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on Microeconomic European Issues |
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Issue of 2021‒05‒10
33 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | D’Ambrosio, Anna (Polytechnic of Turin); Leombruni, Roberto (University of Turin); Razzolini, Tiziano (University of Siena) |
| Abstract: | Populist parties' propaganda portrays immigrants as a threat to native workers' jobs. When propaganda materializes as an electoral success, it may drive changes in natives' attitudes towards immigrants. As shown experimentally by Bursztyn et al. (2020), electoral results may signal a change in social preferences about immigration and make individuals more likely to express anti-immigrant resentment that they were previously hiding. We employ Italian administrative data to explore whether this mechanism implies actual differences in native and foreign workers' labor market outcomes. We estimate the impact of the electoral results of an Italian populist party, the Lega Nord, on natives and foreigners' workplace injuries and wages. We show that, on average, a 1% increase in the votes for the Lega Nord increases within-job-spell injury rates of foreign workers by 0.9%. Firms below fifteen employees benefiting from less employment protection drive the result. We argue that this is due to a reallocation of hazardous tasks to immigrant workers only in contexts characterized by higher job insecurity. The evidence is weaker for wage reductions, arguably due to labor market rigidity. |
| Keywords: | social norms, discrimination, workplace injuries |
| JEL: | D72 J28 J71 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14322&r= |
| By: | Duso, Tomaso; Nardotto, Mattia; Seldeslachts, Jo |
| Abstract: | We provide an evaluation of the impact of public subsidy schemes that aimed to support the development of basic broadband infrastructure in rural areas of Germany. Such subsidies are subject to state aid control by the European Commission (EC). While the EC increasingly recognises the role of economic analysis in controlling public aid to companies, there are to date no full retrospective studies performed on state aid control, especially assessing the so-called balancing test. In this study, we do not only analyse whether the aid was effective in solving a market failure -- low broadband coverage in rural areas -- but also study its impact on competitive outcomes, on both rival firms and consumers. We adopt a difference-in-differences framework after using a matching procedure to account for selection on observables. We find that the aid significantly increased broadband coverage. More importantly, we find that the number of internet providers has significantly increased in the municipalities receiving aid. This additional entry decreased average prices. Therefore, the subsidies complied with EU state aid rules, both in terms of effectiveness and competition. |
| Keywords: | Broadband; Competition; Coverage; Entry; Ex-Post Evaluation; prices; state aid |
| JEL: | C23 D22 L1 L4 L64 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15779&r= |
| By: | Péter Elek (Health and Population Lendület Research Group, Centre for Economic and Regional Studies, 1097 Budapest, Tóth Kálmán u. 4., Hungary and Institute of Economics, Corvinus University of Budapest); Anikó Bíró (Health and Population Lendület Research Group, Centre for Economic and Regional Studies); Petra Fadgyas-Freyler (National Health Insurance Fund Administration) |
| Abstract: | We analyse the timing, magnitude and income dependence of pharmaceutical panic buying around the outbreak of the COVID-19 pandemic in Hungary. We use district-level monthly and daily administrative data on detailed categories of pharmaceutical purchases, merge them to income statistics and estimate multilevel panel models. Our main results are as follows. First, the days of therapy (DOT) of pharmaceutical purchases increased by more than 30% in March 2020, when major lockdown measures were announced. This pattern holds for almost all categories of pharmaceuticals. Second, shortly after the panic reactions, the aggregate amount of pharmaceutical purchases returned to their pre-shock levels, however, the frequency of pharmacy visits decreased. Third, the panic buying reaction was significantly stronger in richer geographical areas, where – according to the daily data – people also reacted earlier to the pandemic-related news. Overall, the results suggest that panic buying of pharmaceuticals can have dtrimental effects on vulnerable populations.We combine macro-level data on high-stakes testing with survey data on more than 300,000 students aged 10-16 years in 31 European countries, from three waves (2002, 2006 and 2010) of the Health Behaviour in School-aged Children (HBSC) study. With variation in high-stakes testing across countries, years and grade levels, we use a quasi-experimental difference-in-differences (DD) design for identification of causal effects. We find that high-stakes testing increases self-reported school-related stress by almost 10 % of a standard deviation. This is primarily driven by a strong effect for girls, meaning that high-stakes testing increases the gender gap in school-related stress. The results are robust to a range of sensitivity analyses. |
| Keywords: | COVID-19, inequality, panic buying, pharmaceutical demand |
| JEL: | I12 I14 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2113&r= |
| By: | Fitjar, Rune Dahl; Muringani, Jonathan; Rodríguez-Pose, Andrés |
| Abstract: | Social capital is an important factor explaining differences in economic growth among regions. However, the key distinction between bonding social capital, which can lead to lock-in and myopia, and bridging social capital, which promotes knowledge flows across diverse groups, has been overlooked in growth research. In this paper, we address this shortcoming by examining how bonding and bridging social capital affect regional economic growth, using data for 190 regions in 21 EU countries, covering eight waves of the European Social Survey between 2002 and 2016. The findings confirm that bridging social capital is linked to higher levels of regional economic growth. Bonding social capital is highly correlated with bridging social capital and associated with lower growth when this is controlled for. We do not find significantly different effects of bonding social capital in regions with more or less bridging social capital, or vice versa. We examine the interaction between social and human capital, finding that bridging social capital is fundamental for stimulating economic growth, especially in low-skilled regions. Human capital also moderates the relationship between bonding social capital and growth, reducing the negative externalities imposed by excessive bonding. |
| Keywords: | bonding; bridging; economic growth; EU; regions; social capital |
| JEL: | O17 O43 R11 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15871&r= |
| By: | Cavapozzi, Danilo; Francesconi, Marco; Nicoletti, Cheti |
| 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; gender; identity; norms; peer effects |
| JEL: | J12 J16 J22 J24 J31 Z13 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15957&r= |
| By: | Julia Bachtroegler-Unger (Österreichisches Institut für Wirtschaftsforschung (WIFO),Vienna, Austria); Mathieu Doussineau (European Commission - JRC) |
| Abstract: | Over the course of the 2014-2020 period, the European Union has invested more than €125bn into support to research and innovation through two main channels: the excellence-based Horizon 2020 programme and its cohesion policy implemented through the European Structural and investment funds (ESIF) and in particular the European Regional Development fund (ERDF). While projects funded by ESIF are selected in the context of place-based operational programmes and smart specialisation strategies (S3), Horizon 2020 grants are assigned based on the quality of the project proposals and consortia without any geographical criteria. A concentration of R&I funding from both funding schemes in the same technological or policy area could point to the creation of a synergy between EU funding as suggested by the concept of smart specialisation and encouraged by the European Commission. This report uses project data to analyse the regional distribution of Horizon 2020 and ESIF funding among key enabling technologies and societal grand challenges and to map potential synergies between different EU funding policies. |
| Keywords: | ERDF, ESIF, Cohesion policies, database, Horizon 2020 |
| JEL: | O30 O38 O32 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc123485&r= |
| By: | Carlana, Michela; La Ferrara, Eliana |
| Abstract: | In response to the COVID-19 outbreak, the governments of most countries ordered the closure of schools, potentially exacerbating existing learning gaps. This paper evaluates the effectiveness of an intervention implemented in Italian middle schools that provides free individual tutoring online to disadvantaged students during lock-down. Tutors are university students who volunteer for 3 to 6 hours per week. They were randomly assigned to middle school students, from a list of potential beneficiaries compiled by school principals. Using original survey data collected from students, parents, teachers and tutors, we find that the program substantially increased students' academic performance (by 0.26 SD on average) and that it significantly improved their socio-emotional skills, aspirations, and psychological well-being. Effects are stronger for children from lower socioeconomic status and, in the case of psychological well-being, for immigrant children. |
| JEL: | I21 I24 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15761&r= |
| By: | Frondel, Manuel; Osberghaus, Daniel; Sommer, Stephan |
| Abstract: | Based on panel data on around 5,500 German households, 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:903&r= |
| By: | Ganau, Roberto; Rodríguez-Pose, Andrés |
| Abstract: | Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity 'puzzle'. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions' labour productivity growth both directly -as improvements in institutional quality drive productivity growth- and indirectly -as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality. |
| Keywords: | Europe; Human Capital; Innovation; institutional quality; labour productivity; Physical Capital; regions |
| JEL: | E24 J24 O47 R11 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15870&r= |
| By: | Harju, Jarkko; Jäger, Simon; Schoefer, Benjamin |
| Abstract: | How does boosting worker voice affect worker separations, job quality, wages, and firm performance? We study the 1991 introduction of a right to worker voice in Finland. The law granted workers in firms with at least 150 employees the right to elect representatives to company boards. The size-dependent introduction permits a difference-in-differences design. In contrast to exit-voice theory, we find no effects on voluntary job separations as a revealed-preference measure of job quality. We can also rule out small increases in the labor share or rent sharing, with some evidence for small pay premia increases, in particular at the bottom of the wage distribution. We detect a small reduction in involuntary separations, zero effects on worker health, and a moderate increase in survey-based subjective job quality. Regarding firm performance, we find, if anything, small positive effects on survival, productivity, and capital intensity. An additional 2008 introduction of shop-floor representation in smaller firms had similar, limited effects. Interviews and surveys indicate that worker representation facilitates information sharing and cooperation rather than shifting power or rents to labor. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15874&r= |
| By: | Dario Guarascio; Stefano Sacchi |
| 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. |
| Date: | 2021–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/16&r= |
| By: | Löffler, Max; Siegloch, Sebastian |
| Abstract: | We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German institutional setting with 5,200 municipal tax reforms for identification. We find that higher taxes are fully passed on to rental prices after three years. The pass-through is lower when housing supply is inelastic. Combining reduced form estimates with our theoretical framework, we simulate the welfare effects of property taxes and show that they are regressive. |
| Keywords: | Local Labor Markets; property taxation; rental housing; Tax Incidence; welfare |
| JEL: | H22 H41 H71 R13 R31 R38 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15927&r= |
| By: | Puhani, Patrick A.; Sterrenberg, Margret K. |
| Abstract: | In this paper, we estimate the effects of mandatory military service by exploiting the post-cold war decrease in the need for soldiers causing a substantial number of potential conscripts not to be drafted into the German military. Specifically, using previously unavailable information on degree of fitness in the military’s medical exam as a control variable, we test for the effects of mandatory military service on wages; employment; marriage/partnership status; and satisfaction with work, financial situation, health, family life, friends, and life in general. We find almost no statistically significant effects of this 6 to 9 month career interruption for young German men, with the exception of hourly wage, which shows a negative point estimate of -15 percent with a large confidence interval of between -30 and -0.2 percent. This interval estimate is consistent with previous findings for the United States, Denmark, and the Netherlands. |
| Keywords: | career breaks; conscription; wages; employment; life satisfaction; natural experiment |
| JEL: | J12 J24 J47 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-684&r= |
| By: | Magontier, Pierre; Sole-Olle, Albert; Viladecans-Marsal, Elisabet |
| Abstract: | We study the role of intergovernmental cooperation in protecting coastal land from development in Spain. Curbing the development of coastal land may generate benefits (e.g., preservation of environmental amenities and reduced tourist congestion) and costs (e.g., job losses), not only for residents in the political jurisdiction, but also for non-residents. Local governments may therefore make decisions in isolation that do not take account of the welfare of non-residents and may not choose the right amount of development. In this paper we investigate how political alignment between the mayors of neighboring municipalities may enhance incentives to cooperate and affect development in coastal areas. Using a regression discontinuity design and high-quality administrative data from the cadaster on the amount of built-up land along the Spanish coast, we found that municipalities with mayors belonging to the ideological bloc governing a majority of municipalities in a coastal area develop less land than other municipalities. This effect is larger for land very close to the coast and in municipalities with a higher share of environmentally valuable land. |
| Keywords: | land-use policy; Local government; Regression Discontinuity |
| JEL: | D72 H70 R52 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15780&r= |
| By: | Casper A.P. Burik (Vrije Universiteit Amsterdam); Hyeokmoon Kweon (Vrije Universiteit Amsterdam); Philipp D. Koellinger (University of Wisconsin-Madison) |
| Abstract: | Two family-specific lotteries take place during conception— a social lottery that determines who our parents are and which environment we grow up in, and a genetic lottery that determines which part of their genomes our parents pass on to us. The outcomes of these lotteries create inequalities of opportunity that can translate into disparities in health and socioeconomic status. Here, we estimate a lower bound for the relevance of these two lotteries for differences in education, income and body mass index in a sample of 38,698 siblings in the UK who were born between 1937 and 1970. Our estimates are based on models that combine family-specific effects with gene-by-environment interactions. We find that the random differences between siblings in their genetic endowments clearly contribute towards inequalities in the outcomes we study. Our rough proxy of the environment people grew up in, which we derived from their place of birth, are also predictive of the studied outcomes, but not beyond the relevance of family environment. Our estimates suggest that at least 13 to 17 percent of the inequalities in education, wages and BMI in the UK are due to inequalities in opportunity that arise from the outcomes of the social and the genetic lottery. |
| Keywords: | inequality, income, education, BMI, genetics, polygenic index |
| JEL: | I24 I14 J00 |
| Date: | 2021–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210035&r= |
| By: | Bellés-Obrero, Cristina; Cabrales, Antonio; Jimenez-Martin, Sergi; Vall-Castello, Judit |
| Abstract: | We study the effect of women's education on fertility and children's health during a period of gender equalization and women's greater access to economic opportunities. In 1980, Spain raised the minimum working age from 14 to 16, while compulsory education age remained at 14. This reform changed the within-cohort incentives to remain in the educational system. Using a difference-in-differences approach, we find that the reform delayed fertility but did not impact completed fertility of affected women. We also show that the reform was detrimental for the health of the children's of affected mothers at delivery. We document two channels for this negative effect: the postponement in the entrance of motherhood and the deterioration of women's health habits (such as smoking and drinking). This last channel is a direct effect of the gender equalization process. However, in the medium run, these more educated mothers are able to reverse the negative health shocks at birth through maternal vigilance and investment in their children's health habits. |
| Keywords: | Education; Fertility; gender equalization; Infant health |
| JEL: | I12 I25 J13 J81 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15752&r= |
| By: | Arapakis, Karolos; Brunner, Eric; French, Eric Baird; McCauley, Jeremy |
| Abstract: | We compare dementia prevalence and how it varies by socioeconomic status (SES) across the United States and England. We compare between country differences in age-gender standardized dementia prevalence, across the SES gradient. Dementia prevalence was estimated in each country using an algorithm based on an identical battery of demographic, cognitive, and functional measures. Dementia prevalence is higher among the disadvantaged in both countries, with the United States being more unequal according to four measures of SES. Once past health factors and education were controlled for, most of the within country inequalities disappeared; however, the cross-country difference in prevalence for those in lowest income decile remained disproportionately high. This provides evidence that disadvantage in the United States is a disproportionately high risk factor for dementia. |
| Keywords: | dementia; disadvantage; socioeconomic gradient |
| JEL: | I14 I32 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15974&r= |
| By: | Kim Oosterlinck; Anne-Sophie Radermecker |
| Abstract: | We study the effect of public regulation of the art market. In 1981, France passed a Decree to regulate attribution practices, in a market where authenticity plays a key role in valuation and price formation mechanisms. By using empirical evidence from sales of early Flemish paintings (1955-2015), we show that the decree had a limited impact not only on due diligence and attribution practices but also on value of sales. The size and relative depth of the French art market compared to other countries, as well as the development of technical art history, the globalization of the art market, and compliance mechanisms explain the moderate impact of this Decree on old master sales. Our results therefore suggest that to regulate attribution in the arts, market mechanisms might be more effective than regulation. |
| Keywords: | Art Market; Authenticity; Reputation; French Regulation; Marcus Decree |
| JEL: | K20 Z11 |
| Date: | 2021–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/322261&r= |
| By: | Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John |
| 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: | firm size; Innovation; patents; Regulation |
| JEL: | J8 L11 L25 L51 O31 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15743&r= |
| By: | Bonfiglioli, Alessandra; De Pace, Federica |
| Abstract: | This paper studies the effect of firms' export activity on the gender wage gap among its workers. Using matched employer-employee data from Germany for the period between 1993 and 2007, we show that an increase in a firm's export widens the wage gap between male and female blue-collar workers, while it reduces it between male and female white collars. In particular, the former effect is stronger for workers in routine manual tasks, while the latter is driven by employees performing interactive tasks. This evidence is consistent with the hypothesis that serving foreign markets relies more on interpersonal skills, which reinforces female comparative advantage and reduces (widens) the gender wage gap in white-collar (blue-collar) occupations. Our results, identified out of the variation in wages within firm-worker pairs, are robust to controlling for a series of worker and firm characteristics, and a host of firm, sector, time and state fixed effects, and heterogeneous trends. |
| Keywords: | comparative advantage; Employer-employee data; gender wage gap; Trade |
| JEL: | F16 J16 J31 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15801&r= |
| By: | Giuseppe Coco; Daniele Di Simone; Laura Serlenga; Sabrina Molinaro |
| Abstract: | Gambling is widespread among teenagers, requiring intervention to protect especially problem gamblers. The primary aim of the present study is to understand whether young problem gamblers are aware of the economic risks associated with gambling. Secondly, we introduce two gambling indicators that are new in the literature and are useful to public policy assessment: a measure of popularity of different gambling products in Italy and a gambling-pattern index. We analyzed 4025 students aged 15 to 19 years in a large-scale survey from the ESPAD® Italia 2018 project (European School Survey Project on Alcohol and Other Drugs). An Ordinal Logit Regression is applied considering the SOGS-RA problem gambling indicator together with socio-behavioural sphere, gambling context and family related variables and a specific indicator pertinent to economic risk perception. The gambling context variables have been created using the bipartite network and complexity measures defined by Hidalgo-Haussman (2009), considering the number of games played by each student and how popular these gambling products are among the players. The results show that problem gamblers are aware of the economic risks associated with gambling, and at the same time tend to play more games and more unpopular games than non-problem gamblers. The likely effectiveness of different policies is discussed in the light of this evidence. |
| Keywords: | Gambling risks, Risk awareness, Complexity, Network analysis. |
| JEL: | D81 D83 I12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2021_05.rdf&r= |
| By: | Brülhart, Marius; Danton, Jayson; Parchet, Raphaël; Schläpfer, Jörg |
| Abstract: | We study the incidence of local taxes on the welfare of heterogeneous residents. A structural model of imperfectly mobile households who differ in terms of income and family status allows us to back out preferences for local public goods and mobility parameters that vary by family status. We calibrate the model with plausibly causal tax-base and housing-price elasticity estimates. Based on municipality-level data for Switzerland, we find that households with children have stronger preferences for locally provided public services and are less mobile than households without children. This in turn implies that the burden of local taxes is mainly borne - linearity of taxes and capitalization into lower housing notwithstanding - by above-median income households without children. |
| Keywords: | heterogeneous households; household mobility; housing prices; Local taxation; public-good preferences; Tax Incidence |
| JEL: | H24 H71 R21 R31 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15826&r= |
| By: | Hyejin Lee; Johan Swinnen; Patrick Van Cayseele |
| Abstract: | Agricultural cooperatives have often been promoted as a way to increase their market power and to obtain stability of profit against uncertainty. This paper estimates the firm-level markups and markup volatility to identify the countervailing market power of cooperatives in the Italian fruits and vegetable sector and the dairy sector. We use the firm-level data of Italian firms for the period 2007-2014. We find that, overall, there is a tradeoff in cooperatives’ role between obtaining market power and stability. Farmer cooperatives in both sectors gain stability in their markups but their markups are lower, on average, than those for non-cooperatives. For processor cooperatives, the fruits and vegetable sector obtains more market power. This appears to arise from the product differentiation strategy of the processors cooperative. |
| Date: | 2021–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:ete:licosp:674093&r= |
| By: | Rostam-Afschar, Davud; Unsorg, Maximiliane |
| Abstract: | We examine a deregulation of German pharmacists to assess its effects on retail and labor markets. From 2004 onward, the reform allowed pharmacists to expand their single-store firms and to open or acquire up to three affiliated stores. This partial deregulation of multi-store prohibition reduced the cost of firm expansion substantially and provides the basis for our analysis. We develop a theoretical model that suggests that the general limitation of the total store number per firm to four is excessively restrictive. Firms with high managerial efficiency will open more stores per firm and have higher labor demand. Our empirical analysis uses very rich information from the administrative panel data on the universe of pharmacies from 2002 to 2009 and their affiliated stores matched with survey data, which provide additional information on the characteristics of expanding firms before and after the reform. We find a sharp immediate increase in entry rates, which continues to be more than five-fold of its pre-reform level after five years for expanding firms. Expanding firms can double revenues but not profits after three years. We show that the increase of the number of employees by 50% after five years and the higher overall employment in the local markets, which increased by 40%, can be attributed to the deregulation. |
| Keywords: | egulation,acquisitions,entry,market concentration,wages,employment,pharmacists |
| JEL: | L4 L5 L2 J44 J23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:836&r= |
| By: | Kuzmina, Olga |
| Abstract: | Exploiting the variation in labor-market programs in Spain, I show that the use of flexible (shorter and cheaper-to-fire) employment contracts increases a firm's debt capacity. A thought experiment of prohibiting an average firm from hiring workers on flexible contracts suggests that such a firm should reduce its debt-to-capital ratio by 7%. I further nail down the employment flexibility mechanism behind this effect, which works through reductions of the firm's operating leverage and the fixity of its costs. I use specific institutional features to separate this explanation from differences in wages or labor bargaining power. I show that the effects are stronger for firms suffering most in bankruptcy and that in downturns, firms downsize using flexible labor, implying that the employment-contract structure is a significant component of operating flexibility and expected default costs. Finally, employment flexibility increases firm value for firms that benefit most from operating leverage reductions and depend more on external financing. The results demonstrate how management can use heterogenous labor contracts to improve firm outcomes. Most broadly, the results emphasize the importance of studying operating strategy and organizational structure as integral determinants of the financing decisions of firms and highlight the complementarities between CEOs' and CFOs' decision-making. |
| Keywords: | Capital Structure; Fixed-term contracts; Operating flexibility; Operating Leverage |
| JEL: | D22 G32 J41 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15819&r= |
| By: | Siegloch, Sebastian; Wehrhöfer, Nils; Etzel, Tobias |
| Abstract: | We analyze the effects of a large place-based policy, subsidizing up to 50% of investment costs of manufacturing firms in East Germany after reunification. We show that a 1-percentage-point decrease in the subsidy rate leads to a 1% decrease in manufacturing employment. We document important spillovers for untreated sectors in treated counties, untreated counties connected via trade and local taxes, whereas we do not find spillovers on counties in the same local labor market. We show that the policy is at least as efficient as cash transfers to the unemployed, but is more effective in curbing regional inequality. |
| Keywords: | place-based policies,employment,spillovers,administrative microdata |
| JEL: | H24 J21 J23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21038&r= |
| By: | David Margolis (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); Egidio Miotti (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord, HCERES - Haut Conseil de l'Evaluation de la Recherche et de l'Enseignement Supérieur) |
| Abstract: | This paper studies why PhDs in France take longer to find stable jobs than engineers. Using data from CEREQ's "Génération 2004" survey, we show that job finding rates of PhDs are lower than those of engineers and document the differences in their observable characteristics and fields of study. We show that this phenomenon is due to multiple factors: heterogeneity in student characteristics along observable and unobservable dimensions and fields of study, directed search toward public sector positions (especially professors) among PhDs and, in all likelihood, reservation wages of PhDs for private sector jobs that are "too high" relative to their value of marginal product. |
| Keywords: | Wage subsidies,School-to-work transition,STEM,Directed search |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03206891&r= |
| By: | Daniel Goller; Stefan C. Wolter |
| Abstract: | This study is, to the best of our knowledge, the first analysis of apprenticeship supply that allows us to analyse the effects of the shutdowns triggered by the COVID-19 pandemic before, during and after these shutdowns by means of daily searches for vacant apprenticeships. Analysing over 10 million search queries on the national administrative platform for apprenticeship offers from February 2020 until April 2021 we find a sharp reduction of up to 40% in the daily number of search queries associated to the first shutdown in March 2020, followed by some catch-up effect thereafter. Although we find a strong relationship between the intensity of the politically imposed restrictions due to the COVID-19 pandemic and daily search queries, this relationship weakens over time as the pandemic progresses. Finally, we find a large heterogeneity of effects, but all regions and occupational groups studied show a statistically significant negative effect of the measures on the search intensity for apprenticeships. |
| Keywords: | COVID-19, Switzerland, stringency index, apprenticeship |
| JEL: | I20 J22 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0182&r= |
| By: | De Fraja, Gianni; Matheson, Jesse; Rockey, James |
| Abstract: | The Covid-19 health crisis has led to a substantial increase in work done from home, which shifts economic activity across geographic space. We refer to this shift as a Zoomshock. The Zoomshock has implications for locally consumed services; much of the clientèle of restaurants, coffee bars, pubs, hair stylists, health clubs, and the like located near workplaces is transferred to establishments located near where people live. In this paper we measure the Zoomshock at a very granular level for UK neighbourhoods. We establish three important empirical facts. First, the Zoomshock is large; many workers can work-from-home and live in a different neighbourhood than they work. Second, the Zoomshock is very heterogeneous; economic activity is decreasing in productive city centres and increasing residential suburbs. Third, the Zoomshock moves workers away from neighbourhoods with a large supply of locally consumed services to neighbourhoods where the supply of these services is relatively scarce. We discuss the implications for aggregate employment and local economic recovery following the Covid-19 health crisis. |
| Keywords: | COVID-19; Local Labour Markets; lockdown; teleworking; work-from-home |
| JEL: | H12 J01 R12 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15655&r= |
| By: | Dahl, Gordon; Felfe, Christina; Frijters, Paul; Rainer, Helmut |
| Abstract: | What happens when immigrant girls are given increased opportunities to integrate into the workplace and society, but their parents value more traditional cultural outcomes? We answer this question in the context of a reform which granted automatic birthright citizenship to eligible immigrant children born in Germany after January 1, 2000. Using survey data we collected from students in 57 schools and comparing those born in the months before versus after the reform, we find the introduction of birthright citizenship lowers measures of life satisfaction and self-esteem for immigrant girls by .32 and .25 standard deviations, respectively. This is especially true for Muslims, where parents are likely to prefer more traditional cultural outcomes than their daughters. Moreover, we find that Muslim girls granted birthright citizenship are less integrated into German society: they are both more socially isolated and less likely to self-identify as German. Exploring mechanisms for these unintended drops in well-being and assimilation, we find that immigrant Muslim parents invest less in their daughters' schooling and that these daughters receive worse grades in school if they are born after the reform. Consistent with a rise in intrafamily conflict, birthright citizenship results in disillusionment where immigrant Muslim girls believe their chances of achieving their educational goals are lower and the perceived odds of having to forgo a career for a family rise. In contrast, immigrant boys experience, if anything, an improvement in well-being, integration, and schooling outcomes. Taken together, the findings point towards immigrant girls being pushed by parents to conform to a role within traditional culture, whereas boys are allowed to take advantage of the opportunities that come with citizenship. To explain these findings, we construct a simple game-theoretic model which builds on Akerlof and Kranton (2000), where identity-concerned parents constrain their daughter's choices, and hence lower their daughter's well-being, when faced with the threat of integration. Alternative models can explain some of the findings in isolation. |
| JEL: | J15 J16 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15671&r= |
| By: | Tito Boeri (Università Bocconi, IZA, CEP-LSE); Edoardo Di Porto (CSEF, INPS, Università di Napoli Federico II, UCFS, Uppsala University); Paolo Naticchioni (INPS, Università Roma Tre, IZA); Vincenzo Scrutinio (LSE, IZA, Università di Bologna) |
| Abstract: | This paper provides the first analysis of a population-wide controlled field experiment for home visits checking on sick leave in the public sector. The experiment was carried out in Italy, a country with large absenteeism in the public sector, and it concerned the universe of public employees. We exploit unique administrative data from the Italian social security administration (INPS) on sick leave and work histories. We find that receiving a home visit reduces the number of days on sick leave in the following 16 months by about 12% (5.5 days). The effect is stronger for workers who are found irregularly on sick leave (-10.2 days). We interpret our findings as a deterrence effect of home visits: workers being found irregularly on sick leave experience a decline of about 2% of their wage in the following 12 months. Uncertainty aversion (there is no automatism in these sanctions) can play a role in these results. Our estimates suggest that home visits are cost-effective: every Euro spent for the visits involves up to 10 Euros reductions in sick benefits outlays. We estimate the marginal value of public funds (MVPF) spent on home visits at about 1.13, which is significantly lower than estimates of MVPF of income taxes in the US. |
| Keywords: | Sick leave, Absenteeism, Randomized trial. |
| JEL: | I12 J45 |
| Date: | 2021–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:610&r= |
| By: | Bellodi, Luca; Morelli, Massimo; Vannoni, Matia |
| Abstract: | We study the consequences of populism on bureaucratic expertise and government performance. We use novel data on about 8,000 municipalities in Italy, over a period of 20 years, and we estimate the effect of electing a populist mayor with a close-election regression discontinuity design. We find that the election of a populist mayor leads to (1) higher turnover among top bureaucrats; (2) an increase in the probability of replacing expert with non-expert bureaucrats; (3) a decrease in the percentage of highly educated bureaucrats; (4) and lower performance overall. Moreover, we find evidence that the increased inefficiency of the bureaucracy is accompanied by proliferation of council and executive resolutions, in line with the recent literature on overproduction of laws and bureaucratic inefficiency. |
| Keywords: | bureaucracy; Government Performance; Populist Politicians; Turnover |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15929&r= |
| By: | Thoresson, Anna (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper studies how wages respond to a sudden change in employer concentration. It exploits a reform that deregulated the Swedish pharmacy market, which until 2009 was a monopoly. The reform involved a substantial increase in the number of employers on the pharmacy labor market. However, the change in employer concentration was not geographically uniform: certain areas experienced large changes while others were largely unaffected. Exploiting this geographical variation, elasticities of wages with respect to labor market concentration are estimated to be between -0.02 and -0.05. The empirical approach relies only on the variation in concentration controlled by the policymaker to remedy the concern that actual labor market concentration is endogenous. The positive wage effects from reduced labor market concentration are found to be most prevalent for stayers, rather than new hires, as well as those with more industry experience and longer tenure. Overall, the paper adds to a growing literature that finds that market concentration matters for workers' wages, in a context where labor is highly industry-specific. |
| Keywords: | Wages; Competition; Market concentration |
| JEL: | J31 J42 J45 |
| Date: | 2021–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2021_006&r= |