nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒05‒03
25 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Gender Norms and Labor-Supply Expectations: Experimental Evidence from Adolescents By Grewenig, Elisabeth; Lergetporer, Philipp; Werner, Katharina
  2. The health and socioeconomic costs of exposure to soil pollution: evidence from three polluted mining and industrial sites in Europe By Pierre Levasseur; Christelle Gramaglia; Katrin Erdlenbruch
  3. Pandemic Policy and Life Satisfaction in Europe By Andrew E. Clark; Anthony Lepinteur
  4. The interplay between green policy, electricity prices, financial constraints and jobs. Firm-level evidence By Gert Bijnens; John Hutchinson; Jozef Konings; Arthur Saint Guilhem
  5. The Unequal Consequences of the Covid-19 Pandemic: Evidence from a Large Representative German Population Survey By Lea Immel; Florian Neumeier; Andreas Peichl
  6. The COVID-19 Pandemic and Mental Health: Disentangling Crucial Channels By Bettina Siflinger; Michaela Paffenholz; Sebastian Seitz; Moritz Mendel; Hans-Martin von Gaudecker
  7. COVID-19 and Educational Inequality: How School Closures Affect Low- and High-Achieving Students By Grewenig, Elisabeth; Lergetporer, Philipp; Werner, Katharina; Woessmann, Ludger; Zierow, Larissa
  8. Sometimes you cannot make it on your own. How household background influences chances of success in Italy By Bonacini, Luca; Gallo, Giovanni; Scicchitano, Sergio
  9. Expecting Better? How Young People Form Their Earnings Expectations By Favara, Marta; Glewwe, Paul; Porter, Catherine; Sanchez, Alan
  10. The Young Bunch: Youth Minimum Wages and Labor Market Outcomes By Wiljan van den Berge
  11. Technology, risk and social policy. An empirical investigation By Guarascio, Dario; Sacchi, Stefano
  12. Learning Loss and Educational Inequalities in Europe: Mapping the Potential Consequences of the COVID-19 Crisis By Blaskó, Zsuzsa; da Costa, Patricia; Schnepf, Sylke V.
  13. Older mothers' employment and marriage stability when the nest is empty By Hippolyte d'Albis; Karina Doorley; Elena Stancanelli
  14. Do Women Expect Wage Cuts for Part-Time Work? By Schrenker, Annekatrin
  15. Ancestors, inter-generational transmission of attitudes, and corporate performance: Evidence from the Italian Mass Migration By Florio, Erminia; Manfredonia, Stefano
  16. Child Sleep and Maternal Labour Market Outcomes By Joan Costa-Font; Sarah Flèche
  17. Credit Supply, Firms, and Earnings Inequality By Christian Moser; Farzad Saidi; Benjamin Wirth; Stefanie Wolter
  18. Working Life and Human Capital Investment: Causal Evidence from Pension Reform By Gohl, Niklas; Haan, Peter; Kurz, ElisabethWeinhardt, Felix
  19. Does Expert Information Affect Citizens' Attitudes toward Corona Policies? Evidence from Germany By Clemens Fuest; Lea Immel; Florian Neumeier; Andreas Peichl
  20. Incentivizing last-resort social assistance clients: Evidence from a Finnish policy experiment By Palviainen Heikki
  21. Parental Assortative Mating and the Intergenerational Transmission of Human Capital By Bingley, Paul; Cappellari, Lorenzo; Tatsiramos, Konstantinos
  22. Real Responses to Anti-Tax Avoidance: Evidence from the UK Worldwide Debt Cap By Katarzyna Anna Bilicka; Yaxuan Qi; Jing Xing
  23. Who lost the most? Distributive effects of COVID-19 pandemic By Ainaa, Carmen; Brunetti, Irene; Mussida, Chiara; Scicchitano, Sergio
  24. Does Size Matter? Evidence from Municipality Break-Ups By Gissur Ó Erlingsson; Jonas Klarin; Eva Maria Mörk
  25. Firms' Margins of Adjustment to Wage Growth. The Case of Italian Collective Bargaining By Francesco Devicienti; Bernardo Fanfani

  1. By: Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Werner, Katharina (ifo Institute)
    Abstract: Gender gaps in labor-market outcomes often emerge with the arrival of the first child. We investigate a causal link between gender norms and labor-supply expectations within a survey experiment among 2,000 German adolescents. Using a hypothetical scenario, we document that the majority of girls expects to work 20 hours or less per week when having a young child, and expects from their partner to work 30 hours or more. Randomized treatments that highlight the existing traditional norm towards mothers significantly reduce girls’ self-expected labor supply and thereby increase the expected gender difference in labor supply between their partners and themselves (the expected within-family gender gap). Treatment effects persist in a follow-up survey two weeks later, and extend to incentivized outcomes. In a second experiment, we highlight another, more gender-egalitarian, norm towards shared household responsibilities and show that this attenuates the expected within-family gender gap. Our results suggest that social norms play an important role in shaping gender gaps in labor-market outcomes around child birth.
    Keywords: gender norms; female labor supply; survey experiment;
    JEL: J16 J22 C93 D83
    Date: 2020–10–26
  2. By: Pierre Levasseur (SADAPT - Sciences pour l'Action et le Développement : Activités, Produits, Territoires - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Christelle Gramaglia (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - AgroParisTech - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Katrin Erdlenbruch (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - AgroParisTech - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Aim: This article aims at providing a better understanding of the health and socioeconomic costs induced by soil pollution exposure. Subject: We conduct quantitative surveys in households living near mining and/or industrial sites in France, Spain, and Portugal, as well as those located in cleaner neighboring areas. Method: We employ a complementary estimation approach based on ordinary least squares, instrumental variables, and propensity score matching. Results: Our results confirm significant life-long health risks for residents of polluted areas compared to those in control areas. We find lower birth weight and lower childhood health status, as well as a higher risk of chronic disease in adulthood and higher premature mortality. Regarding the socioeconomic costs, we find higher rates of school absenteeism and health service demand among residents from polluted areas compared to control areas. Furthermore, we observe heterogeneous effects according to sociodemographic characteristics. As expected, children and the elderly are the most sensitive age groups; in addition, materially deprived and uneducated households are particularly vulnerable to pollution. More surprisingly, there is some evidence of higher vulnerability of educated households with regard to birth outcomes. Conclusion: Our results have important implications for public policy: they allow alerting about actually observed health risks in the exposed areas, but they also call for designing awareness campaigns and remedial strategies that are targeted towards the most vulnerable
    Keywords: Mining and industrial sites,Pollution,Absenteeism,Reported health outcomes,Southwestern Europe
    Date: 2021
  3. By: Andrew E. 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); Anthony Lepinteur (University of Luxembourg [Luxembourg])
    Abstract: We use data from the COME-HERE longitudinal survey collected by the University of Luxembourg to assess the effects of the policy responses to the COVID-19 pandemic on life satisfaction in France, Germany, Italy, Spain and Sweden over the course of 2020. Policy responses are measured by the Stringency Index and the Economic Support Index from the Blavatnik School of Government. Stringency is systematically associated with lower life satisfaction, controlling for the intensity of the pandemic itself. This stringency effect is larger for women, those with weak ties to the labour market, and in richer households. The effect of the Economic Support is never statistically different from zero.
    Keywords: COVID-19,Life Satisfaction,Policy Stringency,Economic Support COVID-19,Economic Support.
    Date: 2021–04
  4. By: Gert Bijnens (Economics and Research Department, NBB and KULeuven); John Hutchinson (European Central Bank); Jozef Konings (KULeuven, University of Liverpool and Nazarbayev University); Arthur Saint Guilhem (European Central Bank)
    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.
    Keywords: environmental regulation, labor demand, employment, manufacturing industry, monetary policy
    JEL: E52 H23 J23 Q48
    Date: 2021–04
  5. By: Lea Immel; Florian Neumeier; Andreas Peichl
    Abstract: We employ panel data from three waves of a large representative population survey carried out between June and November 2020 to assess in what regards and to what extent different groups of the German population are affected by the COVID- 19 crisis. Using common factor analysis, we demonstrate that people’s lives are mainly affected in two ways: First, a notable fraction of the population is concerned that they or their family members and friends may get infected with the coronavirus. Second, many people suffer from socio-economic consequences of the crisis, including a discontinuation of employment, a decrease in household income, and worries about financial troubles. Regressing these two factors on several socio-demographic characteristics reveals that especially the socio-economic consequences vary across population groups. Self-employed persons, marginally employed workers, low-income households, and families with children appear to be burdened over-proportionally.
    Keywords: Corona, Covid-19, crisis, pandemic, inequality, Germany
    JEL: I10 I14 I18 J11 J20
    Date: 2021
  6. By: Bettina Siflinger; Michaela Paffenholz; Sebastian Seitz; Moritz Mendel; Hans-Martin von Gaudecker
    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
  7. By: Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Werner, Katharina (ifo Institute); Woessmann, Ludger (ifo Institute); Zierow, Larissa (ifo Institute)
    Abstract: In spring 2020, governments around the globe shut down schools to mitigate the spread of the novel coronavirus. We argue that low-achieving students may be particularly affected by the lack of educator support during school closures. We collect detailed time-use information on students before and during the school closures in a survey of 1,099 parents in Germany. We find that while students on average reduced their daily learning time of 7.4 hours by about half, the reduction was significantly larger for low-achievers (4.1 hours) than for high-achievers (3.7 hours). Low-achievers disproportionately replaced learning time with detrimental activities such as TV or computer games rather than with activities more conducive to child development. The learning gap was not compensated by parents or schools who provided less support for low-achieving students. The reduction in learning time was not larger for children from lower-educated parents, but it was larger for boys than for girls. For policy, our findings suggest binding distance-teaching concepts particularly targeted at low-achievers.
    Keywords: educational inequality; COVID-19; low-achieving students; home schooling; distance teaching;
    JEL: I24 J62 D30
    Date: 2020–10–29
  8. By: Bonacini, Luca; Gallo, Giovanni; Scicchitano, Sergio
    Abstract: In this paper, we explore channels by which household background determines an individual's educational and social opportunities in Italy. Our analysis relies on a rich dataset that contains data both on individuals and their real parents, as well as information on individuals' non-cognitive skills. This paper also represents the first attempt to evaluate if and to what extent personality traits affect educational and occupational opportunities in Italy and how they interact with household background. The results highlight that the level of parental education is more relevant than the level of parental occupational skill in individuals' educational and social opportunities. The inclusion of 'Big-5' variables in the model helps control for omitted variables and reduces the unobserved heterogeneity in intergenerational social mobility among individuals with the same level of education and skills. Our results depict a dual and unequal labour market.
    Keywords: intergenerational mobility,equality of opportunity,household background,regional studies,personality traits,big five
    JEL: I24 J62 R23
    Date: 2021
  9. By: Favara, Marta (University of Oxford); Glewwe, Paul (University of Minnesota); Porter, Catherine (Lancaster University); Sanchez, Alan (Group for the Analysis od Development (GRADE))
    Abstract: Education choices are made based on the expected returns to schooling. If individuals are badly informed, they may make inefficient choices. We directly elicit young people's subjective expectations at the age of 14-15 about earnings under different educational scenarios and find these predict university enrolment by the age of 18-19. Females expect lower earnings than males, likely anticipating the reality of the labour market. Living in a poorer household, weaker numeric skills and lower self-efficacy are also associated with lower expected returns to education. Comparing expectations with the actual earnings from a nationally representative sample of individuals matched by sex, region and place of residence, we find that expectations for earnings upon completing secondary education closely match observed earnings, while there is a tendency to overestimate the returns to completing a university degree. These results hold for both males and females although with considerable variation across regions and population subgroups.
    Keywords: subjective expectations, earning realizations, Young Lives, Peru
    JEL: I2 J22 J24
    Date: 2021–04
  10. By: Wiljan van den Berge (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: The 2017 increase in the Dutch youth minimum wage has improved labor market outcomes for low-paid young workers. In particular, these workers’ average wage has risen with 4% without adverse effects on employment or hours worked. These are the key findings of new research on the impact of the minimum wage on labor market outcomes. Minimum wage increases were proposed by several political parties during the Dutch parliamentary elections of 2021, with the aim of increasing job quality in low-paid work. Minimum wages are also a topic of discussion internationally: the United States is witnessing an active campaign for raising minimum wages, and in other countries, such as Germany, minimum wages have recently been introduced or increased. Although many young workers are employed in low-paid jobs, only a relatively small group earns exactly the minimum wage: around 10% in the Netherlands. However, the Dutch minimum wage increase has also boosted incomes of low-paid young workers earning more than the minimum: these so-called spillovers account for 75% of the total wage increase. Further, labor market outcomes have improved most strongly for low-paid young full-time workers who are not enrolled in education: this is important as these workers are less likely to be transient occupants of low-paid jobs.
    JEL: J23 J38 J88
    Date: 2021–04
  11. By: Guarascio, Dario; Sacchi, Stefano
    Abstract: This paper investigates the role of exposure to technological risk in shaping social policy preferences, specifically on support for universal basic income and means-tested generalised minimum income. Evidence is provided for Italy, to exploit the availability of high-quality data, allowing measures of two dimensions of technological risk. Objective risk hinges upon the degree of substitutability of one's occupation by machines, while subjective risk concerns a worker's perception of their substitutability. We posit that exposure to technological risk induces individuals to ask for protection, and thus increases support for social policy. We test two hypotheses: first, that exposure to objective risk of replacement by machines is correlated with support for both safety nets; second, that such effect is increased by high perception of risk. On the whole, results confirm a strong relationship between exposure to technological risk and support for social safety nets, once objective risk is disentangled from subjective perceptions. However, we find that such relationship only holds for men, while it cannot be confirmed for women.
    Keywords: technological change,routine occupations,social policy,generalised minimum income,universal basic income,safety nets
    JEL: I3 J08 O33
    Date: 2021
  12. By: Blaskó, Zsuzsa (European Commission); da Costa, Patricia (European Commission, Joint Research Centre); Schnepf, Sylke V. (European Commission, DG Joint Research Centre)
    Abstract: It is widely discussed that the pandemic has impacted on educational inequalities across the world. However, in contrast to data on health or unemployment, data on education outcomes are not timely. Hence, we have extremely limited knowledge about the actual impact of the pandemic on learning outcomes at the national and the cross-national level. As it might take years to get new comparative evidence on the actual extent of the problem, this paper uses the latest large scale international student assessment data from before the pandemic, the Trends in International Mathematics and Science Study (TIMSS) 2019 and applies simple descriptive analysis, regressions and logical deductions to map potential consequences of the Covid-19 crisis across Europe. We obtain the relative trajectories of children's learning loss and its unequal distribution from information on home and school resources, the importance of these resources for learning outcomes and countries' school closure duration policies and compare Covid-19 related risk of learning loss between European countries. Results based on 4th graders' school achievements indicate that throughout Europe educational inequalities between and within countries are likely to increase substantially. Some European countries are highly likely to face already an education crisis.
    Keywords: educational inequalities, COVID-19, Europe, learning loss
    JEL: I24
    Date: 2021–04
  13. By: Hippolyte d'Albis (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); Karina Doorley (ESRI Dublin); Elena Stancanelli (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)
    Abstract: A significant literature in the social sciences addresses the impact of child-bearing and rearing on marital stability and on mothers' labour market outcomes. Much less is known about older mothers' employment and marriage patterns when the adult children leave the parental nest. This study aims to shed light on these issues using longitudinal labour force data for France. Exploiting retirement laws for identification purposes, and taking a regression discontinuity approach, we find that older women's retirement probability is positively associated with an empty nest. We also conclude that an empty nest is negatively associated with older mothers' marriage probability. There is scope for better targeting of both family and retirement policies for older mothers during those critical years when adult children leave the parental nest.
    Keywords: Ageing,Retirement,Divorce
    Date: 2021–04
  14. By: Schrenker, Annekatrin (DIW and FU Berlin)
    Abstract: Wage expectations for full- and part-time employment are key for understanding the labor supply decisions of women. However, whether women expect different wages between part-time and full-time work is not fully understood. Using German survey data, I quantify the expected full-time/part-time wage differential for a representative sample of female workers. I document that women, on average, expect only minor part-time wage penalties (1-3 percent). Comparing beliefs to selectivity-adjusted estimates of the part-time wage gap indicates that women’s mean expectations are realistic. I also show that women with children and those in managerial positions expect sizeable part-time wage cuts, with mothers overestimating the part-time wage penalty.
    Keywords: expectations; female labor supply; part-time wage gap;
    JEL: D84 J22 J31
    Date: 2020–09–08
  15. By: Florio, Erminia; Manfredonia, Stefano
    Abstract: We study the effect of the attitudes of a CEO's ancestors on firm performance. To do so, we collect detailed information on emigrants from Italian municipalities during the Age of Mass Migration (1892-1924) from Ellis Island ships lists and use emigration experience as a proxy for ancestors' risk propensity. We adopt an epidemiological approach complemented with an instrumental variables strategy and find that Italian firms managed by a CEO that belongs to a family with past emigration experience tend to perform better and to be more productive. In line with an inter-generational transmission of attitudes hypothesis, we show a positive relationship between the emigration experience of a CEO's ancestors and alternative measures of corporate risk-taking. The attitudes of a CEO's ancestors have as well consequences on firm solvency and on the cost of capital.
    Keywords: Emigration,Attitudes,Corporate Performance,Mass Migration
    JEL: G30 M14 Z1
    Date: 2021
  16. By: Joan Costa-Font; Sarah Flèche (CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We show that sleep deprivation exerts strong negative effects on mothers' labour market performance. To isolate exogenous variations in maternal sleep, we exploit unique variations in child sleep disruption using a UK panel dataset that follows mother-child pairs through time. We find that sleeping one hour less per night on average significantly decreases maternal labour force participation, the number of hours worked, and household income. We identify one mechanism driving the effects, namely the influence of maternal sleep on selection into full-time versus part-time work. Increased schedule flexibility for mothers with sufficient tenure mitigates the negative effects of sleep deprivation.
    Date: 2021–04–21
  17. By: Christian Moser (Columbia University, Federal Reserve Bank of Minneapolis, and CEPR); Farzad Saidi (University of Bonn and CEPR); Benjamin Wirth (Bavarian State Office for Statistics); Stefanie Wolter (Institute for Employment Research (IAB))
    Abstract: We study the distributional consequences of monetary policy-induced credit supply in the labor market. To this end, we construct a novel dataset that links worker employment histories to firm financials and banking relationships in Germany. Firms in relationships with banks that are more exposed to the introduction of negative interest rates in 2014 experience a relative contraction in credit supply, associated with lower average wages and employment. These effects are heterogeneous within and between firms. Within firms, initially lower-paid workers are more likely to leave employment, while initially higher-paid workers see a relative decline in wages. Between firms, wages fall by more at initially higher-paying employers. In this way, credit affects the distribution of pay and employment in line with predictions of an equilibrium model with both credit and search frictions.
    Keywords: Wages, Employment, Worker and Firm Heterogeneity, Monetary Policy, Negative Interest Rates
    JEL: J31 E24 J23 G21 E51
    Date: 2021–04
  18. By: Gohl, Niklas (DIW Berlin and Potsdam University); Haan, Peter (DIW Berlin and FU Berlin); Kurz, ElisabethWeinhardt, Felix (DIW Berlin, CESifo, IZA, CEP/LSE)
    Abstract: In this paper we present a life-cycle model with human capital investment during working life through training and provide a novel empirical test of human capital theory. Using a sizable pension reform which shifts the retirement age between two adjacent cohorts by three years, we document causal evidence that an increase in the working life increases investment into human capital through training. We estimate this effect using a regression discontinuity design based on a large sample from the German microcensus. We discuss and test further predictions regarding the relation between initial schooling, training, and the reform effect and show that only individuals with a college degree increase human capital investment. Our results speak to a large class of human capital models as well as policies extending or shortening working life.
    Keywords: human capital; retirement policies; RDD;
    JEL: J24 J26 H21
    Date: 2019–12–11
  19. By: Clemens Fuest; Lea Immel; Florian Neumeier; Andreas Peichl
    Abstract: Information provided by experts is widely believed to play a key role in shaping attitudes towards policy responses to the COVID-19 pandemic. This paper uses a survey experiment to assess whether providing citizens with expert information about the health risk of COVID-19 and the economic costs of lockdown measures affects their attitudes towards these policies. Our findings show that providing respondents with information about COVID-19 fatalities among the elderly raises support for lockdown measures, while information about their economic costs decreases support. However, different population subgroups react very differently. Men and younger respondents react more sensitively to information about lockdown costs, while women and older respondents are more susceptible towards information regarding fatality rates. Strikingly, the impact of the information treatment is entirely driven by West German respondents, while East Germans do not react. Finally, our results are entirely driven by respondents who underestimate the fatality of COVID-19, who represent a clear majority.
    Keywords: Corona, Covid-19, pandemic, lockdown, survey experiment, Germany
    JEL: H12 I10 I18
    Date: 2021
  20. By: Palviainen Heikki (Faculty of Management and Business, Tampere University)
    Abstract: In 2002, the Finnish government introduced an earnings disregard experiment aimed at improving the incentives of low-income individuals who receive last-resort social as- sistance. The aim of the experiment was to reduce unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the experiment using a quasi-experimental design. The experiment allowed for some social assistance client groups to earn a small temporary income to supplement their disposable income. There are small positive ef- fects on earnings for women and single-person households.
    Keywords: Difference-in-differences, making work pay, earnings disregard, welfare
    JEL: C93 H53 I38 J68
    Date: 2021–04
  21. By: Bingley, Paul (VIVE - The Danish Centre for Applied Social Science); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Tatsiramos, Konstantinos (University of Luxembourg, LISER)
    Abstract: We study the contribution of parental similarity in schooling levels to the intergenerational transmission of educational attainment. We develop an empirical model for educational correlations within the family in which parental sorting can translate into intergenerational transmission, or transmission can originate from each parent independently. Estimating the model using educational attainment from Danish population-based administrative data for over 400,000 families, we find that about 75 percent of the intergenerational correlation in education is driven by the joint contribution of the parents. We also document a sizeable secular decline of parental assortative mating in education, with a corresponding fall in joint intergenerational transmission from both parents; a fall compensated by an increase in parent-specific intergenerational transmission, leaving total intergenerational persistence unchanged. The mechanisms of intergenerational transmission have changed, with an increased importance of one-to-one parent-child relationships.
    Keywords: assortative mating, intergenerational transmission, human capital, inequality
    JEL: I24 J62
    Date: 2021–04
  22. By: Katarzyna Anna Bilicka; Yaxuan Qi; Jing Xing
    Abstract: We analyze how multinational firms reallocate real operations and debt across their affiliates in response to anti-tax avoidance policies. The UK introduced a worldwide debt cap in 2010, generating a quasi-natural experiment that limited interest deductibility for a group of multinational firms. We find that multinationals affected by the reform reduced the amount of debt held in the UK and increased debt held abroad. Affected multinationals reallocated a share of their real operations away from the UK. Our findings provide causal evidence for tax-motivated debt and real activity reallocation within multinationals and show how multinationals can circumvent tax avoidance regulations.
    Keywords: debt shifting, multinational companies, capital reallocation
    JEL: H25 H26
    Date: 2021
  23. By: Ainaa, Carmen; Brunetti, Irene; Mussida, Chiara; Scicchitano, Sergio
    Abstract: This paper investigates what happened to the wage distribution in Italy during the first wave of the COVID-19 pandemic. It shows which categories of workers and economic sectors have suffered more than others and to what extent both the actual level of smart-working and the ability to Working From-Home can influence the wage distribution. We use a unique dataset relying on the merging of two sample surveys: the Italian Labor Force Survey set up by National Institute of Statistics and the Italian Survey of Professions conducted by the National Institute for Public Policy Analysis. We estimate quantile regression models accounting for selection. First, the findings reveal that the pandemic has affected the wages of the whole workers, but the effect is higher at the bottom of the wage distribution. Second, the actual working from home mitigates the negative distributional consequences of the COVID-19 observed for those at the bottom of the wage distribution. However, the advantage of workers at the bottom tail of the wage distribution seems to lessen in the long term once the health emergency is passed. Third, looking at sectoral heterogeneity, retail and the restaurant are the most hit sectors in terms of wage loss. Fourth, separating by gender, men have been mostly hit by the pandemic, particularly at lowest deciles, though they benefited more from working at home at higher deciles. Finally, women appear as the one that in the long run would benefit more from increasing working from home possibility.
    Keywords: Wage inequality,COVID-19,Working from home,Quantile regression
    Date: 2021
  24. By: Gissur Ó Erlingsson; Jonas Klarin; Eva Maria Mörk
    Abstract: Municipal break-ups are an understudied phenomenon despite the fact that such territorial reforms regularly take place across the globe. This paper estimates how seven voluntary splits of Swedish municipalities affected municipal current costs. To predict what would have happened had the break-ups not taken place, we apply the matrix completion method with nuclear norm minimization. Our results do not support the standard view, that smaller municipalities imply higher per capita costs. Instead, we find an intriguing heterogeneity: costs increase in some municipalities, are unaffected in others and decrease elsewhere. The findings point to the complex nature of territorial reforms, the difficulty in drawing general conclusions of such, and hence, the perils of expecting them to have uniform outcomes.
    Keywords: territorial reforms, municipalities, matrix completion
    JEL: H72 R12 R50
    Date: 2021
  25. By: Francesco Devicienti; Bernardo Fanfani (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: This paper studies firms' adjustment behavior to the growth in labor costs induced by Italian collective bargaining institutions. Our research design compares several firms' outcomes across collective agreements within the same sector and geographic location, exploiting discontinuities in contractual wages' growth as a source of vari- ation in labor costs. Results show that on average employment, revenues, profits and investments fall, wages increase, while firms' productivity and workers' average quality do not change in response to higher labor costs. These e ects are highly heterogeneous across the firms' productivity distribution. Employment, revenues, productivity, profits and investments are positively or not related to contractual wage growth among relatively more ecient firms, while they are negatively related to this shock at less productive companies. More efficient firms tend to substitute high- with low-skilled workers, which are instead more likely to be laid o by less ecient employers. These results suggest that more efficient companies adjust to the generalized growth in labor costs through cost-saving strategies and they may benefit from cleansing effects that tend to increase their product market shares.
    Keywords: Collective Bargaining; Minimum Wage; Productivity; Employment; Matched Employer-Employee Data.
    JEL: J00 J23 J24 J31 J38 J58 L13
    Date: 2021–04

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