nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒11‒15
eighteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Regional and national results on entrepreneurship using GEM data By Velilla, Jorge
  2. Tax-benefit policies to fight poverty among young adults in Europe By Vincent Vergnat
  3. Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics By Jacobs, Valentine; Rycx, François; Volral, Mélanie
  4. Regional variation in women’s education-fertility nexus in Northern and Western Europe By Jonas Wood; Leen Marynissen; Jessica Nisén; Peter Fallesen; Karel Neels; Alessandra Trimarchi; Lars Dommermuth; Ruben Van Gaalen; Martin Kolk; Pekka Martikainen
  5. The COVID-19 Curtain: Can Past Communist Regimes Explain the Vaccination Divide in Europe By Inés Berniell; Yarine Fawaz; Anne Laferrère; Pedro Mira; Elizaveta Pronkina
  6. Health and Aging before and after Retirement By Ana Lucia Abeliansky; Holger Strulik
  7. Diverse pathways in young Italians’ entrance into sexual life: The association with gender and birth cohort By Valentina Tocchioni; Marcantonio Caltabiano; Silvia Meggiolaro
  8. Technological Diffusion and Productivity Convergence across European Regions: A Spatial Approach over the Period 2000-2015 By Fabio Manca; Giuseppe Piroli
  9. Belonging or estrangement: The European refugee crisis and its effects on immigrant identity By Prömel, Christopher
  11. Does Labor Protection Increase Support for Immigration? Evidence from Switzerland By Mirjam Bächli; Teodora Tsankova
  12. The Economics of Being LGBT. A Review: 2015-2020 By Drydakis, Nick
  13. Economic education at the expense of indoctrination? Evidence from Germany By Kaiser, Tim; Oberrauch, Luis
  14. Job Search During a Pandemic Recession:Survey Evidence From the Netherlands By Maria Balgova; Simon Trenkle; Christian Zimpelmann; Nico Pestel
  15. LifeSim: a lifecourse dynamic microsimulation model of the millennium birth cohort in England By Skarda, Ieva; Asaria, Miqdad; Cookson, Richard
  16. The Italian Geography of Regional Resilience: The Role of Cooperative Firms By Michele Costa; Flavio Delbono
  17. Is There a Need for Reverse Mortgages in Germany? Empirical Evidence and Policy Implications By Florian Bartsch; Florian Buhlmann; Karolin Kirschenmann; Carolin Schmidt
  18. Worker Mobility and Labour Market Opportunities By Monica Costa Dias; Ella Johnson-Watts; Robert Joyce; Fabien Postel-Vinay; Peter Spittal; Xiaowei Xu

  1. By: Velilla, Jorge
    Abstract: In this paper, we use different sources of data from the GEM to show a descriptive and comparative analysis of the different dimensions of the entrepreneurial activity, in the Spanish regions, and at international level. We also study the individual determinants of the entrepreneurial activity in Spain, and Europe, using bootstrapping techniques to avoid overfitted results. The results indicate that entrepreneurial levels in Spain are below the average of European countries, and also below the levels of United States, Canada, and Australia. However, the determinants of entrepreneurship appear to be similar in all the regions studied.
    Keywords: Entrepreneurship; GEM data; Spain
    JEL: L26
    Date: 2021–10
  2. By: Vincent Vergnat
    Abstract: European countries o?er a large amount of policies to protect the population against the risk of poverty and social exclusion but Young adults generally do not have access to unemployment bene?ts since their period of contribution is relatively short and in some countries they do not have access to minimum income. In times of high unemployment in Europe, is it possible for young people to access autonomy without family resources? This paper aims to compare the budgetary constraints of young adults to understand the various strategies implemented by di?erent European countries. I rely on microsimulation and hypothetical data to compare identical individuals and to isolate the e?ect of di?erent tax-bene?t systems on the budget constraint of young adults. I ?nd that European countries can be classi?ed into ?ve groups concerning the design of social assistance policies for young people. Belgium, Finland and Denmark, which consider young people as an independant household, while taking into account the situation of cohabitation, are on average more e?ective in reducing the intensity of youth poverty.
    Keywords: Youth; Income; Microsimulation
    JEL: J13
    Date: 2021–11
  3. By: Jacobs, Valentine; Rycx, François; Volral, Mélanie
    Abstract: This paper analyses the wage effects of educational mismatch by workers’ origin using a sizeable, detailed matched employer-employee dataset for Belgium. Relying on a fine-grained approach to measuring educational mismatch, the results show that over-educated workers, regardless of their origin, suffer a wage penalty compared to their well-matched former classmates. However, the magnitude of this wage penalty is found to vary considerably depending on workers’ origin. In addition, the estimates show that origin-based differences in over-education wage penalties significantly depend on both demographics (workers’ region of birth, education, and gender) and employer characteristics (firm size and collective bargaining).
    Keywords: Immigrants,educational mismatch,wage gap,linked employer-employee data
    JEL: I24 I26 J15 J24 J31
    Date: 2021
  4. By: Jonas Wood; Leen Marynissen; Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Peter Fallesen; Karel Neels; Alessandra Trimarchi (Max Planck Institute for Demographic Research, Rostock, Germany); Lars Dommermuth; Ruben Van Gaalen; Martin Kolk (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The relationship between female education and fertility is a long-standing topic in demography, our understanding of which continues to develop. Since the turn of the century, a growing body of research has documented cross-national variation in the female educational gradient in fertility, with mostly positive gradients in Western and Northern European countries. However, such national gradients may mask important variation in the educational gradient in fertility at the subnational level. This study is among the first to use large-scale individual-level administrative data to study regional educational gradients in parity-specific fertility in Northern and Western European countries: Belgium, Denmark, Finland, France, the Netherlands, Norway, and Sweden. Adopting hazard models and model-based Synthetic Parity Progression Ratios, our results highlight considerable subnational regional variation in the educational gradient in first, second and third births. We conclude that, in addition to variation between countries, substantial within-country regional variation deserves to receive future scholarly attention. The documentation of regional variation in the female education-fertility nexus is a substantial extension of cross-national comparisons and contributes to the empirical and theoretical debate on the context-contingencies of the education-fertility nexus.
    Keywords: Europe, education, fertility, population registers, regional demography
    JEL: J1 Z0
    Date: 2021
  5. By: Inés Berniell (CEDLAS-IIE-FCE-UNLP); Yarine Fawaz (CEMFI); Anne Laferrère (Universit´e Paris-Dauphine); Pedro Mira (CEMFI); Elizaveta Pronkina (Universit´e Paris-Dauphine)
    Abstract: As of November 2021, all former Communist countries from Central and Eastern Europe exhibit lower vaccination rates than Western European countries. Can institutional inheritance explain, at least in part, this heterogeneity in vaccination decisions across Europe? To study this question we exploit novel data from the second wave of the SHARE (Survey of Health, Ageing, and Retirement in Europe) Covid-19 Survey fielded in Summer 2021 that covers 27 European countries and Israel. First, we document lower Covid-19 vaccine take-up amongst individuals above 55 years old who were born under Communism in Europe. Next, we turn to reunified Germany to get closer to a causal effect of exposure to Iron curtain regimes. We find that exposure to the Communist regime in East Germany decreases one’s probability to get vaccinated against Covid-19 by 8 percentage points, increases that of not wanting the vaccine by 4 percentage points. Both effects are quite large and statistically significant, and they hold when controlling for individual socio-economic and demographic characteristics. We identify low social capital -measured as voluntary work, political engagement, trust in people- as a plausible channel through which past Communist regimes would still affect individuals’ preferences for Covid-19 vaccination.
    JEL: I15 I12 P36 Z18
    Date: 2020–11
  6. By: Ana Lucia Abeliansky; Holger Strulik
    Abstract: We investigate health and aging before and after retirement for specific occupational groups. We use five waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) and construct a frailty index for elderly men and women from 10 European countries. Occupational groups are classified according to low vs. high education, blue vs. white collar color, and high vs. low physical or psychosocial job burden. Controlling for individual fixed effects, we find that, regardless of the used classification, workers from the first (low status) group display more health deficits at any age and accumulate health deficits faster than workers from the second (high status) group. We instrument retirement by statutory retirement ages (“normal” and “early”) and find that the health of workers in low status occupations benefits greatly from retirement, whereas retirement effects for workers in high status occupations are small and frequently insignificant. We also find that workers from low status occupations always have higher health deficits, i.e. we find evidence for an occupational health gradient that widens with increasing age, before and after retirement.
    Keywords: health deficits, occupation, retirement, frailty index, Europe
    JEL: I10 I19 J13
    Date: 2021
  7. By: Valentina Tocchioni (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Marcantonio Caltabiano (Università di Messina); Silvia Meggiolaro (Università di Padova)
    Abstract: BACKGROUND: Sexual development is a complex process, the study of which should consider not only first sexual intercourse, but multiple behavioural trajectories in a comprehensive perspective. Moreover, first romantic relationships and sexual experimentation during adolescence form the building blocks for subsequent more mature relationships and sexual behaviours later in life. OBJECTIVE: This study focuses on young Italians’ first romantic and sexual experiences, with a twofold aim. We seek to both describe the trajectories characterizing the first stages of youth’s affective and sexual development and to study the differences among them by gender and birth cohort. METHODS: Applying sequence analysis and subsequent cluster analysis to a sample taken from two surveys conducted in 2000-2001 and 2017 on Italian university students, we identify young people’s affective and sexual development trajectories. This is followed by a multinomial logistic regression analysis to discern the effect of gender and birth cohort on the probability of belonging to a given pathway. RESULTS: We identify six distinct sexual ideal-types among young men and women, with gender differences that characterize the trajectories of affective and sexual development of most of university students. That said, our results also suggest that differences between the two genders have narrowed over time. CONTRIBUTION: The findings confirm the importance of considering not only first sexual intercourse and the ‘typical’ trajectory of affective and sexual development, but also accounting for diverse trajectories so as to accurately capture the complexity of youths’ early romantic and sexual lives.
    Keywords: First sexual intercourse; romantic relationships; first sexual experiences; sequence analysis; university students; Italy
    JEL: C49 C14 J13
    Date: 2021–06
  8. By: Fabio Manca; Giuseppe Piroli
    Abstract: What are the drivers of growth and convergence in productivity at regional level? Differences in the stock of human capital across regions are hypothesized to be the major cause of differences in the speed by which following regions converge and catch-up with the most advanced ones. In addition, we test the role played by R&D expenditures and institutions exploiting a database covering European regions from 1995 to 2015, which includes regional total factor productivity (TFP) computed by the conventional residual approach. We find robust empirical evidence for these hypotheses in terms of both model specifications and sectoral disaggregation.
    Keywords: Regional Studies, European Regions, Catching-up, Total Factor Productivity
    JEL: P48 D24 J24 E02 C31 C33
    Date: 2021–10–07
  9. By: Prömel, Christopher
    Abstract: This study deals with the impact of the 2015 European Refugee Crisis on the ethnic identity of resident migrants in Germany. To derive plausibly causal estimates, I exploit the quasiexperimental setting in Germany, by which refugees are allocated to different counties by state authorities without being able to choose their locations themselves. This study finds that higher shares of refugees in a county increased migrants' attachment to their home countries, while not affecting their perceived belonging to Germany. Further analyses uncover strong heterogeneities with respect to country of origin and immigrant characteristics and suggest that the observed effects may be primarily driven by experiences of discrimination and the consumption of foreign media. Lastly, I find that changes in ethnic identity coincide with the political polarization of migrants. These results have various policy implications in terms of the dispersal of asylum seekers, the modes of communication with different migrant groups and the importance of antidiscrimination measures.
    Keywords: Refugees,Migrants,Ethnic Identity,European Refugee Crisis
    JEL: F22 J15 P16 Z13
    Date: 2021
    Abstract: In this article we estimate the determinants of broadband penetration in Europe. We use data from the European Innovation Scoreboard of the European Commission for 37 countries in the period 2010-2019. We apply Panel Data with Fixed Effects, Panel Data with Random Effects, WLS, OLS and Dynamic Panel. We found that the level of “Broadband Penetration” in Europe is positively associated to “Enterprises Providing ICT Training”, “Innovative Sales Share”, “Intellectual Assets”, “Knowledge-Intensive Service Exports”, “Turnover Share SMEs”, “Innovation Friendly Environment” and negatively associated with “Government procurement of advanced technology products”, “Sales Impact”, “Firm Investments”, “Opportunity-Driven Entrepreneurship”, “Most Cited Publications”, “Rule of Law”. In adjunct we perform a clusterization with k-Means algorithm optimized with the Silhouette Coefficient and we find the presence of three different clusters. Finally, we apply eight machine learning algorithms to predict the level of “Broadband Penetration” in Europe and we find that the Polynomial Regression algorithm is the best predictor and that the level of the variable is expected to increase of 10,4%.
    Keywords: General; Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Choices and Consequences; Intellectual Property and Intellectual Capital.
    JEL: O30 O31 O32 O33 O34
    Date: 2021–10–31
  11. By: Mirjam Bächli; Teodora Tsankova
    Abstract: What affects native support for immigration? At a time of rising anti-immigration sentiments, this is a question raised by both academics and policy makers. We study the role of labor protection in shaping native preferences over migration policies. We look at Swiss national votes which took place from 2000 to 2014. Our results show that a higher immigrant exposure reduces pro-immigration vote shares in municipalities with a relatively low-skilled native population. The negative response is mitigated under higher levels of labor protection as measured by collective bargaining coverage. We look at labor market outcomes to understand mechanisms at play and find some suggestive evidence that collective agreements mitigate negative wage responses among low-skilled natives. Overall, the analysis suggests that labor protection affects vote outcomes by improving in addition other labor market conditions or by alleviating existing fears among the native population.
    Keywords: immigration, popular votes, collective bargaining
    JEL: D72 F22 J52 J61
    Date: 2021
  12. By: Drydakis, Nick
    Abstract: This paper reviews studies on LGBT workplace outcomes published between 2015 and 2020. In terms of earnings differences, in the US, Canada, Europe, and Australia, gay men were found to experience earnings penalties of 7% in comparison to heterosexual men, bisexual men experienced earnings penalties of 9% in comparison to heterosexual men, and bisexual women faced earnings penalties of 5% in comparison to heterosexual women. In the same regions, lesbian women experienced an earnings premium of 7% in comparison to heterosexual women. Trans women, in the US and Europe, faced earnings penalties ranging from 4% to 20%. In terms of job satisfaction, in the US, Canada, and Europe, gay men, and lesbian women experienced 15% and 12%, respectively lower job satisfaction than their heterosexual counterparts. Additionally, bullying against sexual minorities has persisted. In the UK, sexual minorities who experienced frequent school-age bullying faced a 32% chance of experiencing frequent workplace bullying. In relation to job exclusions, in OECD countries, gay men and lesbian women were found to experience 39% and 32%, respectively lower access to occupations than comparable heterosexual men and women. For trans men and women in Europe, comparable patterns are in evidence. Given these patterns, it is not of surprise that LGBT people in the US and the UK experience higher poverty rates than heterosexual and cis people. However, in these two regions, anti-discrimination laws and positive actions in the workplace helped reduce the earnings penalties for gay men, enhance trans people's self-esteem, spur innovation and firms' performance, and boost marketing capability, corporate profiles, and customer satisfaction. The evidence indicated that LGBT inclusion and positive economic outcomes mutually reinforced each other.
    Keywords: Sexual Orientation,Gender Identity,Discrimination,Earnings,Poverty,Bullying,Job Satisfaction,Inclusivity
    JEL: C93 E24 J15 J16 J71
    Date: 2021
  13. By: Kaiser, Tim; Oberrauch, Luis
    Abstract: We study the impact of a recent curriculum reform introducing mandatory economic education in higher-track secondary schools in Southwest Germany. The curriculum reform provides the opportunity to leverage the exogenous variation in exposure to economic education relative to the previous cohort not affected by the reform. One year after exposure to the mandate, we observe positive treatment effects on test scores measuring cognitive elements of economic competence only for students with high test scores at baseline. Two years after exposure to the mandate, we find positive treatment effects on test scores across the entire distribution, as well as socio-emotional skills relevant to financial decision making while we do not observe effects on self-reported financial behaviors. At the same time, we find no changes in social preferences and normative attitudes that could give rise to concerns of indoctrination effects regarding students’ views on profit maximization and the market mechanism.
    Keywords: Economic education,financial literacy,impact evaluation,social preferences,indoctrination,financial behaviors
    JEL: A21 G53 I21
    Date: 2021
  14. By: Maria Balgova; Simon Trenkle; Christian Zimpelmann; Nico Pestel
    Abstract: This paper studies job search behavior in the midst of a pandemic re- cession. We use long-running panel data from the Netherlands (LISS) and complement the core survey with our own COVID-specific module, con- ducted in June 2020, surveying job search e ort of employed as well as un- employed respondents. We estimate an empirical model of job search over the business cycle over the period 2008{2019 to explore the gap between predicted and actual job search behavior in 2020. We find that job search during the pandemic recession di ers strongly from previous downturns. The unemployed search signi cantly less than what we would normally observe during a recession of this size. For the employed, the propensity to search is even greater than what we would expect, but those who do search make significantly fewer job applications. Expectations about the duration of the pandemic seem to play a key role in explaining job search e ort for the unemployed in 2020. Furthermore, employed individuals whose work situation has been a ected by COVID-19 are searching more actively for a new job.
    Keywords: COVID-19, job search, labor supply, survey
    JEL: J21 J64 J68
    Date: 2021–10
  15. By: Skarda, Ieva; Asaria, Miqdad; Cookson, Richard
    Abstract: We present a dynamic microsimulation model for childhood policy analysis that models developmental, economic, social and health outcomes from birth to death for each child in the Millennium Birth Cohort (MCS) in England, together with public costs and a summary wellbeing measure. The model is a discrete event simulation in discrete time (annual periods), implemented in R, which progresses 100,000 individuals through each year of their lives from birth in the year 2000 to death. From age 0 to 18 the model draws observational data from the MCS, with explicit modelling of only a few derived outcomes (mental health, conduct disorder, mortality, health-related quality of life, public costs and a general wellbeing metric). During adulthood, all outcomes are modelled dynamically using explicit networks of stochastic process equations, with separate networks for working age and retirement. Our equations are parameterised using effect estimates from existing studies combined with target outcome levels from up-to-date administrative and survey data. We present our baseline projections and a simple validation check against external data from the British Cohort Study 1970 and Understanding Society survey.
    Keywords: childhood; conduct problems; inequality; lifecourse; policy evaluation; simulation; skills; well-being; SRF-2013-06- 015; 205427/Z/16/Z
    JEL: N0
    Date: 2021–10–25
  16. By: Michele Costa; Flavio Delbono
    Abstract: We investigate the economic resilience of the Italian regions between 2008 and 2019. We then calculate some indices of resistance as well as recovery for both real GDP per capita and employment. We show that during (and after) recessions such indices follow different patterns and the Southern regions perform worse than the rest of the country. Then we try to detect if and how the composition of employment relates to regional resilience. We show that the size of the cooperative employment improves the overall resilience of regional employment, especially during recoveries. We also show and explain that this is not the case with cooperative added value as related to the resilience of regional GDP. Overall, the cooperative movement seems to positively contribute to the resilience of regional economies, supporting an inclusive growth especially through the employment channel.
    JEL: E32 J54 L21 R11
    Date: 2021–10
  17. By: Florian Bartsch; Florian Buhlmann; Karolin Kirschenmann; Carolin Schmidt
    Abstract: Building up sufficient capital for old‐age provision often is a challenge for private households. For homeowners, one way to generate old‐age income from illiquid housing wealth is the use of equity release products such as home reversion plans or reverse mortgages. However, in Germany the market for reverse mortgages is quasi non‐existent. In this policy brief, we provide evidence on the demand‐ and supply‐side reasons for the absence of a reverse mortgage market in Germany, estimate the potential size of and discuss ways how to establish such a market. Using data from financial market expert and household surveys and information from extensive telephone interviews with (former) suppliers of equity release products, we find that uncertainty relating to the homeowner’s longevity, moral hazard and adverse selection are the strongest deterrents to reverse mortgage supply. At the same time, the demand‐side deterrents are manifold, ranging from product complexity to trust issues and a strong emotional attachment to the home. Estimated market size is very small, but our results suggest that it might grow in the medium term. From a political economy point of view, it might also be worthwhile stimulating the growth of a reverse mortgage market in Germany because it could particularly benefit cash‐poor but house‐rich households, decreasing old‐age poverty.
    Date: 2021
  18. By: Monica Costa Dias; Ella Johnson-Watts; Robert Joyce; Fabien Postel-Vinay; Peter Spittal; Xiaowei Xu
    Abstract: We develop a measure of labour market opportunities for heterogenous types of worker, exploiting information on their suitability different jobs encoded in historical patterns of worker mobility.We provide a theoretical foundation for our measure, which features naturally in a general random search framework. Our measure is flexible in the sense that it admits general definitions of worker and job heterogeneity, and is easily implementable empirically with data on worker mobility and labour demand. We apply our measure to high-quality data on labour demand in the UK, based on the universe of 104.7 million job adverts posted online from January 2015 to June 2021. We demonstrate the utility of our measure with an analysis of worker prospects throughout the Covid-19 pandemic. First, while the direct impact of lockdown policies was concentrated on relatively few industries, labour demand fell much more broadly. And, as our measure highlights,the full effects were broader still because of the disruption to usual career progression, even for those in less -affected sectors such as healthcare. Second, despite aggregate labour demand returning to pre-pandemic levels by June 2021, 25% of the work force faced new job opportunities more than 10% below pre-pandemic levels. This is because of a change in the composition of vacancy postings (towards lower-paying occupations) which our measure of labour market opportunities is sensitive to. Finally,the majority (64%) of unemployed workers faced at least 10% more competition for jobs from unemployed job seekers than before the pandemic.
    Date: 2021–11–01

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