|
on Microeconomic European Issues |
|
Issue of 2020‒11‒23
thirty-six papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Krenz, Astrid |
| Abstract: | Almost 30 years after German reunification, a persistent gap in different firm performance measures exists between East and West Germany. In this paper I focus on the differences in new German manufacturing plants' location choices across the German district-free cities and districts and investigate its regional determinants. For that purpose, I construct a novel, rich regional- and plant-level dataset based on the Official Firm Statistics from the German Federal Statistical Office and the Offices of the Laender. The analysis provides first-time evidence regarding how in particular the location decision of plants in the German economy is in uenced by regional road infrastructure as well as regional structural funding. The effects are economically important and significant. The results reveal that a 10 percent increase in plant agglomeration increases the odds of a new plant to locate in the region by 12 percent. A 10 percent decrease of travel time on roads increases the odds of a plant to locate by 4 percent in Germany overall, by 7.6 percent among East German regions and by 26.5 percent in particular for large plants in the East German regions. A 10 percent larger population increases the odds to locate by 8.7 percent. A 10 percent increase in regional structural funding for infrastructure purposes increases the odds to locate in a region in East Germany by 8.3 percent in particular for large plants. Policy implications emerge that address in particular the improvement of infrastructure and support to reap the benefits that arise from agglomeration externalities. |
| Keywords: | Firm location choice,regional road infrastructure,Germany,agglomeration economies,regional structural funding,East-West gap,conditional logit,nested logit. |
| JEL: | D22 L25 R11 R12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224614&r=all |
| By: | Francesca Carta (Bank of Italy); Francesco D'Amuri (Bank of Italy); Till von Wachter (University of California Los Angeles) |
| Abstract: | Raising statutory retirement ages has been a popular policy to increase the labor supply of older workers in the face of population aging. In this paper, we quantify the effect of a sharp and unexpected increase in retirement ages on firms’ input mix and economic outcomes using Italian administrative and survey data on employment, wages, value added and capital. Exploiting information on lifetime pension contributions for the universe of employees, we are able to quantify the extra number of older workers employed by each firm as a result of the reform. We find that a 10 per cent increase in older workers implies a rise in employment of young and middle-aged workers of 1.8 per cent and 1.3 per cent, respectively. Total labor costs and value added increase broadly in line with employment, with little impact on labor productivity and unit labor costs. These results suggest older workers are valuable to employers and that pension reforms postponing retirement can remove a constraint rather than place a burden on firms. |
| Keywords: | pension reform, wages, firms and labor market outcomes |
| JEL: | H55 J24 J26 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1297_20&r=all |
| By: | Beznoska, Martin; Hentze, Tobias; Stockhausen, Maximilian |
| Abstract: | The inheritance tax is often seen as an effective tool to reduce wealth inequality, to raise public budgets if needed, and to increase incentives to work by lowering the tax burden on labour, which is especially high in Germany according to the OECD. The purpose of this paper is therefore to shed light on the question whether the inheritance tax is a promising tool for fighting wealth inequality without having distorting effects for the economy. For this purpose, the distributional effects of inheritances on the wealth distribution are evaluated for Germany first and are set into comparison with Austria and France using data from the Household Finance and Consumption Survey (HFCS). A change in the German inheritance tax law in 2009 is further used in a difference-in-difference analysis to identify the behavioural effects of the inheritance tax change on the volume of bequests, which are large and robust for different specifications. Second, the insight from part one is applied to design an inheritance tax reform for Germany. The potential tax revenue of the reform can be estimated by using the data from the inheritance and gift tax statistics for Germany. A revenue shift from income to inheritance tax could be used to increase work incentives by cutting the marginal tax rates for the working population. However, it turns out that taxing inheritances is accompanied by significant behavioural responses of donors via tax planning. Furthermore, the introduction of a flat tax model with a broad tax base would not generate large enough additional revenue to foster relevant employment effects. |
| Keywords: | Inheritance taxation,wealth distribution,redistribution,inequality,labour supply |
| JEL: | D31 H20 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224552&r=all |
| By: | Meekes, Jordy (University of Melbourne); Hassink, Wolter (Utrecht University); Kalb, Guyonne (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | We examine whether the COVID-19 crisis affects women and men differently in terms of employment, working hours and hourly wages outcomes, and whether the effects are demand or supply driven. COVID-19 impacts are studied using administrative data on all Dutch employees up to 30 June 2020, focussing on the national lockdown and the emergency childcare for essential workers in the Netherlands. First, we find that the impact of COVID-19 is much larger for non-essential workers than for essential workers. Although, on average, women and men are equally affected, female non-essential workers are more affected than male non-essential workers. Second, partnered individuals with young children are equally affected by the crisis as others, irrespective of gender and spousal employment. Third, single-parent essential workers experience relatively large negative labour supply effects, suggesting emergency childcare was not sufficient for this group. However, overall, labour demand effects appear more important than labour supply effects. |
| Keywords: | COVID-19, gender, employment, hours worked, lockdown, essential workers |
| JEL: | J13 J16 J20 J64 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13843&r=all |
| By: | Taruttis, Lisa; Weber, Christoph |
| Abstract: | The German government aims at a climate-neutral building stock by 2050 to reach the goals defined in the Climate Action Plan 2050. Increasing the energy efficiency of existing buildings is therefore a high priority. For this purpose, investments of private homeowners will play a major role since about 46.5% of the German dwellings are owner-occupied. To identify potential monetary benefits of investing in energetic retrofits, we investigate whether energy efficiency is reflected in property values of single-family houses in Germany. Thereby we examine possible heterogeneous effects among regions. With 455,413 individual observations on a 1km²-grid level for 2014 to 2018, this study adds to the literature 1) by examining the effect of energy efficiency on housing values for Germany on a more small-scale level and specifically investigating regional disparities in this context and 2) by estimating an energy efficiency value-to-cost ratio. Applying a hedonic analysis, we find a positive relationship between energy efficiency and asking prices. We also find evidence for regional disparities. Effects are significantly weaker in large cities compared to other urban areas, whereas the impact in rural areas is much stronger. Since property values are expected to decline in rural regions, homeowners could alleviate this development by increasing the energy efficiency of their dwellings. |
| Keywords: | Energy efficiency,residential buildings,regional disparities,German housing market,hedonic analysis,housing value |
| JEL: | C31 Q40 R21 R31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224582&r=all |
| By: | Zorlu, Aslan (University of Amsterdam); van Gent, Wouter (University of Amsterdam) |
| Abstract: | This paper examines ethnic disparities in intergenerational economic mobility for the children of second-generation "migrants." Using rich register data for adult children aged 20 to 30, we provide empirical evidence on the economic assimilation outcomes of the descendants of immigrants who mainly arrived in the Netherlands in the post-World War II period. Acknowledging a high degree of diversity in the starting positions of immigrants associated with their dominant migration motives, we estimate the Dutch-migrant group gap in incomes from an intergenerational mobility perspective. Our descriptive rank-rank analysis reveals significant ethnic disparities in absolute and relative intergenerational income mobility. The absolute mobility of the ethnic groups we study appears to have the following rank order: Moroccan, Turkish Surinamese, Indish, German, and Dutch. While a higher level of intergenerational transmission of parental income narrows the gap for Turkish and Surinamese children, it widens the gap for Indish and Moroccan children. Our decomposition analysis shows that the ethnic disparities found for the Moroccan, Turkish, and Surinamese third generation are entirely explained by their relatively young ages and associated unfavorable socioeconomic positions, and by their lower parental income levels. |
| Keywords: | income, third generation, second generation, immigrants |
| JEL: | J15 J31 J61 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13855&r=all |
| By: | Dolls, Mathias; Fuest, Clemens; Krolage, Carla; Neumeier, Florian |
| Abstract: | This paper examines the effects of real estate transfer taxes (RETT) on house prices using a rich micro dataset on German properties covering the period from 2005 to 2018. We exploit a 2006 constitutional reform that allowed states to set their own RETT rates, leading to frequent increases in states' tax rates in subsequent years. Our monthly event study estimates indicate a price response that strongly exceeds the change in the tax burden for single transactions. I.e., twelve months after a reform, a one percentage point increase in the tax rate reduces property prices by on average 3.5%. Effects are stronger for apartments and apartment buildings than for singlefamily houses. We interpret these results in the context of a theoretical model that accounts for the effects of RETT on a property's resale value. If a property is expected to be traded more frequently in the future, the decline in its price can exceed the increase in the tax burden. Moreover, larger price effects can be explained by higher bargaining power of sellers. |
| Keywords: | Real estate transfer taxes,property taxes,housing market |
| JEL: | H22 H71 R32 R38 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224525&r=all |
| By: | Malin, Lydia |
| Abstract: | Despite increasing educational attainment and greater labor market participation of women in the last decades, occupational segregation and gender differences in employment patterns remain stable. While men continue to have fairly stable employment patterns, women’s occupational trajectories are more affected by discontinuity and part-time work. Previous research on gender inequality in labor markets (LM) focused on individual- and macro-level influences on e.g. female labor supply and wages. This study adds to and extends previous research by focusing on men’s employment patterns in occupations with different gender-types. Doing so, this analysis contributes to disentangle individual and contextual influences by comparing typical employment patterns of men in female-typical occupations with those of their female colleagues and those of men in male-typical occupations. By this means, the aim of this study is to detect the contribution of occupational settings to gender differentiation in employment patterns. Drawing on data from the German National Educational Panel Study (NEPS), I use sequence clustering to detect different types of employment patterns and following multinomial logistic regressions on cluster membership. The results show that employment patterns differ by gender and type of occupation. Most men do have continuous fulltime employment patterns, even in female occupations. However, men in female occupations are significantly more likely to have work interruptions for further education and part-time dominated employment trajectories compared to men in male-typical occupations. |
| Keywords: | Career patterns,employment trajectories,work histories,gender-atypical occupations,sequence analysis,optimal matching,cluster analysis |
| JEL: | J |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224522&r=all |
| By: | Windsteiger, Lisa; Martinangeli, Andrea |
| Abstract: | In a survey experiment conducted in Germany, we investigate how preferences over both the financing and the provision of redistributive policies are affected by poverty and immigration. We find that while information about poverty has no detectable impact on the progressivity of the respondents' demanded income tax schedule, information about immigration has a sizeable and signi ficant negative impact for middle income respondents. The opposite holds for low income earners, such that effects cancel out at the aggregate level. On the provision side, middle income respondents see public education as a viable response to both poverty and immigration, while low income respondents desire less public expenditure on education due to immigration. These heterogeneities suggest that understanding the relationship between immigration, poverty and demand for redistribution and addressing its pitfalls requires in-depth investigations by population segment. |
| Keywords: | Immigration,poverty,redistribution,survey experiment |
| JEL: | D31 D63 H53 J15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224537&r=all |
| By: | Guglielmo Barone (University of Padua); Francesco David (Bank of Italy); Guido de Blasio (Bank of Italy); Sauro Mocetti (Bank of Italy) |
| Abstract: | We examine the impact of household mortgages on house prices. Using biannual data on Italian cities for the years 2003-2015, we build an exogenous and fully data-driven indicator of mortgage supply stances and use it as an instrument for actual extended mortgages. Our results indicate that mortgages have a positive and significant causal effect on house prices, with an estimated elasticity of around 0.1. The estimated effect is larger during the expansionary phase of the housing cycle. We also find evidence of significant spatial heterogeneity: mortgages push real estate values higher in cities where the housing supply curve is less elastic or households are more dependent on external finance. |
| Keywords: | mortgage supply, house prices, local housing market |
| JEL: | G21 R21 R51 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1282_20&r=all |
| By: | Bassanini, Andrea (OECD); Caroli, Eve (Université Paris-Dauphine); Ferreira, Bruno Chaves; Rebérioux, Antoine (University Paris Ouest-Nanterre) |
| Abstract: | We study the reactions to job destructions on Twitter. We use information on large-scale job-destruction and job-creation events announced in the United Kingdom over the period 2013-2018. We match it with data collected on Twitter regarding the number and sentiments of the tweets posted around the time of the announcement and involving the company name. We show that job-destruction announcements immediately elicit numerous and strongly negative reactions. On the day of the announcement, the number of tweets and first-level replies sharply increases as does the negativity of the sentiments of the posted tweets. These reactions are systematically more important than reactions to job creations. We also show that they trigger significant losses in the market value of the downsizing firms. Our findings suggest that job destructions generate reputational costs for firms to the extent that they induce a strong negative buzz involving the company name. |
| Keywords: | job destructions, job creations, adjustment costs, social media, sentiment analysis, cumulative abnormal returns |
| JEL: | G14 J63 L82 M21 M51 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13840&r=all |
| By: | Laura Bottazzi; Annamaria Lusardi |
| Abstract: | We examine gender differences in financial literacy among high school students in Italy using data from the 2012 Programme for International Student Assessment (PISA). Gender differences in financial literacy are large among the young in Italy. They are present in all regions and are particularly severe in the South and the Islands. Combining the rich PISA data with a variety of other indicators, we provide a thorough analysis of the potential determinants of the gender gap in financial literacy. We find that parental background, in particular the role of mothers, matters for the financial knowledge of girls. Moreover, we show that the social and cultural environment in which girls and boys live plays a crucial role in explaining gender differences. We also show that history matters: Medieval commercial hubs and the nuclear family structure created conditions favorable to the transformation of the role of women in society, and shaped gender differences in financial literacy as well. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28065&r=all |
| By: | Jacques MAIRESSE (CREST ENSAE (France); UNU-MERIT, Maastricht University (Netherlands); EHESS (France); NBER (USA)); Michele PEZZONI (GREDEG, CNRS, Université Côte d’Azur (France); OST, HCERES, (France); ICRIOS, Bocconi University (Italy)); Fabiana VISENTIN (UNU-MERIT, Maastricht University (Netherlands)) |
| Abstract: | In this study, we investigate what are the factors of the promotion of female and male scientists at the French Institute of Physics (INP) at CNRS, one of the largest European public research organizations. We construct a long panel of INP physicists combining various data sources on their research activities and career. Using event history analysis, we find that female and male physicists have the same rate of promotion from junior to senior positions when controlling for research productivity and a variety of other promotion factors. Our results also suggest that promotion factors such as family characteristics, mentoring, professional network, research responsibilities have different impacts on female and male researchers. |
| Keywords: | Gender disparity, Promotion, Research productivity, Family characteristics, Research Responsibilities, Mentoring activities, Panel Data, Event history analysis. |
| JEL: | I23 J16 |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2020-25&r=all |
| By: | Zucco, Aline; Bächmann, Ann-Christin |
| Abstract: | Occupational positions can explain an important part of the differences in pay between men and women. However, a considerable Gender Pay Gap exists even within the same occupational position. In this paper, we aim at understanding the reasons for the gap within occupational positions and, therefore, investigate whether promotions lead to the same effect on earnings growth for men and women. Using administrative data, we are the first to investigate potential gender gaps in earnings increase due to a promotion in Germany. Moreover, we are the first to analyze differences in the gender gap across promotions into different occupational positions. Our results emphasize that women's earnings growth are larger than men's after being promoted to the same position. We find that this effect is mainly due to selection since we compare a highly positively selected group of women to an average group of men. Once, we add firm fixed effects, however, gender differences disappear, which highlights the role of collective agreements. |
| Keywords: | Gender,Promotions,Wage Growth |
| JEL: | J16 M51 J31 J24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224514&r=all |
| By: | Mathilde POULHES (CREST, SDES (Ministry of Housing), Insee and SciencesPo (Paris)) |
| Abstract: | This paper estimates the impact of the rise in the housing transfer tax (the régime de droit commun) in France in 2014. It exploits both time and geographical discontinuities in the implementation of this reform that gave the right to local authorities to raise their housing transfer tax, an entitlement that most départements have chosen to exercise. In the short term, I provide evidence that buyers anticipated the reform to avoid the additional tax burden. I then use an event-study design to examine whether there was any lock-in effect in the volume of dwelling sales. I show there is evidence of a long-term negative effect of the tax increase on the number of transactions, but only in markets where supply was high relative to demand. Finally, I find no effect on pre-tax sale prices, meaning that the burden of the transfer tax rests now on the buyer. My findings highlight the price rigidity of the French housing market and suggest that lowering housing transfer taxes could be used as a fiscal stimulus in the short term. |
| Date: | 2020–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2020-23&r=all |
| By: | Andreas Lichter; Amelie Schiprowski |
| Abstract: | This paper studies how the potential duration of unemployment benefits affects individuals' job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance scheme in 2008, which increased the potential benefit duration from 12 to 15 months for recipients of age 50 to 54. Based on detailed survey data and difference-in-differences techniques, we estimate that one additional month of benefits reduces the number of filed applications by around 10% on average over the first two months of unemployment. Treatment effects on the reservation wage are positive but statistically insignificant. In a complementary analysis, we use social security data to investigate how the reform affected re-employment outcomes. The difference-in-differences estimates yield an elasticity of 0.24 (0.1) additional months in unemployment (nonemployment) per additional month of potential benefits. A cautious back-of-the-envelope calculation reveals substantial returns to early search effort. |
| Keywords: | Unemployment Insurance, Job Search, Re-Employment Outcomes, Natural Experiment |
| JEL: | D83 I38 J64 J68 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_164v1&r=all |
| By: | Lochner, Benjamin; Merkl, Christian; Stüber, Heiko; Gürtzgen, Nicole |
| 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: | recruiting intensity,vacancies,labor selection,administrative data,survey data |
| JEL: | E24 J63 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224559&r=all |
| By: | Groh, Elke D.; Ziegler, Andreas |
| Abstract: | As long as electricity is generated from fossil fuels, the reduction of its consumption is an important direction for climate protection and related policy measures. Based on data of more than 3700 respondents in Germany, we thus empirically examine the relevance of a large set of well-known determinants of electricity consumption such as household and dwelling char-acteristics, but also of individual values and norms. Since behavioral economics highlights the importance of economic preferences in such public good contexts, we additionally consider risk and time preferences, trust, altruism, and reciprocity in our econometric analysis. With respect to the latter group of factors, however, only time preferences have a strong significant effect on electricity consumption. Furthermore, norms also play only a minor role. In contrast, our estimation results suggest a high relevance of dwelling characteristics and socio-demographics. Interestingly, it seems that a low electricity consumption is no important cli-mate protection activity of German inhabitants with strong environmental values, which is in contrast to the demand of such citizens for green electricity. |
| Keywords: | electricity consumption,economic preferences,individual values,social norms,econometric analysis |
| JEL: | Q41 Q54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224587&r=all |
| By: | Paule-Paludkiewicz, Hannah |
| Abstract: | This paper studies how the statutory right to work part-time affects mothers' post-birth labor market outcomes and higher-order fertility. I use a differences-in-differences design to investigate the introduction of a German law in 2001 that grants the right to work part-time to employees working in firms with more than 15 employees. I find that the reform does not increase the probability to return to work after childbirth significantly. However, mothers who gain the right to work part-time are more likely to work part-time in the short-run after childbirth, indicating that the law is effective in granting access to part-time employment to those mothers who want it. While the probability to return to work after childbirth is unaffected, the law has a positive effect on maternal employment and labor income in the long-run. The results suggest that the increase in the employment rate is due to a lower probability to drop out of the labor market after the temporary return and a lower probability to give birth to an additional child. |
| Keywords: | Female Employment,Part-Time Work,Fertility,Family and Work Obligations |
| JEL: | J13 J18 J22 J83 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224556&r=all |
| By: | Slavtchev, Viktor; Bräuer, Richard; Mertens, Matthias |
| Abstract: | This study analyzes empirically the effects of import competition on firm productivity (TFPQ) using administrative firm-level panel data from German manufacturing. We find that only import competition from high-income countries is associated with positive incentives for firms to invest in productivity improvement, whereas import competition from middle- and low-income countries is not. To rationalize these findings, we further look at the characteristics of imports from the two types of countries and the effects on R&D, employment and sales. We provide evidence that imports from high-income countries are relatively capital-intensive and technologically more sophisticated goods, at which German firms tend to be relatively good. Costly investment in productivity appears feasible reaction to such type of competition and we find no evidence for downscaling. Imports from middle- and low-wage countries are relatively labor-intensive and technologically less sophisticated goods, at which German firms tend to generally be at disadvantage. In this case, there are no incentives to invest in innovation and productivity and firms tend to decline in sales and employment. |
| Keywords: | productivity,multi-product firms,import competition |
| JEL: | F14 L25 D22 D24 F61 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224563&r=all |
| By: | Brall, Franziska; Schmid, Ramona |
| Abstract: | We analyze how and through which channels wage inequality is affected by the rise in automation and robotization in the manufacturing sector in Germany from 1996 to 2017. Combining rich linked employer-employee data accounting for a variety of different individual, firm and industry characteristics with data on industrial robots and automation probabilities of occupations, we are able to disentangle different potential causes behind changes in wage inequality in Germany. We apply the recentered influence function (RIF) regression based Oaxaca-Blinder (OB) decomposition on several inequality indices and find evidence that besides personal characteristics like age and education the rise in automation and robotization contributes significantly to wage inequality in Germany. Structural shifts in the workforce composition towards occupations with lower or medium automation threat lead to higher wage inequality, which is observable over the whole considered time period. The effect of automation on the wage structure results in higher inequality in the 1990s and 2000s, while it has a significant decreasing inequality effect for the upper part of the wage distribution in the more recent time period. |
| Keywords: | Wage Inequality,Automation,Robots,Decomposition Method,RIFregression,Linked employer - employee data,Germany |
| JEL: | J31 C21 D63 O30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:142020&r=all |
| By: | Sophie-Charlotte Klose |
| Abstract: | This paper identifies latent group structures in the effect of motherhood on employment by employing the C-Lasso, a recently developed, purely data-driven classification method. Moreover, I assess how the introduction of the generous German parental benefit reform in 2007 affects the different cluster groups by taking advantage of an identification strategy that combines the sharp regression discontinuity design and hypothesis testing of predicted employment probabilities. The C-Lasso approach enables heterogeneous employment effects across mothers, which are classified into an a priori unknown number of cluster groups, each with its own group-specific effect. Using novel German administrative data, the C-Lasso identifies three different cluster groups pre- and post-reform. My findings reveal marked unobserved heterogeneity in maternal employment and that the reform affects the identified cluster groups' employment patterns differently. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.03541&r=all |
| By: | Antonio Villar (Universidad Pablo de Olavide); José Ignacio García Pérez (Universidad Pablo de Olavide) |
| Abstract: | We present an evaluation model that aims at developing a synthetic index of non-employment that combines incidence and severity. This index considers, besides conventional unemployment rates, unemployment duration, discouraged workers and workers with suspended jobs. We have applied this methodology to the analysis of the impact of the Covid-19 in the Spanish labour market. The impact of the epidemics on the job market has been very asymmetric by regions and types of workers. Compared to the situation in the third quarter of 2019 we find that one year later the non-working index arrived to more than 150 in regions in the south whereas it is below 75 in regions like Navarra, Catalunya or Madrid. The dynamics of this indicator, though, shows that the larger increments have occurred among the regions with lower initial values so that the variability is now smaller. Regarding age and education, we find that the young (and among them the less educated) are the population subgroup that suffers more intensely the impact of this new economic crisis. On the contrary, older workers seem to improve for all education subgroups during 2020. The main reason behind this is the asymmetric concentration of temporary collective redundancy scheme measures among older workers, what is very much connected with the dual character of the Spanish labour market regarding contract types and job security. |
| Keywords: | Unemployment, Severity, Incidence, Unemployment Duration, Inequality, Covid-19. |
| JEL: | J01 J21 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-564&r=all |
| By: | Breyer, Friedrich; Lorenz, Normann; Ihle, Peter |
| Abstract: | One of the most important controversies in health economics concerns the question whether the imminent aging of the population in most OECD countries will increase per-capita health care expenditures (HCE). Proponents of the "red-herring hypothesis" argue that this is not the case because most of the correlation of age and HCE is due to the compression of the mortality rate in old age and the high costs of dying. The evidence for this hypothesis is, however, mixed. Our contribution to this debate is mainly methodological: We argue that the relationship of age, time to death (TTD) and HCE should be estimated non-parametrically. Using a large panel data set from the German Statutory Health Insurance, we demonstrate that the non-parametric approach is particularly useful to answer the question whether age still has an impact on HCE once TTD is taken into account and find that it is clearly the case. This relationship is even more pronounced for long-term care expenditures (LTCE). We then show that the age-expenditure relationship is not stable over time: for many age classes, HCE in the last year of life grow considerably faster than HCE of survivors. We explore the impact of these findings on the simulation of future HCE and find that population aging will in fact contribute to rising HCE in the coming decades. However, the total impact of demographics on future HCE and LTCE is dwarfed by the exogenous time trend, which is due to medical progress and increasing generosity of public LTC insurance. |
| Keywords: | health care expenditures,aging,red-herring hypothesis,non-parametric regression |
| JEL: | H51 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224635&r=all |
| By: | Mense, Andreas |
| Abstract: | I estimate the impact of market-rate new housing supply on the local rent distribution. As an exogenous shifter of new housing supply, I exploit local weather shocks during the construction phase that lead to temporary delays in housing completions at the municipal level. Adding one new housing unit to the stock for every 100 rental housing units offered on the market in a given month reduces rents by 0.4-0.7%. A series of instrumental variable quantile regressions show that shocks to new housing supply shift the rent distribution as a whole, suggesting that market-rate new housing supply effectively reduces housing costs of all renter households. I rationalize this finding by analyzing moving decisions in the German Socio-Economic Panel. The housing quality at a household's previous address is a poor predictor of the housing quality at the current address, suggesting that new housing supply triggers supply of (rental) housing units across the housing quality spectrum. |
| Keywords: | Rental housing,new housing supply,housing demand elasticity,housing supply elasticity,filtering |
| JEL: | R21 R31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224569&r=all |
| By: | Winkler, Erwin |
| Abstract: | This paper provides evidence that labor reallocation from the manufacturing into the non-manufacturing sector causes an increase in sorting of high-skilled (low-skilled) workers into high-paying (low-paying) firms and thereby triggers a rise in wage inequality. I use data on 50% of all West German male employees and exploit industry-level variation in trade-induced labor reallocation into the non-manufacturing sector, stemming from Germany's trade integration with China and Eastern Europe. The results suggest that labor reallocation into the non-manufacturing sector causes an increase in sorting because low-educated workers performing routine and codifiable tasks are less likely to move to high paying service firms than more skilled workers. These results are not specific to trade-induced labor reallocation, but carry over to any shock or policy which causes a contraction of the manufacturing sector and labor reallocation into the service sector. A back-of-the-envelope calculation suggests that total observed labor reallocation into the non-manufacturing sector explains at least 30% of the rise in sorting and 10% of the rise in wage inequality between 1990 and 2010 in Germany. |
| Keywords: | Labor reallocation,wage inequality,sorting,firms,international trade |
| JEL: | J31 J62 F14 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224535&r=all |
| By: | Lucia Savadori; Giuseppe Espa; Maria Michela Dickson |
| Abstract: | Political orientation polarizes the attitudes of more educated individuals on controversial issues. A highly controversial issue in Europe is immigration. We found the same polarizing pattern for opinion toward immigration in a representative sample of citizens of a southern European middle-size city. Citizens with higher numeracy, scientific and economic literacy presented a more polarized view of immigration, depending on their worldview orientation. Highly knowledgeable individuals endorsing an egalitarian-communitarian worldview were more in favor of immigration, whereas highly knowledgeable individuals with a hierarchical-individualist worldview were less in favor of immigration. Those low in numerical, economic, and scientific literacy did not show a polarized attitude. Results highlight the central role of socio-political orientation over information theories in shaping attitudes toward immigration. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.02362&r=all |
| By: | Arni, Patrick; Liu, Xingfei |
| Abstract: | Standard program evaluations implicitly assume that individuals are perfectly informed about the considered policy change and the related institutional rules. This seems not very plausible in many contexts, as diverse examples show. However, evidence on how incomplete information affects the size of measured treatment effects is broadly missing. We exploit a unique set of natural experiments to assess the importance of incomplete information in shaping policy effects. We compare different large-scale quasi-experiments on changing potential benefit duration (PBD) in unemployment insurance (UI). Thereby, we confront the benchmark case, in which individuals are fully informed about their different PBD levels, with cases in which job seekers experience a change of their benefit eligibility without being initially informed. However, in any of the considered cases they face exactly the same size of treatment: an increase or decrease of the PBD by 200 days. We identify the treatment effects around the threshold of age 25 where PBD rules change in the considered Swiss UI system. We find substantial differences in the treatment effects across cases with different information conditions on benefit levels. The differences can be rationalized by a model in which individuals invest different amounts of effort to acquire the necessary information. Quantifications of the impact of incomplete information on the PBD effects demonstrate the policy relevance of this usually ignored issue. |
| Keywords: | asymmetric treatment effects,natural experiment,incomplete information,job search,policy evaluation,unemployment insurance |
| JEL: | J64 J68 H41 D03 D83 D84 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224629&r=all |
| By: | Ivanović, Vladan; Kufenko, Vadim |
| Abstract: | The relationship between female empowerment and economic development is one of the most complex examples of reverse causality, yet multiple scholars acknowledge that female empowerment promotes economic progress. One of the crucial aspects of female empowerment is female entrepreneurship; however, the literature on the emergence of female entrepreneurship is scarce. We focus on the rise of female entrepreneurship in Serbia and collect an extensive biographical dataset of women, who took part in privatization. Although women enjoyed the same de jure rights as men, they faced a number of informal restrictions such as i) patriarchal values, limiting the role of women in the society and ii) occupations in low-wage sectors, making it difficult to accumulate capital. Analyzing the determinants of failures of the newly privatized firms during 2002-2019 we find a significant negative relationship between the risks of failure and the cases of own independent entrepreneurial success of women prior to privatization as well as the cases, in which only the entrepreneurial success of husbands of these women was registered. This relationship is robust to controlling for diverse characteristics of firms and to inclusion of ownership duration. We also find that the presence of influential husbands in the background was not significantly related to the subsequent change of ownership. Although the ownership change was registered for the majority of firms in our sample, we find that during the Serbian privatization women managed to build up on their own entrepreneurial success, which contributed to female empowerment. These findings can be relevant for understanding the aftermath of privatizations with respect to gender inequality in other transition countries. |
| Keywords: | entrepreneurship,female entrepreneurship,economics of gender,political,economy,transition |
| JEL: | J16 L26 D72 P26 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:072020&r=all |
| By: | Schmidt, Vanessa; Schreiber, Sven |
| Abstract: | Using detailed establishment-level micro data, this paper analyzes the quantitative implications of the missing-growth hypothesis by Aghion, Bergeaud, Boppart, Klenow, and Li (2019) for Germany. This hypothesis states that actual growth rates of real output are systematically understated by official estimates, such that a part of real growth is missing in the published data. The underlying effect rests on overstated inflation estimates due to imputed prices for disappearing goods and services varieties, which is indirectly measured by plant entry and exit dynamics. Using different market share proxies our main results regarding understated real output growth lie in the range of 0:39 to 0:54 percentage points per year on average for the benchmark sample 1998-2016. These are quite closely in line with existing findings for France, the USA, and Japan (in different periods). We provide additional robustness analysis and discuss limitations of the approach. |
| Keywords: | creative destruction,price imputation,inflation measurement |
| JEL: | E31 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224616&r=all |
| By: | Tyrowicz, Joanna |
| Abstract: | Financing consumption of the elderly in the face of the projected increase in life expectancy is a key challenge for economic policy. Moreover, standard structural models with fully rational agents suggest that about 50-60 percent of old-age consumption is financed with voluntary savings, even in the presence of a fairly generous public pension system. This is clearly inconsistent with either the data, or the alarming simulations of old-age poverty in the years to come. Oldage saving (OAS) schemes are widely used policy instruments to address this challenge, but structural evaluations of such instruments remain rare. We develop a framework with incompletely rational agents: lacking financial literacy and experiencing commitment difficulties. We study a broad selection of OAS schemes and find that they raise welfare of financially illiterate agents and to a lesser extent improve welfare of agents with a high degree of time inconsistency. They also reduce the incidence of poverty at old age. Unfortunately, these instruments are fiscally costly, induce considerable crowd-out and direct fiscal transfers mostly to those agents, who need it the least. |
| Keywords: | old-age savings,incomplete rationality,welfare effects |
| JEL: | H31 H55 I38 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224526&r=all |
| By: | Briel, Stephanie; Osikominu, Aderonke; Pfeifer, Gregor; Reutter, Mirjam; Satlukal, Sascha |
| Abstract: | We analyze the impact of (over-)confidence on gender differences in expected starting salaries using elicited beliefs of prospective university students in Germany. According to our results, female students have lower wage expectations and are less overconfident than their male counterparts. Oaxaca-Blinder decompositions of the mean show that 7.7% of the gender gap in wage expectations is attributable to a higher overconfidence of males. Decompositions of the unconditional quantiles of expected salaries suggest that the contribution of gender differences in confidence to the gender gap is particularly strong at the bottom and top of the wage expectation distribution. |
| Keywords: | Gender Pay Gap,Wage Expectations,Overconfidence,Decomposition Analyses,Unconditional Quantile Regressions (RIF-Regressions) |
| JEL: | J16 D84 D91 C21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:082020&r=all |
| By: | Arenas, Andreu (University of Barcelona); Calsamiglia, Caterina (IPEG); Loviglio, Annalisa (Universitat Autònoma de Barcelona) |
| Abstract: | The outbreak of COVID-19 in 2020 inhibited face-to-face education and constrained exam taking. In many countries worldwide, high-stakes exams happening at the end of the school year determine college admissions. This paper investigates the impact of using historical data of school and high-stakes exams results to train a model to predict high-stakes exams given the available data in the Spring. The most transparent and accurate model turns out to be a linear regression model with high school GPA as the main predictor. Further analysis of the predictions reflect how high-stakes exams relate to GPA in high school for different subgroups in the population. Predicted scores slightly advantage females and low SES individuals, who perform relatively worse in high-stakes exams than in high school. Our preferred model accounts for about 50% of the out-of- sample variation in the high-stakes exam. On average, the student rank using predicted scores differs from the actual rank by almost 17 percentiles. This suggests that either high-stakes exams capture individual skills that are not measured by high school grades or that high-stakes exams are a noisy measure of the same skill. |
| Keywords: | performance prediction, high-stakes exams, college allocation, COVID-19 |
| JEL: | I23 I24 I28 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13838&r=all |
| By: | Ginja, Rita (University of Bergen); Karimi, Arizo (Uppsala University); Xiao, Pengpeng (Yale University) |
| Abstract: | Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms' adjustment costs upon worker absence and exit. The reform increased women's leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms' availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women. |
| Keywords: | parental leave, firm-specific human capital, statistical discrimination |
| JEL: | J13 J16 J21 J22 J31 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13833&r=all |
| By: | Umbach, Tim |
| Abstract: | Much research has been done showing that unemployment can cause crime, and that crime adversely impacts economic activity. However, very few authors have considered a simultaneous relationship. Using an IV-setup and regional panel-data, I find evidence for the possibility of a vicious cycle, with unemployment leading to higher crime rates and crime rates raising unemployment. I further find that especially employment in low-skill service jobs is adversely affected by crime, that many types of crime are impacted by unemployment differently and that both apartment rents and GDP-growth decrease if crime increases. The spatial dependencies found further raise the possibility that these vicious cycles could spill over into neighboring regions. |
| Keywords: | Crime,Unemployment,Amenities,spatial autregresssive model,SARAR,endogenous regessors. |
| JEL: | J21 J32 K42 R11 R23 R30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224611&r=all |
| By: | Filippo Pusterla (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | This paper investigates how rms' productivity is a ected by the relationship between organiza- tional practices and workers' level of education. Using rm-level panel data covering the period 2002 to 2008, I estimate complementarities among workers' level of education and a large set of organizational practices aggregated into three domains: decentralization, incentive pay, and work design where work design comprises job rotation and teamwork. I consider workers with four lev- els of education: no post-compulsory education, upper-secondary vocational education and train- ing, tertiary vocational education, and tertiary academic education. The results indicate that the complementarity between education and the extent of rms' decentralization is higher for tertiary- educated workers. In contrast, the estimations reveal no complementarity between incentive pay and higher levels of workers' education. Furthermore, complementarity exists between work design and tertiary-educated workers, especially workers with a tertiary vocational education. Finally, the estimations using an aggregate measure of organization suggest complementarities across organiza- tional practices. |
| Keywords: | complementarity, education, organization, productivity |
| JEL: | J24 L23 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:20-478&r=all |