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on Microeconomic European Issues |
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Issue of 2021‒08‒23
nineteen papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Muckenhuber, Mattias; Rehm, Miriam; Schnetzer, Matthias |
| Abstract: | We investigate how previous generations of migrants and their children integrated into Austrian society, as measured by their wealth ownership. Using data from the Household Finance and Consumption Survey (HFCS), we document a positive average migrant wealth gap between migrant and native households. However, the raw gap is almost negligible for second generation migrant households, whereas it rises across the unconditional net wealth distribution for first generation migrant households and peaks at more than e140,000 around the 75th percentile. Decomposing the partial effects of a set of covariates using RIF regressions suggests that the lack of inheritances and the presence of children have the highest explanatory power for the migrant wealth gap of first generation migrant household. For second generation migrant households, inheritances have the highest impact, but they contribute negatively towards the explanation of the migrant wealth gap. In general, the covariates in our analysis can explain only a small part of the migrant wealth gap. Given the similarity of native and second generation migrant households, we cannot reject the hypothesis that migrants in the past integrated into Austrian society by acquiring comparable wealth levels. |
| Keywords: | Migration,Wealth Distribution,Wealth Gap,Unconditional Quantile Regression |
| JEL: | C31 D31 F22 G51 J15 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifsowp:15&r= |
| By: | Kraft, Kornelius (TU Dortmund); Lammers, Alexander (TU Dortmund) |
| Abstract: | In this paper we report the results of an empirical study on the employment growth effects of a policy intervention, explicitly aimed at increasing placement efficiency of the Federal Employment Agency in Germany. We use the Hartz III reform in the year 2004 as an exogenous intervention that improves the matching process and compare establishments that use the services of the Federal Employment Agency with establishments that do not use the placement services. Using detailed German establishment level data, our difference-in-differences estimates reveal an increase in employment growth among those firms that use the agency for their recruitment activities compared to non-user firms. After the Hartz III reform was in place, establishments using the agency grew roughly two percentage points faster in terms of employment relative to non-users and those establishments achieve an increase in the proportion of hires. We provide several robustness tests using, for example, inverse-probability weighting to additionally account for differences in observable characteristics. Our paper highlights the importance of the placement service on the labor demand side, in particular on the so far overlooked establishment level. |
| Keywords: | Hartz III reform, Federal Employment Agency, matching efficiency, employment growth, difference-in-differences |
| JEL: | J23 J64 J68 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14629&r= |
| By: | Rüttenauer, Tobias; Best, Henning |
| Abstract: | The topic of environmental inequality, in general describing the unequal distribution of environmental pollution across different social groups, has received increasing attention in Germany and other European countries during the past decade. Though research points towards a disadvantage of minorities in Europe, conclusions regarding the extent of this disadvantage vary across studies. In this contribution, we thus examine whether the extent of environmental inequality depends on the measure of pollution and the spatial scale. We connect spatially aggregated data of the 2011 German census to geographical information of industrial facilities and pollution estimates of German-wide diffusion models. We then use spatial regression models to identify the disadvantage of foreign minorities across these measures. Furthermore, we perform geographically weighted regressions to scrutinize the role of the spatial scale and location. We find that the pollution minority gap is stronger for estimates based on industrial facilities than it is for general pollution models, though there is a consistent disadvantage of minorities within municipalities. Furthermore, we demonstrate that there is strong heterogeneity in the association between the share of foreign minorities and air pollution according to the spatial scale and location of the research area. |
| Date: | 2021–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:5tavs&r= |
| By: | Ardito, Chiara (University of Turin); Berton, Fabio (University of Turin); Pacelli, Lia (University of Turin); Passerini, Filippo (Catholic University Milan) |
| Abstract: | We measure the impact of employment protection reduction in an uncertain framework on firms' hires and performance, exploiting the Italian 2015 Jobs Act. Results indicate that firms (1) stabilize workforce mainly through contract transformations of low-tenure and low-human-capital incumbent workers performing high-physical and low-intellectual tasks; (2) apply a cost-saving strategy that increases profits and decreases value added per-head. Effects are stronger among non-exporting and non-innovative firms. Our evidence casts doubts on the effectiveness of employment protection reductions in enhancing productivity in the long run. |
| Keywords: | employment protection, human capital, productivity, tenure, tasks |
| JEL: | J08 J21 J24 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14613&r= |
| By: | Paul Lavery; José María Serena Garralda; Marina-Eliza Spaliara |
| Abstract: | This paper examines the impact of private equity buyouts on the export activity of target firms. We exploit data on UK firms over the 2004-2017 period, and use difference-in-differences estimations on matched target versus non-target firms. Following private equity buyouts, non-exporting firms are more likely to begin exporting, and target firms are likewise more likely to increase their value of exports and their export intensity. Evidence from split-sample analysis further suggests that these patterns are consistent with private equity investors relaxing financial constraints and inducing productivity improvements. |
| Keywords: | private equity buyouts, exporting, financial constraints, transactions |
| JEL: | G34 G32 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:961&r= |
| By: | Advani, Arun (University of Warwick, CAGE, the Institute for Fiscal Studies (IFS), and the LSE International Inequalities Institute (III)); Bangham, George (Resolution Foundation); Leslie, Jack (Resolution Foundation) |
| Abstract: | We show that wealth inequality in the UK is high and has increased slightly over the past decade as financial asset prices increased in the wake of the financial crisis. But data deficiencies are a major barrier in understanding the true distribution, composition and size of household wealth. The most comprehensive survey of household wealth in the UK does a good job of capturing the vast majority of the wealth distribution, but that nearly £800 billion of wealth held by the very wealthiest UK households is missing. We also find tentative evidence that survey measures of high-wealth families undervalue their assets – our central estimate of the true value of wealth held by households in the UK is 5% higher than the survey data suggests. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1367&r= |
| By: | Parsons, Sam (University College London); Bryson, Alex (University College London); Sullivan, Alice (University College London) |
| Abstract: | Using data from two British birth cohorts born in 1958 and 1970 we investigate the impact of teenage conduct problems on subsequent employment prospects through to age 42. We find teenagers with conduct problems went on to spend fewer months both in paid employment, and in employment, education and training (EET) between age 17 and 42 than comparable teenagers who did not experience conduct problems. Employment and EET disadvantages were greatest among those with severe behavioural problems. The 'gap' in time spent in employment or EET by conduct problem status was similar for men and women across cohorts, with only a small part of the gap being attenuated by differences in social background, individual characteristics and educational attainment in public examination at age 16. We discuss the implications of our findings. |
| Keywords: | education, training, disadvantage, educational attainment, labour market, employment, behavioural problems, Rutter |
| JEL: | I12 J20 J64 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14616&r= |
| By: | Davillas, A; Burlinson, A.; Liu, H-H. |
| Abstract: | This paper uses data from Understanding Society: the UK Household Longitudinal Study to explore the association between fuel poverty and a set of well-being outcomes: lifesatisfaction, self-reported health measures and more objectively measured biomarker data. Over and above the conventional income–fuel cost indicators, we also use more proximal heating deprivation indicators. We create and draw upon a set of composite indicators that concomitantly capture (the lack of) affordability and thermal comfort. Depending on which fuel deprivation indicator is used, we find heterogeneous associations between fuel poverty and our well-being outcomes. Employing combined fuel deprivation indicators, which takes into account the income–fuel cost balance and more proximal perceptions of heating adequacy, reveals the presence of more pronounced associations with life satisfaction and fibrinogen, one of our biological health measures. The presence of these strong associations would have been less pronounced or masked when using separately each of the components of our composite fuel deprivation indicators as well as in the case of self-reported generic measures of physical health. Lifestyle and chronic health conditions plays a limited role in attenuating our results, while material deprivation partially, but not fully, attenuates our associations between fuel deprivation and well-being. These results remain robust when bounding analysis is employed to test the potential confounding role of unobservables. Our analysis suggests that composite fuel deprivation indicators may be useful energy policy instruments for uncovering the underlining mechanism via which fuel poverty may get “under the skin†. |
| Keywords: | fuel poverty; biomarkers; health; well-being; |
| JEL: | I12 I31 I32 Q4 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:21/13&r= |
| By: | Lukas Menkhoff; Carsten Schröder |
| Abstract: | We present evidence from a repeated survey on risky asset holdings carried out on a representative sample of the German population six times between April and June 2020. Given the size of the Covid-19 shock, we find little evidence of portfolio rebalancing in April 2020. In May, however, individual investors started buying heavily, fueling market recovery. The cross-section shows large differences as young, educated, high income, and risk tolerant investors are net buyers throughout and, thus, benefit from the stock market recovery. Older individuals, parents of young children, and individuals affected by adverse liquidity shocks from Covid-19 are net sellers. Given the high risk of illness, older people are hit by dual blows to both health and finances. |
| Keywords: | Risky assets, distributional effects, individual investment behavior, health and income shocks, expected adverse shocks |
| JEL: | D31 G50 H31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1962&r= |
| By: | Crescenzi, Riccardo; De Filippis, Fabrizio; Giua, Mara; Vaquero Pineiro, Cristina |
| Abstract: | Can Geographical Indications (GIs) promote local economic development in rural areas? This paper explores the impact of GIs that identify and endorse agri-food products which are strictly embedded within the territory from which they originate. Examining Italian wine protected by GIs through an innovative dataset and by means of propensity score matching and difference-in-differences models make it possible to compare the local economic development trajectories of rural municipalities afforded GIs with the correspondent dynamics of a counterfactual group of similar municipalities without GI status since 1951. Rural municipalities with GIs experience population growth and economic reorganization towards non-farming sectors, which frequently involve higher value-added activities. |
| Keywords: | geographical Indications;; rural development; EU policies; local development; propensity score matching; difference in differences; 639633-MASSIVE-ERC-2014-STG); H2020 project BATModel; Taylor & Francis deal |
| JEL: | O18 Q18 R10 |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:110767&r= |
| By: | Leyla D. Karakas; Nam Seok Kim; Devashish Mitra |
| Abstract: | Using six waves of the Swedish National Election Studies (SNES) survey data, we investigate the determinants of attitudes towards globalization barriers (trade and immigration) and how important these attitudes are in how people vote. In line with the existing results in the literature, we find that more educated and richer voters support freer trade and more immigration. We also find that conservative voters in Sweden are more likely to prefer freer trade but higher immigration barriers. Once various economic and demographic determinants of globalization barrier preferences along with voters’ ideologies on a liberal-conservative spectrum are controlled for in the analysis of voting behavior, trade barrier preferences lose their statistical significance while attitudes towards immigration barriers remain significant. This suggests that immigration attitudes affect voting behavior through channels involving identity-driven factors that are different from the channels through which more traditional electoral issues, such as trade barriers, work. Focusing on the anti-globalization Swedish Democrats, we confirm that voters with a greater preference for barriers to immigration were more likely to switch their votes to this party from the 2014 to the 2018 election. |
| Keywords: | globalization, trade, immigration, elections, voting, survey data, Sweden |
| JEL: | D72 F16 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9236&r= |
| By: | Jules Linden; Cathal O'Donoghue; Denisa M. Sologon |
| Abstract: | During recent crisis, wage subsidies played a major role in sheltering firms and households from economic shocks. During COVID-19, most workers were affected and many liberal welfare states introduced new temporary wage subsidies to protected workers' earnings and employment (OECD, 2021). New wage subsidies marked a departure from the structure of traditional income support payments and required reform. This paper uses simulated datasets to assess the structure and incentives of the Irish COVID-19 wage subsidy scheme (CWS) under five designs. We use a nowcasting approach to update 2017 microdata, producing a near real time picture of the labour market at the peak of the crisis. Using microsimulation modelling, we assess the impact of different designs on income replacement, work incentives and income inequality. Our findings suggest that pro rata designs support middle earners more and flat rate designs support low earners more. We find evidence for strong work disincentives under all designs, though flat rate designs perform better. Disincentives are primarily driven by generous unemployment payments and work related costs. The impact of design on income inequality depends on the generosity of payments. Earnings related pro rata designs were associated to higher market earnings inequality. The difference in inequality levels falls once benefits, taxes and work related costs are considered. In our discussion, we turn to transaction costs, the rationale for reform and reintegration of CWS. We find some support for the claim that design changes were motivated by political considerations. We suggest that establishing permanent wage subsidies based on sectorial turnover rules could offer enhanced protection to middle-and high-earners and reduce uncertainty, the need for reform, and the risk of politically motivated designs. |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2108.04198&r= |
| By: | Miqdad Asaria; Joan Costa-i-Font; Frank Cowell |
| Abstract: | We study the determinants of individual aversion to health and income inequality in three European countries and the effects of exposure to COVID-19 including the effect employment, income and health shocks using representative samples of the population in each country. Comparing levels of health- and income-inequality aversion in the UK between the years 2016 and 2020 we find a significant increase in inequality aversion in both income and health domains. Inequality aversion is higher in the income domain than in the health domain and inequality aversion in both income and health domains is increasing in age and education and decreasing in income and risk appetite. However, people directly exposed to major health shocks during the COVID-19 pandemic generally exhibited lower levels of aversion to both income and health inequality. But for those at high risk of COVID-19 mortality who experienced major health shocks during the pandemic, inequality aversion was significantly higher than for those of similar individuals experiencing a health shock prior to the pandemic. |
| Keywords: | inequality aversion, income, health, Covid-19, attitudes to inequality, employment shocks, health shocks, difference in differences |
| JEL: | I18 I30 I38 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9250&r= |
| By: | Marco Gambaro; Valentino Larcinese; Riccardo Puglisi; James M. Snyder Jr. |
| Abstract: | We analyze minute-by-minute, individual level data on viewership for Italian TV news broadcasts (from AUDITEL™), matched with detailed data on content (from Osservatorio di Pavia). We are interested in the behavior of viewers, and in particular in their decision to switch away from a news program as a function of the type of story they are currently watching. Somewhat surprisingly, we find that “soft” news systematically induces viewers to switch away, even more than “hard” news. On the other hand, sensational stories about crime, accidents and disasters are associated with less switching. We also find significant differences in this switching behavior according to gender, age, and the specific TV channel being watched. For example, young people are relatively more likely to switch away from hard news than soft news, compared to older people. |
| JEL: | D72 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29020&r= |
| By: | Conti, Gabriella (University College London); Pizzo, Elena (University College London); Morris, Stephen (University of Cambridge); Melnychuk, Mariya (University College London) |
| Abstract: | Child maltreatment is a major public health problem with significant consequences for individual victims and for society. In this paper we quantify for the first time the economic costs of fatal and non-fatal child maltreatment in the UK in relation to several short-, medium- and long-term outcomes ranging from physical and mental health problems, to labour market outcomes and welfare use. We combine novel regression analysis of rich data from the National Child Development Study and the English Longitudinal Study of Ageing with secondary evidence to produce an incidence-based estimate of the lifetime costs of child maltreatment from a societal perspective. The discounted average lifetime incidence cost of non-fatal child maltreatment by a primary caregiver is estimated at £89,390 (95% uncertainty interval £44,896 to £145,508); the largest contributors to this are costs from social care, short-term health and long-term labour market outcomes. The discounted lifetime cost per death from child maltreatment is estimated at £940,758, comprising health care and lost productivity costs. Our estimates provide the first comprehensive benchmark to quantify the costs of child maltreatment in the UK and the benefits of interventions aimed at reducing or preventing it. |
| Keywords: | child maltreatment, incidence-based approach, lifetime costs, health care costs, productivity losses, sensitivity analysis |
| JEL: | I18 J17 D61 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14612&r= |
| By: | Campigotto, Nicola; Rapallini, Chiara; Rustichini, Aldo |
| Abstract: | Academic consensus about normative prescriptions on the ethnic and cultural composition of societies has been shifting in recent decades. It has evolved from what seemed desirable but was acknowledged to be unrealistic (the noble idea of a melting pot), to what is realistic because it has already happened, but might be undesirable in the long run: the multicultural diaspora. Plural societies, an unintended consequence of multiculturalism, lurk in the background. Thus scholars of social and economic questions, as well as societies, face a threehorned dilemma. We throw some light on the dilemma by examining school friendship networks in five European countries with recent immigration. Our results highlight the force of elective affinities in overcoming differences, but they also point to the countervailing forces of elective discordance that are currently driving increasing division. |
| Keywords: | Friendship,Homophily,Immigration,Networks,Social cohesion |
| JEL: | D85 J15 Z13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:910&r= |
| By: | Fischer, Kai; Reade, J. James; Schmal, W. Benedikt |
| Abstract: | The COVID-19 pandemic has caused economic shock waves across the globe. Much research addresses direct health implications of an infection, but to date little is known about how this shapes lasting economic effects. This paper estimates the workplace productivity effects of COVID-19 by studying performance of soccer players after an infection. We construct a dataset that encompasses all traceable infections in the elite leagues of Germany and Italy. Relying on a staggered difference-in-differences design, we identify negative short- and longer-run performance effects. Relative to their preinfection outcomes, infected players' performance temporarily drops by more than 6%. Over half a year later, it is still around 5% lower. The negative effects appear to have notable spillovers on team performance. We argue that our results could have important implications for labor markets and public health in general. Countries and firms with more infections might face economic disadvantages that exceed the temporary pandemic shock due to potentially long-lasting reductions in productivity. |
| Keywords: | Labor Performance,Economic Costs of COVID-19,Public Health |
| JEL: | I18 J24 J44 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:368&r= |
| By: | Gaggero, A.; Ajnakina, O.; Hackett, R.A |
| Abstract: | The extent to which heavy smoking and early retirement are causally related remains to be determined. To overcome the endogeneity of heavy smoking behaviour, we employ a novel approach by exploiting Mendelian Randomisation and use genetic predisposition to heavy smoking, as measured with a polygenic risk score (PGS), as an instrumental variable. A total of 3578 participants from the English Longitudinal Study of Ageing (mean age 64.41 years) had data on smoking behaviour, employment and a heavy smoking PGS. Heavy smoking was indexed as smoking at least 20 cigarettes a day. Early retirement was classified as retiring before state pension age. Our results show that being a heavy smoker increases significantly the probability of early retirement. Results were robust to a battery of robustness checks and a falsification test. Overall, our findings support a causal pathway from heavy smoking to early retirement. |
| Keywords: | smoking; early retirement; polygenic risk scores; instrumental variable; mendelian randomisation |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:21/12&r= |
| By: | Thierry Kamionka (CNRS - Centre National de la Recherche Scientifique, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, IP Paris - Institut Polytechnique de Paris); Pauline Leveneur (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, IP Paris - Institut Polytechnique de Paris) |
| Abstract: | We investigate interactions between individual's position in the labor market and health status. We jointly model health, employment and working hours using a dynamic model. We estimate a dynamic multivariate model with random effects for the period going from 1991 to 2009 and using data from the British Household Panel Survey (BHPS). Instrumental variables are used. We consider interactions of the error terms of the model using a vector autoregressive process of the order 1. A shock on one component of the error term can have an impact on the distribution of the error term the next period of time. Individual effects-one for each equation-can be correlated. The model is estimated using simulated maximum likelihood estimator. We consider the initial conditions problem. We find that joint dynamics of health and employment is determined by the interactions of their past realizations as well as by the individual's socioeconomic characteristics. |
| Keywords: | Employment dynamics,Self-assessed health,Working hours,General physician visits,Panel data,IV estimation |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03307591&r= |