nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒06‒14
twenty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Role of Education for Assessing Population Health: An Analysis of Healthy Life Expectancy by Educational Attainment for 16 European Countries By Markus Sauerberg
  2. Did COVID-19 affect the division of labor within the household? Evidence from two waves of the pandemic in Italy By Daniela Del Boca; Noemi Oggero; Paola Profeta; Maria Cristina Rossi
  3. Survivors Benefits and Conjugal Behavior. Evidence from the Netherlands By Julie Tréguier; Simon Rabaté
  4. The CoViD-19 Pandemic and Mental Health: Disentangling Crucial Channels By Bettina Siflinger; Michaela Paffenholz; Sebastian Seitz; Moritz Mendel; Hans-Martin von Gaudecker
  5. Drivers of Working Hours and Household Income Dynamics during the COVID-19 Pandemic: The Case of the Netherlands By Christian Zimpelmann; Hans-Martin von Gaudecker; Radost Holler; Lena Janys; Bettina Siflinger
  6. Should I wait or should I go? Travelling versus waiting for better healthcare By Matteo Lippi Bruni; Cristina Ugolini; Rossella Verzulli
  7. The socio-economic cost of wind turbines: A Swedish case study By Westlund, Hans; Wilhelmsson, Mats
  8. Temporary layoffs, short-time work and COVID-19: the case of a dual labour market By Victoria Osuna; José Ignacio García-Pérez
  9. Technological breakthroughs in European regions: the role of related and unrelated combinations By Ron Boschma; Ernest Miguelez; Rosina Moreno; Diego B. Ocampo-Corrales
  10. From organizational capabilities to corporate performances: at the roots of productivity slowdown By Stefano Costa; Stefano De Santis; Giovanni Dosi; Roberto Monducci; Angelica Sbardella; Maria Enrica Virgillito
  11. Can You Teach an Old Dog New Tricks? New Evidence on the Impact of Tenure on Productivity By Gagliardi, Nicola; Grinza, Elena; Rycx, François
  12. Cracking under Pressure? Gender Role Attitudes toward Maternal Employment in Times of a Pandemic By Natalia Danzer; Mathias Huebener; Astrid Pape; C. Katharina Spieß; Nico A. Siegel; Gert G. Wagner
  13. The Bayesian approach to poverty measurement By Michel Lubrano; Zhou Xun
  14. How Does Disability Affect Income? An Empirical Study on Older European Workers By Justine Bondoux; Thomas Barnay; Thomas Renaud; Florence Jusot
  15. Global and digitalised economy, new labour demand scenarios and optimal tax-transfer reforms By Ugo Colombino; Nizamul Islam
  16. The Income Protection Role of an EMUWide Unemployment Insurance System: the Case of Atypical Workers By Jara Tamayo, Holguer Xavier; Simon, Agathe
  17. Financing Constraints, Home Equity and Selection into Entrepreneurship By Thais Laerkholm Jensen; Søren Leth-Petersen; Ramana Nanda
  18. Escaping from Low-Wage Employment: The Role of Co-worker Networks By Anna Baranowska-Rataj; Zoltán Elekes; Rikard Eriksson
  19. Employers' Willingness to Invest in the Training of Temporary Workers: A Discrete Choice Experiment By Poulissen, Davey; de Grip, Andries; Fouarge, Didier; Künn-Nelen, Annemarie
  20. Cohesion project characteristics and regional economic growth in the European Union By Darvas, Zsolt; Mazza, Jan; Midões, Catarina
  21. Stepping-up innovation in manufacturing firms: Knowledge combinations in an Italian local production system By Plechero, Monica; Grillitsch, Markus

  1. By: Markus Sauerberg
    Abstract: Healthy life expectancy (HLE) is a prominent summary indicator for evaluating and comparing the levels of population health status across Europe. Variations in HLE, however, do not necessarily reflect underlying differences in health and mortality levels among countries and are particularly sensitive when broken down by population subgroups. For instance, despite European countries showing large HLE inequalities by educational level, these countries are also highly heterogenous regarding their educational population composition, which most likely affects their HLE levels. We demonstrate how this compositional effect shapes HLE levels by providing HLE estimates of educational attainment and gender for 16 European countries using the Sullivan method. We use prevalence data about activities of daily living (ADLs) limitations from the European Union Statistics on Income and Living Conditions (EU-SILC) and mortality data from the Eurostat database. We then quantify the magnitude of educational inequalities based on the composite inequality index (CII). Finally, we express total HLE as the sum of education-specific HLEs, weighted by the educational population structure. As expected, we find large educational inequalities in HLE, with men's CII ranging from about 8.5 years in Portugal to approximately 3 years in Romania. For women, educational inequalities are slightly smaller. The decomposition reveals the population structure's strong effects on HLE, which can elicit misleading conclusions about people's health status and potentially turn HLE into an improper measure of educational differences as opposed to a measure of health gaps. For example, low-, medium-, and highly educated individuals in Portugal show more healthy life years than their counterparts in Poland. Still Poland's total HLE value slightly exceeds that of Portugal, indicating favorable health and mortality conditions in Poland. However, Poland's greater relative number of highly educated individuals in its population is responsible for producing this higher total HLE value. We conclude that education is not only paramount for assessing health inequalities across European countries, but also the population composition by educational attainment, because it drives the differences in HLE levels.
    Keywords: Health, mortality, educational inequalities, compositional effects, healthy life expectancy, life expectancy
    Date: 2020–11
  2. By: Daniela Del Boca; Noemi Oggero; Paola Profeta; Maria Cristina Rossi
    Abstract: The COVID-19 pandemic has had a dramatic impact on families’ lives, with parents all over the world struggling to meet the increased demands of housework, childcare and home-schooling. Much of the additional burden has been shouldered by women, particularly in countries with a traditionally uneven division of household labor. Yet the dramatic increase in remote work from home since the pandemic also has the potential to increase paternal involvement in family life and thus to redress persistent domestic gender role inequalities. This effect depends on the working arrangements of each partner, whether working remotely, working at their usual workplace or ceasing work altogether. We examine the role of working arrangements during the pandemic on the traditional division of household labor in Italy using survey data from interviews with a representative sample of working women conducted during the two waves of COVID-19 (April and November 2020). Our data show that the gender gap in household care related activities was widest during the first wave of the pandemic, and although it was less pronounced during the second wave, it was still higher than pre-COVID-19. The time spent by women on housework, childcare, and assisting their children with distance learning did not depend on their partners’ working arrangements. Conversely, men spent fewer hours helping with the housework and distance learning when their partners were at home. It is interesting, however, that although men who worked remotely or not at all did devote more time to domestic chores and child care, the increased time they spent at home did not seem to lead to a reallocation of couples’ roles in housework and child care. Finally, we find that working arrangements are linked to women’s feelings of uncertainty, with heterogeneous effects by level of education.
    Keywords: COVID-19, work arrangements, housework, childcare, distance learning.
    JEL: J13 J16 J21
    Date: 2021
  3. By: Julie Tréguier; Simon Rabaté
    Abstract: This paper investigates the impact of survivors insurance on marital behavior. We study the 1996 Dutch reform which considerably tightened eligibility rules to survivors' benefits. Exploiting a discontinuity in date of birth eligibility to survivors insurance and using a rich and exhaustive Dutch population administrative dataset, we carry out a regression discontinuity design and we find no evidence of the reform on divorce probability. Exploring possible explanations for our zero-effect result, we study how labor supply responses can compensate the income drop the reform induced. We find a strong increase in the labor force participation of widows after the reform. However this response does not completely offset the decrease in income generated form the cut in survivors benefits.
    Keywords: divorce, marriage dissolution, survivor benefits, labor supply, income effect, unearned income
    JEL: H31 J12 I38 J22 J48
    Date: 2021
  4. By: Bettina Siflinger (Department of Econometrics and OR, Tilburg University, The Netherlands); Michaela Paffenholz (Center for Doctoral Studies in Economics, University of Mannheim, Germany); Sebastian Seitz (Center for Doctoral Studies in Economics, University of Mannheim, Germany); Moritz Mendel (Bonn Graduate School of Economics, Bonn, Germany); Hans-Martin von Gaudecker (University of Bonn, Germany; IZA, Bonn, Germany)
    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: 2021–05
  5. By: Christian Zimpelmann; Hans-Martin von Gaudecker; Radost Holler; Lena Janys; Bettina Siflinger (Department of Economics, University of Bonn, Adenauerallee 24-42, 53113 Bonn, Germany)
    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: inequality, labor market, working from home, coronavirus, essential workers, mitigation policies
    JEL: D31 J21 J22 J24 J33
    Date: 2021–05
  6. By: Matteo Lippi Bruni; Cristina Ugolini; Rossella Verzulli
    Abstract: We study patient mobility in the Italian National Health System, using patient-episode level data on elective Percutaneous Transluminal Coronary Angioplasty procedures over the years 2008-2011. We examine how patients’ choice of the hospital is affected by changes in waiting times and clinical quality within hospitals over time. We estimate mixed-logit specifications and show the importance of jointly controlling for time-invariant and time varying clinical quality to identify the effect of waiting times. Conversely, failure to capture variations in clinical quality over time does not affect the estimate of the discouraging effect of travel distance. We provide evidence that patients are responsive to changes in waiting times and clinical quality: average demand elasticity with respect to own waiting times and mortality is estimated to be – 0.17 and – 1.38, respectively. Patients’ personal characteristics significantly influence how they trade off distance and waiting times with quality of care. We find a higher Willigness-To-Wait and Willingness-to-Travel to seek higher quality care for patients in the younger age groups and who are more severely ill. The results convey important policy implications for highly regulated healthcare markets.
    JEL: I11 I18 R22
    Date: 2021–06
  7. By: Westlund, Hans (Department of Urban Planning and Environment); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The expansion of wind turbines plays a significant role in developing the ability of a country like Sweden to achieve climate-neutral energy production without relying on nuclear power plants. Wind-turbine energy production is expected to grow in coming decades. Conflicts may arise between, on the one hand, the government and the energy authority, and, on the other hand, between municipalities and property owners, especially if this expansion affects other economic activities, such as tourism and reindeer husbandry, or affects property values. This report aims to analyse the negative capitalisation of wind turbines on property values in Sweden over the last ten years. Our conclusions clearly show a relatively significant capitalisation, and that this capitalisation is relatively local, within ten kilometres of the wind power plant. Large wind turbines, or larger clusters of wind turbines in wind farms, impose a greater socio-economic cost in lower property values.
    Keywords: sustainability; wind turbines; capitalisation; housing values; hedonic analysis
    JEL: Q01 Q53 R51 R53
    Date: 2021–05–27
  8. By: Victoria Osuna (Department of Economics, Universidad Pablo de Olavide;); José Ignacio García-Pérez (Department of Economics, Universidad Pablo de Olavide & FEDEA ;)
    Abstract: This paper examines the type of short-time work schemes implemented in Spain to preserve jobs and worker’s incomes during the COVID-19 crisis. These policies have typically involved some degree of subsidization of payroll taxes for firms and also subsidies to workers. For this purpose, we simulate the impact of the COVID-19 crisis in 2020 on labor market outcomes. The steady-state results show that the availability of short-time work schemes and temporary layoffs does not necessarily prevent a large increase in unemployment and job destruction. The effects of these measures depend on the degree of subsidization of payroll taxes and on the design of the policy. The heavily subsidized short-time work schemes provide incentives to preserve workers on payroll working very few hours that would not have been employed in the benchmark situation, generating deadweight costs and inefficiencies. The transition exercise shows that a scenario with a moderate degree of subsidization of payroll taxes, and where the subsidy is independent of the reduction in hours worked, is the least harmful for both welfare and fiscal deficit. However, this is not the scenario that maximizes the number of jobs preserved. A more generous short-time work scheme, similar to the one implemented in the first year of the pandemic, accomplishes that goal instead. The drawbacks, though, are fiscal sustainability and deadweight costs. The winners and losers exercise shows that more than 50% of the workers are hit negatively in terms of average income and very few workers are better off after this shock: less than 3% in the scenarios which heavily subsidizes short-time work as a result of this generous work sharing strategy. The category that experiences the strongest distributional changes is the one composed of unemployed workers. In the heavily subsidized short-time work scenarios they are the ones who improve more in terms of the proportion of workers affected and also in terms of the average increase in annual income, but among the losers, they are also the ones who lose more in both respects.
    Keywords: Short-time Work; Temporary layoffs; Unemployment; Job destruction; Permanent and Temporary Contracts; Duality; Severance Costs; Fiscal Deficit; Welfare; Deadweight Costs
    JEL: J23 J32 J63 J64 J65 J68
    Date: 2021
  9. By: Ron Boschma; Ernest Miguelez; Rosina Moreno; Diego B. Ocampo-Corrales
    Abstract: This paper analyzes if the emergence and occurrence of breakthrough technologies in 277 European regions in the period 1981 to 2010 is related to the existing technological portfolio of regions. The study shows that, by far, most combinations breakthrough inventions make are between related technologies: almost no breakthrough patent makes combinations between unrelated combinations only. We also find that breakthrough inventions primarily combine and cite technological classes that are present in the region. Regressions show that the occurrence of breakthrough patents in a technology in a region is positively affected by the local stock of technologies that is related to such technology, but we do not find such an effect for the local stock of unrelated technologies, in contrast to studies that suggest otherwise. However, the region’s ability to enter new breakthrough inventions in a technology relies on the combination of knowledge that is both related and unrelated to such technology.
    Keywords: relatedness, unrelatedness, technological breakthroughs, regional diversification, European regions
    JEL: O18 O31 O33 R11
    Date: 2021–06
  10. By: Stefano Costa; Stefano De Santis; Giovanni Dosi; Roberto Monducci; Angelica Sbardella; Maria Enrica Virgillito
    Abstract: This paper is one of the first attempts at empirically identifying organisational capabilities - in this work concerning Italian firms. Together, it proposes new evidence on the link between capabilities and economic performances. In order to do so, we employ the Indagine Multiscopo del Censimento Permanente delle Imprese (IMCPI), a survey carried out by the Italian Statistical Office (ISTAT) in 2019, covering the three-year period 2016-2018, addressing a wide range of organizational characteristics including various organizational routines, human resource management, internationalisation strategies and many others. Our contribution is threefold: first, we aim at detecting what practices and combinations of them result in underlying different capabilities; second, we propose a taxonomy of the production system, both at firm- and sector-level based on the mapping of such capabilities, third we study the performance outcomes of different capability-taxa in terms of productivity and employment growth.
    Keywords: Organizational capabilities; productivity slowdown; employment growth; learning.
    Date: 2021–05–31
  11. By: Gagliardi, Nicola; Grinza, Elena; Rycx, François
    Abstract: In this paper, we explore the impact of workers’ tenure on firm productivity, using rich longitudinal matched employer-employee data on private Belgian firms. We estimate a production function augmented with a firm-level measure of tenure. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of Ackerberg et al.’s (2015) control function method, which explicitly removes firm fixed effects. Consistently with recent theoretical predictions, we find that tenure exhibits an inverted-U-shaped relationship with respect to productivity. The existence of decreasing marginal returns to tenure is corroborated in our analysis on the tenure composition of the workforce. We also find that the impact of tenure differs widely across workforce and firm dimensions. Tenure is particularly beneficial for productivity in contexts characterized by a certain degree of routineness and lower job complexity. Along the same lines, our findings indicate that tenure exerts stronger (positive) impacts in industrial and high capital-intensive firms, as well as in firms less reliant on knowledge- and ICT-intensive processes.
    Keywords: Tenure,Firm productivity,Semiparametric methods to estimate production functions,Longitudinal matched employer-employee data
    JEL: D24 M59
    Date: 2021
  12. By: Natalia Danzer; Mathias Huebener; Astrid Pape; C. Katharina Spieß; Nico A. Siegel; Gert G. Wagner
    Abstract: This paper studies the effects of Covid-19 related daycare and school closures on gender role attitudes toward maternal employment in Germany. We compare women and men with dependent children to those without children one year after the outbreak of the pandemic. Using data on gender role attitudes from 2008 through 2021, we find that fathers’ egalitarian attitudes toward maternal employment dropped substantially in 2021. This drop is observed for men in West Germany, who showed a steady progression toward more egalitarian attitudes in the pre-pandemic period. Attitudes by women are not affected. These findings suggest that the pandemic not only affected the short-term allocation of housework and childcare, but also reversed recent trends toward more egalitarian gender roles.
    Keywords: Covid-19, gender role attitudes, childcare, difference-in-difference, ALLBUS, COMPASS
    JEL: J13 J16 J18 J22
    Date: 2021
  13. By: Michel Lubrano (; Zhou Xun (School of Economics and Management, Nanjing University of Finance and Economics, China)
    Abstract: This survey paper reviews the recent Bayesian literature on poverty measurement. After introducing Bayesian statistics, we show how Bayesian model criticism could help to revise the international poverty line. Using mixtures of lognormals to model income, we derive the posterior distribution for the FGT, Watts and Sen poverty indices, then for TIP curves (with an illustration on child poverty in Germany) and finally for Growth Incidence Curves. The relation of restricted stochastic dominance with TIP and GIC dominance is detailed with an example on UK data. Using panel data, we show how to decompose poverty into total, chronic and transient poverty, comparing child and adult poverty in East Germany when redistribution is introduced. When a panel is not available, a Gibbs sampler is used to build a pseudo panel. We illustrate poverty dynamics by examining the consequences of the Wall on poverty entry and poverty persistence in occupied West Bank.
    Keywords: Bayesian inference, mixture model, poverty indices, stochastic dominance, poverty dynamics
    JEL: C11 C46 I32 I38
    Date: 2021–05
  14. By: Justine Bondoux; Thomas Barnay; Thomas Renaud; Florence Jusot
    Date: 2021
  15. By: Ugo Colombino; Nizamul Islam
    Abstract: Processes like globalisation, automation and digitalisation might imply important changes on the size and structure of labour demand. An important policy issue is whether and how the tax-transfer rules should be reformed to cope with those changes. We present an extension of the numerical approach to empirical optimal taxation, allowed by a peculiar structure of a microeconometric model of labour supply that includes a representation of the demand side. This makes it possible to identify optimal tax-transfer rules while accounting for equilibrium constraints and to evaluate the effects of exogenous labour demand shocks, such as those that might be caused by globalisation, automation and digitalisation. We consider a flexible class of rules where household disposable income is a 4th polynomial in household taxable income. We perform three exercises. First, we identify optimal polynomial tax transfer rules accounting for labour market equilibrium under the observed labour demand scenario. Second, we investigate how the current tax-transfer rules are able to cope with an exogenous shift of labour demand. Third, we identify the optimal polynomial tax-transfer rule given the new labour demand scenario. We present results using the 2015 EU-SILC data sets for Italy and Luxembourg. The optimal rules, under both the current scenario and the shifted labour demand scenario, feature a universal and unconditional basic income (or, equivalently, a Negative Income Tax) and an almost flat marginal tax rate profile. The welfare gains from the optimal rules critically depend on how elastic the labour demand is, which ultimately depends on the degree of competitiveness of the markets. Therefore, optimal polynomial rules seem to represent a promising direction for reforming the tax-transfer systems, especially if complemented by other reforms aimed at improving the competitiveness of the economy.
    Keywords: empirical optimal taxation, microsimulation, microeconometrics, evaluation of tax-transfer rules, equilibrium, labour demand shocks.
    Date: 2021
  16. By: Jara Tamayo, Holguer Xavier; Simon, Agathe
    Abstract: This paper evaluates the potential of a common unemployment insurance system for the Economic and Monetary Union (EMU-UI) to improve income protection of atypical workers, namely those in part-time and temporary contracts. We use EUROMOD, the European tax-benefit microsimulation model, to simulate entitlements to national and EMU-UI and assess their effects on the household disposable income of atypical workers in the event of unemployment. Our results show that there are sizable gaps in the coverage of national UI schemes between countries, with atypical workers having particularly low coverage rates. The introduction of an EMU-UI would reduce coverage gaps and increase net replacement rates, especially for atypical workers, and would protect a large share of the workforce against the risk of poverty. Extending eligibility for the EMU-UI to the self-employed would further improve income protection, reducing their risk of falling into poverty in the event of unemployment.
    Date: 2021–05–25
  17. By: Thais Laerkholm Jensen (Danmarks Nationalbank); Søren Leth-Petersen (CEBI, Department of Economics, University of Copenhagen, CEPR); Ramana Nanda (Harvard Business School, NBER)
    Abstract: We exploit a mortgage reform that differentially unlocked home equity across the Danish population and study how this impacted selection into entrepreneurship. We find that increased entry was concentrated among entrepreneurs whose firms were founded in industries where they had no prior work experience. In addition, we find that marginal entrants benefiting from the reform had higher pre-entry earnings and that a significant share of entrants started longer-lasting firms. Our results are most consistent with the view that housing collateral enabled high ability individuals with less-well-established track records to overcome credit rationing and start new firms, rather than just leading to `frivolous entry' by those without prior industry experience.
    Keywords: credit constraints, entrepreneurship, household wealth, mortgage finance
    JEL: D14 D31 G21 L25 L26
    Date: 2021–06–03
  18. By: Anna Baranowska-Rataj (Department of Sociology, UmeA University and Centre for Demographic and Ageing Research, UmeA University); Zoltán Elekes (Agglomeration and Social Networks Research Group, Centre for Economic and Regional Studies and Department of Geography, UmeA University); Rikard Eriksson (Department of Geography, Umea University and Centre for Regional Science, Umea University)
    Abstract: Low-wage jobs are often regarded as dead-ends in the labour market careers of young people. Previous research focused on disentangling to what degree the association between a low-wage job at the start of working life and limited chances of transitioning to better-paid employment is causal or spurious. Less attention has been paid to the channels that may facilitate the upward wage mobility of low-wage workers. We focus on such mechanisms, and we scrutinize the impact of social ties to higher-educated co-workers. Due to knowledge spillovers, job referrals, as well as firm-level productivity gains, having higher-educated co-workers may improve an individual’s chances of transitioning to a better-paid job. We use linked employer-employee data from longitudinal Swedish registers and panel data models that incorporate measures of low-wage workers’ social ties to higher-educated co-workers. Our results confirm that having social ties to higher-educated co-workers increases individual chances of transitioning to better-paid employment.
    Keywords: co-worker networks, employer-employee data, low-wage, wage mobility
    JEL: C23 D85 J24 J31
    Date: 2021–05
  19. By: Poulissen, Davey (Maastricht University); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Künn-Nelen, Annemarie (ROA, Maastricht University)
    Abstract: Various studies have shown that temporary workers participate less in training than those on permanent contracts. Human resources practices are considered to be an important explanation for this difference. We develop a theoretical framework for employers' provision of training that explicitly incorporates the costs and benefits associated with training investments in employees with different types of employment contracts. Our framework not only predicts employers to be less willing to invest in temporary workers due to the shorter time horizon associated with such an investment, but it also provides insights into how this willingness depends on characteristics of the training that are related to the expected costs and benefits of the training investment. A discrete choice experiment is used to empirically test the predictions from our theoretical framework. In line with our theoretical framework, we find that employers are less likely to invest in the training of temporary workers. This particularly holds when temporary workers do not have the prospect of a permanent contract with their current employer. Furthermore, we show that employers' likelihood of investing in temporary workers indeed depends on aspects related to the costs and benefits of training, that is, a financial contribution to the training costs made by employees, a repayment agreement that applies when workers leave the organisation prematurely, and the transferability of the skills being trained. Our findings can be used to increase employers' willingness to invest in temporary workers. However, similar effects are observed when looking at employers' willingness to invest in permanent workers, suggesting that it will be difficult to decrease the gap in employers' willingness to invest between temporary and permanent workers.
    Keywords: flexible contracts, human capital investments, stated preference experiment, cost–benefit assessment
    JEL: J24 J41 J62
    Date: 2021–05
  20. By: Darvas, Zsolt; Mazza, Jan; Midões, Catarina
    Abstract: We employ a novel methodology for the study of the characteristics of successful European Union cohesion projects. We first estimated ‘unexplained economic growth’ by controlling for the influence of various region-specific factors, and then analysed its relationship with about two dozen cohesion project characteristics. We found that the best-performing regions have on average projects with longer durations, more inter-regional focus, lower national co-financing, more national (as opposed to regional and local) management, higher proportions of private or non-profit participants among the beneficiaries and higher levels of funding from the Cohesion Fund. No clear patterns emerged concerning the sector of intervention.
    Keywords: EU cohesion policy, growth determinants, regional convergence, project characteristics
    JEL: C21 O47 R11
    Date: 2021–04–12
  21. By: Plechero, Monica (Ca’ Foscari University of Venice); Grillitsch, Markus (CIRCLE, Lund University)
    Abstract: Industry 4.0 requires from manufacturing firms to become more innovative in order to remain relevant and competitive. To step-up firm innovation, several studies in Innovation and Economic Geography foreground that firms need to combine knowledge in novel ways either within local industrial structures or over distance. The contribution of this paper is to investigate in-depth how manufacturing firms with traditional roots combine new generative knowledge in and beyond a local production system (LPS), what enables them to access and integrate such knowledge from external sources, and how this relates to the firms’ innovation performance, with a focus on radical and varied forms of innovation. The contribution of this paper lies also in a mixed-methods research approach, which combines a population-based survey of mechatronics firms in an Italian LPS, with in-depth interviews. This allows for a qualitative interpretation of the causes of the identified distributions and correlations. The main finding of the paper is that firms generating radical innovations and varied forms of innovation combine unrelated types of knowledge in-house and through external sources. The pattern is that the traditional manufacturing knowledge of mechatronics firms still prevails but that firms increasingly complement this with new knowledge, in particular science-based analytical knowledge. Firms that have acquired complementary knowledge in-house are able to access new knowledge nationally or internationally. Even though firms source knowledge relatively frequently within the local production system, the firms who access new knowledge nationally and internationally stand out in terms of their innovation performance.
    Keywords: Industry 4.0; knowledge bases; local productive system; innovation; manufacturing firms
    JEL: O33 R11
    Date: 2021–06–02

This nep-eur issue is ©2021 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.