nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒04‒19
35 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Is longer education a substitute for job search through social contacts? By Müller, Dagmar
  2. Does initial vocational training foster innovativeness at the company level? Evidence from German establishment data By Matthies, Eike; Haverkamp, Katarzyna; Thomä, Jörg; Bizer, Kilian
  3. The fiscal impact of immigration in the EU By Michael Christl; Alain Bélanger; Alessandra Conte; Jacopo Mazza; Edlira Narazani
  4. Employment Responses to Income Effect: Evidence from Pension Reform By Sebastian Becker; Hermann Buslei; Johannes Geyer; Peter Haan
  5. The impact of place-based policies on income distribution By Giuseppe Albanese; Guglielmo Barone; Guido DeBlasio
  6. Does it pay to go public? Understanding the public-private sector wage gap in Germany By Bonaccolto-Töpfer, Marina; Castagnetti, Carolina; Prümer, Stephanie
  7. The impact of mandatory economic education on adolescents' attitudes By Oberrauch, Luis; Seeber, Günther
  8. Trade Credit and Firm Investments: Empirical Evidence from Italian Cooperative Banks By Filomeni, Stefano; Modina, Michele; Tabacco, Elena
  9. Postgraduate education and job mismatch: the role of migration By Martina Aronica; Alessandra Faggian; Debora Insolda; Davide Piacentino
  10. The Fall in Income Inequality during COVID-19 in Five European Countries By Andrew Clark; Conchita Ambrosio; Anthony Lepinteur
  11. Does robotization affect job quality? Evidence from European regional labour markets By Antón, José Ignacio; Fernández-Macías, Enrique; Rudolf Winter-Ebmer
  12. The gender wealth gap in Europe: A comparative study using a model averaging methodology By Merike Kukk; Jaanika Merikyll; Tairi Room
  13. Institutions and the uneven geography of the first wave of the COVID-19 pandemic By Andrés Rodríguez-Pose; Chiara Burlina
  14. "The Impact of Combining Work with Study on the Labour Market Performance of Graduates: the Joint Role of Work Intensity and Job-Field Match". By Antonio Di Paolo; Alessia Matano
  15. Gender Differences in Reduced Well-being during the COVID-19 Pandemic – the Role of Working Conditions By Zoch, Gundula; Bächmann, Ann-Christin; Vicari, Basha
  16. Do You Really Want to Share Everything? The Wellbeing of Work-Linked Couples By Juliane Hennecke; Clemens Hetschko
  17. Incumbents beware: the impact of offshoring on elections By Rickard, Stephanie
  18. Technological novelty and key enabling technologies: Evidence from European regions By Sandro Montresor; Gianluca Orsatti; Francesco Quatraro
  19. Do nonfinancial firms hold risky financial assets? Evidence from Germany By Hoang, Daniel; Silbereis, Fabian; Stengel, Raphael
  20. The COVID-19 Pandemic's Effects on Voter Turnout By Matteo Picchio; Raffaella Santoloni
  21. Trade Shocks, Fertility, and Marital Behavior By Osea Giuntella; Lorenzo Rotunno; Luca Stella
  22. The gender gap in pension wealth in Europe: Evidence from twenty countries By Tairi Room; Orsolya Soosaar
  23. The Value Added Tax Simulation Model: VATSIM-DF (II) By Cristina Cirillo; Lucia Imperioli; Marco Manzo
  24. The Impact of Gender Role Norms on Mothers' Labor Supply By Danilo Cavapozzi; Marco Francesconi; Cheti Nicoletti
  25. Wind of Change? Experimental Survey Evidence on the COVID-19 Shock and Socio-Political Attitudes in Europe By Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger
  26. Corona and the stability of personal traits and preferences: Evidence from Germany By Frondel, Manuel; Osberghaus, Daniel; Sommer, Stephan
  27. Financial vulnerability and seeking expert advice: Evidence from a survey experiment By Delis, Manthos; Galariotis, Emilios; Monne, Jerome
  28. Moving (within and across) spatial labour markets in times of COVID-19: evidence from Facebook mobility data on Italian labour market areas By Andrea Ascani; Alessandra Faggian; Sandro Montresor; Alessandro Palma
  29. Assessing Alternative Indicators for Covid-19 Policy Evaluation, with a Counterfactual for Sweden By Spagnolo, Giancarlo; Latour, Chiara; Peracchi , Franco
  30. The interplay between green policy, electricity prices, financial constraints and jobs: firm-level evidence By Bijnens, Gert; Hutchinson, John; Konings, Jozef; Saint-Guilhem, Arthur
  31. Populism Amidst Prosperity: Dimensionality, party competition and voter preference in the era of populism: The case of England, 2010-2017 By Do Won Kim
  32. The COVID-19 Pandemic and Mental Health: Disentangling Crucial Channels By Siflinger, Bettina M.; Paffenholz, Michaela; Seitz, Sebastian; Mendel, Moritz; Gaudecker, Hans-Martin von
  33. What Types of Firms Become Illiquid as a Result of COVID-19? A Firm-Level Perspective Using French Data By William Connell Garcia; Victor Ho
  34. The relationship between pandemic containment measures, mobility and economic activity By Corinna Ghirelli; María Gil; Samuel Hurtado; Alberto Urtasun
  35. Populism Amidst Prosperity:The urban-rural polarisation of political disenchantment: An investigation of social and political attitudes in 30 European countries By Michael Kenny; Davide Luca

  1. By: Müller, Dagmar (Research Institute of Industrial Economics (IFN),)
    Abstract: This paper investigates whether longer upper secondary education affects the role of parents in the job finding process. Previous research has shown that less educated workers rely more on contacts, and theory suggests that education and social connections can be substituted as signals of ability. I investigate this question by exploiting a Swedish trial that generated exogenous variation across municipalities and student cohorts in the length of vocational upper secondary education. Relying on Swedish matched employer-employee data, I estimate the effect of receiving one more year of education on the probability of being employed at the same establishment as a parent for up to 20 years after graduation. The results indicate that the average impact of a longer education is negative during the early career and non-trivial in magnitude. The overall effect is entirely driven by a large and statistically significant effect within the group of vocational students with high-educated parents. For the group of students where the use of parental ties is most prevalent, students with low-educated parents, the reliance on parental contacts appears resilient to policy-induced changes in the length of education.
    Keywords: social contacts; young workers; labor market transitions; mobility
    JEL: J24 J62
    Date: 2021–04–13
  2. By: Matthies, Eike; Haverkamp, Katarzyna; Thomä, Jörg; Bizer, Kilian
    Abstract: While an increasing number of conceptual studies postulate that vocational education and training (VET) activities have a positive impact on the innovative capacity of training companies, empirical evidence on the subject remains scarce. This study exploits establishment data from a representative survey of German companies to estimate the effects of firms' participation in initial VET on their innovation outcomes. The results based on linear probability models and instrumental variable regressions with entropy balancing show that the impact of VET activity on innovation is more ambiguous than postulated. Overall, the participation in initial VET has virtually no effect on product innovation and radical novelties. For the total population of all German companies, the positive impact of VET activities is only observable in case of process innovation. However, our results point to significant causal effects on the innovative capacities of small and medium-sized enterprises (SMEs). We conclude that companies' participation in the VET system facilitates organizational learning in training companies and knowledge transfer from VET institutions to those enterprises, which are otherwise more likely to be detached from modern technology networks. The paper concludes with implications for policy and research.
    Keywords: education,apprenticeship training,modes of innovation,innovation without R&D,SMEs
    JEL: I20 J24 O31
    Date: 2021
  3. By: Michael Christl (European Commission - JRC); Alain Bélanger; Alessandra Conte; Jacopo Mazza; Edlira Narazani
    Abstract: The increasing flows of immigrants in Europe over the last decade has generated a range of considerations in the policy agenda of many receiving countries. One of the main considerations for policy makers and public opinions alike is whether immigrants contribute their "fair" share to their host country tax and welfare system. This paper seeks to answer this question based on an empirical assessment of the net fiscal contributions of immigrants in the 27 EU member states using EUROMOD, a EU-wide tax-benefit microsimulation model. In addition to the traditional view of the tax-benefit system, we add indirect taxation and in-kind benefits to the analysis of net contributions. Our findings highlight that migrants on average contributed about 250 euro per year more than natives to the welfare state in 2015. However, when we take an average age-specific life-cycle perspective, we find that natives generally show a higher net fiscal contribution than both, intra-EU and extra-EU migrants, while extra-EU migrants contribute on average less than intra-EU migrants.
    Keywords: Migration Microsimulation Tax-benefit system EUROMOD
    JEL: J15 H2 H5
    Date: 2021–04
  4. By: Sebastian Becker; Hermann Buslei; Johannes Geyer; Peter Haan
    Abstract: For the design of the pension system, it is crucial to disentangle the employment responses related to the substitution effect and the income effect. In this paper, we provide causal evidence regarding the importance of the income effect, which is generally assumed to be small or non-existent. We exploit a pension reform in Germany that raised pension bene- fits related to children. For the identification, we exploit the discontinuity induced by the reform: only mothers with children born before 1.1.1992 were affected by the pension reform. Children born after this cut-off date did not change pension income. We use a difference-in-differences estimator based on administrative data from the German pension insurance that includes complete individual employment histories. We find that income effects are significant and economically important. We show that the policy led to a reduction in the employment of affected females. Further, we are able to show effect heterogeneity on different dimensions: by treatment intensity, age of the mother, and pre-reform pension wealth.
    Keywords: Natural experiment, female labor supply, pension benefit
    JEL: H55 J13 J22
    Date: 2021
  5. By: Giuseppe Albanese (Banca d'Italia); Guglielmo Barone (Università di Bologna); Guido DeBlasio (Banca d'Italia)
    Abstract: This paper assesses the causal impact of a prominent place-based policy - the EU cohesion policy - on income distribution in the receiving areas by studying a severe contraction of financing, which took place in the Italian region of Molise starting from 2008. We focus on the Gini Index at the municipality level and leverage a spatial difference-in-discontinuity empirical design. We show that local income distribution becomes more equal in the municipalities exposed to the shrinkage of EU funds, relative to untreated units located on the other side of the geographical border that identifies the generosity of aid regimes. The decrease in the Gini coefficient is due to the move of top earners to the center of the distribution. The reduction in the Gini index is confirmed even if we resort to a region-level analysis, in which the causal effect of the end of the policy is assessed by means of the synthetic control method.
    Keywords: place-based policy, income distribution
    JEL: R58 D31
    Date: 2021–03
  6. By: Bonaccolto-Töpfer, Marina; Castagnetti, Carolina; Prümer, Stephanie
    Abstract: Using data from the German Socio-Economic Panel 1984-2017, this paper provides first evidence on the public-private sector wage gap in Germany based on a fixed effect quantile approach. The results reveal substantial differences in the decomposition of the gap compared to the standard cross-sectional approach. We find that women earn more in public employment, while men are penalized. Our analysis suggests that this penalization is not related to compensating wage differentials. Against the background of demographic change, the public sector may face difficulties to recruit (skilled) men and may need to adjust its pay schemes to fair and merit-based ones.
    Keywords: Public-Private Sector Wage Gap,Quantile Regression for Panel Data,Germany
    JEL: J31 J45 C33
    Date: 2021
  7. By: Oberrauch, Luis; Seeber, Günther
    Abstract: Various studies have examined how the study of economics affects students’ views on economic phenomena, yet there is little evidence regarding its impact on teenagers. We study the role of a recent curriculum reform introducing mandatory economic education on teenagers’ attitudes towards economics in Southwest Germany. Our findings reveal that students affected by the reform show, on average, more interest in economics, see money as more important and expect more social responsibility from companies. Conversely, we don't observe differences in attitudes towards competition. Regarding socio-economic characteristics, our data reveal strong gender differences already before adulthood.
    Keywords: Pre-college economic education,economic attitudes,economic competence,gender gap
    JEL: A21 D14 I20
    Date: 2021
  8. By: Filomeni, Stefano; Modina, Michele; Tabacco, Elena
    Abstract: By exploiting a unique and proprietary panel dataset comprising 18,682 Italian SMEs operating with 99 cooperative banks over the period 2008-2014, we investigate the influence of the trade credit channel on firm investment decisions in the Italian market, distinguished by a considerable presence of relationship cooperative banks’ branches with a heterogeneous geographical distribution. Firstly, our findings confirm a significant influence of the trade credit channel on firm investment decisions. Secondly, we document that those SMEs located in those Italian provinces with an abundance of cooperative banks’ branches rely less on trade credit to finance investments. Lastly, we show that longer firm-bank relationships decrease firm dependence on trade credit to boost investments. Our study is of particular relevance because it strengthens the effectiveness of the commercial credit channel for SMEs in spurring corporate investments. Indeed, fostering a deep understanding of the real effects of firm financing sources is paramount to encourage investment by SMEs and to allow them to preserve their positioning in the market. Moreover, we exploit the Italian market, well-suited to perform such an analysis, since it is characterized by more inter-personal financing relationships as compared to other countries.
    Keywords: SMEs, trade credit, investment, relationship lending, soft information, cooperative bank
    Date: 2021–04–06
  9. By: Martina Aronica (Università di Palermo); Alessandra Faggian (Gran Sasso Science Institute); Debora Insolda (Università di Palermo); Davide Piacentino (Università di Palermo)
    Abstract: Despite the increase of doctoral studies, PhD holders face many obstacles in finding non-academic jobs matching their competencies. This paper explores this phenomenon under three angles: overeducation, overskilling and satisfaction. While considering a rich set of determinants, we particularly focus on the role of migration. Spatial mobility may represent not only a way to favour the education-job match at an aggregate level, but also a way to get a stronger motivation in searching a suitable job at an individual level. Looking at the case of Italy, we find a positive effect of migration on the education-job matching. We also find two evident gaps. The first between domestic and foreign labour markets and the second between genders.
    Keywords: PhD degree, education-job mismatching, human capital migration, Italian regions
    JEL: I21 J24 J61 R23
    Date: 2020–11
  10. By: Andrew Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 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 Paris 1 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); Conchita Ambrosio (University of Luxembourg [Luxembourg]); Anthony Lepinteur (University of Luxembourg [Luxembourg])
    Abstract: We here use panel data from the COME-HERE survey to track income inequality during COVID-19 in France, Germany, Italy, Spain and Sweden. Relative inequality in equivalent household disposable income among individuals changed in a hump-shaped way over 2020. An initial rise from January to May was more than reversed by September. Absolute inequality also fell over this period. As such, policy responses may have been of more benefit for the poorer than for the richer.
    Keywords: COVID-19,COME-HERE,Income Inequality
    Date: 2021–03
  11. By: Antón, José Ignacio (Universidad de Salamanca); Fernández-Macías, Enrique (European Commission – JRC); Rudolf Winter-Ebmer (Johannes Kepler University of Linz)
    Abstract: Whereas there are recent papers on the effect of robot adoption on employment and wages, there is no evidence on how robots affect non-monetary working conditions. We explore the impact of robot adoption on several domains of non-monetary working conditions in Europe over the period 1995-2005 combining information from the World Robotics Survey and the European Working Conditions Survey. In order to deal with the possible endogeneity of robot deployment, we employ an instrumental variables strategy, using the robot exposure by sector in other developed countries as an instrument. Our results indicate that robotization has a negative impact on the quality of work in the dimension of work intensity and no relevant impact on the domains of physical environment or skills and discretion.
    Keywords: Robotization, Working conditions, Job quality, Europe, Regional labour markets
    Date: 2021–04
  12. By: Merike Kukk; Jaanika Merikyll; Tairi Room
    Abstract: There is abundant evidence on the gender wage gaps across countries, but much less is known about the gender differences in personal wealth. This paper provides comparative estimates of the gender wealth gaps for 21 European countries, employing data from the Household Finance and Consumption Survey. A common problem for studies focusing on this topic is that the data on wealth are usually provided at the household level and not at the individual level. This means it is only possible to estimate gender wealth gaps for single-person households. To overcome this constraint, we propose a novel approach using a model averaging methodology to predict individualised wealth data for multi-person households. We find that the gender wealth gaps tend to be in favour of men in the whole population, especially when estimated at the top of the wealth distribution. In contrast, the estimated gaps in the subset of single-person households tend to be statistically insignificant. The country-level gender wealth gaps are correlated with overall wealth inequality but not with gender gaps in pay and employment.
    Keywords: gender gap, imputation, model averaging, wealth distribution, inequality, intra-household allocation of wealth, household finance, Europe
    JEL: D31 G51 J16 J71
    Date: 2021–04–08
  13. By: Andrés Rodríguez-Pose (London School of Economics); Chiara Burlina (Gran Sasso Science Institute)
    Abstract: This paper examines the uneven geography of COVID-19-related excess mortality during the first wave of the pandemic in Europe, before assessing the factors behind the geographical differences in impact. The analysis of 206 regions across 23 European countries reveals a distinct COVID-19 geography. Excess deaths were concentrated in a limited number of regions — expected deaths exceeded 20% in just 16 regions — with more than 40% of the regions considered experiencing no excess mortality during the first six months of 2020. Highly connected regions, in colder and dryer climates, with high air pollution levels, and relatively poorly endowed health systems witnessed the highest incidence of excess mortality. Institutional factors also played an important role. The first wave hit regions with a combination of weak and declining formal institutional quality and fragile informal institutions hardest. Low and declining national government effectiveness, together with a limited capacity to reach out across societal divides, and a frequent tendency to meet with friends and family were powerful drivers of regional excess mortality
    Keywords: COVID-19, pandemic, institutions, regions, Europe
    JEL: H75 O43 R58
    Date: 2020–11
  14. By: Antonio Di Paolo (AQR-IREA Research Group, University of Barcelona.); Alessia Matano (University of Rome "La Sapienza" , Dipartimento di Economia e Diritto, e AQR-IREA, University of Barcelona.)
    Abstract: This paper investigates the effects of working during university education on students' labour market performance. We jointly consider the role of work intensity and the relationship with the field of study in a framework that accounts for self-selection into different types of jobs. The empirical analysis draws on data from three successive cohorts of graduates from the Spanish region of Catalonia. Our results point out that the probability of being employed four years after graduation is significantly higher for students who have worked in jobs well-matched with their degree relative to both full-time students and students who have worked in unrelated jobs. Further, the probability of having a permanent job is generally higher for those who worked before graduation, especially in the case of jobs related to the degree. However, the likelihood of early career job-qualification match is negatively affected by pre-graduation work experiences unrelated to degree's contents.
    Keywords: University Graduates, Pre-graduation Jobs, Employability, Job Quality, Self-Selection. JEL classification: I23, J24, J22.
    Date: 2021–04
  15. By: Zoch, Gundula; Bächmann, Ann-Christin; Vicari, Basha (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The COVID-19 pandemic has had very different impacts on the employment and family work conditions of men and women. Thus, it might have jeopardised the slow and hard-won reduction of gender inequalities in the division of labour achieved in recent decades. Using data from the National Educational Panel Study (NEPS) and its supplementary COVID-19 web survey for Germany, we investigate the relationship between working conditions and gender differences in subjective well-being during the first months of the pandemic. Therefore, we systematically consider the household context by distinguishing between adults with and without young children. The results from multivariate regression models accounting for pre-corona satisfaction reveal a decline in all respondents' life satisfaction, particularly among women and mothers with young children. However, the greater reduction in women's well-being cannot be linked to systematic differences in working conditions throughout the pandemic. Kitagawa-Oaxaca-Blinder counterfactual decompositions confirm this conclusion. However, further robustness checks suggest that women's societal concerns and greater loneliness partly explain the remaining gender differences during the first months of the crisis. From a general perspective, our results suggest important gender differences in social life and psychological distress in spring 2020, which are likely to become more pronounced as the crisis unfolds." (Author's abstract, IAB-Doku) ((en))
    JEL: I31 J22 J28 J13
    Date: 2021–04–06
  16. By: Juliane Hennecke (NZ Work Research Institute, Faculty of Business, Economics and Law at AUT University); Clemens Hetschko (School of Economics, Leeds University Business School, University of Leeds)
    Abstract: Work as well as family life are crucial sources of human wellbeing, which however often interfere. This is especially so if partners work in the same occupation or industry. At the same time, being work-linked may benefit their career success. Still, surprisingly little is known about the wellbeing of work-linked couples. Our study fills this gap by examining the satisfaction differences between work-linked and non-work-linked partners. Using data from the German Socio-Economic Panel (SOEP, 2019), we estimate the effect of working in the same occupation and/or industry on life satisfaction as well as satisfaction with four areas of life: income, work, family and leisure. In the process, we employ pooled OLS estimations and instrumental variable strategies, for instance based on the gender disparity in industries and occupations. Our results suggest that being work-linked increases satisfaction with life as well as income and job satisfaction. These findings are consistent with positive assortative matching and mutual career support between work-linked partners. Our conclusions concern hiring couples as a means of recruiting exceptional talent.
    Keywords: work-linked couples, wellbeing, assortative matching, relationship quality, work-life balance, copreneurs, occupational gender disparity, dual career support
    JEL: I31 J12 J21 J44 M51
    Date: 2021–03
  17. By: Rickard, Stephanie
    Abstract: How does globalization affect politics? One of the most controversial aspects of globalization is offshoring, when manufacturing operations and business functions move abroad. Although voters generally dislike offshoring, it remains unclear how moving jobs abroad impacts democratic elections. Using a difference-in-differences estimation strategy, the author finds that incumbent government parties lose more votes in municipalities where a local plant moved production abroad between elections than in municipalities that did not experience such an event. The result holds across various time periods, different incumbent parties and diverse types of elections. In both national and regional elections, voters punish incumbent government parties when a local firm moves production abroad. Incumbent parties' vote shares fall as the number of jobs lost due to offshoring increases. In multiparty governments, voters disproportionately punish the largest coalition party for offshoring. The results of an original survey administered in Spain verify the importance of offshoring for voters' retrospective evaluations of incumbents.
    Keywords: globalization; offshoring; voting; coalition government; incumbents; economic vote; regional government; elections
    JEL: R14 J01
    Date: 2021–03–05
  18. By: Sandro Montresor (Gran Sasso Science Institute); Gianluca Orsatti (Università di Torino); Francesco Quatraro (Università di Torino)
    Abstract: This paper investigates whether the local endowment of Key Enabling Technologies (KETs) drives the regions’ capacity to create technological novelty. Looking at regional innovations as re-combinations of preexisting knowledge, we propose two indicators of regional technological novelty (absolute and local), based on patents that originally draw on still unexplored prior-art knowledge connections. We argue that KETs have inherent re-combinatorial properties of the regional knowledge base and that their local endowment drives technological novelty. We test for this argument by focusing on a sample of 1,255 NUTS3 EU regions over the period 2000-2014 in an original instrumental variable setting. With some nuances, results confirm our main hypotheses. KETs do drive significantly the introduction of local technological novelty, but this mainly occurs for an absolute kind of novelty. The development, use or eventually external acquisition of KETs is thus an important policy priority for regions willing to compete at the technological frontier.
    Keywords: technological novelty, knowledge combination, key enabling technologies (KETs)
    JEL: R11 R58 O31 O33
    Date: 2020–09
  19. By: Hoang, Daniel; Silbereis, Fabian; Stengel, Raphael
    Abstract: Recent empirical evidence suggests that US industrial firms invest heavily in noncash, risky financial assets. Using hand-collected data on financial portfolios of German firms, we show that risky asset holdings are not an anomaly unique to the US. We find that industrial firms in Germany invest 11.6% of their financial assets in noncash and risky assets. Value-weighted, this percentage increases to 25.4%. While the equally-weighted average is substantial, it is clearly lower (5 percentage points or 30% in relative terms) than that in the US. After accounting for cross-country compositional differences (especially the dominance of large firms in the US technology sector), this difference in risky financial asset holdings decreases but remains at 3 percentage points. The remaining difference is driven by institutional differences that affect the relationship between firm characteristics and risky financial asset holdings in the two countries. In contrast to the US, German firms largely follow the precautionary savings motive and do not seem to misappropriate their funds when shifting them towards riskier asset allocations. Our results have implications for how asset management by nonfinancial firms should be regulated.
    Keywords: Cash Policy,Financial Portfolio,Precautionary Savings,Liquidity Management
    JEL: G31 G32 G34 G38 G11
    Date: 2021
  20. By: Matteo Picchio (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); Raffaella Santoloni (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche)
    Abstract: The COVID-19 pandemic has increased the risk of participating in public events, among them elections. We assess whether the voter turnout in the 2020 local government elections in Italy was affected by the COVID-19 pandemic. We do so by exploiting the variation among municipalities in the intensity of the COVID-19 outbreak as measured by the mortality rate among the elderly. We find that a 1 percentage point increase in the elderly mortality rate decreased the voter turnout by 0.5 percentage points, with no gender differences in the behavioural response. The effect was especially strong in densely populated municipalities. We do not detect statistically significant heterogeneous effects between the North and the South or among different levels of autonomy from the central government.
    Keywords: COVID-19 outbreak, pandemic, voter turnout, mortality rate, Italian municipalities.
    JEL: D72 D81 H70
    Date: 2021–03
  21. By: Osea Giuntella (University of Pittsburgh and IZA); Lorenzo Rotunno (Aix Marseille Univ, CNRS, AMSE, Marseille, France.); Luca Stella (Cattolica University, CESifo and IZA)
    Abstract: Using longitudinal data from the German SocioEconomic Panel, we analyze the effects of exposure to trade on the fertility and marital behavior of German workers. We find that individuals working in sectors that were more affected by import competition from Eastern Europe and suffered worse labor market outcomes were less likely to have children. In contrast, workers in sectors that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated and married men, and reflect changes in the likelihood of having any child (extensive margin). While among workers exposed to import competition there is evidence of some fertility postponement, we find a significant reduction of completed fertility. There is instead little evidence of any significant effect on marital behavior.
    Keywords: international trade, labor market outcomes, fertility, marriage
    JEL: F14 F16 J13
    Date: 2021–04
  22. By: Tairi Room; Orsolya Soosaar
    Keywords: retirement saving behaviour, voluntary retirement savings, mandatory retirement saving system, private pension wealth, gender gap, Europe
    JEL: D14 G23 G11 J32
    Date: 2021–04–08
  23. By: Cristina Cirillo (Ministry of Economy and Finance); Lucia Imperioli (Ministry of Economy and Finance); Marco Manzo (Ministry of Economy and Finance)
    Abstract: This paper describes the VATSIM-DF (II), a non-behavioural microsimulation model on the Value Added Tax (VAT), recently developed to support policy makers in designing VAT related policies in Italy. The most important goals of VATSIM-DF (II) are to estimate actual and expected VAT revenues, assess the VAT incidence on household disposable income, and simulate the distributional effects of changes in fiscal policies. Our results for 2019, at current VAT legislation, confirm the regressivity of VAT with respect to household income. Compared to existing models, the VATSIM-DF (II) has the great advantage of using Tax Register and National Accounts data, which make our model ideal for microsimulation purposes and perfectly consistent with the most updated macroeconomic data. To develop VATSIM-DF (II), we produce an original dataset by merging different data sources. Results for 2019, at current VAT legislation, show the VAT burden on Italian households and confirm the regressivity of VAT. Finally, we test the distributional effect of a revenue neutral reform, with two VAT rates, which applies the reduced VAT rate also to female and babies sanitary products.
    Keywords: redistributive effects, simulation, taxation, Value Added Tax
    JEL: H2 H22 H23
    Date: 2021–03
  24. By: Danilo Cavapozzi; Marco Francesconi; Cheti Nicoletti
    Abstract: We study whether mothers’ labor supply is shaped by the gender role attitudes of their peers. Using detailed information on a sample of UK mothers with dependent children, we find that having peers with gender-egalitarian norms leads mothers to be more likely to have a paid job and to have a greater share of the total number of paid hours worked within their household, but has no sizable effect on hours worked. Most of these effects are driven by less educated women. A new decomposition analysis allows us to estimate that approximately half of the impact on labor force participation is due to women conforming gender role attitudes to their peers’, with the remaining half being explained by the spillover effect of peers’ labor market behavior. These findings suggest that an evolution towards gender-egalitarian attitudes promotes gender convergence in labor market outcomes. In turn, a careful dissemination of statistics on female labor market behavior and attitudes may accelerate this convergence.
    Keywords: culture, norms, gender, identity, peer effects
    JEL: J12 J16 J22 J24 J31 Z13
    Date: 2021
  25. By: Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger
    Abstract: This paper investigates whether the COVID-19 crisis has affected the way we vote and think about politics, as well as our broader attitudes and underlying value systems. We ï¬ elded large online survey experiments in Italy, Spain, Germany and the Netherlands, well into the ï¬ rst wave of the epidemic (May-June), and included outcome questions on trust, voting intentions, policies & taxation, and identity & values. With a randomised survey flow we vary whether respondents are given COVID-19 priming questions ï¬ rst, before answering the outcome questions. With this treatment design we can also disentangle the health and economic effects of the crisis, as well as a potential “rally around the flag†component. We ï¬ nd that the crisis has brought about severe drops in interpersonal and institutional trust, as well as lower support for the EU and social welfare spending ï¬ nanced by taxes. This is largely due to economic anxiety rather than health concerns. A rallying effect around (scientiï¬ c) expertise combined with populist policies losing ground forms the other side of this coin, and hints at a rising demand for competent leadership.
    Keywords: COVID-19, Social Trust, Institutional Trust, Survey Experiment, European Union, Welfare, Health, Taxation, Accountability, Populism, Values
    JEL: D72 H51 H53 H55 O52 P52
    Date: 2020–08
  26. By: Frondel, Manuel; Osberghaus, Daniel; Sommer, Stephan
    Abstract: Based on panel data on around 5,500 German household heads originating from four years, this paper analyzes whether the experience of financial losses due to the Corona pandemic has affected three kinds of personal traits and preferences: the willingness to take risks, patience, and the locus of control. Our empirical results indicate that patience and the locus of control remain unchanged by the experience of pandemic-related financial losses, whereas we find a significantly negative effect of severe financial losses on risk taking, contrasting with the traditional assumption that such preferences are constant. In this respect, our heterogeneity analysis indicates that financial losses due to Corona particularly affect the most vulnerable households, notably low-income households and those with little income diversification.
    Keywords: Patience,risk aversion,locus of control
    JEL: D91 C23
    Date: 2021
  27. By: Delis, Manthos; Galariotis, Emilios; Monne, Jerome
    Abstract: The role of a bank advisor is especially important for guiding and counseling financially distressed individuals. Using a randomized controlled survey experiment conducted on a representative sample of French individuals and priming the financial vulnerability of half the respondents, we examine attitudes toward bank advisors. We find that priming deters low-income individuals from showing an extremely negative attitude toward seeking banking advice (positive effect); it also deters them from showing an extremely positive attitude (negative effect). We also find that acute financial distress partially drives the positive effect, and a lack of financial literacy partially drives the negative effect.
    Keywords: Behavioral economics and finance; Poverty; Salience; Survey experiment; Priming; Banking services; Financial advisor.
    JEL: C83 C9 D14 D90 D91 G2
    Date: 2021–04–10
  28. By: Andrea Ascani (Gran Sasso Science Institute); Alessandra Faggian (Gran Sasso Science Institute); Sandro Montresor (Gran Sasso Science Institute); Alessandro Palma (Gran Sasso Science Institute)
    Abstract: This article aims at investigating the interplay between the local spread of COVID-19 and the patterns of individual mobility. Conceptually, we connect the debate on the resilience to the perturbation caused by COVID-19 with the literature on spatial labour markets. By looking at very granular flows of Facebook users moving within and across Italian labour market areas (LMAs), we analyse whether their heterogeneous internal mobility has had a significant impact on excess mortality, thus testing whether, and under which circumstances, LMAs have actually behaved as self-containing local systems or have rather exported/imported people (and possibly) infections to/from other labour markets. We further extend the analysis by exploring how individual mobility plays different roles depending on the typology of LMAs considered. Specifically, we focus on LMAs hosting industrial districts, which are characterised by a thicker local labour market and denser business and social interactions, as well as LMAs with a high presence of “essential sectors†, i.e. activities not affected by the COVID-19 containment measures taken by the Italian government at the onset of the crisis.
    Keywords: labour market, mobility, COVID-19, resilience, Facebook
    JEL: R10 R12 R23 J61 I18
    Date: 2021–01
  29. By: Spagnolo, Giancarlo (Stockholm Institute of Transition Economics); Latour, Chiara (University of Stockholm); Peracchi , Franco (University of Rome Tor Vergata and EIEF)
    Abstract: We compare different indicators of the spread and consequences of the COVID-19 pandemic, developing a novel method to adjust daily COVID-19 deaths to match weekly excess mortality. Focusing on Sweden, the only country that has good data and did not impose a lockdown, we construct counterfactuals for what would have happened if it had imposed a lockdown, using a synthetic control method. Correcting for data problems and optimizing the synthetic control for each indicator considered, we find stronger effects than previously estimated. Most importantly, studying the ratio of positives to the number of tests, we find that a lockdown would have had sizable effects already after a week. The 3–4 weeks delay highlighted in previous studies appears mainly driven by the large changes in testing frequency that occurred in Sweden during the period considered.
    Keywords: COVID-19 indicators; excess deaths; COVID-19 deaths; containment policies; lockdown; synthetic control method; Sweden
    JEL: I18
    Date: 2021–04–02
  30. By: Bijnens, Gert; Hutchinson, John; Konings, Jozef; Saint-Guilhem, Arthur
    Abstract: Increased investment in clean electricity generation or the introduction of a carbon tax will most likely lead to higher electricity prices. We examine the effect from changing electricity prices on manufacturing employment. Analyzing firm-level data, we find that rising electricity prices lead to a negative impact on labor demand and investment in sectors most reliant on electricity as an input factor. Since these sectors are unevenly spread across countries and regions, the labor impact will also be unevenly spread with the highest impact in Southern Germany and Northern Italy. We also identify an additional channel that leads to heterogeneous responses. When electricity prices rise, financially constrained firms reduce employment more than less constrained firms. This implies a potentially mitigating role for monetary policy. JEL Classification: E52, H23, J23, Q48
    Keywords: employment, environmental regulation, labor demand, manufacturing industry, monetary policy
    Date: 2021–04
  31. By: Do Won Kim
    Abstract: This study examines how the UK political space, party competition and voting behaviour have changed with the recent rise of populism. First, this paper identifies the changes in UK dimensionality by conducting factor analyses on British Election Study data. Then, it maps parties and their supporters on the identified space to explore the changes in party competition and voter-party congruence. Finally, this study runs an OLS regression to analyse to what extent voter-party congruence influences voter’s party preference. This study finds that UK political space has become multidimensional as issues related to populism have become salient enough to form an independent dimension. After Brexit, however, the main contents of this new dimension have changed from EU-related immigration issues to Brexit negotiation. Meanwhile, party competition and voter preferences have revolved around and placed more emphasis on the salient dimension.
    Keywords: Multidimensionality, populism, voter-party congruence
    Date: 2020–10
  32. By: Siflinger, Bettina M. (Tilburg University); Paffenholz, Michaela (University of Mannheim); Seitz, Sebastian (ZEW Mannheim); Mendel, Moritz (briq and University of Bonn); Gaudecker, Hans-Martin von (University of Bonn)
    Abstract: Since the start of the COVID-19 pandemic, a major source of concern has been its effect on mental health. Using pre-pandemic information and five customized questionnaires in the Dutch LISS panel, we investigate how mental health in the working population has evolved along with the most prominent risk factors associated with the pandemic. Overall, mental health decreased sharply with the onset of the first lockdown but recovered fairly quickly. In December 2020, levels of mental health are comparable to those in November 2019. We show that perceived risk of infection, labor market uncertainty, and emotional loneliness are all associated with worsening mental health. Both the initial drop and subsequent recovery are larger for parents of children below the age of 12. Among parents, the patterns are particularly pronounced for fathers if they shoulder the bulk of additional care. Mothers' mental health takes a particularly steep hit if they work from home and their partner is designated to take care during the additional hours.
    Keywords: COVID-19, mental health, gender inequality, lockdown
    JEL: I10 I14 I18 I30 J22
    Date: 2021–04
  33. By: William Connell Garcia; Victor Ho
    Abstract: This analysis uses the most recent cross-section of financial statements of French companies from the ORBIS database only as an illustration in order to evaluate their capacity to cushion the COVID-19 shock on sales through previously accumulated cash reserves, operational flexibility and policy intervention. This paper has two main objectives. The first one being to investigate the extent to which the ability to cushion the economic shock is linked to specific company characteristics. The second objective is to evaluate how variation in the parameterisation of the economic shock, i.e. policy intervention and duration of the economic shock, affects the likelihood that specific types of companies become illiquid. We find evidence that both more productive companies and firms with a higher solvency ratio (profits/liabilities) are less likely to become illiquid. This result is robust to the parameterisation of the economic shock. Policy intervention, modelled as additional operational flexibility, alleviates the risk of facing a liquidity shortfall across the board, but does not eliminate it. Finally, using sectoral data from Eurostat, this analysis connects the risk of liquidity shortfalls to specific characteristics of the labour force, finding that the relatively vulnerable sectors are those that rely the most on labour, and whose workforce is relatively young and low-skilled.
    JEL: C25 C54 D22 D24 G30
    Date: 2021–01
  34. By: Corinna Ghirelli (Banco de España); María Gil (Banco de España); Samuel Hurtado (Banco de España); Alberto Urtasun (Banco de España)
    Abstract: This paper first constructs a regional-scale indicator that seeks to gauge the volume of measures implemented at each point in time to contain the pandemic. Using textual analysis techniques, we analyse the information in press news. At the start of the pandemic, measures were taken in a centralised fashion; but from June, regional differences began to be seen and increased in the final stretch of the year. Second, using linear estimates, with monthly data and a level of regional disaggregation, the paper documents how most of the reduction in mobility observed in Spain has been due to the restrictions imposed. However, there has been a perceptible change in this relationship over recent months. In the early stages of the pandemic, the reduction in mobility was found to be greater than would be inferred by the restrictions approved. That is to say, at the outset there was apparently some voluntary reduction in mobility. Yet following lockdown-easing, the behaviour of mobility has fitted more closely with what might be attributed to the containment measures in force. Finally, the findings in the paper suggest that most of the decline in economic activity since the start of the crisis can be explained by the reductions observed in mobility. The analysis considers only the short-term effects on activity, which is very useful for preparing the projections on GDP behaviour in the current quarter. Conversely, the methodological approach pursued does not allow for evaluation of the effect of the pandemic containment measures on activity over longer time horizons. In particular, the adverse impact on the economy’s output that occurs concurrently as a result of the restrictions may be countered in the medium term by an effect of the opposite sign, to the extent that the restrictions imposed today may serve to prevent other more forceful ones in the future.
    Keywords: nowcasting, GDP, economic activity, textual analysis, sentiment indicators, soft indicators, pandemic, COVID-19, coronavirus, mobility, restrictions, panel data
    JEL: I18 I12 E32 E37 C53 C23
    Date: 2021–03
  35. By: Michael Kenny; Davide Luca
    Abstract: Despite the prevalent focus upon increasing political divisions between urban and rural Europe, relatively little research has explored whether there is a systemic urban-rural divide in the political and socioeconomic attitudes of citizens across the entire continent. This paper aims to fill this gap. Drawing on individual-level data from the European Social Survey, it explores potential linkages between place of residence and individual attitudes. Our results show that there are strong, and statistically significant, differences between the populations in these different settings. On average, rural dwellers show stronger levels of dissatisfaction with democracy and lower trust in the political system. Yet, while we uncover stark differences in attitudes towards migration and globalisation, we do not find significant variation on some social and economic issues traditionally at the core of left-right cleavages. And our analysis suggests that this spatial divide does not operate in a binary fashion. It is more of a continuum, running on a gradient from inner cities to metropolitan suburbs, towns, and the countryside. The differences are explained by both composition and contextual effects, and underscore the importance of moving beyond ‘standard’ trade-offs between so-called ‘people-based’ versus ‘place-based’ policy approaches to territorial inequality.
    Keywords: urban-rural divide; regional inequality; geography of discontent; Europe
    Date: 2020–11

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