting Fertility Behaviour of Young Women in Contemporary Germany By Martha Ottenbacher
  24. Fuel Poverty: Potentially Inconsistent Indicators and Where Next? By David Deller; Glen Turner; Catherine Waddams Price
  25. School Schedule and the Gender Pay Gap By Duchini, Emma; Van Effenterre, Clémentine
  26. School Re-Openings after Summer Breaks in Germany Did Not Increase SARS-CoV-2 Cases By Isphording, Ingo E.; Lipfert, Marc; Pestel, Nico
  27. Behavioral Responses to Inheritance and Gift Taxation: Evidence from Germany By Ulrich Glogowsky
  28. Refugees’ Integration into the Austrian Labour Market: Dynamics of Occupational Mobility and Job-Skills Mismatch By Michael Landesmann; Sandra M. Leitner
  29. The Take-Up of Unemployment Benefit Extensions By B. BOUTCHENIK; R. LARDEUX
  30. The persistence of subjective wellbeing: permanent happiness, transitory misery? By L. WILNER
  31. The Statutory Minimum Wage in Germany and the Labor Demand Elasticities of Low-Skilled Workers: A Regression Discontinuity Approach with Establishment Panel Data By Kölling, Arnd
  32. How do citizens perceive centralization reforms? Evidence from the merger of French regions By L. WILNER
  33. Are there rebound effects from electric vehicle adoption? Evidence from German household data By Huwe, Vera; Gessner, Johannes
  34. Health of Elderly Parents, Their Children's Labor Supply, and the Role of Migrant Care Workers By Frimmel, Wolfgang; Halla, Martin; Paetzold, Jörg; Schmieder, Julia
  35. Political competition and legislative shirking in roll-call votes: Evidence from Germany for 1953–2017 By Marco Frank; David Stadelmann
  36. Abolishing the Marital Wage Premium in Greece: Employment and Participation Effects on Minimum Wage Workers By Theano Kakoulidou; Panagiotis Konstantinou; Thomas Moutos
  37. Do More Tourists Promote Local Employment? By Libertad González; Tetyana Surovtseva

  1. By: Thomsen, Stephan L. (Leibniz University of Hannover); Trunzer, Johannes (Leibniz University of Hannover)
    Abstract: Starting in 1999, the Bologna Process reformed the German five-year study system for a first degree into the three-year bachelor's (BA) system to harmonize study lengths in Europe and improve competitiveness. This reform unintentionally challenged the German apprenticeship system that offers three-year professional training for the majority of school leavers. Approximately 29% of new apprentices are university-eligible graduates from academic-track schools. We evaluate the effects of the Bologna reform on new highly educated apprentices using a generalized difference-in-differences design based on detailed administrative student and labor market data. Our estimates show that the average regional expansion in first-year BA students decreased the number of new highly educated apprentices by 3%–5%; average treatment effects on those indecisive at school graduation range between –18% and –29%. We reveal substantial gender and occupational heterogeneity: males in STEM apprenticeships experienced the strongest negative effects. The reform aggravated the skills shortage in the economy.
    Keywords: Bologna Process, post-secondary education decisions, apprenticeships, higher education
    JEL: I23 I28 J24
    Date: 2020–10
  2. By: De Graaf-Zijl, Marloes (UWV Netherlands Social Security Institute); Spijkerman, Marcel (UWV Netherlands Social Security Institute); Zwinkels, Wim (Epsilon Research)
    Abstract: This paper examines a broad set of short- and long-term impacts of Individual Placement and Support (IPS) for disability benefit recipients with severe mental disabilities. IPS is a specific intervention that first aims to place an individual in employment and subsequently trains the worker on the job. We compare the outcomes for IPS-recipients to a control group that received traditional vocational rehabilitation (TVR) services. We use administrative data to apply difference-in-difference estimation on a matched sample of 513 IPS recipients and almost 23,000 TVR-recipients in the Netherlands. Our results show that from six months after the start of the treatment onwards employment probabilities of IPS participants significantly outperform those of TVR participants. The higher probability to be in competitive employment does not come at the expense of fewer work in sheltered employment or trial periods. Nor do they come at the expense of shorter working hours or lower wages. The share of people on disability benefits declines equally in both group for quite some time after the start of the intervention but there is some indication that the benefit dependency in the long run declines faster for IPS recipients. Effects regarding medical costs are not statistically significant.
    Keywords: program evaluation, treatment effects, vocational rehabilitation, individual placement and support, temporary disability, labor supply, social insurance
    JEL: C21 H51 H55 I38 J22 J24
    Date: 2020–10
  3. By: Krapf, Matthias; Roth, Anja; Slotwinski, Michaela
    Abstract: We study the effect of childcare availability on child penalties. Using Swiss administrative data, we exploit the staggered opening od childcare facilities across municipalities in the canton of Bern. We find that the presence of childcare facilities in the year of birth of the first child reduces the child penalty. The availability of childcare increases maternal earnings and decreases the compensating increase in fathers' earnings in households with below median earnings, but not in households with above median earnings. Although childcare affects relative earnings contributions within the household, there is no effect on total household earnings.
    Keywords: child penalty,childcare,parental employment,gender wage gap
    JEL: D1 J00 J13 J16 H31
    Date: 2020
  4. By: Belloc, Filippo (University of Siena); Burdin, Gabriel (Leeds University Business School); Landini, Fabio (University of Parma)
    Abstract: The interplay between labour institutions and the adoption of automation technologies remains poorly understood. Specifically, there is little evidence on how the nature of industrial relations shapes technological choices at the workplace level. Using a large sample of more than 20000 European establishments located in 28 countries, this paper documents conditional correlations between the presence of employee representation (ER) and the use of automation technologies. We find that ER is positively associated with robot usage. The presence of ER also correlates with the utilization of software-based artificial intelligence tools for data analytics. We extensively dig into the mechanisms through which ER may foster the use of robots by exploiting rich information on the de facto role played by ER bodies in relation to well-defined decision areas of management. Greater automation in establishments with ER does not seem to result from more adversarial employment relationships (as measured by past strike activity) or constraints on labour flexibility imposed by the interference of employee representatives with dismissal procedures. Interestingly, the positive effect of ER on robot usage is driven by workplaces operating in relatively centralized wage-setting environments, where one would expected a more limited influence of ER on wages. While our findings are exploratory and do not have a causal interpretation, they are suggestive that ER influences certain workplace practices, such as skill development, job redesign and working time management, that may be complementary to new automation technologies.
    Keywords: automation, robots, artificial intelligence, unions, employee representation, labor market institutions, European Company Survey
    JEL: J50 O32 O33
    Date: 2020–10
  5. By: Hillerich-Sigg, Annette
    Abstract: This paper analyzes the effect of alternative transition paths after grade 9 of German lower secondary school on vocational training. Using a selection-on-observables approach I show that a delayed transition into vocational training after lower track secondary school is not a disadvantage conditional on a successful transition into vocational training. Students benefit from continuing general schooling or attending vocational school compared to transitioning directly with regard to wages paid during vocational training as well as average wages, prestige, and socioeconomic status of the training occupation. This comes at the cost of a lower probability to match the training occupation with the reported desired occupation and being less satisfied with the vocational training. Participation in pre-vocational training does not lead to a different type of vocational training position than after a direct transition. However, those participants are less satisfied with their vocational training.
    Keywords: school-to-work transition,secondary school,pre-vocational training,vocational training
    JEL: J24 I28 I26
    Date: 2020
  6. By: Erik Hernæs; Zhiyang Jia (Statistics Norway); John Piggott; Trond Christian Vigtel (Statistics Norway)
    Abstract: Reducing the eligibility age for pension benefits is considered by many as a policy that will discourage labor supply by mature workers. This paper analyzes a recent Norwegian pension reform which effectively lowered the eligibility age of retirement from 67 to 62 for a group of workers. For the individuals we study, the expected present value of benefits was held constant by introducing flexible claiming and actuarially adjusting the periodic pension payment. This provides us with a unique opportunity to study the isolated impact of increased flexibility. As expected, we find that on average workers reduced their earnings and working hours. However, this initial negative effect is partially offset by an increase in labor force participation rate later at age 64 and 65. Our findings suggest that increased flexibility could potentially serve as a policy aimed at increasing the labor supply of older workers through promoting gradual exit from the labor force.
    Keywords: Retirement; Pension; Flexibility
    JEL: J14 J23 J26
    Date: 2020–08
  7. By: Omar Bamieh; Francesco Bripi; Matteo Fiorini
    Abstract: The paper investigates the relationship between services trade performance and employment characteristics in Italian firms. Our analysis is at the micro level and descriptive in nature. We merge micro data on services trade transactions with employment and wage variables at the level of the firm. We find that firms engaged in services trade tend to employ a larger share of managers and white collars and to pay higher average wages. They also exhibit systematically smaller shares of blue collars in their employment structure. These patterns hold qualitatively across all main sectors of firms' affiliation and across sectors of traded services. We find a strong and positive association between services exports and/or imports and total employment. Regression analysis confirms this last finding and shows it is robust to controlling for various confounding heterogeneity.
    Keywords: Services trade, Employment, Firm-level data, Italy
    JEL: F14 F16
    Date: 2020–05
  8. By: Lucas Jeanneau; Quitterie Roquebert; Marianne Tenand
    Abstract: Amid the spread of the Covid-19, restrictions on external visits to nursing home residents were widely implemented. Such measures may affect the well-being of the institutionalized elderly, notably by depriving them of care that would be otherwise be provided by relatives and friends. There is little quantitative evidence about informal care receipt by residents in `normal times’. The aim of this study is twofold. First, it investigates quantitatively the importance of informal care in nursing homes, the forms it takes and its determinants outside the corona-crisis. Second, based on the findings, it discusses the likely implications of the Covid-19 restrictions on visits for nursing home residents. It relies on a sample representative of the French 60+ population living in nursing homes (N=3,223) from the 2016 CARE-Institutions survey. Over 80% of residents receive informal support. Relatives are primarily involved in help with the activities of daily living), which generally comes along with moral support. Residents are mostly helped with administrative tasks and activities related to mobility and the outside. Both the probability to receive informal care and its intensity highly depend on having close relatives alive (partner, children, siblings), age and health status. Loss of informal care due to visit bans may undermine the well-being of residents and entail medium- run adverse effects, in terms of further activity restrictions and deterioration of mental health. Policy makers should factor in the usual role of informal caregivers when assessing the benefits and costs of restrictions on visits for nursing home residents.
    Keywords: Nursing home; Informal care; Long-term care; Covid-19.
    JEL: J14 I1 C2
    Date: 2020
  9. By: Deng, Liuchun; Plümpe, Verena; Stegmaier, Jens
    Abstract: Using a newly collected dataset with plant-level information of robot use from 2014 to 2018, we provide the first microscopic portrait of robotisation in Germany and study the potential determinants of robot adoption. Our descriptive analysis uncovers five stylised facts concerning both extensive and, perhaps more importantly, intensive margin of plant-level robot use: (1) Robot use is relatively rare with only 1.55% German plants using robots in 2018. (2) The robot distribution is highly skewed. (3) New robot adopters contribute substantially to the recent robotisation. (4) Robot users are exceptional along several dimensions of plant-level characteristics. (5) Heterogeneity in robot types matters. Our regression results further suggest that plant size, low-skilled labour intensity, and exporter status all have strong and positive effect on future probability of robot adoption. However, controlling for plant size, we find that plant-level productivity has no, if not negative, impact on robot adoption.
    Keywords: robots,robot adoption,automation,labour,productivity,plant-level
    JEL: J24 O14 O33
    Date: 2020
  10. By: Guerino Ardizzi (Bank of Italy); Elisa Bonifacio (Bank of Italy); Cristina Demma (Bank of Italy); Laura Painelli (Bank of Italy)
    Abstract: Economic operators have a number of different procedures and instruments for regulating their cashless monetary transactions safely and quickly. Nevertheless, divergences in the use of non-cash payment instruments persist among European countries and, in Italy, between the Centre and North and the southern regions. In this paper, we study which factors are associated with the backwardness of South and Islands in the use of non-cash payment instruments. We focus on the period 2013-18, when there was a widespread increase in non-cash transactions among the main advanced economies, spurred by technological innovation and the new legal framework supporting security, efficiency and transparency in digital payments. We find that the main factors associated with a lower demand for cash are technological innovation in payments and the population’s digital skills and education levels; criminality and tax evasion are also significantly and positively correlated to the use of cash, but their correlations with the observed heterogeneity among Italian provinces are not predominant.
    Keywords: payment instruments, cash demand, retail payments, technological innovation
    JEL: E41 E42 G21 G23
    Date: 2020–09
  11. By: Bächli, Mirjam; Teodora Tsankova
    Abstract: We investigate how the introduction of free movement of workers affects enrolment of natives in tertiary education. In a difference-in-differences framework, we exploit a policy change that led to a significant increase in the share of cross-border commuters in local employment in border regions of Switzerland. Our results show a rise in enrolment at Universities of Applied Sciences in affected relative to non-affected regions in the post-reform period but no change in enrolment at traditional universities. Furthermore, we find that enrolment increases in non-STEM fields that build skills less transferable across national borders. This allows for complementarities with foreign workers who are more likely to hold occupations requiring STEM training. Individuals with a labor market oriented education such as vocationally trained respond to the increase in labor market competition because they have employment opportunities and access to tertiary education through Universities of Applied Sciences.
    Keywords: Cross-border commuting, demand for tertiary education, study field choice, labor market conditions
    JEL: F22 I26 J24 J61 R23
    Date: 2020–10
  12. By: P. PORA (Insee - Crest)
    Abstract: I leverage the staggered expansion of subsidized childcare institutions across municipalities, induced by asuccession of national plans, to investigate the effect of collective childcare on parents' labor outcomes and childcare choices in France between 2007 and 2015. These plans did not lead to any substantial change neither in the labor outcomes of parents nor in the take-up of paid parental leave. Instead, these collective childcare expansions crowded out more costly formal childcare solutions, such as childminders or at-home childcare. These crowding-out effects highlight a downside of family policy strategies that foster the coexistence of multiple childcare arrangements.
    Keywords: Labor supply, childcare, event-study, parental leave.
    JEL: J13 J16 J18 J22
    Date: 2020
  13. By: Ángel Marrero (Universidad de La Laguna); Gustavo A. Marrero (Universidad de La Laguna); Marina González (Universidad de La Laguna); Jesús Rodríguez-López (U. Pablo de Olavide)
    Abstract: In Europe the transport sector accounts for more than 27% of total CO2 emissions and, within this sector, road transport is by far the largest polluter. This fact has placed road transport emissions abatement firmly on the agenda of global alliances. In this paper, we examine the convergence in per capita road transport CO2 emissions in a sample of 22 European Union (EU) countries over the 1990-2014 period. We find evidence that EU countries converge to one another but depending on certain structural factors (conditional convergence), and that the convergence speed has increased over time. In light of this evidence, we estimate a conditional convergence dynamic panel data model to examine the structural factors affecting the convergence process and its influence on the convergence speed. Because, in our sample, road transport CO2 emissions depend almost exclusively on (fossil) fuel consumption, we focus on the determinants channelled through the use of energy in the sector. By using alternative econometric approaches (pooled-OLS, fixed-effects and instrumental variables), our results show that the convergence process is conditioned by factors such as economic activity and fuel prices and that some of these factors have a significant effect on the convergence speed. These results may entail policy implications with regards to the geographical impact of the EU policies on climate change currently in place.
    Keywords: Road transport; CO2 emissions; Convergence; Dynamic panel data models.
    JEL: Q43 C23 Q54
    Date: 2020
  14. By: Miquel-Àngel Garcia-López (Department of Applied Economics, Universidad Autónoma de Barcelona, 08193, Bellaterra, Spain); Ilias Pasidis (Barcelona Institute of Economics (IEB), Universidad de Barcelona 08034, Barcelona, Spain); Elisabet Viladecans-Marsal (Department of Economics, Universidad de Barcelona 08034, Barcelona, Spain)
    Abstract: Using data from the 545 largest European cities, we study whether the expansion of their highway capacity provides a solution to the problem of traffic congestion. Our results confirm that in the long run, and in line with the ’fundamental law of highway congestion’, the expansion in cities of lane kilometers causes an increase in vehicle traffic that does not solve urban congestion. We disentangle the increase in traffic due to the increases in coverage and in capacity. We further introduce road pricing and public transit policies in order to test whether they moderate congestion. Our findings confirm that the induced demand is considerably smaller in cities with road pricing schemes, and that congestion decreases with the expansion of public transportation.
    Keywords: congestion, highways, Europe, cities
    JEL: R41 R48
    Date: 2020–10
  15. By: Alessandro Moro (Bank of Italy); Enrico Tosti (Bank of Italy)
    Abstract: This paper analyses the main drivers of Italian service exports using firm-level data. A gravity equation, augmented with firm characteristics and FDI variables, is estimated using a panel of Italian exporters constructed by merging two datasets, the first on international trade in services and the second on FDI relationships, both used to compile the Italian balance of payments. After presenting a formal justification for the presence of FDI variables in the gravity equation, the model is estimated using a panel composed of non-financial firms exporting services other than travel, transport and processing in the period from 2013 to 2018. The econometric analysis shows that FDI is, among the standard drivers of exports (firm size and productivity, foreign demand, trade costs), a significant variable that positively affects Italian firms’ exports of services, pointing to complementarity rather than to substitution. This evidence suggests that a significant component of trade in services includes intra-group transactions.
    Keywords: trade in services, firm-level data, gravity model, FDI, panel data, firm heterogeneity
    JEL: F14 L80 D22 C23 C51
    Date: 2020–09
  16. By: Krotova, Alevtina; Mertens, Armin; Scheufen, Marc
    Abstract: Data is an important business resource. It forms the basis for various digital technologies such as artificial intelligence or smart services. However, access to data is unequally distributed in the market. Hence, some business ideas fail due to a lack of data sources. Although many governments have recognised the importance of open data and already make administrative data available to the public on a large scale, many companies are still reluctant to share their data among other firms and competitors. As a result, the economic potential of data is far from being fully exploited. Against this background, we analyse current developments in the area of open data. We compare the characteristics of open governmental and open company data in order to define the necessary framework conditions for data sharing. Subsequently, we examine the status quo of data sharing among firms. We use a qualitative analysis of survey data of European companies to derive the sufficient conditions to strengthen data sharing. Our analysis shows that government data is a public good, while company data can be seen as a club or private good. Latter frequently build the core for companies' business models and hence are less suitable for data sharing. Finally, we find that promoting legal certainty and the economic impact present important policy steps for fostering data sharing.
    JEL: L21 L86 M21 O32
    Date: 2020
  17. By: Peter Huber; Marian Fink; Thomas Horvath
    Abstract: As part of a larger research project, we survey existing data sets and research results on immigrants' integration success in Austria focusing on educational and labour market outcomes. We consider different registers as well as survey data available to researchers on a regular basis and compare to what extent these data contain relevant information on immigrants and their educational and employment careers and survey the research that has been conducted based on the different datasets. We also aim to identify research gaps and potential data gaps resulting from the fragmentation of relevant information over different data sets. While different data sources contain different aspects relevant for integration research, a "complete" picture of integration processes as well as the identification of supporting and hindering factors for successful integration typically requires a combination of different data sets that may also enrich longitudinal (register-based) individual data by more detailed characteristics from survey data.
    Keywords: dynamic microsimulation, migration, labour market integration, immigrant integration, social security, education
    Date: 2020–10–20
  18. By: Aizer, Anna (Brown University); Devereux, Paul J. (University College Dublin); Salvanes, Kjell G. (Norwegian School of Economics)
    Abstract: Women who give birth as teens have worse subsequent educational and labor market outcomes than women who have first births at older ages. However, previous research has attributed much of these effects to selection rather than a causal effect of teen childbearing. Despite this, there are still reasons to believe that children of teen mothers may do worse as their mothers may be less mature, have fewer financial resources when the child is young, and may partner with fathers of lower quality. Using Norwegian register data, we compare outcomes of children of sisters who have first births at different ages. Our evidence suggests that the causal effect of being a child of a teen mother is much smaller than that implied by the cross-sectional differences but that there are probably still significant long-term, adverse consequences, especially for children born to the youngest teen mothers. Unlike previous research, we have information on fathers and find that negative selection of fathers of children born to teen mothers plays an important role in producing inferior child outcomes. These effects are particularly large for mothers from higher socio- economic groups. Our data also enable us to examine the effect of age at first birth across a range of maternal ages. Importantly, while we find that child outcomes are worst for those born to teen mothers, outcomes improve with mothers' age at first birth until mothers are in their mid-20s and then flatten out.
    Keywords: teen childbearing, child outcomes, human capital
    JEL: J12 J13 I31 I32
    Date: 2020–10
  19. By: Clemens Fuest; Felix Hugger; Susanne Wildgruber
    Abstract: While corporate tax rates in OECD countries declined over the last decades, revenues from corporate taxation relative to GDP remained remarkably stable. This paper uses a comprehensive firm-level dataset to provide an explanation for this rate-revenue puzzle in corporate taxation. Focusing on the period 1995-2016, we show that the reduction in corporate tax rates was counterbalanced by a pronounced increase in corporate profits before taxes. We decompose the rise in profits into changes in EBITDA, depreciation, and financial profits. On average, these three factors contributed almost equally to the tax base expansion, albeit differently across sectors, countries, and firm sizes.
    Keywords: corporate income taxation, corporate tax revenues, corporate profitability
    JEL: H25
    Date: 2020
  20. By: Martin Spielauer (WIFO); Thomas Horvath; Walter Hyll; Marian Fink
    Abstract: The aim of this paper is twofold: First, it provides an overview of the socio-demographic core modules of the dynamic microsimulation model microWELT. Second, it describes the essential socio-demographic characteristics of four European countries – Austria, Spain, Finland, and UK as representatives of four welfare state regimes (conservative, mediterranean, universalistic, and liberal) – and the processes that drive socio-demographic change which we aim at capturing with the model. MicroWELT is developed as a tool for the comparative study of the distributional effects of four welfare state regimes, represented by the four studied countries. Processes with potential links to welfare state types include 1. the intergenerational transmission of education, 2. childlessness and fertility by education, 3. partnership behaviours and lone parenthood, 4. age at leaving home, and 5. mortality differentials by sex and education. Through microWELT projections, we identify the impact of these processes on the future population composition by age, sex, education, and family characteristics of the studied countries. This paper is part of a series of related papers and other resources which together build comprehensive documentation and presentation of the research performed developing and using microWELT. All materials are available at the project website
    Keywords: Dynamic Microsimulation, Demographic Change, Welfare State Regimes
    Date: 2020–10–13
  21. By: Klein, Daniel; Ludwig, Christopher A.; Nicolay, Katharina
    Abstract: Our study investigates firms' internal digitalizationas a crucial foundation for timely, data-driven decision making. We evaluate the association between digital infrastructure and improved decision making intax planning decisions to analyze if the benefits of digitalization expand beyond firms' core business functions. The novel use of a survey that identifies European firms' digital infrastructure over the period from 2005 to 2016 allows us to create an index of IT sophistication. Using this index, we extend prior approaches and observe the effectiveness of tax planning decisions in terms of a firm's ability to exploit income shifting incentives. Our empirical analysis confirms the prediction that digitalized firms respond more efficiently to income shifting incentives. Further, we provide evidence that firms with sophisticated IT are more reactive to shocks in the income shifting incentive than non-digital firms. Our results suggest that internal digitalization allows firms to efficiently monitor and manage internal processes and to strategically price internal transactions. With this work, we are the first to document the association of digitalization and the performance of firms' support functions.
    Keywords: Digital Transformation,Digitalization,Firm Performance,Decision Making,Multinational Corporations,Business Taxation,Information Technology,Profit Shifting
    JEL: O33 L25 H25 H26 K34
    Date: 2020
  22. By: Koumenta, Maria; Pagliero, Mario; Rostam-Afschar, Davud
    Abstract: We use a unique survey of the EU labor force to investigate the relationship between occupational licensing and the gender wage gap. We find that the gender wage gap is canceled for licensed self-employed workers. However, this closure of the gender wage gap is not mirrored by significant changes in the gender gap in hours worked. Our results are robust using decomposition methods, quantile regressions, different datasets, and selection correction.
    Keywords: Licensing,Gender gap,Wages,Female Labour Supply,Quantile regression,Selection
    JEL: J16 J31 J44 J71
    Date: 2020
  23. By: Martha Ottenbacher
    Abstract: Religion in contemporary Germany is marked by institutionalized outreach as well as increased pluralisation. Religion can thus play a decisive role in fertility behaviour, despite of secularizing tendencies. Religion may influence the debut and frequency of sexual activity, contraceptive behaviour, cohabitation and marriage. Religious rules on alcohol consumption relate to the likelihood of miscarriages; religious values transmit into abortion laws. This fertility behaviour determines the time when young women have their first live birth. Using data from the German Panel Analysis of Intimate Relationships and Family Dynamics, the paper explores whether being Catholic, Protestant, Muslim or non-religious shapes fertility patterns of young women in contemporary Germany. The paper extends earlier analyses by integrating miscarriages and abortions, rather than limiting the analysis to births. Results show that Muslims are the youngest when becoming pregnant for the first time. Protestants delay first pregnancy, but once being pregnant, Protestants are more likely to carry their first pregnancy to term rather than having an abortion. With respect to first pregnancy and its outcome, Catholics surprisingly compare to non-religious women. Against the background of increasing immigration from religiously vivid countries to Germany, the relation between religion and fertility behaviour is likely to remain significant.
    Keywords: Religion, pregnancy, miscarriage, abortion, live birth, young women
    JEL: Z12 J13
    Date: 2020
  24. By: David Deller (Centre for Competition Policy, University of East Anglia); Glen Turner (Centre for Competition Policy, University of East Anglia); Catherine Waddams Price (Centre for Competition Policy and Norwich Business School, University of East Anglia)
    Abstract: The measurement of fuel poverty is critical for judgements about the significance of the problem and the design of policies to address it. Reducing fuel poverty has been a government objective in the UK for many years, and is generally seen through the lens of the government’s official fuel poverty statistics . We compare the households identified as fuel poor according to three metrics: (i) the 10% indicator; (ii) the Low Income High Consumption indicator; and (iii) whether households self-report an inability to afford to keep their home warm, using data from the British Household Panel Survey. We find substantial differences in the households identified according to each of these indicators; this highlights a lack of clarity about which households might be considered truly fuel poor. In particular, a surprisingly low proportion of those identified by the 10% and LIHC indicators report an inability to afford to keep their home warm. While this could raise concerns that current fuel poverty policies in the UK are misdirected, instead we emphasise the difficulties of drawing policy conclusions from the differences between the indicators, unless it can be combined with information on households’ heating preferences and the in-home temperatures achieved.
    Date: 2020–10–01
  25. By: Duchini, Emma (University of Warwick); Van Effenterre, Clémentine (University of Toronto)
    Abstract: We provide causal evidence that children's school schedules contribute to the persistence of the gender pay gap between parents. Historically, French children have had no school on Wednesdays. In 2013, a reform reallocated some classes to Wednesday mornings. Exploiting variations in the application of this reform over time and across the age of the youngest child, we show that mothers are more likely to adopt a regular Monday-Friday full-time working schedule after the reform, while fathers' labor supply is unchanged. Consequently, the reform decreased the monthly gender pay gap by 6 percent, generating fiscal revenues that substantially outweigh its costs.
    Keywords: school schedule, gender inequality, female labor supply, child penalty
    JEL: H52 J13 J16 J22
    Date: 2020–10
  26. By: Isphording, Ingo E. (IZA); Lipfert, Marc (University of Bonn); Pestel, Nico (IZA)
    Abstract: This paper studies the effect of the end of school summer breaks on SARS-CoV-2 cases in Germany. We exploit variation in the staggered timing of summer breaks across federal states which allows us to implement an event study design. We base our analysis on official daily counts of confirmed coronavirus infections by age groups across all 401 German counties. We consider an event window of two weeks before and three weeks after the end of summer breaks. Over a large number of specifications, sub-group analyses and robustness checks, we do not find any evidence of a positive effect of school re-openings on case numbers. On the contrary, our preferred specification indicates that the end of summer breaks had a negative effect on the number of new confirmed cases. Three weeks after the end of summer breaks, cases have decreased by 0.55 cases per 100,000 inhabitants or 27 percent of a standard deviation. Our results are not explained by changes in mobility patterns around school re-openings arising from travel returnees. We conclude that school re-openings in Germany under strict hygiene measures combined with quarantine and containment measures have not increased the number of newly confirmed SARS-CoV-2 infections.
    Keywords: COVID-19, schooling, education, Germany
    JEL: I12 I18 I28
    Date: 2020–10
  27. By: Ulrich Glogowsky
    Abstract: The desirability of inheritance and gift taxes depends on individuals’ tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a convex kink in the tax liability precedes a concave kink. Extending the bunching approach to such double-kinked tax schedules, I document that individuals tailor their taxable wealth transfers to the schedules. One type of response dominates for inheritances: testators engage in testament planning. The magnitude of the testament-planning response is comparable to that of inter vivos gifts. However, neither the overall responses of gifts nor those of inheritances heavily interfere with tax revenue collection: the associated short-run net-of-tax elasticities of taxable wealth transfers lie below 0.1.
    Keywords: wealth-transfer tax, inheritance tax, gift tax, estate tax, real responses, tax avoidance, tax evasion, behavioral responses, bunching at kinks
    JEL: H20 H20 H21 H24 H26 H31
    Date: 2020
  28. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses the employment experiences of the recent wave of Middle Eastern refugees (from Syria, Iraq, Afghanistan and Iran) in the Austrian job market. The emphasis in this research was to investigate whether refugees experienced an initial (sharp) downgrade in their occupational status when they accepted their first employment, compared with the occupation they had in their home country, and then whether (and to what extent) such a downgrade had been followed by an upgrade in the jobs they currently hold. This U-shaped pattern of occupational trajectories is familiar in the migration literature, and it is here tested using data from two survey waves of recent refugees in the Austrian labour market. The paper also analyses, in its second part, subjective assessments of refugees as to whether they feel that they are ‘over-’ or ‘under-’ qualified (regarding their previous educational attainment levels and work experiences) for the jobs in which they are currently employed. In both exercises, we report results regarding the heterogeneity across groups of refugees by age, gender, the specific occupations they held in their home country, their educational attainment levels, their country of origin, and whether they obtained refugee status as first-time asylum applicants or through family reunion. We also refer, in the section on ‘job-skills’ (mis)match, to further factors such as the refugees’ (mental) health state and the degree of their social integration with the host population.
    Keywords: Refugees, occupational trajectories, job-skills mismatch, Austria, refugees from Middle East, migrants’ job-market integration
    JEL: J15 J24 J61 J62
    Date: 2020–10
  29. By: B. BOUTCHENIK (Insee); R. LARDEUX (Insee)
    Abstract: French National Employment Agency grants benefit extensions to recipients who reach benefit exhaustion and have worked for a certain period of time since the start of their spell. To this end, claimants are required to send an Employer Certificate for each contract they undertook. Until mid-2014, above one fifth of unemployed workers did not fully certify their work history. In this paper, we show that a simple informational intervention may strongly increase the take-up of potential UI benefit extensions, especially among recipients with little unemployment experience. The "renewal-of-entitlement" reform of October 2014 introduced an informative letter automatically sent to claimants upon benefit exhaustion and emphasizing the role of Employer Certificates. Relying on the administrative file of French UI claimants (FNA) in a regression discontinuity design, we estimate that the letter reduced by 14 points the share of claimants who do not certify their full work history and extended the potential benefit duration by one month on average. This informational mailing narrowed the gap incertification behavior between claimants with different levels of unemployment experience.
    Keywords: Take-up, Unemployment Insurance, Information, Policy Evaluation
    JEL: C23 D83 J65
    Date: 2020
  30. By: L. WILNER (Insee - Crest)
    Abstract: This paper disentangles the roles played by state dependence and unobserved heterogeneity in self-assessed happiness. It estimates a dynamic nonlinear model of subjective well-being on longitudinal data, primarily from France, but also from Australia, Germany, and the UK. Life satisfaction is persistent over time, which static models ignore. This persistence is heterogeneous across individuals: it concerns mostly those already happy with their lives while, in contrast, unhappiness seems more transitory. The impact of initial conditions is large in comparison with usual determinants of happiness, or with state dependence.
    Keywords: Happiness; subjective well-being; life satisfaction; dynamic model; state dependence; correlated random effects; initial conditions.
    JEL: I31
    Date: 2020
  31. By: Kölling, Arnd
    Abstract: This study examines the influence of the statutory minimum wage on labor demand elasticities regarding low-skilled workers. For this, a regression discontinuity analysis is conducted using company panel data from 2013 to 2018. In addition, a possible endogeneity of the remuneration for low-skilled workers was considered using an IV estimation. It is shown that the monopsonistic structures of the labor market may continue to exist after the introduction of the minimum wage. Additionally, the own-wage elasticity for low-skilled workers did not change over the period considered. However, in the short run, stronger substitutive relationships with medium-skilled workers seem to exist, and probably also with highly qualified employees in the long run.
    Keywords: Minimum Wage,Labor Demand,Monopsony,Low-skilled Workers
    JEL: J23 J42 J31 J21
    Date: 2020
  32. By: L. WILNER (Insee - Crest)
    Abstract: Using the 2016 merger of French regions as a natural experiment, this paper adopts a difference-in-difference identification strategy to recover its causal impact on individual subjective wellbeing. No depressing effect is found despite increased centralization; life satisfaction has even increased in regions that were absorbed from economic and political viewpoints. The empirical evidence also suggests that local economic performance improved in the concerned regions, which includes a faster decline in the unemployment rate. In this setting, economic gains have likely outweighed cultural attachment to administrative regions.
    Keywords: Merger of regions; natural experiment; difference-in-difference; subjective wellbeing; centralization.
    JEL: H75 I31
    Date: 2020
  33. By: Huwe, Vera; Gessner, Johannes
    Abstract: Widespread electric vehicle adoption is considered a major policy goal in order to decarbonize the transport sector. However, potential rebound effects both in terms of vehicle ownership and distance traveled might nullify the environmental edge of electric vehicles. Using cross-sectional household-level microdata from Germany, we identify rebound effects of electric vehicle adoption on both margins for specific subgroups of electric vehicle owners. As our data is cross-sectional, we resort to data-driven methods which are not yet commonly used in the economic literature. For the identification of changes in the number of cars owned after electric vehicle adoption, we predict counterfactual car ownership using a supervised learning approach. Furthermore, we investigate the effect of electric vehicle adoption on household mileage based on a genetic matching of households owning electric vehicles to similar owners of conventional cars. For the selection of covariates for matching, we contrast ad hoc variable selection based on the available literature with a data-driven variable selection method (double LASSO). We cannot verify asignificant increase in the number of cars owned for households with one electric and one conventional vehicle. For the subgroup of households who substitute the electric car for a conventional vehicle, electric vehicle ownership is associated with a significant reduction in annual mileage of -23% of the sample mean. The result indicates a strive for behavior consistent with the environmentally-friendly car choice rather than a rebound effect. Our results are subgroup-specific and may not generalize to the overall population. Methodologically, we find that data-driven variable selection identifies a refined set of covariates and changes the magnitude of the estimation results substantially. It may thus be considered a useful complement, especially in settings with limited theoretical or empirical knowledge established.
    Keywords: Rebound Effect,Electric Vehicle Adoption,Variable Selection
    JEL: R41 Q55
    Date: 2020
  34. By: Frimmel, Wolfgang (University of Linz); Halla, Martin (University of Linz); Paetzold, Jörg (University of Salzburg); Schmieder, Julia (DIW Berlin)
    Abstract: We estimate the impact of parental health on adult children's labor market outcomes. We focus on health shocks which increase care dependency abruptly. Our estimation strategy exploits the variation in the timing of shocks across treated families. Empirical results based on Austrian administrative data show a significant negative impact on labor market activities of children. This effect is more pronounced for daughters and for children who live close to their parents. Further analyses suggest informal caregiving as the most likely mechanism. The effect is muted after a liberalization of the formal care market, which sharply increased the supply of foreign care workers.
    Keywords: informal care, formal care, aging, health, labor supply, labor migration
    JEL: J14 J22 I11 I18 R23
    Date: 2020–10
  35. By: Marco Frank; David Stadelmann
    Abstract: We analyze the impact of elected competitors from the same constituency on legislative shirking in the German Bundestag from 1953 to 2017. The German electoral system ensures that there is always at least one federal legislator per constituency with a varying number of elected competitors from the same constituency from zero to four. We exploit the exogenous variation of elected competitors by investigating changes in competition induced by legislators who leave parliament during the legislative period and their respective replacement candidates in an instrumental variables setting with legislator fixed effects. The existence of elected competitors from the same constituency decreases absence rates in roll-call votes by about 6.1 percentage points, which corresponds to almost half of the mean absence rate in our sample. This effect is robust to the inclusion of other measures for political competition.
    Keywords: Political Competition; Accountability; Absence; Rent Seeking; Political Representation
    JEL: D72 D78 H11
    Date: 2020–10
  36. By: Theano Kakoulidou; Panagiotis Konstantinou; Thomas Moutos
    Abstract: We estimate the employment and labour force participation effects resulting from the abolition of the marital allowance - a 10 percent mandatory top-up in the Minimum Wage (MW) for married individuals - in Greece in November 2012. Using data from the Greek LFS over the period 2008:Q1-2016:Q1 we do not find any differential change in the probability of employment for individuals depending on their marital status for the whole sample. However, excluding individuals for whom the MW may not be of relevance (individuals between 50 to 64 years of age and individuals with second stage tertiary education), we find that married individuals are 1.26 percentage points more likely to be employed after the reform (relative to singles). Moreover, we find that the probability of labour force participation after the reform is 1.42 percentage points higher for married individuals – a result driven by higher participation rates of married females after the beginning of the crisis, which is evidence in favour of the added worker effect.
    Keywords: minimum wage, marital allowance, employment, labour force participation
    Date: 2020
  37. By: Libertad González; Tetyana Surovtseva
    Abstract: We analyze the short-term impact of tourist flows on local labour markets. We propose a novel identification strategy that uses shocks to competing international tourist destinations to instrument for tourist inflows across Spanish regions. We show that negative shocks in alternative international destinations have a strong positive effect on tourism flows to Spain. We follow an instrumental variables strategy and find that an exogenous increase in tourist inflows leads to more employment in the tourism industry for prime-age workers in the short term but does not increase total employment in local economies. Total employment actually falls for very young and older workers, as well as for prime-age women. The increase in employment in tourism is compensated by a fall in (low-skilled) employment in other sectors, especially construction and manufacturing.
    Keywords: employment, tourism, local labour markets, shift-share, terrorism, Spain
    JEL: J21
    Date: 2020–10

This nep-eur issue is ©2020 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.