nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒07‒26
thirty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Social Mobility in Germany By Majed Dodin; Sebastian Findeisen; Lukas Henkel; Dominik Sachs; Paul Schüle
  2. The cushioning effect of fiscal policy in the EU during the COVID-19 pandemic By Michael Christl; Silvia De Poli; Francesco Figari; Tine Hufkens; Chrysa Leventi; Andrea Papini; Alberto Tumino
  3. The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany By Michael Christl; Silvia De Poli; Tine Hufkens; Andreas Peichl; Mattia Ricci
  4. On the right track? The role of work experience in migrant mothers' current employment probability By Boll, Christina; Lagemann, Andreas
  5. Gender Norms and Intimate Partner Violence By Gonzalez, Libertad; Rodríguez-Planas, Núria
  6. Age at Arrival and Residential Integration By Cristina Bratu; Matz Dahlberg; Madhinee Valeyatheepillay
  7. COVID-19 and (gender) inequality in income: the impact of discretionary policy measures in Austria By Michael Christl; Silvia De Poli; Denes Kucsera; Hanno Lorenz
  8. Has the COVID-19 pandemic widened the gender gap in paid work hours in Spain? By Maite Blázquez; Ainhoa Herrarte; Ana I. Moro Egido
  9. Joint Retirement of Couples: Evidence from Discontinuities in Denmark By Esteban García-Miralles; Jonathan M. Leganza
  10. School Health Programs: Education, Health, and Welfare Dependency of Young Adults By Abrahamsen, Signe A.; Ginja, Rita; Riise, Julie
  11. For Some, Luck Matters More: The Impact of the Great Recession on the Early Careers of Graduates from Different Socio-Economic Backgrounds By Del Bono, Emilia; Morando, Greta
  12. Does informal care delay nursing home entry? Evidence from Dutch linked survey and administrative data By Bergeot, Julien; Tenand, Marianne
  13. The effect of social benefit reform on educational inequality By Trinh, Nhat An
  14. Work histories and provision of grandparental childcare among Italian older women By Francesca Zanasi; Bruno Arpino; Elena Pirani; Valeria Bordone
  15. The Causal Effect of an Income Shock on Children’s Human Capital By Cristina Borra; Ana Costa-Ramon; Libertad González; Almudena Sevilla-Sanz
  16. The Impact of Covid-19 on Economic Activity: Evidence from Administrative Tax Registers By Nikolay Angelov; Daniel Waldenström
  17. Media Coverage of the Economy and Fertility By Raffaele Guetto; Maria Francesca Morabito; Daniele Vignoli; Matthias Vollbracht
  18. Voting under Threat: Evidence from the 2020 French local elections By Elsa Leromain; Gonzague Vannoorenberghe
  19. Covid-19 and Income Inequality: Evidence from Monthly Population Registers By Nikolay Angelov; Daniel Waldenström
  20. Does A Wealth Tax Improve Equality of Opportunity? By Kristoffer Berg; Shafik Hebous
  21. Circular Economy Approach: The benefits of a new business model for European Firms By Carlo Bellavite Pellegrini; Laura Pellegrini; Claudia Cannas
  22. A Change is (not) Gonna Come: A twenty-year overview of Italian grandparents-grandchildren exchanges By Pasqualini, Marta; di Gessa, Giorgio; Tomassini, Cecilia
  23. Does Educational Mismatch Affect Emigration Behaviour? By Wanner, Philippe; Pecoraro, Marco; Tani, Massimiliano
  24. Alleviating Energy Poverty in Europe: Front-runners and Laggards By Rodríguez-Álvarez, Ana; Llorca, Manuel; Jamasb, Tooraj
  25. Can a Supranational Medicines Agency Restore Trust After Vaccine Suspensions? The Case of Vaxzevria By Albanese, Andrea; Fallucchi, Francesco; Verheyden, Bertrand
  26. Does lowering the bar help? Results from a natural experiment in high-stakes testing in Dutch primary education By Jacobs, Madelon; van der Velden, Rolf; van Vugt, Lynn
  27. Non-Base Compensation and the Gender Pay Gap By Hirsch, Boris; Lentge, Philipp
  28. Are payroll tax cuts absorbed by insiders? Evidence from the Swedish retail industry By Seerar Westerberg, Hans
  29. More or Less Unmarried. The Impact of Legal Settings of Cohabitation on Labour Market Outcomes By Goussé, Marion; Leturcq, Marion
  30. Too Family Friendly? The Consequences of Parent Part-Time Working Rights By Fernández-Kranz, Daniel; Rodríguez-Planas, Núria
  31. Does a Spoonful of Sugar Levy Help the Calories Go Down? An Analysis of the UK Soft Drinks Industry Levy By Dickson, Alex; Gehrsitz, Markus; Kemp, Jonathan
  32. A Study of UK Household Wealth through Empirical Analysis and a Non-linear Kesten Process By Samuel Forbes; Stefan Grosskinsky

  1. By: Majed Dodin (University of Mannheim); Sebastian Findeisen (University of Konstanz); Lukas Henkel (European Central Bank); Dominik Sachs (LMU Munich); Paul Schüle (ifo Munich and LMU Munich)
    Abstract: We characterize intergenerational social mobility in Germany using census data on the educational attainment of 526,000 children and their parents’ earnings. Our measure of educational attainment is the A-Level degree, a requirement for access to university and the most important qualification in the German education sys-tem. On average, a 10 percentile increase in the parental income rank is associated with a 5.2 percentage point increase in the probability to obtain an A-Level. This parental income gradient has not changed for the birth cohorts from 1980 to 1996, despite a large-scale policy of expanding upper secondary education in Germany. At the regional level, there exists substantial variation in mobility estimates. Place effects, rather than sorting of households into different regions, seem to account for most of these geographical differences. Mobile regions are, among other as-pects, characterized by high school quality and enhanced possibilities to obtain an A-Level degree on vocational schools.
    Keywords: Intergenerational Mobility, Educational Attainment, Local Labor Markets
    JEL: I24 J62 R23
    Date: 2021–07–10
  2. By: Michael Christl (European Commission - JRC); Silvia De Poli (European Commission - JRC); Francesco Figari; Tine Hufkens; Chrysa Leventi; Andrea Papini (European Commission - JRC); Alberto Tumino (European Commission - JRC)
    Abstract: This paper analyses the extent to which the tax-benefit systems of the EU Member States have protected household incomes during the COVID-19 pandemic. We makes use of EUROMOD, the EU tax-benefit microsimulation model based on 2018 EU-SILC data. Detailed aggregate labour market statistics combined with a novel approach to simulate transitions from work into monetary compensation schemes (short-time work schemes, as well as compensation schemes for self-employed) and into unemployment allows us to replicate the labour market conditions during the COVID-19 crisis in 2020 in the underlying EU-SILC data. Our analysis highlights that most of the countries analysed experienced a significant drop in market incomes, with poorer households hit the hardest. However, our findings also suggest that the tax-benefit systems of the EU Member States have been able to absorb a significant share of the COVID-19 shock, offsetting – or alleviating – its regressive nature on market incomes. Monetary compensation schemes implemented by EU Member States played a key role in cushioning against the fall in household income during the crisis.
    Keywords: COVID-19, EUROMOD, microsimulation, EU, automatic stabilisers, compensation schemes
    JEL: D31 E24 H24
    Date: 2021–07
  3. By: Michael Christl (European Commission - JRC); Silvia De Poli (European Commission - JRC); Tine Hufkens; Andreas Peichl (Ifo Institute); Mattia Ricci (European Commission - JRC)
    Abstract: In this paper, we investigate the impact of the COVID-19 pandemic on German household income using a micro-level approach. We combine a microsimulation model with labour market transition techniques to simulate the COVID-19 shock on the German labour market. We find the consequences of the labour market shock to be highly regressive with a strong impact on the poorest households. However, this effect is nearly entirely offset by automatic stabilisers and discretionary policy measures. We explore the cushioning effect of these policies in detail, showing that short-time working schemes and especially the one-off payments for children are effective in cushioning the income loss of the poor.
    Keywords: COVID-19, EUROMOD, microsimulation, short-time work, automatic stabilisers
    JEL: D31 E24 H24
    Date: 2021–07
  4. By: Boll, Christina; Lagemann, Andreas
    Abstract: This paper investigates the role of work experience in migrant mothers' current employment in Germany. Unlike previous papers, we focus on actual experience and add the motherhood aspect. To this end, we use data from the German Socio-Economic Panel 2013-2018 including the IAB-SOEP Migration Sample. Having immigrated to Germany and female sex are the two treatments of our sample of 491 migrant mothers, with 7,077 native mothers and 1,383 migrant fathers serving as control groups. Running LPM with individual FE and testing the robustness of the work experience estimators against a range of covariates and unobserved time-varying confounders with Oster bounds, we show that years of domestic part-time experience yield higher returns for migrant mothers compared to migrant fathers and non-migrant mothers. We conclude that current employment is significantly fueled by former employment; thus policies should be designed such that they help women to 'get on the right track'.
    Keywords: migrant employment,maternal employment,LPM with individual FE,Oster test,actual work experience
    JEL: J61 J16 J24
    Date: 2021
  5. By: Gonzalez, Libertad (Universitat Pompeu Fabra); Rodríguez-Planas, Núria (Queens College, CUNY)
    Abstract: We study the relevance of gender norms in accounting for the incidence and intensity of domestic violence. We use data for 28 European countries from the 2012 EU survey on violence against women, and focus on first- and second-generation immigrant women. We find that, after controlling for country-of-residence fixed effects, as well as demographic characteristics and other source-country variables, higher gender equality in the country of ancestry is significantly associated with a lower risk of victimization in the host country. This suggests that gender norms may play an important role in explaining the incidence of intimate partner violence.
    Keywords: domestic violence, gender, social norms, immigrants, epidemiological approach
    JEL: I1 Z1
    Date: 2021–07
  6. By: Cristina Bratu; Matz Dahlberg; Madhinee Valeyatheepillay
    Abstract: We study residential integration patterns in adulthood for children of refugees who arrive in Sweden before the age of 16. Using geo-coded information on the residential location of each individual in Sweden, we take a novel, data-driven approach in defining neighborhoods and construct individualized k-nearest neighborhoods, for k = 100 or k = 1000. Exploiting a siblings design, we find that, at age 30, refugee children arriving later live in neighborhoods with lower shares of natives, high-educated individuals, and high-income earners, and higher share of welfare receivers, regardless of the level of k. We also provide evidence that refugee children arriving later experience worse labor market outcomes in terms of earnings, lower educational outcomes and likelihood to marry Swedish-born partners at age 30 as compared to children arriving earlier to the host country. Using a decomposition analysis, we show that the mean effects of age at arrival on neighborhood integration are only partly explained by economic integration, educational integration and intermarriage. Our findings indicate that a large part of the estimated mean age at arrival effects remains unaccounted for, particularly for k = 100, which suggests a role for Swedish housing policies, housing discrimination and taste-based preferences in fully explaining the effects of age at arrival.
    Keywords: refugees, residential integration, age at arrival
    JEL: R23 J15 J12 J01
    Date: 2021
  7. By: Michael Christl (European Commission - JRC); Silvia De Poli (European Commission - JRC); Denes Kucsera; Hanno Lorenz
    Abstract: This paper analyzes the impact of the COVID-19 crisis on household income in Austria, using detailed administrative labor market data, in combination with micro-simulation techniques, that enable specific labor market transitions to be modeled. We find that discretionary fiscal policy measures in Austria are key to counteracting the inequality- and poverty-enhancing effect of COVID-19. Additionally, we find that females tend to experience a greater loss in terms of market income. The Austrian tax-benefit system, however, reduces this gender differences. Disposable income has dropped by around 1% for both males and females. By comparison, males profit mainly from short-time work scheme, while females profit especially from other discretionary policy measures, such as the one-off payment for children.
    Keywords: COVID-19, EUROMOD, microsimulation, short-time work, automatic stabilisers
    JEL: D31 E24 H24
    Date: 2021–07
  8. By: Maite Blázquez (Universidad Autonoma de Madrid.); Ainhoa Herrarte (Universidad Autonoma de Madrid.); Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: This paper analyzes the effect of the COVID-19 pandemic on the within-household gender gap in relation to paid work hours in full-time employed heterosexual couples in Spain, one of the European countries hardest hit by the pandemic. Using the Spanish Labor Force Survey (2019-2020) and a Difference-in-Differences method, we analyze three stages of the pandemic; strict lockdown, de-escalation, and partial closures to study the short-term effects and potential medium-term effects on gender inequality in terms of paid work hours. Our results suggest that during the strict lockdown period there was a tendency to fall back on traditional family gendered patterns to manage the work-life balance, especially when young children are present in male-headed households. However, this phenomenon seems to be a short-term consequence of the pandemic. The sector of activity (essential or non-essential) has also played a key role given that during the period of partial recovery amid partial closures, the gender gap increased in maleheaded households with female partners employed in non-essential sectors.
    Keywords: Covid-19, gender gap, division of labor, hours of work.
    JEL: D13 J22 J16 J21
    Date: 2021–07–08
  9. By: Esteban García-Miralles; Jonathan M. Leganza
    Abstract: We study how social security influences the retirement behavior of couples. First, we exploit over two decades of full-population data and a discontinuity design to document sizable retirement spillovers to spouses when individuals reach pension eligibility age. Next, we explore underlying mechanisms. We find age differences within couples to be a fundamental determinant of joint retirement, which is driven by older spouses working longer. Accounting for these age differences reveals a strong gender gap, which prevails after controlling for relative earnings. Finally, in a complementary analysis we show that a reform increasing eligibility ages induces similar spillovers to spouses.
    Keywords: joint retirement, pension eligibility age, couples labor supply
    JEL: J14 J26 D10 H55
    Date: 2021
  10. By: Abrahamsen, Signe A. (University of Bergen); Ginja, Rita (University of Bergen); Riise, Julie (University of Bergen)
    Abstract: This paper provides new evidence that preventive health care services delivered at schools and provided at a relatively low cost have positive and lasting impacts. We use variation from a 1999-reform in Norway that induced substantial differences in the availability of health professionals across municipalities and cohorts. In municipalities with one fewer school nurse per 1,000 school-age children before the reform there was an increase in the availability of nurses of 35% from the pre- to the post-reform period, attributed to the policy change. The reform reduced teenage pregnancies and increased college attendance for girls. It also reduced the take-up of welfare benefits by ages 26 and 30 and increased the planned use of primary and specialist health care services at ages 25-35, without impacts on emergency room admissions. The reform also improved the health of newborns of affected new mothers and reduced the likelihood of miscarriages.
    Keywords: school health services, teenage pregnancy, welfare dependency, utilization of health services, health status
    JEL: H75 I10 I12 I28 I30 I38
    Date: 2021–07
  11. By: Del Bono, Emilia (ISER, University of Essex); Morando, Greta (University of Essex)
    Abstract: This paper uses variation in unemployment caused by the 2008 recession to analyse socio- economic gaps in graduate outcomes. Our data comes from a survey which collects information on several cohorts of students from all English universities and reports their destinations at 6 months after graduation. The results show that when students from less advantaged family backgrounds graduate during a recession they are more likely to become unemployed, to work part-time, and to earn less than students from more advantaged families. There is evidence that professional networks established while at university are important in explaining some of these socio-economic gaps in outcomes.
    Keywords: graduate employment, socio-economic gap, recession
    JEL: E32 I23 I24 I26 J62
    Date: 2021–07
  12. By: Bergeot, Julien; Tenand, Marianne
    Abstract: We assess whether informal care receipt affects the probability of transitioning to a nursing home. Available evidence points towards informal care decreasing the chance of admission but it only derives from the US, where nursing home stays are often temporary. Exploiting linked survey and administrative data on the 65+ in the Netherlands, we use the gender mix of children to retrieve plausibly exogenous variation in informal care receipt. Our results suggest that nursing home admissions within a three-year period are reduced with informal care for individuals with mild limitations, while they are increased for individuals with severe limitations. For the latter, although informal care increases formal care costs, it also results in lower post-acute care use and mortality. Therefore, policy makers should not expect that promoting informal care systematically results in lower institutionalization rate and care costs. Still, informal support can well be welfare-enhancing: a timely admission may come along with benefits in terms of well-being and survival that may outweigh additional costs.
    Keywords: Long-term care, nursing home care, informal care, instrumental variables, bivariate probit
    Date: 2021–07
  13. By: Trinh, Nhat An (University of Oxford)
    Abstract: Cross-country research argues that the design of welfare states and social protection systems shapes the intergenerational transmission of inequality. Studies that examine this relationship within a country are however lacking from the literature. Using difference-in-differences estimation and data from the Socio-Economic Panel, I analyse whether children of unemployment assistance recipients have lower educational attainment after changes to eligibility criteria, benefit levels and conditionality were introduced in Germany in 2005. I find that differences in the probability to attend the academic secondary school track between children of unemployment assistance recipients and children living in families, where no benefits are claimed, increased by 13 percentage points. In part, this was driven by the introduction of means-testing that changed the composition of unemployment assistance recipients towards the more disadvantaged. However, a further worsening in the financial conditions of these already disadvantaged families following reductions in benefit criteria appear as the main driver of the observed effect. By contrast, changes in parental subjective wellbeing due to increased benefit conditionality and stigma do not appear to play a significant mediating role.
    Date: 2021–07–12
  14. By: Francesca Zanasi (Department of Political Science, University of Bari Aldo Moro, Italy); Bruno Arpino (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Elena Pirani (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valeria Bordone (Department of Sociology, University of Vienna, Austria)
    Abstract: While the literature has widely shown that the provision of childcare by grandparents is often crucial for young mothers’ participation in the labour market, this work investigates the link between grandmothers’ participation in the labour market during adult life (between ages 18-49) and their provision of grandparental childcare later in life. Two contrasting theoretical arguments are plausible in this respect. On the one hand, lifelong homemakers could be more family-oriented and more likely to provide grandchild care in later life. On the other hand, ever-employed grandmothers could be more likely to have employed daughters, and provide grandchild care to support their working careers. With data from the Multipurpose surveys on Families and Social Subjects (2003, 2009, 2016), we estimate logistic regression models, considering various specifications of grandparental childcare, and measuring labour market attachment in three different ways (having ever worked, length of working career, employment interruptions for family reasons). Results show a positive association between grandmothers’ labor market attachment and grandparental childcare provision. A strong dualism emerges between grandmothers who ever worked and those who never did, with the former more likely to provide grandparental childcare, especially when parents are at work. Grandmothers who worked only a few years are more similar, in terms of grandchild care provision, to those who worked throughout their life, than to lifelong homemakers. Comparing Italian macro-areas strengthens our conclusions: differences between ever- and never-employed grandmothers are present in whole the country, but this holds especially in Northern regions, where the higher female participation to the labour market amplifies the need for grandparental childcare. Overall, we showed that intergenerational family solidarity is activated throughout the country, but it is evident that in a context of growing female labour force participation, couples cannot continue to count only on grandmothers to juggle family and work.
    Keywords: grandparents; childcare; female labour force participation; work histories
    Date: 2021–07
  15. By: Cristina Borra; Ana Costa-Ramon; Libertad González; Almudena Sevilla-Sanz
    Abstract: We investigate the causal impact of a generous unconditional cash transfer at birth on children's later health outcomes and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a “baby bonus” in Spain in 2007, and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find that the subsidy did not have a significant effect on health outcomes during childhood, nor on test scores in primary school. In line with this result, we show that the benefit did not affect the main potential mechanisms that could in turn have affected children’s health and academic performance. Our results contribute to understanding which interventions are effective at improving children's health and human capital formation.
    Keywords: children, health, education, income shock, Child benefit, Spain
    JEL: I12 J13 H31 H24
    Date: 2021–07
  16. By: Nikolay Angelov; Daniel Waldenström
    Abstract: We use population-wide tax register data to document the impact of the COVID-19 pandemic on firm sales, tax revenues, and sick pay in Sweden. The pandemic impact is identified using within-year, between-year, and geographical variation, and our data allows us to run placebo tests. Our findings confirm the large negative effects of the pandemic, but shed new light on their magnitudes and sensitivity to COVID-19 morbidity rates. Specifically, we find that the impact on VAT and firm sales was larger than on commonly used industrial and service production indexes, larger than the effect on electricity for industrial use, but less than the effect on excise taxes on air travel. The pandemic’s impact on short-term sick pay is large, but unlike tax payments, it does not vary with local infection rates, indicating behavioral responses to more generous rules for sickness insurance during the pandemic.
    Keywords: Covid-19 impact, VAT, excise taxes, sick pay
    JEL: H24 H25 J22 J24
    Date: 2021
  17. By: Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Maria Francesca Morabito (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Matthias Vollbracht (Media Tenor International AG, Zurich, Switzerland)
    Abstract: In this paper, we argue that economic narratives conveyed by the media are crucial for understanding contemporary fertility dynamics net of objective economic constraints. We test such a hypothesis for Italy by combining individual-level data from the 2009 and 2016 releases of the nationally-representative Family and Social Subjects Surveys with Media Tenor data on the media coverage of the economy derived from the evening newscast of Italian TV channel one. Our findings reveal that both the incidence and tone of news on the state of the economy influence fertility behavior. An increase in the number of negative economic news items inhibits fertility, whereas an increase in positive news items facilitates fertility. The share of economic coverage out of all news has a negative association with fertility, yet this weakens as the average tone of the news improves. Interestingly, when positive news items outnumber negative ones, an increase in the incidence of economic news encourages fertility. These effects are substantially relevant, and statistically significant, net of contextual and individuals’ socioeconomic characteristics.
    Keywords: Media; Economy; Fertility; Italy
    JEL: J13
    Date: 2021–07
  18. By: Elsa Leromain (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Gonzague Vannoorenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: We study how Covid-related risk affected participation across the French territory in the March 2020 local elections. We document that participation went down disproportionately in towns exposed to higher Covid-19 risk. Towns that lean towards the far-right saw a stronger drop in turnout, in particular in the vicinity of clusters. We argue that these patterns are partly a result of risk perceptions, and not only of political considerations. We use data on the drop in cinema admissions in early March 2020 and show that these went down more around infection clusters, especially in areas with substantial vote for the far-right. Taken together, our findings suggest that the fear of Covid-19 may have been on average more prevalent among far-right voters, contributing to a drop in their electoral participation.
    Keywords: Electoral turnout, Local elections, Covid-19, Far-right
    JEL: D74
    Date: 2021–07–08
  19. By: Nikolay Angelov; Daniel Waldenström
    Abstract: We measure the distributional impact of the COVID-19 pandemic using newly released population register data in Sweden. Monthly earnings inequality increased during the pandemic, and the key driver is income losses among low-paid individuals while middle- and high-income earners were almost unaffected. The pandemic had a larger negative impact on private-sector workers and on women. Using data on individual take-up of government COVID-19 support, we show that policy significantly dampened the inequality increase, but did not fully offset it. Annual total market income inequality, which also includes capital income and taxable transfers, shows similar patterns of increasing inequality during the pandemic.
    Keywords: pandemic, income inequality, earnings, government policy
    JEL: D31 H12 H24 J22
    Date: 2021
  20. By: Kristoffer Berg; Shafik Hebous
    Abstract: Does parental wealth inequality impact next generation labor income inequality? And does a tax on parental wealth affect the labor income distribution of the next generation? We tackle both questions empirically using detailed intergenerational data from Norway, focusing on effects on wages rather than capital income. Results suggest that a net wealth of NOK 1 million increases wages of the children by NOK 14,000. Children of wealthy parents also have a higher labor income mobility. The estimated hypothetical wage distribution without the wealth tax is more unequal. Moreover, suggestive evidence indicates parental wealth is associated with higher labor risk taking.
    Keywords: wealth tax, equality of opportunity, parental wealth, income mobility, inequality, redistribution
    JEL: D31 D63 H24
    Date: 2021
  21. By: Carlo Bellavite Pellegrini (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore); Laura Pellegrini (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore); Claudia Cannas (Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore)
    Abstract: This study investigates the relationship between Firms’ Performance and the adoption of a Circular Economy (CE) Approach. Considering different “recovery-recycling” models embraced by European countries between 2003 and 2016, the empirical analysis aims to highlight benefits related to CE approach. Specifically, we built a sample of panel data, which involved 60 European listed companies producing several types of packaging (including plastic, glass, cardboard and metal), and raw materials (glass and paper). Over the last decades, the increasing attention to Circular Economy issues in Europe has been followed by an important regulation’s activity aimed to define a common policy on the production and treatment of waste. However, European countries due to their different economic conditions, experienced more or less effectively benefits of CE models which are still under-explored. Our empirical findings confirm previous economic literature (Ferreira N. et al. 2014; CIWM, 2016), pointing out better Perfomances for European companies adopting “Extended Producer Responsability” (ERP) scheme, such as PRO's Competition model. Empirical evidences suggested a positive and highly significant impact on Firms’ Performance as results of more competition among recovery organizations which can be justified by lower costs for companies joining collective recovery schemes.
    Keywords: Circular Economy, Firms’ Perfomance, Extended Producer Responsability (ERP), Stock Return
    JEL: C23 Q01 Q56
    Date: 2021–07
  22. By: Pasqualini, Marta; di Gessa, Giorgio; Tomassini, Cecilia
    Abstract: Levels of coresidence, residential proximity, face-to-face contacts and intergenerational support exchanges remain overall high and stable across European countries. However, to date, few studies have focused on trends in grandparent-grandchild relations. Therefore, this study aims to investigate whether and to what extent grandparent-grandchild exchanges have changed over time. We used data from the Italian Surveys on Family, covering the years 1998-2016, and considered three different currencies of exchanges between grandparents and their grandchildren (coresidence, face-to-face contacts, and grandchild care provision). Our results showed an astonishing stability over time in these indicators of grandparent-grandchild exchanges, with only a small reduction in daily contacts. Also, we found little changes in the associations between such indicators of intergenerational exchanges and the demographic and socio-economic determinants usually used to explain them. Despite changes among Italian grandparents such as increases in their age profile, in education, and in marital disruption, the relations between grandparents and their grandchildren remain stable over time with generally high levels of intergenerational exchanges.
    Date: 2021–07–20
  23. By: Wanner, Philippe (University of Geneva); Pecoraro, Marco (University of Neuchatel); Tani, Massimiliano (University of New South Wales)
    Abstract: This paper uses linked Swiss administrative and survey data to examine the relationship between educational mismatch in the labour market and emigration decisions, carrying out the analysis for both Swiss native and previous immigrant workers. In turn, migrants' decisions separate returning home from onward migration to a third country. We find that undereducation is positively associated with the probability of emigration and return to the country of origin. In contrast, the reverse relationship is found between overeducation and emigration, especially among non-European immigrant workers. According to the predictions of the traditional model of migration, based on self-selection, migrants returning home are positively selected relative to migrants emigrating to other countries. We also find that immigrants from a country outside the EU27/EFTA have little incentive to return home and generally accept jobs for which they are mismatched in Switzerland. These results highlight the relevance to understand emigration behaviours in relation to the type of migrant that is most integrated, and productive, in the Swiss market, hence enabling better migration and domestic labour market policy design.
    Keywords: emigration, return migration, onward migration, wages, occupation, educational mismatch
    JEL: J15 J24 J61 O15
    Date: 2021–07
  24. By: Rodríguez-Álvarez, Ana (Oviedo Efficiency Group, Department of Economics, University of Oviedo, Spain); Llorca, Manuel (Department of Economics, Copenhagen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School)
    Abstract: In recent years, awareness of energy poverty has gained increasing attention in European countries. Comparative country studies can enhance our understanding of the causes and effects of this growing problem. This paper proposes a new model for the analysis of energy poverty. We define a theoretical framework and model to estimate an energy poverty frontier. The estimated frontier indicates the minimum level of energy poverty that a country can achieve given its income level, energy prices, and other country-specific features. We apply the approach to a sample of 30 European countries during the period 2005-2018. This allows us to contrast whether policy measures aimed at reducing the poverty among vulnerable individuals and households have been effective. The estimates indicate that financial aid aimed at especially vulnerable groups, reductions in energy prices, and improvements in energy efficiency seem to be beneficial to face energy poverty. The impact of these factors may partly explain why, despite the negative impact of the financial crisis, we have found a steady and general energy poverty reduction during the period in almost all the countries analysed.
    Keywords: Energy poverty in Europe; Energy poverty determinants; Social protection; Stochastic frontier analysis
    JEL: C23 H53 I32 Q43 Q48
    Date: 2021–07–13
  25. By: Albanese, Andrea (LISER); Fallucchi, Francesco (LISER); Verheyden, Bertrand (LISER (CEPS/INSTEAD))
    Abstract: Over the first half of March 2021, the majority of European governments suspended Astrazeneca's Vaxzevria vaccine as a precaution following media reports of rare blood clots. We analyse the impact of the European Medicines Agency's (EMA) March 18th statement assuring the public of the safety of Vaxzevria and the immediate reinstatement of the vaccine by most countries on respondents' intention to get vaccinated. By relying on survey data collected in Luxembourg and neighbouring areas between early March and mid-April, we observe that the willingness to be vaccinated was severely declining in the days preceding the EMA statement. We implement a regression discontinuity design exploiting the time at which respondents completed the survey and find that the vaccine reinstatement substantially restored vaccination intentions.
    Keywords: COVID-19, vaccine hesitancy, supranational regulation, public health, regression discontinuity design
    JEL: I12 I18 C21 H12 H40
    Date: 2021–07
  26. By: Jacobs, Madelon (ROA / Education and transition to work, RS: GSBE other - not theme-related research); van der Velden, Rolf (RS: GSBE Theme Learning and Work, ROA / Education and transition to work); van Vugt, Lynn (RS: GSBE Theme Learning and Work, ROA / Education and transition to work)
    Abstract: In many countries, high-stakes tests play an important role in the allocation of pupils to prestigious tracks or schools in secondary education or students to prestigious programs or colleges in tertiary education. It is not clear what would happen if the standards for these tests were systematically raised or lowered. Would that affect the subsequent educational career? This paper exploits a unique natural experiment in the Netherlands using the market entrance of two new suppliers of high-stakes tests in primary education. In the first year of introduction, these new tests were not yet properly calibrated: For one test the standards were too low, while for the other test they were too high, compared to the standards of the traditional test that continued to be the main supplier. We use high-quality register data and a within-schools-across-cohorts design to model the short- and long-term outcomes (i.e., change in teacher advice and actual track three years later) for the students that were affected by the new tests. We find evidence for short-term effects, but no evidence for long-term effects. This implies that the Dutch educational system is sufficiently flexible to allocate pupils to the appropriate track, even if a high-stakes test advice does not recommend the right track. At the same time, it also implies that lowering the bar is not a simple way to increase the share of students going to prestigious tracks.
    JEL: J24
    Date: 2021–06–21
  27. By: Hirsch, Boris (Leuphana University Lüneburg); Lentge, Philipp (Leuphana University Lüneburg)
    Abstract: This paper investigates whether non-base compensation contributes to the gender pay gap. In wage decompositions, we find that lower bonus payments to women explain about 10% of the gap at the mean and at different quantiles of the unconditional wage distribution whereas the lower prevalence of shift premia and overtime pay among women is unimportant. Among managers, the contribution of bonuses to the mean gap more than doubles and is steadily rising as one moves up the wage distribution. Our findings suggest that gender differences in bonuses are an important contributor to the gender pay gap, particularly in top jobs.
    Keywords: gender pay gap, bonus payments, shift premia, overtime pay, glass ceilings
    JEL: J31 J71
    Date: 2021–07
  28. By: Seerar Westerberg, Hans (Institute of Retail Economics (Handelns Forskningsinstitut))
    Abstract: It is commonly argued that payroll tax cuts are inefficient for increasing employment among outsiders because insiders will use their power to bargain for higher wages at the expense of outsiders’ possibility of becoming employed. The extent to which insiders or outsiders reap the rewards of payroll tax cuts is a longstanding issue, and previous literature has largely focused on the employment effects of outsiders. Using wage statistics of employees in the Swedish retail sector, we investigate the effects of a youth payroll tax cut in 2007 on insiders’ wage earnings and the number of hours worked. In accordance with earlier studies, the results show that the payroll tax cut increased insiders’ total wage earnings. However, only 21 percent of the increase in wage earnings was a result of higher bargained wages, 57 percent of the wage increase corresponds to a higher intensive margin of employment, and the rest was attributed to the number of hours worked by insiders with a higher hourly wage rate. There is, thus, little to suggest that insiders can absorb large amounts of payroll tax cuts in the form of higher bargained wages, even in the case of a small number of workers with the most bargaining power.
    Keywords: Retail; labor market; wage; payroll tax; DiD; employment; inconvenience allowance
    JEL: D24 L25 L26
    Date: 2021–07–17
  29. By: Goussé, Marion (Université Laval); Leturcq, Marion (INED, France)
    Abstract: We study how different levels of protection upon separation affect the labour market behaviour of unmarried cohabiting partners. In Canada, unmarried cohabitation becomes a legal status after one year of relationship. Most provinces automatically expand couples' rights and responsibilities after several years of cohabitation: some provinces allow cohabiting partners to claim for alimony upon separation, while others consider cohabiting couples to be equal to married couples. Using cross-province variations in legal settings and minimum eligibility duration, we show that eligibility for a more protective regime increases men's labour supply and earnings and decreases those of women's. The impact of the marriage-like regime is stronger, especially for women. We find that the effect is significantly stronger for couples directly eligible at the time of the reform than for couples who are eligible after the reform and may have anticipated changes in the legal settings. Our results show that eligibility affects within-household allocation of earnings and hours of work, and reinforces existing inequality. We present some evidence that enhancing protection upon separation has an effect on the selection of couples into cohabitation. Our results contribute to the ongoing public debate regarding the legal recognition and level of protection that should be given to unmarried cohabiting partners. Our results show that behavioural response may offset additional protection upon separation by increasing women's dependence on their partner.
    Keywords: alimony rights, unmarried cohabitation, labour supply, common law marriage
    JEL: J12 J22 J18 K36
    Date: 2021–06
  30. By: Fernández-Kranz, Daniel (IE Business School, Madrid); Rodríguez-Planas, Núria (Queens College, CUNY)
    Abstract: We use a difference-in-differences model with individual fixed effects to evaluate a 1999 Spanish law granting employment protection to workers with children younger than 6 who had asked for a shorter workweek due to family responsibilities. Our analysis shows that well- intended policies can potentially backfire and aggravate labor market inequalities between men and women, since there is a very gendered take-up, with only women typically requesting part-time work. After the law was enacted, employers were 49% less likely to hire women of childbearing age, 40% more likely to separate from them, and 37% less likely to promote them to permanent contracts, increasing female non-employment by 4% to 8% relative to men of similar age. The results are similar using older women unaffected by the law as a comparison group. Moreover, the law penalized all women of childbearing age, even those who did not have children. These effects were largest in low-skill jobs, at firms with less than 10 employees, and in industries with few part-time workers. These findings are robust to several sensitivity analyses and placebo tests.
    Keywords: female employment transitions and wages, compositional bias, fixed-term and permanent contract employment
    JEL: C23 J16 J18 J62
    Date: 2021–07
  31. By: Dickson, Alex (University of Strathclyde); Gehrsitz, Markus (University of Strathclyde); Kemp, Jonathan (AG Barr)
    Abstract: This study evaluates the effects of the 2018 UK Soft Drinks Industry Levy on soft drinks prices, sales, reformulation activities, and consequently calories consumed. We combine novel electronic point of sale data that cover most of the UK soft drinks market with longitudinal nutritional information and a variety of event-study specifications. We document that all but a few global soft drinks brands reduced sugar content and hence avoided the tiered levy. For brands that maintained their original sugar content, the levy was on average over-shifted resulting in substantial retail price increases. Consumers responded by reducing their consumption of levied drinks by around 18% which is indicative of an inelastic demand response, especially in the drink-now and energy drink segments of the market. We also document substitution into diet drinks in response to the tax. In total, the levy is responsible for a reduction in intake of just under 6,500 calories from soft drinks per annum per UK resident. More than 80% of reductions were due to manufacturers' reformulation activities and occurred in the two years between the announcement of the levy and its implementation.
    Keywords: sugar tax, soda tax, reformulation, tax pass-through, sin taxes
    JEL: H21 H23 H51 I12 I18
    Date: 2021–07
  32. By: Samuel Forbes; Stefan Grosskinsky
    Abstract: We study the wealth distribution of UK households through a detailed analysis of data from wealth surveys and rich lists, and propose a non-linear Kesten process to model the dynamics of household wealth. The main features of our model are that we focus on wealth growth and disregard exchange, and that the rate of return on wealth is increasing with wealth. The linear case with wealth-independent return rate has been well studied, leading to a log-normal wealth distribution in the long time limit which is essentially independent of initial conditions. We find through theoretical analysis and simulations that the non-linearity in our model leads to more realistic power-law tails, and can explain an apparent two-tailed structure in the empirical wealth distribution of the UK and other countries. Other realistic features of our model include an increase in inequality over time, and a stronger dependence on initial conditions compared to linear models.
    Date: 2021–07

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.