nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒01‒25
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Earnings of university dropouts across Europe By Berlingieri, Francesco; Bolz, Theresa
  2. Are firms withdrawing from basic research? An analysis of firm-level publication behaviour in Germany By Krieger, Bastian; Pellens, Maikel; Blind, Knut; Schubert, Torben
  3. EU start-up calculator: impact of COVID-19 on aggregate employment: Scenario analysis for Bulgaria, Croatia, Czechia, Luxemburg, Netherlands, Poland, Romania, Slovakia and Slovenia By Cristiana Benedetti Fasil; Petr Sedlacek; Vincent Sterk
  4. AI Watch : AI Uptake in Health and Healthcare, 2020 By DE NIGRIS Sarah; CRAGLIA Massimo; NEPELSKI Daniel; HRADEC Jiri; GOMEZ-GONZALES Emilio; GOMEZ GUTIERREZ Emilia; VAZQUEZ-PRADA BAILLET Miguel; RIGHI Riccardo; DE PRATO Giuditta; LOPEZ COBO Montserrat; SAMOILI Sofia; CARDONA Melisande
  5. Is the German Mittelstand More Resistant to Crises? Empirical Evidence from the Great Recession By Michael Berlemann; Vera Jahn; Robert Lehmann
  6. Job Placement via Private vs. Public Employment Agencies: Investigating Selection Effects and Job Match Quality in Germany By Ayaita, Adam; Grund, Christian; Pütz, Lisa
  7. Being on the Frontline? Immigrant Workers in Europe and the COVID-19 Pandemic By Francesco Fasani; Jacopo Mazza
  8. Quality and Selection in Regulated Professions By Gaetano Basso; Eleonora Brandimarti; Michele Pellizzari; Giovanni Pica
  9. Quality of government and regional trade: Evidence from European Union regions By Javier Barbero; Giovanni Mandras; Giovanni Mandras; Ernesto Rodriguez-Crespo; Andres Rodriguez-Pose
  10. The private and fiscal returns to higher education: A simulation approach for a young German cohort By Fischer, Benjamin; Hügle, Dominik
  11. Understanding the Reallocation of Displaced Workers to Firms By Paul Brandily; Camille Hémet; Clément Malgouyres
  12. The Effect of Increasing Retirement Age on Households’ Savings and Consumption Expenditures By Stefan Etgeton; Björn Fischer; Han Ye
  13. Higher education funding in Germany: A distributional lifetime perspective By Hügle, Dominik
  14. Unemployment Duration and the Take-up of Unemployment Insurance By Blasco, Sylvie; Fontaine, Francois
  15. Who Cleans My House If the Government Pays? Disadvantaged Labor Market Groups in the Tax-Subsidized Domestic Service Sector By Rickne, Johanna
  16. Mandatory Integration Agreements for Unemployed Job Seekers: A Randomized Controlled Field Experiment in Germany By van den Berg, Gerard J.; Hofmann, Barbara; Stephan, Gesine; Uhlendorff, Arne
  17. How green is greening? A fine-scale analysis of spatio-temporal dynamics in Germany By Lakes, Tobia; Garcia-Marquez, Jaime; Müller, Daniel; Lakner, Sebastian; Pe’er, Guy
  18. Family Size and Subjective Well-being in Europe: Do More Children Make Us (Un)Happy? By Barbara Pertold-Gebicka; Dominika Spolcova
  19. Gender Norms and Specialization in Household Production: Evidence from a Danish Parental Leave Reform By Lassen, Anne Sophie
  20. Unearned Income and Labor Supply: Evidence from Survivor Pensions in Austria By Böheim, René; Topf, Michael
  21. Forward to the Past: Short-Term Effects of the Rent Freeze in Berlin By Anja M. Hahn; Konstantin A. Kholodilin; Sofie R. Waltl
  22. A Model for Dual Healthcare Market with Congestion Differentiation By Damien Besancenot; Karine Lamiraud; Radu Vranceanu
  23. Publicly funded hospital care: expenditure growth and its determinants By Nigel Rice; María José Aragón
  24. Does Online Search Improve the Match Quality of New Hires? By Gürtzgen, Nicole; Lochner, Benjamin; Pohlan, Laura; van den Berg, Gerard J.
  25. Earnings and Labor Market Dynamics: Indirect Inference Based on Swedish Register Data By Holmberg, Johan
  26. Does the Education Level of Refugees Affect Natives’ Attitudes? By Philipp Lergetporer; Marc Piopiunik; Lisa Simon
  27. Exposure to OFDI and regional labour markets: Evidence for routine and non-routine jobs in Great Britain By Luisa Gagliardi; Simona Iammarino; Andres Rodriguez-Pose
  28. The impact of regulation on innovation By Philippe Aghion; Antonin Bergeaud; John Van Reenen
  29. Moms' Time—Married or Not By Hamermesh, Daniel S.

  1. By: Berlingieri, Francesco; Bolz, Theresa
    Abstract: This paper investigates relative earnings of individuals leaving tertiary education without a degree across 18 European countries employing survey data on adult workers. We find that, on average, university dropouts earn 8% more than those never enrolling into tertiary education, but 25% less than university graduates. Moreover, university dropouts do not appear to have better employment chances than other upper secondary graduates while they have a significantly lower employment probability than those graduating from tertiary education. We document substantial heterogeneity across countries concerning whether university attendance without completion is rewarded in the labour market. We find some suggestive evidence that university dropouts are less penalised in terms of earnings in countries with a lower share of tertiary graduates and with more flexible labour market policies.
    Keywords: university dropout,returns to higher education,international comparisons
    JEL: I23 I26 J31
    Date: 2020
  2. By: Krieger, Bastian; Pellens, Maikel; Blind, Knut; Schubert, Torben
    Abstract: Previous research has expressed concerns about firms engaging less in basic research. We contribute to this debate by studying trends in the scientific publishing activities of firms located in Germany. Our results do not confirm a declining trend in raw numbers with numbers indicating that firms' aggregate volume of scientific publications stayed constant between 2008 and 2016. However, the number of publishing firms declined, in particular in high-tech and knowledge-intensive industries. Beyond that, we observe positive trends in publishing in basic research journals compared to journals focused on applied research, and publishing in collaboration with academic partners compared to publishing alone. Thus, our results paint an ambiguous picture. While they do not confirm a decrease in firms' basic research engagement in the aggregate, the figures document a concentration of publishing activities on fewer firms. We argue that this concentration of basic research activities in firms may pose a threat to the longer term innovativeness of the German economy.
    Keywords: Corporate publishing,Basic research,R&D strategy
    JEL: O32 O33 O34 O36
    Date: 2020
  3. By: Cristiana Benedetti Fasil (European Commission – JRC); Petr Sedlacek (University of Oxford, UK, CFM-LSE & CEPR); Vincent Sterk (University College London, UK, CFM-UCL & CEPR)
    Abstract: Early data show that the COVID-19 pandemic has affected particularly strongly start-up business activity. This may have dramatic and lasting effects on aggregate employment which persist as the cohort of new firms age. To assess such an impact, we developed the EU start-up calculator. A first application targeted to Austria, Belgium, Germany, Hungary, Italy and Spain is discussed in Benedetti Fasil, SedláÄ ek and Sterk (2020a) and a second focusing Denmark, Estonia, Finland, France, Latvia, Lithuania, Portugal and Sweden is presented in Benedetti Fasil, SedláÄ ek and Sterk (2020b). The EU start-up calculator is an empirical tool that allows to conduct scenario analysis to compute the impact that the disruption of start-up activity has on aggregate employment on EU Member States and their economic sectors. In this paper, we simulate the effects of a strong (i.e. of magnitude equivalent to the Great Recession of 2008 and 2009) but short-lived (i.e. lasting one-year) crisis in Bulgaria, Croatia, Czechia, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia. This shock generates important and persistent job losses in all the countries ranging between 0.25 (Luxemburg) and 6.9% (Slovakia) of negative deviation from the employment trend in 2020 and results in a computed potential cumulative loss of jobs for the period 2020-2030 ranging from 5,600 (Luxemburg) to 2179,000 (Poland). The potential negative impact is particularly high in Bulgaria, Croatia, Poland, Romania and Slovakia as well as in the service sector, which are characterized by a high firm turnover and a reliance on start-ups and young firms for job creation. We also find that in most countries the deterioration of the survival rate of young firms plays an important role in driving employment, seconded by the number of new entrants. As a consequence, policies aimed at supporting young firms and incentivizing the creation of new ones may significantly mitigate the medium-term effect of the pandemic. In fact, when we simulate bounce-back scenarios where the number of firms entering the economy rapidly increases in 2021, in every country the outlook is significantly improved, the recovery is faster and the aggregate job loss is lower.
    Keywords: COVID-19, start-ups, employment
    Date: 2020–12
  4. By: DE NIGRIS Sarah (European Commission - JRC); CRAGLIA Massimo (European Commission - JRC); NEPELSKI Daniel (European Commission - JRC); HRADEC Jiri (European Commission - JRC); GOMEZ-GONZALES Emilio; GOMEZ GUTIERREZ Emilia (European Commission - JRC); VAZQUEZ-PRADA BAILLET Miguel (European Commission - JRC); RIGHI Riccardo (European Commission - JRC); DE PRATO Giuditta (European Commission - JRC); LOPEZ COBO Montserrat (European Commission - JRC); SAMOILI Sofia (European Commission - JRC); CARDONA Melisande (European Commission - JRC)
    Abstract: This document presents a sectoral analysis of AI in health and healthcare for AI Watch, the knowledge service of the European Commission monitoring the development, uptake and impact of Artificial Intelligence for Europe. Its main aim is to act as a benchmark for future editions of the report to be able to assess the changes in uptake and impact of AI in healthcare over time, in line with the mission of AI Watch. The report recognises that we are still at an early stage in the adoption of AI and that AI offers many opportunities in the short term for improved efficiency in administrative and operational processes and in the medium-long term for clinical applications, patients’ care, and increased citizen empowerment. At the same time, AI applications in this sensitive sector raise many ethical and societal issues and shaping the direction of development so that we can maximise the benefits whilst reducing the risks is a key issue. In the global context, Europe is well positioned with a strong research base and excellent health data, which is the pre-requisite for the development of beneficial AI applications. Where Europe is less well placed is in translating research and innovation into industrial applications and in venture capital funding able to support innovative companies to set themselves up and scale up once successful. There are however noticeable exception as the case of the BioNTech that is leading the development of one of the COVID-19 vaccines. It should also be noted that in AI-enabled health start-ups, many of them are in the area of drug discovery, i.e. the domain of BioNTech. Investment in education and training of the healthcare workforce as well as creating environments for multidisciplinary exchange of knowledge between software developers and health practitioners are other key areas. The report recognizes that there are many important policy developments already in the making that will shape future directions, including the European Strategy for Data which is setting up a common dataspace for health, a riskbased regulatory framework for AI to be put in place by the end of 2020, and the forthcoming launch of the Horizon Europe programme as well the Digital Europe Programme with large investments in AI, computing infrastructure, cybersecurity and training. The COVID-19 crisis has also acted as a booster to the adoption of AI in health and the digital transition of business, research, education and public administration. Furthermore, the unprecedented investments of the Recovery Plan agreed in July 2020 may fuel development in digital technologies and health beyond expectation. We are therefore at the junction of a potentially extraordinary period of change which we will be able to measure in future years against the baseline set by this report.
    Keywords: artificial intelligence, health, health care, technology uptake
    Date: 2020–12
  5. By: Michael Berlemann; Vera Jahn; Robert Lehmann
    Abstract: Germany’s comparatively good economic performance throughout the Great Recession of the years 2008/2009 is often attributed to the business model of the German Mittelstand firm. Somewhat surprisingly, this claim has never been backed by empirical evidence. In this paper we use micro panel data from the ifo Business Survey to study the comparative performance of Mittelstand enterprises, defined as owner-managed SMEs. We present supporting evidence for the hypothesis that Mittelstand firms performed more stable throughout the Great Recession than non-Mittelstand firms. We also show that owner-managed SMEs performed significantly better than SMEs and owner-managed large enterprises. Thus, it is rather the combination of firm-size and owner-management that leads to more crisis resistance.
    Keywords: Mittelstand firms, Great Recession, crisis resistance
    JEL: E31 G12
    Date: 2020
  6. By: Ayaita, Adam (RWTH Aachen University); Grund, Christian (RWTH Aachen University); Pütz, Lisa (RWTH Aachen University)
    Abstract: Employment agencies aim to match individuals to appropriate jobs. There are public and private employment agencies, which co-exist in many countries. Selection effects may be relevant in the sense that private agencies potentially engage in 'cream-skimming' by prioritizing highly qualified workers. The resulting job match quality is also important from an individual, a firm, and a society perspective. We examine the selection into job placement via private and public employment agencies as well as the resulting job match qualities, taking a job-market reform in Germany into account: the introduction of placement vouchers for private job placements. Using representative German panel data, we find that cream-skimming is significantly less pronounced under the voucher policy, as private agencies shift the focus toward unemployed individuals with a voucher. In addition, we find evidence based on propensity score matching estimations that private agencies tend to create better matches than their public counterparts.
    Keywords: cream-skimming, job match quality, job placement, job search, private employment agencies, public employment agency, selection, vouchers
    JEL: J64 L33 M5
    Date: 2021–01
  7. By: Francesco Fasani (Queen Mary University of London, CEPR, CReAM and IZA); Jacopo Mazza (European Commission Joint Research Centre)
    Abstract: We provide a first timely assessment of the pandemic crisis impact on the labour market prospects of immigrant workers in Europe by proposing a novel measure of their exposure to employment risk. We characterize migrants' occupations along four dimensions related to the role of workers' occupations in the response to the pandemic, the contractual protection they enjoy, the possibility of performing their job from home and the resilience of the industry in which they are employed. We show that our measure of employment risk closely predicts actual employment losses observed in European countries after the first wave of the COVID-19 pandemic. We estimate that, within industries and occupations, Extra-EU migrants and women are exposed to higher risk of unemployment than native men and that women are losing jobs at higher rates than equally exposed men. According to our estimates, more than 9 million immigrants in the EU14+UK area are exposed to a high risk of becoming unemployed due to the pandemic crisis, 1.3 million of which are facing a very high risk.
    Keywords: employment risk, COVID-19, key occupations
    JEL: F22 J61 J20
    Date: 2021–01
  8. By: Gaetano Basso (Bank of Italy); Eleonora Brandimarti (University of Geneva); Michele Pellizzari (University of Geneva, CEPR and IZA.); Giovanni Pica (Università della Svizzera Italiana, LdA and CSEF.)
    Abstract: Entry in many occupations is regulated with the objective to screen out the least able producers and guarantee high quality of output. Unfortunately, the available empirical evidence suggests that in most cases these objectives are not achieved. In this paper we investigate entry into the legal profession in Italy and we document that such a failure is due to the combination of the incomplete anonymity of the entry exam and the intergenerational transmission of business opportunities. We use microdata covering the universe of law school graduates from 2007 to 2013 matched with their careers and earnings up to 5 years after graduation. Variation generated by the random assignment of the entry exam grading commissions allows us to identify the role of family ties in the selection process. We find that connected candidates, i.e. those with relatives already active in the profession, are more likely to pass the exam and eventually earn more, especially those who performed poorly in law school. When we simulate the process of occupational choice assuming family connections did not matter, we find that strong positive selection on ability would emerge.
    Keywords: Occupational Regulation, Licensing, Intergenerational Mobility.
    JEL: J24 J44 J62
    Date: 2021–01–15
  9. By: Javier Barbero; Giovanni Mandras; Giovanni Mandras; Ernesto Rodriguez-Crespo; Andres Rodriguez-Pose
    Abstract: This paper examines – using a novel database of regional trade flows between 267 European regions for 2013 – how government quality affects trade between European Union (EU) regions. The results of a structural gravity cross-sectional analysis of trade show that trade across EU regions is highly influenced by differences in regional government quality. This influence varies by sector of economic activity and by the level of economic development of the region. The results indicate that, if the less developed regions of the EU want to engage in greater interregional trade, improving their institutional quality is a must.
    Keywords: Quality of government; institutions; regional policy; gravity model of trade; structural estimation
    JEL: F15 R10 E02
    Date: 2021–01
  10. By: Fischer, Benjamin; Hügle, Dominik
    Abstract: We quantify the private and fiscal lifetime returns to higher education in Germany accounting for the redistribution through the tax-and-transfer system, cohort effects, and the effect of income pooling within households. For this purpose we build a dynamic microsimulation model that simulates individual life cycles of a young German cohort in terms of several key variables, such as employment, earnings, and household formation. To estimate the returns to higher education, we link our dynamic microsimulation model to a tax-benefit simulator that allows converting gross wages into disposable incomes. On average, we find private and fiscal returns that are substantially higher than current market interest rates. However, analyzing the distribution of returns we also find that there is a considerable share of young adults for whom we forecast vocational training, the alternative to higher education, to be financially more rewarding. We demonstrate how the taxtransfer system and income pooling within couple households affect private returns and decompose the fiscal returns into its major components.
    Keywords: Higher education,Returns to education,Dynamic microsimulation
    JEL: C53 I23 I26
    Date: 2020
  11. By: Paul Brandily (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Camille Hémet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Clément Malgouyres (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IPP - Institut des politiques publiques)
    Abstract: We investigate the cost of job displacement using administrative data from France that covers employer and employee over both employment and unemployment spells. We find that displaced workers experience earnings losses both because of a decline in hours worked (especially in the short run) and because of lower re-employment hourly wages. In line with an active literature, we find that loss in employer-specific wage premium drives most of earnings losses in the long run. However, displaced workers tend to be re-employed by more productive firms. This result contrasts strikingly with the strong positive correlation between firms' productivity and wage premium in the cross-section. We further show that the re-employment firms also display lower labor shares. Overall, our results show that the commonly estimated loss in wage premium following job displacement does not reflect a reallocation toward low productivity firms. Instead they are most consistent with a loss in bargaining power and reallocation towards low-labor share firms.
    Keywords: Displaced workers,Wage,Reallocation,Labor share
    Date: 2020–12
  12. By: Stefan Etgeton; Björn Fischer; Han Ye
    Abstract: This paper examines how households adjust their savings and consumption expenditure in response to an anticipated increase in the early retirement age (ERA). We examine the 1999 pension reform in Germany, which increased the ERA for women born after 1951 by at least three years. Using the German Income and Consumption Survey, we find a negative impact on private savings of 0.6 percentage points, which is driven by married households. We show that households consisting of highly educated women and homeowners are more likely to reduce their savings rates. Furthermore, we find that the treated households increase their leisure spending while maintaining an unchanged level of disposable income. Our findings suggest that the treated households absorb the pension wealth shock without increasing their savings.
    Keywords: Pension Reform; Early Retirement Age; Savings; Pension Wealth; Consumption Expenditur
    JEL: D14 J14 J26
    Date: 2021–01
  13. By: Hügle, Dominik
    Abstract: This paper analyzes higher education funding in Germany from a distributional perspective. For this, I first compare the quantitative importance of different funding instruments, from free tuition to subsidized health insurance for students. I show that free tuition is, by far, the most important instrument. Then, I take a lifetime perspective and assess how individuals of different expected lifetime incomes benefit from higher education funding. I distinguish between different fields of study as there are large differences in both the expected lifetime earnings of graduating from a specific field and the social cost of tuition associated with each field. Finally, I focus exclusively on the instrument of subsidized tuition and simulate the introduction of different tuition fee schemes with income-contingent loans. While the distributional effects would be sizable in absolute terms, I estimate that they would cause few individuals to change their educational decisions.
    Keywords: Higher education,Education finance,Dynamic microsimulation
    JEL: C53 I22 I23
    Date: 2020
  14. By: Blasco, Sylvie (GAINS, Université du Maine); Fontaine, Francois (Paris School of Economics)
    Abstract: A large fraction of the eligible unemployed workers does not claim for unemployment insurance (UI) and, among claimants, many do not register immediately upon layoff. This paper argues that, to understand this intriguing phenomenon, one needs to model jointly job search and take-up efforts and to allow for heterogeneity in both dimensions. Estimating such a model using French administrative data, we find substantial heterogeneity in both search and claiming frictions. If half of the sample faces high claiming frictions, many have good employment prospects and exit unemployment quickly. The burden of the claiming difficulties is concentrated on 10% of the sample that suffers both from claiming and job search difficulties. For that reason, the alleviation of the complexity of the claiming process is likely to have very heterogenous effects but little effect on aggregate unemployment duration. Additionally we show that the link between claiming and job search efforts has important implications when measuring how UI parameters impact unemployment duration.
    Keywords: unemployment insurance, take-up, job search
    JEL: J64 J65 C41
    Date: 2021–01
  15. By: Rickne, Johanna (Swedish Institute for Social Research)
    Abstract: Many European countries have implemented policies to revive their domestic service sectors. A common goal of these reforms has been to create employment for disadvantaged groups on the labor market. I study Sweden, where a 50% tax deduction on labor costs for domestic services was introduced in 2007. I use detailed administrative data to report the shares of three disadvantaged groups among small business owners and employees in tax-subsidized firms. I then compare these shares to all private firms and to firms in two industrial subsectors with a predominance of elementary occupations. I find that the shares of refugees and long-term unemployed are of similar sizes in the subsidized firms as in the private sector as a whole. For the third group—people with a low level of education—I find a larger share in the subsidized firms compared to the average private firm, but a smaller share compared to the other industries with elementary occupations. An extended analysis suggests that labor immigration to the subsidized sector from other EU countries may have crowded out the disadvantaged groups. EU immigrants operate half of all subsidized firms in Sweden's largest cities and employ mainly other EU immigrants in their businesses.
    Keywords: domestic services, tax deduction, employment, refugee immigrants
    JEL: J21 J23 J61 H2
    Date: 2021–01
  16. By: van den Berg, Gerard J. (University of Bristol); Hofmann, Barbara (FEA Nuremberg); Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg); Uhlendorff, Arne (CREST)
    Abstract: In the German unemployment insurance system, Integration Agreements (IA) are mandatory contracts between the employment agency and the unemployed, jointly signed by the latter and the caseworker. IAs stipulate rights and obligations but are generally perceived as instruments to control search behavior. We designed and implemented a Randomized Controlled Trial involving thousands of newly unemployed workers, where we randomize the timing of the IA as well as the extent to which this timing is announced prior to the meeting. Randomization is at the individual level. We use administrative registers to observe outcomes. A theoretical analysis of anticipation of prior announcements provides suggestions to empirically detect this. The results show that IAs early in the spell have on average a small positive effect on entering employment within a year. When classifying individuals using an employability indicator, we find that this result is driven by individuals with adverse prospects. Among them, being assigned to an early IA increases the probability of re-employment within a year from 45% to 53%.
    Keywords: unemployment, monitoring, job search, active labor market policy, nudge, anticipation, randomized controlled trial
    JEL: J68 J64 C93
    Date: 2021–01
  17. By: Lakes, Tobia; Garcia-Marquez, Jaime; Müller, Daniel; Lakner, Sebastian; Pe’er, Guy
    Abstract: The “Greening” measures of the EU’s CAP, implemented in 2015, have been intensively debated in terms of their effectiveness and efficiency for agricultural, environmental, and climate outcomes. This study explores the fine-scale spatiotemporal dynamics of Ecological Focus Areas (EFAs) (with a particular emphasis on fallow land). We use annual land-use data at the plot level from IACS for Brandenburg in Germany from 2005 to 2018 and apply quantitative spatial metrics. In result, we find EFA measures to represent a small percentage of the total area of agriculture, with catch crops dominating, followed by fallow land and nitrogen-fixing crops. Fallow land decreased until 2015 and slightly increased with the introduction of Greening. Half of the fallow land in 2015 was fallow land in the previous year, while the other half had been used for cereals, fodder and oil seed plants. A large share of fallow land shows a low permanency of 1 up to 4 years. EFAs and particularly fallow land hence may contribute to environmental performance in agricultural land use, yet currently they do so to a limited degree. We suggest a change in types of EFA measures, spatial optimisation to reduce fragmented patterns, and a higher permanency of fallow land by a better alignment of agricultural and landscape policies and planning.
    Keywords: sustainable land use,Common Agricultural Policy,ecological focus areas,fallow land,Integrated Administration and Control System (IACS)
    JEL: Q57 Q1 Q58
    Date: 2020
  18. By: Barbara Pertold-Gebicka; Dominika Spolcova
    Abstract: We estimate the causal relationship between the number of children and parental subjective well-being using the 2013 wave of SILC data and relying on multiple births as the source of exogenous variation. The major value added of our study is estimating this effect by children’s age. We show that parents of larger families experience the same or higher levels of well-being than parents of smaller families. The positive effect is mainly driven by parents of teenage children. Among parents of pre-school children we mainly estimate a negative effect of an additional (twin) child. We further show that the negative relationship between the number of children and parental well-being at young child ages is mainly driven by dissatisfaction with accommodation and by increased frequency of feeling nervous. The positive effect at higher child ages is driven by satisfaction with financial situation only for fathers, while for mothers it is mainly driven by lower frequency of experiencing negative feelings. We conclude that higher fertility levels might be reached if parents receive more help during the early years of their children and if the positive future effects of having large families are publicized.
    Keywords: fertility; subjective well-being;
    JEL: I31 J12 J13
    Date: 2020–12
  19. By: Lassen, Anne Sophie (Department of Economics, Copenhagen Business School)
    Abstract: This paper shows that decisions regarding intra-household specializations are determined by gender norms rather than standard economic incentives. To test theoretical predictions of both the standard model of intra-household time allocation and the role of gender identity, social category and prescriptions, I use variation from a Danish parental leave reform. I find large effects among mothers and virtually unchanged behavior among fathers, irrespective of relative earnings in the household. This is consistent with the notion of pay-off from gender identity. Subsequently, I find peer effects among sisters and interpret this as reform-induced prescriptions regarding extensive leave for mothers.
    Keywords: Intra-household specialization; Gender norms; Parental leave; Peer effects
    JEL: D13 J13 J16 J18 J22
    Date: 2021–01–08
  20. By: Böheim, René (University of Linz); Topf, Michael (Federal Ministry of Social Affairs, Health, Care and Consumer Protection, Austria)
    Abstract: We study the effect of lower unearned income on labor supply. To identify the causal effect of an unexpected reduction in unearned income, we exploit a policy reform that lowered survivor pensions in Austria. Men widowed after the survivor pension reform received an approximately 34% lower survivor pension than men widowed before the reform. We follow the employment history of both groups for 150 months and estimate the reform's effect on labor supply using a regression discontinuity design. The effect of the lower pension is evident immediately after the death of their spouse, is persistent over time, becomes more pronounced over time, and is robust across model specifications. Our baseline result suggests a 3.5 to 5.4 percentage point higher employment rate for survivors in the low pension regime in the long run. The estimated effect corresponds to a labor supply elasticity at the extensive margin with respect to the changes in total income of about -0.9 to -1.3.
    Keywords: labor supply, unearned income, regression discontinuity design
    JEL: I38 J22 J48
    Date: 2020–12
  21. By: Anja M. Hahn; Konstantin A. Kholodilin; Sofie R. Waltl
    Abstract: In 2020, Berlin enacted a rigorous rent-control policy: the “Mietendeckel” (rent freeze), aiming to stop rapidly growing rental prices. We evaluate this newly enacted but old-fashionably designed policy by analyzing its immediate supply-side effects. Using a rich pool of rent advertisements reporting asking rents and comprehensive dwelling characteristics, we perform hedonic-style Difference-in-Difference analyses comparing trajectories of dwellings inside and outside the policy’s scope. We find no immediate effect upon announcement of the policy. Yet advertised rents drop significantly upon the policy’s enactment. Additionally, we document a substitution effect affecting the rental markets of Berlin’s (unregulated) satellite city Potsdam and adjacent smaller municipalities. On top, the supplemental quantity analyses reveal a stark reduction of the number of advertised rental units hampering a successful housing search for newcomers, (young) first-time renters and tenants aiming for a different housing opportunity.
    Keywords: First-generation rent control, rent freeze, urban policy, rent price, supply disruptions, Berlin
    JEL: C14 C43 O18
    Date: 2021
  22. By: Damien Besancenot (UP - Université de Paris, LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UP - Université de Paris); Karine Lamiraud (ESSEC Business School - Essec Business School, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); Radu Vranceanu (ESSEC Business School - Essec Business School, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)
    Abstract: The French market for specialist physician care has a dual legal structure: physicians must exclusively work in sector 1 and charge regulated fees or in sector 2, where they can freely set their fees. Patient out-of-pocket payments in sector 2 are partially covered by private insurance. The primary differentiating factor between both sectors is the number of patients per specialist, which in turn directly affects the overall quality of the service provided. We built an equilibrium model to analyse both specialists decisions about which sector to work in, and patients choice of physician and therefore sector. More specifically, the model allowed us to study the effect of changes in prices and economy-wide patient-to-specialist ratios on profits and patients utility associated with the services provided in each sector.
    Keywords: Dual market,Congestion,Regulation,Balance billing
    Date: 2020–11–22
  23. By: Nigel Rice (Centre for Health Economics, University of York, UK); María José Aragón (Centre for Health Economics, University of York, UK)
    Abstract: Understanding the drivers of growth in health care expenditure is crucial for forecasting future health care requirements and for the efficient use of resources. We consider total hospital admitted care expenditure in England between 2009/10 and 2016/17. Decomposition techniques are used to separate changes in expenditure into elements due to changes in the distribution of characteristics, of both individuals and the services they receive, and due to changes in the impact of characteristics on expenditures. Growth in aggregate expenditure was due to increases in total patient admissions together with a substantial shift towards episodes of non-elective care, particularly the use of long-stay care. Decomposition of patient level expenditure suggests efficiency gains in treatment across the full distribution of expenditures, but that these were outweighed by structural changes towards a greater proportion of patients presenting with high-dimensional comorbidities. This is particularly relevant at the top end of the expenditure distribution and accounts for a large proportion of the total expenditure growth.
    Keywords: Health Care Expenditure Growth, decompositions, Hospital Episode Statistics
    JEL: C1 I1
    Date: 2021–01
  24. By: Gürtzgen, Nicole (Institute for Employment Research (IAB), Nuremberg); Lochner, Benjamin (University of Erlangen-Nuremberg); Pohlan, Laura (ZEW Mannheim and IAB Nuremberg); van den Berg, Gerard J. (University of Bristol)
    Abstract: This paper studies the effects of the high-speed internet expansion on the match quality of new hires. We combine data on internet availability at the local level with German individual register and vacancy data. Results show that internet availability has no major impact on the stability of new matches and their wages. We confirm these findings using vacancy data, by explicitly comparing match outcomes of online and non-online recruits. Further results show that online recruiting not only raises the number of applicants and the share of unsuitable candidates per vacancy, but also induces employers to post more vacancies.
    Keywords: matching, internet, informational friction, recruiting channel, vacancy, wage, job duration
    JEL: J64 H40 L96 C26
    Date: 2021–01
  25. By: Holmberg, Johan (Department of Economics, Umeå University)
    Abstract: In this paper, we present a life-cycle earnings dynamics model including endogenous employment and job change. The model is estimated with the method of indirect inference using Swedish register data. By simulating data from this microeconomic model, we study the macroeconomic consequences of transitory shocks to unemployment risk. The results show that transitory aggregate shocks to unemployment risk have long-lasting negative effects on employment, income, and increases earnings volatility. By studying how unemployment at different ages affects the accumulation and distribution of pension entitlements, we find that becoming unemployed at 40 has the largest effect on pension accumulations. Furthermore, unobserved individual heterogeneity contributes substantially to the observed life-cycle earnings inequality for both men and women in Sweden.
    Keywords: Earnings dynamics; unemployment; inequality; social insurance; pensions
    JEL: D63 E27 H55 J24 J64
    Date: 2021–01–19
  26. By: Philipp Lergetporer; Marc Piopiunik; Lisa Simon
    Abstract: In recent years, Europe has experienced a large influx of refugees. While natives’ attitudes toward refugees are decisive for the political feasibility of asylum policies, little is known about how these attitudes are shaped by information about refugees’ characteristics. We conducted a survey experiment with a representative sample of more than 4,000 adults in Germany in which we randomly provide information about refugees’ education level. Information provision strongly increases respondents’ beliefs that refugees are well educated. The information also increases labor market competition concerns, decreases fiscal burden concerns, and positively affects general attitudes toward refugees. We perform several robustness analyses in additional experiments with more than 5,000 university students. In sum, we show that correcting misperceptions about refugees’ education level has profound effects on natives’ attitudes.
    Keywords: Refugees, information provision, education, survey experiment, labor market
    JEL: F22 J24 D83 C91
    Date: 2021
  27. By: Luisa Gagliardi; Simona Iammarino; Andres Rodriguez-Pose
    Abstract: This paper explores the role of subnational geography in the analysis of the consequences of outward foreign direct investment (OFDI) for workers performing different typologies of jobs. We qualify jobs according to their knowledge content, degree of tradability and response to agglomeration economies. While the former two dimensions are key to signal the intensity to OFDI exposure of different typologies of jobs, the latter contributes to explain the unequal spatial distribution of benefits and losses from OFDI in terms of job creation/destruction. We theorise that areas that are more severely exposed to OFDI experience job losses in routine occupations, whereas they do not necessarily benefit from job creation in non-routine jobs. To test our hypothesis, we make use of a balanced panel dataset at the local labour market level, exploiting variations in OFDI exposure and in the job composition of local areas. Our findings – robust to numerous checks, including unobserved global and local trends – indicate that job losses concentrate in regions that were more exposed to OFDI based on their initial industry mix, and affect individuals performing mainly routine tasks. In these same areas, however, no significant effects are found when looking at job creation in non-routine occupations.
    Keywords: OFDI, Local Labour Markets, Routine and Non-routine Occupations, Home impact of MNEs
    Date: 2021–01
  28. By: Philippe Aghion; Antonin Bergeaud; John Van Reenen
    Abstract: Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labor regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to "swing for the fence" with more radical (and labor saving) breakthroughs.
    Keywords: innovation, regulation, patents, firm size
    JEL: O31 L11 L51 J8 L25 O31 L11 L51 J8 L25 O31 L11 L51 J8 L25
    Date: 2021–01
  29. By: Hamermesh, Daniel S. (Barnard College)
    Abstract: Using time-diary data from the U.S. and six wealthy European countries, I demonstrate that non-partnered mothers spend slightly less time performing childcare, but much less time in other household activities than partnered mothers. Unpartnered mothers' total work time—paid work and household production—is slightly less than partnered women's. In the U.S. but not elsewhere they watch more television and engage in fewer other leisure activities. These differences are independent of any differences in age, race/ethnicity, ages and numbers of children, and household incomes. Non-partnered mothers feel slightly more pressured for time and much less satisfied with their lives. Analyses using the NLSY79 show that mothers whose partners left the home in the past two years became more depressed than those whose marriages remained intact. Coupled with evidence that husbands spend substantial time in childcare and with their children, the results suggest that children of non-partnered mothers receive much less parental care—perhaps 40 percent less—than other children; and most of what they receive is from mothers who are less satisfied with their lives.
    Keywords: time use, marital status, life satisfaction, time stress, depression
    JEL: J22 J12 I31
    Date: 2020–12

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