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on Microeconomic European Issues |
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Issue of 2021‒05‒31
twenty-two papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Cahuc, Pierre (Sciences Po, Paris); Kramarz, Francis (CREST (ENSAE)); Nevoux, Sandra (CREST (ENSAE)) |
| Abstract: | To understand which firms take-up short-time work and which workers they enroll in this program, we provide a model which shows that short-time work may save jobs in firms hit by strong negative revenue shocks, but not in less severely-hit firms, where hours worked are reduced, without saving jobs. Using detailed data on the administration of the program covering the universe of French establishments in the 2008-2009 Great Recession, we find that short-time work did indeed save jobs and increase hours of work in firms faced with large negative shocks. These firms have been able to recover rapidly in the aftermath of the Recession thanks to short-time work. We also provide evidence of large windfall effects which significantly increased the cost of the policy per job saved; yet we also find that short-time work remains more cost-efficient at saving jobs than wage subsidies. |
| Keywords: | short-time work, employment, hours of work |
| JEL: | E24 J22 J65 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14381&r= |
| By: | Genz, Sabrina; Schnabel, Claus |
| Abstract: | While numerous studies have analyzed the aggregate employment effects of digital technologies, this paper focuses on the employment development of individual workers exposed to digitalization. We use a unique linked employer-employee data set for Germany and a direct measure of the first-time introduction of cutting-edge digitalization technologies in establishments between 2011 and 2016. Applying a matching approach, we compare workers in establishments investing in digital technologies with similar employees in establishments that do not make such an investment. We find that the employment stability of incumbent workers is lower in investing than non-investing establishments, but most displaced workers easily find jobs in other firms, and differences in days in unemployment are small. We also document substantial heterogeneities in the employment effects across skill groups, occupational tasks performed, and gender. Employment reactions to digitalization are most pronounced for both low- and high-skilled workers, for workers with non-routine tasks, and for female workers. Our results underline the importance of tackling the impending digital divide among different groups of workers. |
| Keywords: | digitalization,employment,separations,skills,tasks |
| JEL: | J21 J63 O33 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:118&r= |
| By: | Paolo Castelnuovo; Stefano Clo; Massimo Florio |
| Abstract: | To what extent public procurement for mission-oriented policies drives innovation? Space policy is a particularly interesting case study, and we investigate the impact of technological procurement of the Italian Space Agency (ASI) on suppliers’ innovation output. We have built an empirical model that takes advantage of unique data on ASI orders merged with patent and company data of more than 460 firms involved in a procurement relationship with ASI over the period 2004-2018. We combine matching techniques with a diff-in-diff approach with heterogeneous timing in treatment to assess whether becoming a space agency technological supplier has an impact on the extent and quality of firms’ patenting activity. Our findings, that are novel for space policy studies, suggest a statistically significant effect of space agency procurement. The effect is stronger for high-tech suppliers. These results are robust to several alternative specifications and estimation methods and provide evidence about the importance of space policy in enhancing firms’ innovation capacity through the procurement pathway. |
| Keywords: | Public procurement, space industry, space policy, innovation. |
| JEL: | C25 H57 O32 O38 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2021_08.rdf&r= |
| By: | Zimpelmann, Christian (IZA); Gaudecker, Hans-Martin von (University of Bonn); Holler, Radost (Bonn Graduate School of Economics); Janys, Lena (University of Bonn); Siflinger, Bettina M. (Tilburg University) |
| Abstract: | Using customized panel data spanning the entire year of 2020, we analyze the dynamics of working hours and household income across different stages of the CoVid-19 pandemic. Similar to many other countries, during this period the Netherlands experienced a quick spread of the SARS-CoV-2 virus, adopted a set of fairly strict social distancing measures, gradually reopened, and imposed another lockdown to contain the second wave. We show that socio-economic status is strongly related to changes in working hours, especially when strict economic restrictions are in place. In contrast, household income is equally unaffected for all socio-economic groups. Examining the drivers of these observations, we find that pandemic-specific job characteristics (the ability to work from home and essential worker status) explain most of the socio-economic gradient in total working hours. Furthermore, household income is largely decoupled from shocks to working hours for employees. We provide suggestive evidence that large-scale labor hoarding schemes have helped insure employees against demand shocks to their employees. |
| Keywords: | essential workers, coronavirus, working from home, labor market, inequality, mitigation policies, COVID-19 |
| JEL: | D31 J21 J22 J24 J33 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14382&r= |
| By: | Brunello, Giorgio (University of Padova); Yamamura, Eiji (Seinan Gakuin University) |
| Abstract: | This study documents the matrilineal advantage in grandparent – grandchildren relationships in Europe, using data on 20 European countries and Israel from the Survey of Health, Ageing and Retirement (SHARE). We show that maternal grandparents look after grandchildren and provide financial or material gifts to children more than paternal grandparents do. In exchange, daughters help their parents with personal care, household tasks and paperwork more than sons do. The matrilineal advantage is stronger for grandmothers than for grandfathers, and stronger in the more conservative societies of Southern Europe, where gender inequality is higher and trust in others is lower. |
| Keywords: | childcare, Europe, family |
| JEL: | J12 J13 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14379&r= |
| By: | Astri Syse (Statistics Norway); Alyona Artamonova; Michael Thomas (Statistics Norway); Marijke Veenstra |
| Abstract: | Elderly’s use of long-term care (LTC) services are likely to be influenced by family members, but there is scarce research on the role played by partners and/or adult children, especially taking geographic proximity into account. We thus examine how partners and adult children influence elderly’s LTC use, taking regional differences into account. We employ logistic discrete-time hazard regression models on linked registry data for complete cohorts of elderly individuals (65+ years), their partners, their adult children, residing in Norway in the period 2010-2016 (N=820 000). We also include municipal characteristics. One’s own, partner’s and child(ren)’s characteristics are all associated with elderly individuals’ LTC use. Partners’ resources matter the most, but those of adult children are relevant when partners are less resourceful or absent. Childless elderly use more LTC services than elderly with children, and elderly with resourceful children living nearby use the least LTC services. The trends are similar across municipalities, but the magnitudes vary slightly depending on their geographic location and sociodemographic and economic resources. Future demographic and economic changes warrant a better understanding of the role played by family members for elderly’s use of LTC services. |
| Keywords: | Care use, Family, Formal care, Geographic, Informal care, Long-term care (LTC) |
| JEL: | I10 I12 I18 J10 H41 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:954&r= |
| By: | Schüller, Simone (German Youth Institute (DJI)); Steinberg, Hannah S. (German Youth Institute (DJI)) |
| Abstract: | What are the effects of school and daycare facility closures during the COVID-19 pandemic on parental well-being and parenting behavior? Can emergency childcare policies during a pandemic mitigate increases in parental stress and negative parenting behavior? To answer these questions, this study leverages cross-state variation in emergency childcare eligibility rules during the first COVID-19 lockdown in Germany and draws on unique data from the 2019 and 2020 waves of the German AID:A family panel. Employing a DDD and IV approach we identify medium-term ITT and LATE effects and find that while emergency care policies did not considerably affect parents' life satisfaction, partnership satisfaction or mental health, they have been effective in diminishing harsh parenting behavior. We find partly gendered effects, specifically on paternal parenting behavior. Our results suggest that decreasing parental well-being likely constitutes a general effect of the pandemic, whereas the observed increase in negative and potentially harmful parenting behavior is largely directly caused by school and daycare facility closures. |
| Keywords: | parental well-being, harsh parenting, COVID-19, policy evaluation, school and daycare closures, AID:A, difference-in-difference-in-differences, instrumental variable estimation |
| JEL: | D04 D13 I18 I31 J13 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14359&r= |
| By: | Lergetporer, Philipp (Ifo Institute for Economic Research); Woessmann, Ludger (University of Munich) |
| Abstract: | Higher education finance depends on the public's preferences for charging tuition, which may be partly based on beliefs about the university earnings premium. To test whether public support for tuition depends on earnings information, we devise survey experiments in representative samples of the German electorate (N>15,000). The electorate is divided, with a plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. We subject the baseline result to various experimental tests of replicability, robustness, heterogeneity, and consequentiality. |
| Keywords: | tuition, higher education, information, earnings premium, public opinion, voting |
| JEL: | H52 I22 D72 D83 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14386&r= |
| By: | Wang, Zhiling (Erasmus University Rotterdam); Pastore, Francesco (Università della Campania Luigi Vanvitelli); Karreman, Bas (Erasmus University Rotterdam); van Oort, Frank (Erasmus University Rotterdam) |
| Abstract: | International study programmes are increasing in number worldwide, but little is known about the impact on local students' job prospects, especially in a non-English speaking countries. Using rich administrative data from Statistics Netherlands, we analyse labour market outcomes of native graduates in master programmes of Dutch universities between 2006 to 2014 within 5 years after graduation. A coarsened exact matching analysis within cohort-university-detailed field of study group addresses the self-selection issue by generating a matched sample of students with similar characteristics. We find that graduates from international programmmes obtain a wage premium of 2.3% starting from the 1st year after graduation, ceteris paribus. The wage premium keeps increasing by about 1% every year. We investigate the mechanisms through which the wage premium operates. The wage premia can neither be explained by wage increase via cross-firm mobility, nor by faster upward mobility within a firm. Instead, evidence point towards the differential characteristics of the first job upon graduation. Graduates from international programmes are much more likely to choose large firms that have a higher share of foreign-born employees and have business of trade for the first job. They get a head start in wage level and the initial wage advantages persist in the long-run. |
| Keywords: | international programme, native students, wage premium, coarsened exact matching |
| JEL: | I23 J24 F22 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14374&r= |
| By: | Pierre-Alexandre Balland; Ron Boschma; |
| Abstract: | Do scientific capabilities in regions translate into technological leadership? This is one of the most pressing questions in academic and policy circles. This paper analyzes the matching of scientific and technological capabilities of 285 European regions. We build on patent and publication records to identify regions that lie both at the scientific and technological frontiers (strongholds), that are pure scientific leaders, pure technological leaders, or just followers in 18 domains. Our regional diversification model shows that local scientific capabilities in a domain are a strong predictor of the development of new technologies in that domain in regions. This finding is particularly relevant for the Smart Specialization policy because it implies that the analysis of domain-specific scientific knowledge can be a powerful tool to identify new diversification opportunities in regions. |
| Keywords: | science-technology link, regional diversification, relatedness, strongholds, scientific capabilities, technological capabilities, Smart Specialization policy |
| JEL: | B52 O33 R11 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2116&r= |
| By: | Böckerman, Petri (Labour Institute for Economic Research); Haapanen, Mika (Jyväskylä University School of Business and Economics); Jepsen, Christopher (University College Dublin) |
| Abstract: | This paper studies the causal effect of parental death on children's mental health. Combining several nationwide register-based data for Finnish citizens born between 1971 and 1986, we use an event study methodology to analyze hospitalization for mental health-related reasons by the age of 30. We find that there is no clear evidence of increased hospitalization following the death of a parent of a different gender, but there are significant effects for boys losing their fathers and girls losing their mothers. Depression is the most common cause of hospitalization in the first three years following paternal death, whereas anxiety and, to a lesser extent, self-harm are the most common causes five to ten years after paternal death. We also provide descriptive evidence of an increase in the use of mental health-related medications and sickness absence, as well as substantial reductions in years of schooling, employment, and earnings in adulthood for the affected children. |
| Keywords: | parental death, mental health, hospitalization, depression, labor market |
| JEL: | I10 I12 J12 J13 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14385&r= |
| By: | Felfe, Christina (University of Würzburg); Kocher, Martin G. (University of Munich); Rainer, Helmut (Ifo Institute for Economic Research); Saurer, Judith (University of Würzburg); Siedler, Thomas (University of Potsdam) |
| Abstract: | Inequality of opportunity, particularly when overlaid with socioeconomic, ethnic, or cultural differences, may limit the scope of cooperation between individuals. A central question, then, is how to overcome such obstacles to cooperation. We study this question in the context of Germany, by asking whether the propensity of immigrant youth to cooperate with native peers was affected by a major integration reform: the introduction of birthright citizenship. Our unique setup exploits data from a large-scale lab-in-the-field experiment in a quasi-experimental evaluation framework. We find that the policy caused male, but not female, immigrants to significantly increase their cooperativeness toward natives. We show that the increase in out-group cooperation among immigrant boys is an outcome of more trust rather than a reflection of stronger other-regarding preferences towards natives. In exploring factors that may explain these behavioral effects, we present evidence that the policy also led to a near-closure of the educational achievement gap between young immigrant men and their native peers. Our results highlight that, through integration interventions, governments can modify prosocial behavior in a way that generates higher levels of efficiency in the interaction between social groups. |
| Keywords: | cooperation, in-group/out-group behavior, lab-in-the-field experiment, birthright citizenship |
| JEL: | C93 D90 J15 K37 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14384&r= |
| By: | Pierre-André Chiappori (Columbia University); Edoardo Ciscato (KU Leuven); Carla Guerriero (Università di Napoli Federico II and CSEF) |
| Abstract: | WSocial scientists have long been interested in marital homogamy and its relationship with inequality. However, measuring homogamy is not straightforward, particularly when one is interested in assessing marital sorting based on multiple traits. In this paper, we argue that Separate Extreme Value (SEV) models not only generate a matching function with several desirable theoretical properties, but they are also suited for the study of multidimensional sorting. Specifically, we show how a small number of factors can be identified that capture most of the explained variance in matching patterns. We then use rich small-scale survey data to examine sorting among parents of children attending schools in Naples. Our findings show that homogamy is pervasive; not only do men and women sort by age, education, height, and physical characteristics, but they also look for partners that share similar health-related behavioral traits and risk attitude. We also show that marital patterns are well explained by a low number of dimensions, the most important being age and human capital. Moreover, children of parents with a high human capital endowment perform better at school, although they report lower levels of subjective well-being and perceived quality of relationship with their mothers. |
| Keywords: | Homogamy, Matching, Intergenerational Inequality. |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:613&r= |
| By: | Siegloch, Sebastian (University of Mannheim); Wehrhöfer, Nils (ZEW Mannheim); Etzel, Tobias (Deutsche Bundesbank) |
| 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: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14362&r= |
| By: | Boll, Christina; Müller, Dana (Institute for Employment Research (IAB), Nuremberg); Schüller, Simone (German Youth Institute (DJI)) |
| Abstract: | Using unique monthly panel data from the Institute for Employment Research (IAB) covering the immediate postlockdown period from June to August 2020, we investigate the opposing claims of widening/closing the gender gap in parental childcare during the COVID-19 pandemic in Germany. We contribute to the current literature by analyzing the medium-term dynamics of couples' childcare division and by considering the prepandemic division rather than providing merely snapshots during lockdown. Our results suggest a slight shift toward a more egalitarian division in June that, however, faded out in subsequent months. Starting from a fairly "traditional" prepandemic childcare division, the lockdown stimulus was not nearly strong enough to level the playing field. A subgroup analysis differentiating between parents' individual lockdownspecific work arrangements shows that the drivers of the observed shift were mothers who worked more than 20 hours a week and for whom remote work was not possible. Fathers' work arrangement instead did not play a significant role. We conclude that the shift emerged out of necessity rather than opportunity, which makes it likely to fade once the necessity vanishes, thereby catapulting parents back to their initial childcare arrangements. |
| Keywords: | COVID-19, intracouple division of unpaid work, childcare, gender, working from home, IAB-HOPP |
| JEL: | D13 J13 J16 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14375&r= |
| By: | Guillaume Andrieu (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Benjamin Le Pendeven (Audencia Recherche - Audencia Business School); Gaël Leboeuf (COACTIS - COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne]) |
| Abstract: | A large body of literature documents the significant difficulties experienced by female entrepreneurs in obtaining early-stage funding from investors. We investigate this issue in the emerging equity crowdfunding (ECF) context. Our results, based on data from four French ECF platforms, confirm that the feminisation of top management significantly reduces the likelihood of funding, suggesting that crowdfunding does not alleviate the difficulties that women face in raising funds to create startups. |
| Date: | 2021–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03227572&r= |
| By: | Bonaccolto-Töpfer, Marina; Castagnetti, Carolina |
| Abstract: | Transition to online teaching during the first wave of the COVID-19 pandemic has led to various concerns about educational quality. So far, researchers have mainly focused on the effects on school teaching. This paper looks at the effects on a large Italian university (University of Pavia, Lombardy). Administrative data allows us to track both students' evaluation of teaching and student performance. Using a difference-in-differences design, we exploit the fact that the summer term 2020 started right after the first lockdown and compare students' outcome during this term to those of the same term in the previous year. In contrast to the literature, our results suggest no substantial effects of the pandemic on higher education. The findings are robust across various dimensions of courses, students and lecturers. In particular, the results suggest also no difference between top and bottom students or students from wealthier and poorer families. |
| Keywords: | Online teaching,COVID-19 pandemic,difference-in-differences,higher education |
| JEL: | G18 I18 I23 I24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:117&r= |
| By: | Ryohei Mogi; Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | The sexual debut and dating behaviour of the youth are vital to the process of personal and social transition from adolescence to adulthood and can have both direct and indirect influences on later union formation processes. Nonetheless, little attention has been paid to the sexual and dating behaviour of young people in Southern Europe and East Asia—both of which are categorized as societies with strong family ties and lowest-low fertility. The present study steps back to the initial events of the transition to adulthood and examines the sexual and dating behaviours of university students in Italy and Japan. Our results suggest that the world record-low fertility levels in Italy and Japan originate from very different processes in the transition to adult sexuality. In Japan, the sexual and affective behaviour of students in life’s early stages seems to be an important reason in explaining low fertility. In Italy, however, the reasons behind low fertility do not seem to stem from a problematic path of transition to adult sexuality and finding a partner, at least among higher educated individuals. We conclude that a focus on sexual and dating histories can provide an important perspective on the foundations of low fertility societies. |
| Keywords: | Sexual debut; Transition to adulthood; Partnership dynamics; Italy; Japan |
| JEL: | J13 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2021_06&r= |
| By: | Bakalova, Irina; Berlinschi, Ruxanda; Fidrmuc, Jan; Dzyuba, Yuri |
| Abstract: | The COVID-19 pandemic has led to a substantial increase in the prevalence of working from home among white-collar occupations. This can have important implications for the future of the workplace and quality of life. We discuss an additional implication, which we label reverse brain drain: the possibility that white-collar migrant workers return to live in their countries of origin while continuing to work for employers in their countries of destination. We estimate the potential size of this reverse flow using data from the European Labor Force Survey. Our estimates suggest that the UK, France, Switzerland and Germany each have around half a million skilled migrants who could perform their jobs from their home countries. Most of them originate from the other EU member states: both old and new. We discuss the potential economic, social and political implications of such reverse brain drain. |
| Keywords: | Covid-19,working from home,return migration,brain drain |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:845&r= |
| By: | Suh, Ellie |
| Abstract: | This study examines retirement saving activity outside the state and workplace pension saving schemes among British adults aged between 30 and 49 on the premise that individuals are increasingly encouraged to save for their retirement in the new pension policy structure in Britain. The issue of under-saving among the younger adults has been studied with the focus on internal characteristics, such as undesirable attitudinal or behavioural tendencies (‘won't save’), or on external factors, such as income (‘can't save’). Building on these discussions, this study tests the role of internal characteristics and further examines the interplay between internal and external factors. The decision-making process for retirement saving is mapped based on the Model of Financial Planning with minor modifications. The analysis utilises the fourth wave of the Wealth and Assets Survey (2012/2014), and is conducted in the structural equation modelling framework. Results show that younger adults’ discretionary retirement saving is an outcome of a complex interplay between internal and external factors. Financial resilience, which indicates current financial behaviours and wellbeing, is found to be the strongest predictor for identifying a discretionary retirement saver, but it is closely connected to individuals’ income and home-ownership. The findings also suggest that social and economic arrangements are important to consider as social ageing, individuals’ projection on their lifestages, may be more informative than age per se for understanding younger adults’ retirement saving behaviour. These findings have important implications for the policies that aim to increase retirement saving participation. |
| Keywords: | retirement saving; young adults; financial resilience; saving behaviours; structural equation modelling (SEM); Wealth and Assets Survey (WAS) |
| JEL: | F3 G3 N0 |
| Date: | 2021–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:110492&r= |
| By: | Vivien Burrows (Department of Economics, University of Reading); Chris Lennartz (University of Amsterdam) |
| Abstract: | Wealth transfers between family members play an important role in explaining wealth accumulation and wealth inequalities. While part of this is accounted for by the size of the transfer, the timing of the transfer is also likely to be important, reflecting either a cumulative advantage effect or a lifecycle effect. This paper uses data from the Eurosystem Housing Finance and Consumption Survey to analyse how the age at which a transfer was received affects household net wealth and different components of household wealth. We find that the age at which a transfer is received does matter: after controlling for the total value and number of transfers received, receiving a transfer later in life has a negative impact on household net wealth, and this effect appears to operate primarily through housing wealth, and in particular non-HMR property wealth. We then explore the extent to which these effects vary across European countries. |
| Keywords: | Intergenerational transfers, household wealth, cumulative advantage effects, lifecycle effects |
| JEL: | D31 D12 |
| Date: | 2021–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2021-11&r= |
| By: | Eero Mäkynen (University of Turku, Finland.); Oskari Vähämaa (University of Helsinki, Finland.) |
| Abstract: | We develop a measure of static misallocation that separates uncertainty from misallocation generated by tax-like distortions. In the Finnish firm-level data, uncertainty accounts for the majority of ex post misallocation and explains a strong decreasing age-dependent trend in it. To understand these observations, we set up a life-cycle model of firm growth where new firms have to learn their productivity. We match our model with the salient features of the data and show that our model implies idiosyncratic distortions, in line with our accounting approach. According to our quantitative results, uncertainty suppresses output by 38%, while misallocation has a 26% negative effect on output. |
| Keywords: | firm dynamics, uncertainty, misallocation |
| JEL: | D24 E23 L11 O47 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp146&r= |