nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2021‒12‒06
35 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Duration of the School-To-Work Transition in Italy and in Other European Countries: A Flexible Baseline Hazard Interpretation By Pastore, Francesco; Quintano, Claudio; Rocca, Antonella
  2. The Effect of Mandatory Non-financial Reporting on CSR (and Environmentally Sustainable) Investment: a Discontinuity Design Approach By Leonardo Becchetti; Sara Mancini; Nazaria Solferino
  3. Membership in Employers' Associations and Collective Bargaining Coverage in Germany By Jirjahn, Uwe
  4. Profit Taxation, R&D Spending, and Innovation By Lichter, Andreas; Löffler, Max; Isphording, Ingo E.; Nguyen, Thu-Van; Pöge, Felix; Siegloch, Sebastian
  5. Labor Market Reforms and Earnings Dynamics: the Italian Case By Mr. Davide Malacrino; Luigi Pistaferri
  6. Platform Work and Economic Insecurity:Evidence from Representative Italian Survey Data By Valeria Cirillo; Dario Guarascio; Zachary Parolin
  7. Is raising the school leaving age enough to decrease dropping out? By Adamecz-Völgyi, Anna
  8. Train drain? Access to skilled foreign workers and firms' provision of training By Maria Esther Oswald-Egg; Michael Siegenthaler
  9. Does Gender Matter? The Effect of High Performing Peers on Academic Performances By Modena, Francesca; Rettore, Enrico; Tanzi, Giulia
  10. The Happy Cultural Omnivore? Exploring the Relationship between Cultural Consumption Patterns and Subjective Well-Being By Bertacchini, Enrico; Bolognesi, Valentina; Venturini, Alessandra; Zotti, Roberto
  11. Measuring the Child Penalty Early in a Career: The Case of Young Adults in France By Bazen, Stephen; Joutard, Xavier; Périvier, Hélène
  12. PeCan relief measures nudge compliance in a public health crisis? Evidence from a kinked fiscal policy rule By Claudio Deiana; Andrea Geraci; Gianluca Mazzarella; Fabio Sabatini
  13. Disability and happiness: the role of accessibility By Asya Bellia
  14. The human side of productivity: Uncovering the role of skills and diversity for firm productivity By Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti
  15. Redistribution across Europe: How much and to whom? By Hammer, Bernhard; Christl, Michael; De Poli, Silvia
  16. Resilience, Social Capital, Active Citizenship and Subjective Wellbeing: the Contribution of Generativity By Leonardo Becchetti; Gianluigi Conzo
  17. The Gender Pay Gap in University Student Employment By Paul David Boll; Lukas Mergele; Larissa Zierow
  18. Climate change and behavior: Do environmental attitudes and perceptions impact on subjective well-being in Europe? By Ary José A. Souza-Jr.
  19. The Long-Term Effects of Forced Migration: An Early-Life Approach with Evidence from Yugoslavian Refugees in Sweden By Serratos-Sotelo, Luis
  20. Air Pollution Affects Decision-Making: Evidence from the Ballot Box By Bellani, Luna; Ceolotto, Stefano; Elsner, Benjamin; Pestel, Nico
  21. Banking Diversity, Financial Complexity and Resilience to Financial Shocks: Evidence From Italian Provinces By Beniamino Pisicoli
  22. The Psychological Gains from COVID-19 Vaccination: Who Benefits the Most? By Bagues, Manuel; Dimitrova, Velichka
  23. Labour Market Power and the Quest for an Optimal Minimum Wage: Evidence from Italy By Mauro Caselli; Jasmine Mondolo; Stefano Schiavo
  24. The Fiscal Multiplier of European Structural Investment Funds: Aggregate and Sectoral Effects with an Application to Slovenia By Mr. Raphael A Espinoza
  25. Colocation of Entrepreneurs and New Firm Survival: Role of New Firm Founder’s Experiential Relatedness to Local Entrepreneurs By Tavassoli, Sam; Jienwatcharamongkhol, Viroj; Arenius, Pia
  26. The Legacy of COVID-19 in Education By Werner, Katharina; Woessmann, Ludger
  27. The Role of Local Public Goods for Gender Gaps in the Spatial Economy By Fabian Bald, Marcel Henkel
  28. Does Firm Exit Increase Prices? By Suveg, Melinda
  29. The Long-Term Effect of Research Grants on the Scientific Output of University Professors By Katrin Hussinger; João N. Carvalho
  30. Skill Downgrading Among Refugees and Economic Immigrants in Germany: Evidence from the Syrian Refugee Crisis By Plamen Nikolov; Leila Salarpour; David Titus
  31. Contact vs. Information: What shapes attitudes towards immigration? Evidence from an experiment in schools By Florio, Erminia
  32. Fertility, Family Policy, and Labor Supply: Quasi-Experimental Evidence from France By Elmallakh, Nelly
  33. How digital technology affects working conditions in globally fragmented production chains: evidence from Europe. By Aleksandra Parteka; Joanna Wolszczak-Derlacz; Dagmara Nikulin
  34. Dynamic analysis of loneliness and disability at older ages in Europe by gender By Pagan, Ricardo; Malo, Miguel
  35. Testing the gender gap in subjective financial literacy of spouses By Marie-Hélène BROIHANNE

  1. By: Pastore, Francesco (Università della Campania Luigi Vanvitelli); Quintano, Claudio (Università degli Studi di Napoli Suor Orsola Benincasa); Rocca, Antonella (University of Naples Parthenope)
    Abstract: Purpose: The Italian school-to-work transition (STWT) is astonishingly slow and long in comparison to the other EU countries. The aim of this paper is to analyze its determinants comparing the Italian case with Austria, Poland and the UK in a gender perspective. Design/methodology/ approach: The analysis is based on a Cox survival model with proportional hazard. The smoothed hazard estimates allow us to identify the non-linear path of the hazard function. Findings: We reckon that the actual length of the transition to a stable job is around 30 months. Conversely, it is less than one year in the other countries. Women are particularly penalized, despite being on average more educated than men. Attaining a tertiary degree or a vocational path of education at high secondary school strongly increases the hazard rate. The smoothed hazard estimates support the hypothesis of positive duration dependence at the beginning of the transition and slightly negative thereafter. Practical implications: Stimulating economic growth and investing in education and training are important pre-conditions for shortening the transition. Originality: Despite the duration of the STWT is one of the most important indicators to measure the efficiency of the STWT, it is not easy to measure. The authors build on their previous research work on this topic, but relaxing the assumption of a monotonic hazard rate and using the flexible baseline hazard approach to test for the existence of non-linear duration dependence. Furthermore, they extend the analysis by including student-workers who attended a vocational path of education, in order to detect its effectiveness in allowing young people finding a job sooner.
    Keywords: duration, school-to-work transition, Europe, Italy, transition regime
    JEL: H52 I2 I24 J13 J64 J68
    Date: 2021–11
  2. By: Leonardo Becchetti (CEIS & DEF, University of Rome "Tor Vergata"); Sara Mancini (University of Rome "Tor Vergata"); Nazaria Solferino (Università della Calabria)
    Abstract: We investigate the effects of the introduction of non-financial reporting (NFR) on investment related to corporate social responsibility (CSR). We focus on environmental sustainability by using as exogenous treatment the Italian implementation of the EU Directive 2014/95 that has made NFR mandatory for companies of 500 employees and above passing threshold levels of either net sales or total assets. We estimate the causal effect on data from the ISTAT Multiscopo Survey (including the universe of middle and large sized Italian companies and a large sample of small companies) with a fuzzy discontinuity design approach and find evidence of a sharp discontinuity around the cutoff. Our empirical findings show that mandatory NFR is associated to significant positive effects on CSR investments in some crucial domains (waste management, recycle/reused material in inputs, pollution control, emission reduction). Their magnitude implies that between 20 to 30 percent of additional firms are involved in CSR investments in general and specifically in all the considered types of environmentally sustainable investment. Policy implications of our findings are that the reduction of the mandatory NFR threshold including also medium sized firms could significantly contribute to extend corporate investment in CSR and, more specifically, in environmental sustainability.
    Keywords: Corporate Social Responsibility, non-financial reporting, environmental sustainability.
    JEL: D25 D22
    Date: 2021–11–15
  3. By: Jirjahn, Uwe (University of Trier)
    Abstract: While there is a strong overlap between membership in employers' associations and collective bargaining coverage, the overlap is far from being perfect. Using unique firm-level data from Germany, this study estimates the determinants of the membership in employers' associations and the coverage by industry-level or firm-level agreements. The analysis particularly focuses on the various constellations of membership and collective bargaining status. The results show that firm-level worker representation, foreign ownership, work organization, firm size, age and East-West differences are important determinants. Altogether, the analysis demonstrates that a more differentiated picture of industrial relations can be obtained by considering both membership in employers' associations and collective bargaining coverage.
    Keywords: employers’ associations, industry-level bargaining, firm-level bargaining, foreign ownership, works councils, union density
    JEL: F23 F66 J51 J52
    Date: 2021–10
  4. By: Lichter, Andreas (Heinrich Heine University Düsseldorf); Löffler, Max (Maastricht University); Isphording, Ingo E. (IZA); Nguyen, Thu-Van (Stifterverband Essen); Pöge, Felix (Boston University); Siegloch, Sebastian (University of Mannheim)
    Abstract: We study how profit taxation affects plants' R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987–2013 for identification. Applying event study models, we find a negative and statistically significant effect of an increase in profit taxation on plants' R&D spending with an implied long-run elasticity of −1.25. Reductions in R&D are particularly strong among more credit-constrained plants. In contrast, homogeneity of effects across the plant size distribution questions policy makers common practice to link targeted R&D tax incentives to plant size. We further find lagged negative effects on the (citation-weighted) number of filed patents.
    Keywords: corporate taxation, firms, R&D, innovation, patents
    JEL: H25 H32 O31 O32
    Date: 2021–11
  5. By: Mr. Davide Malacrino; Luigi Pistaferri
    Abstract: This paper summarizes statistics on the key aspects of the distribution of earnings levels and earnings changes using administrative (social security) data from Italy between 1985 and 2016. During the time covered by our data, earnings inequality and earnings volatility increased, while earnings mobility did not change significantly. We connect these trends with some salient facts about the Italian labor market, in particular the labor market reforms of the 1990s and 2000s which induced a substantial rise in fixedterm and part-time employment. The rise in parttime work explains much of the rise in earnings inequality, while the rise in fixed-term contracts explains much of the rise in volatility. Both these trends affect the earnings distribution through hours worked: part-time jobs reduce hours worked within a week, while fixed-term contracts reduce the number of weeks worked during the year as well as increase their volatility. We find weak evidence that fixed-term contracts represent a "stepping-stone" to permanent employment. Finally, we offer suggestive evidence that the labor market reforms contributed to the slowdown in labor productivity in Italy by delaying human capital accumulation (in the form of general and firm-specific experience) of recent cohorts.
    Keywords: earnings mobility; earnings inequality; earnings distribution; labor market market trend; earnings change; Wages; Labor markets; Human capital; Income inequality; Income; Europe; Global
    Date: 2021–05–20
  6. By: Valeria Cirillo; Dario Guarascio; Zachary Parolin
    Abstract: The emergence of the platform economy has served as a defining feature of increasingly fragmented labour markets. Recent research on platform work, however, has struggled to quantify the economic conditions of platform workers relative to other occupations and to determine whether the economic disadvantages of platform workers are primarily channelled through lower incomes or other dimensions of precarity. This study uses representative survey data of platform workers in Italy to investigate their size, composition, and economic insecurity. We find that platform workers face greater economic insecurity relative to all other occupation classes, and a rate of economic insecurity that is not significantly different from that of unemployed adults. Higher levels of insecurity are not primarily channelled through lower incomes; instead, higher rates of insecurity persist when accounting for family incomes, suggesting that other dimensions of precarity associated with platform work matter as much as income differences in shaping economic insecurity.
    Keywords: Low-pay employment; Stratification; Technological change; Inequality
    JEL: J40 J80 J81
    Date: 2021–11
  7. By: Adamecz-Völgyi, Anna
    Abstract: This paper examines the effects of increasing the compulsory school leaving age from 16 to 18 in Hungary using a difference-in-regression-discontinuities design identification strategy. While the reform increased the length of schooling, it did not decrease the probability of dropping out of secondary school, either on average or among the most at-risk group of Roma ethnic minority young people. Due to grade retentions, marginal students were older than their peers and couldn't have made it to the final grade of secondary school by age 18. Neither did the reform increase the probability of employment at age 20 and 25. I show descriptive evidence that the share of disadvantaged students increased heavily in vocational training schools -that most marginal students attended- and potentially crowded out resources. This mechanism raises concerns about using school leaving age reforms as instrumental variables for education as it may violate its monotonicity assumption.
    Keywords: compulsory school leaving age,differences-in-regression discontinuities,dropping out
    JEL: I2
    Date: 2021
  8. By: Maria Esther Oswald-Egg (ETH Zurich, Switzerland); Michael Siegenthaler (ETH Zurich, Switzerland)
    Abstract: Does better access to skilled workers reduce firms’ willingness to provide general skills training to unskilled workers? We analyze how the gradual opening of the Swiss labor market to workers from the European Union affected the number of apprenticeship positions that firms provide. We exploit that the availability of skilled workers increased more in firms close to the border because they gained unrestricted access to cross-border workers from neighboring countries. Our Difference-in-Differences estimates suggest that firm-provided training and access to skilled workers are not necessarily substitutes: open- ing the borders did not have a statistically significant effect on apprenticeship provision. We show theoretically and empirically that the small impact was the consequence of two opposing effects: the greater availability of skilled workers reduced firms’ incentive to train because the cost of hiring external labor fell. Positive impacts on firm growth worked in the opposite direction.
    Keywords: labor demand, skilled immigration, firm-provided training, apprenticeships, vocational education and training, free movement of workers, cross-border workers, recruitment, immigration policy, labor mobility, hiring costs
    JEL: J24 J63 M53
    Date: 2021–08
  9. By: Modena, Francesca (Bank of Italy); Rettore, Enrico (University of Padova); Tanzi, Giulia (Bank of Italy)
    Abstract: This paper exploits student-level administrative data on the population of Italian university students from 2006 to 2014 to analyze the effects of high performing (HP) male or female peers on individual academic performance, according to the gender of the student. The identification strategy is based on quasi-random variation in the exposure to HP peers across cohorts, within the same university and the same degree program. The impact of HP students, proxied by their high school final grade, is heterogeneous. We found that female HP peers have stronger positive effects than HP males, in particular with peers of the same gender. Moreover, there is evidence that the exposure to HP males can be even negative, especially for female students in competitive environments, such as the STEM fields, and for low ability students of both genders.
    Keywords: human capital, higher education, university performance, gender, peers
    JEL: I22 I23 C21 C35
    Date: 2021–10
  10. By: Bertacchini, Enrico (University of Torino); Bolognesi, Valentina (ISI Foundation); Venturini, Alessandra (University of Turin); Zotti, Roberto (University of Turin)
    Abstract: This paper proposes a novel approach to explore the relationship between cultural participation and subjective well-being. While most empirical research has considered such a connection using cultural and leisure activities individually or in additive terms, drawing from the sociological literature, we adopt cultural consumption profiles emerging from the variety and intensity of engagement in different cultural activities simultaneously. Using data from the 2012 Italian Multipurpose survey on households "Aspects of daily life", we first derive categories of cultural consumers through Latent Class Analysis and investigate how heterogeneity in cultural profiles is associated with overall life satisfaction and relevant domains (health, leisure, friendship relations, job and economic conditions). The results of our empirical analysis indicate a positive relationship between cultural participation and overall life satisfaction. Still, a more complex picture arises when considering all the statistically significant differences in life and domain satisfaction across cultural consumption patterns. These findings contribute to a better understanding of the role of cultural consumption habits on individual well-being and have implications for culture-led welfare policies.
    Keywords: life satisfaction, subjective well-being, cultural consumption, cultural participation, cultural activities
    JEL: I31 Z11
    Date: 2021–09
  11. By: Bazen, Stephen (Aix-Marseille University); Joutard, Xavier (Aix-Marseille University); Périvier, Hélène
    Abstract: There is a large literature on the existence of a child penalty for mothers after the birth of a child. There is little discernible effect on fathers' labour incomes, although some studies find that there is a premium. We measure the penalty due to the birth of a first child for both parents for cohorts of young adults after leaving the educational system. Using an event study approach, this paper contributes to the literature by examining the child penalty in France not only in terms of monthly earnings, but also the employment rate, working hours, hourly earnings, and other outcomes. Using on a rich dataset, we estimate child penalty by educational level and for different cohorts. We find evidence of a significant child penalty for mothers: 23% in monthly earnings overall, rising to 35% for those with secondary education only. For the 2010 cohort, we observe the same level of absolute child penalties for mothers, whereas the relative penalty has narrowed. This is due to a decrease in monthly earnings, and more precisely in employment rate of fathers before and after the birth of the child in the aftermath of the 2008 crisis.
    Keywords: child penalty, young adults, event study
    JEL: J08 J16 J13
    Date: 2021–10
  12. By: Claudio Deiana; Andrea Geraci; Gianluca Mazzarella; Fabio Sabatini
    Abstract: We show that compensation measures aimed at improving the fairness of the pandemic policy response can unintendedly nudge compliance with restrictive orders. We combine information on the distribution of resources with data tracking citizens' movements through mobile devices and navigation systems across Italian municipalities. To assess the impact of relief measures on compliance, we exploit a sharp kink schedule in the allocation of funds. The empirical analysis provides evidence that mobility decreased with transfers, suggesting that the observance of emergency rules also depends on the fairness of the pandemic policy response.
    Keywords: Compliance; Mobility; Social capital; COVID-19 policy response; Stay-at home orders; Lockdown; Regression Kink Design
    JEL: D60 H30 I38
    Date: 2021–11
  13. By: Asya Bellia
    Abstract: There exists a significant differential in life satisfaction between disabled and nondisabled people, to the disadvantage of the former. The present work considers both satisfaction and meaning of life (as different facets of happiness),investigating whether environmental accessibility mediates the relationship between disability and happiness. Furthermore, the effect of accessibility on the happiness of different categories of disabled is analysed. The environmental accessibility index is built using data from the 2012 Eurobameter survey on accessibility, while the rest of the variables come from the EU-SILC 2013, which includes an ad hoc module on well-being. Findings show that higher environmental accessibility narrows the happiness gap between disabled people and the rest, even after interaction terms between disability and economic status are introduced. Moreover, environmental accessibility has a greater impact on the happiness of older disabled people, while the opposite is true of disabled people in the highest income quartile.
    Keywords: Disability, Happiness, Accessibility
    JEL: H41 I14 I31
    Date: 2021–11–01
  14. By: Chiara Criscuolo; Peter Gal; Timo Leidecker; Giuseppe Nicoletti
    Abstract: Relying on linked employer-employee datasets from 10 countries, this paper documents that the skills and the diversity of the workforce and of managers – the human side of businesses – account on average for about one third of the labour productivity gap between firms at the productivity “frontier” (the top 10% within each detailed industry) and medium performers at the 40-60 percentile of the productivity distribution. The composition of skills, especially the share of high skills, varies the most along the productivity distribution, but low and medium skilled employees make up a substantial share of the workforce even at the frontier.High skills show positive but decreasing productivity returns. Moreover, the skill mix of top firms varies markedly across countries, pointing to the role of different strategies pursued by firms in different policy environments. We also find that managerial skills play a particularly important role, also through complementarities with worker skills. Gender and cultural diversity among managers – and to a lesser extent, among workers – is positively related to firm productivity as well. We discuss public policies that can facilitate the catch-up of firms below the frontier through skills and diversity. These cover a wide range of areas, exerting their influence through three main channels: the supply, upgrading and the matching across firms (the SUM) of skills and other human factors.
    Keywords: diversity, linked employer-employee data, managers, productivity, skills
    JEL: D24 J24 M14
    Date: 2021–12–06
  15. By: Hammer, Bernhard; Christl, Michael; De Poli, Silvia
    Abstract: Governments face a potential trade-off between provision for the growing population in retirement and the support of working-age households with low income. Using EUROMOD-based microdata from 28 countries, we (a) quantify the redistribution to the pensioner and non-pensioner populations, (b) study the position of net beneficiaries in the overall income distribution and (c) analyse how taxes and benefits affect the working-age population with low income. Our results provide novel insights into the distributive role of tax-benefit systems across Europe. Interestingly, a strong overall redistribution between households is associated with generous pensions for a portion of the retirees but negatively related to support for low-income households.
    Keywords: Redistribution,Welfare state,Inequality,Microsimulation,EUROMOD
    Date: 2021
  16. By: Leonardo Becchetti (DEF and CEIS, Università di Roma "Tor Vergata"); Gianluigi Conzo (Università di Roma "Tor Vergata")
    Abstract: We define generativity as the combination of creativity and care for others wellbeing. Based on John Stuart Mill, Robert Kennedy and Antonio Genovesi quotes we test several research hypotheses on the available waves of the European Social Survey and find that generativity is associated positively and significantly with subjective wellbeing (under the different dimensions of life satisfaction and positive affect), resilience, interpersonal trust, active citizenship and participation to political elections. Our findings are robust across survey waves, gender, age, education splits and significant in estimates considering only individuals living in the same country. With an IV approach we provide evidence that the investigated nexus hides a direct causality link from all our the dependent variables.
    Keywords: generativity, subjective wellbeing, resilience, social capital, active citizenship.
    JEL: I31 O15 Z13
    Date: 2021–11–05
  17. By: Paul David Boll; Lukas Mergele; Larissa Zierow
    Abstract: Gender pay gaps are commonly studied in populations with already completed educational careers. We focus on an earlier stage by investigating the gender pay gap among university students working alongside their studies. With data from five cohorts of a large-scale student survey from Germany, we use regression and wage decomposition techniques to describe gender pay gaps and potential explanations. We find that female students earn about 6% less on average than male students, which reduces to 4.1% when accounting for a rich set of explanatory variables. The largest explanatory factor is the type of jobs male and female students pursue.
    Keywords: Gender pay gap, university student employment, job types
    JEL: I22 I23 J16 J31
    Date: 2021
  18. By: Ary José A. Souza-Jr.
    Abstract: Do subjects’ reactions to climate change help us understand how behavior affects their well-being level? To answer, this article assesses the impact of a large set of Environmental Perceptions and Attitudes (EPA) on subjective well-being across 21 European countries, using an ordered probit model. Furthermore, it tests whether personality traits are capable to influence the relationship between EPA and well-being. The estimation uses data from the European Social Survey, along with air pollution (PM10), precipitation, waste production, and macro variables. This paper builds on Ferrer-i-Carbonell and Gowdy (2007), considering two additional groups of EPA: energy affairs and new expressions of environmental awareness. The results show that both groups have a statistically significant effect on well-being, indicating that a higher variety of EPA may influence welfare. The outcomes also indicate that personality traits partially influence the link between well-being and EPA across Europe.
    Date: 2021–11
  19. By: Serratos-Sotelo, Luis (Department of Economic History, Lund University)
    Abstract: This paper analyzes the effect of being exposed to forced migration during childhood (ages 0-5) on educational achievement at age 15 (grade 9). Using register data from the Swedish Interdisciplinary Panel, I identify children who migrated to Sweden as a consequence of the rising conflict during the disintegration of the former Yugoslavia, and follow them until age 15, when they received their grades at the end of the 9 years of compulsory education in Sweden. The results show that those who experienced forced migration performed worse in school, as measured by Math and Swedish grades and Merit Rating scores, with forced migrants achieving grades that were on average 5 (Merit Rating), 7 (Swedish), and 22 (Math) percentage points of a standard deviation lower than those of native Swedes. Forced migrants outperformed Swedes only in English, obtaining grades that were on average 12 percentage points of a standard deviation higher than did their native-born counterparts.
    Keywords: forced migration; refugees; education; early-life; Sweden
    JEL: I24 J13 J15 N34
    Date: 2021–10–13
  20. By: Bellani, Luna (University of Konstanz); Ceolotto, Stefano (Trinity College Dublin); Elsner, Benjamin (University College Dublin); Pestel, Nico (ROA, Maastricht University)
    Abstract: Does poor air quality affect decision-making? We study this question based on elections, in which millions of people decide on the same issue on the same day in different locations. We use county-level data from 64 federal and state elections in Germany over a nineteen-year period and exploit plausibly exogenous variation in ambient air pollution within counties across election dates. Our results show that a high concentration of particulate matter (PM10) on an election day significantly affects voting behavior. An increase in the concentration of PM10 by 10μg/m3 – around two within-county standard deviations – reduces the vote share of the incumbent by 2 percentage points and increases the vote share of the established opposition by 2.8 percentage points. These are strong effects, equivalent to 4% and 7% of the respective mean vote shares. We generalize these findings by documenting similar effects with data from a weekly opinion poll and a large-scale panel survey. We provide further evidence that emotions are a likely mechanism: the survey data show that poor air quality leads to greater anxiety and unhappiness, which may reduce the support for the political status quo.
    Keywords: pollution, decisions, voting
    JEL: D70 D72 D91 Q53
    Date: 2021–09
  21. By: Beniamino Pisicoli (DEF, University of Rome "Tor Vergata")
    Abstract: In this paper we investigate the influence of banking and financial diversity on stability. We compute an index of banking diversity for Italian provinces and, drawing from network theory, we propose a measure of the diversity and development of the overall provincial financial sector. Our results show that diversity in the banking and financial markets promotes greater stability. Such beneficial effects are particularly evident during periods of financial distress. We ascribe our findings to the better diversification achieved by more diverse financial systems, as documented by lower loans concentration and higher loans diversification in terms of economic destination and borrower category.
    Keywords: financial diversity; financial stability; non-performing loans; financial complexity; financial crises; banking diversity
    JEL: G01 G20 P34
    Date: 2021–11–09
  22. By: Bagues, Manuel (University of Warwick); Dimitrova, Velichka (University of Warwick)
    Abstract: We quantify the impact of COVID-19 vaccination on psychological well-being using information from a large-scale panel survey representative of the UK population. Exploiting exogenous variation in the timing of vaccinations, we find that vaccination increases psychological well-being by 0.12 standard deviation, compensating for around one half of the overall decrease caused by the pandemic. This effect persists for at least two months, and it is associated with a decrease in the perceived likelihood of contracting COVID-19 and higher engagement in social activities. The improvement is 1.5 times larger for mentally distressed individuals, supporting the prioritization of this group in vaccination roll-outs.
    Keywords: psychological well-being, COVID-19, vaccination
    JEL: I18 I31
    Date: 2021–11
  23. By: Mauro Caselli; Jasmine Mondolo; Stefano Schiavo
    Abstract: This study investigates the recent trends in labour market power in Italy and assess-es the impact of a potential minimum wage using a large sample of manufacturing firms. We show that, despite an average shift of labour market power from the own-ers to the workers, monopsony power is still widespread, especially in some sectors and regions. The introduction of a minimum wage would be beneficial to workers and the economy as it reduces the monopsony power of highly productive firms paying low wages; however, it may also have a negative impact, since firms with low wages and low labour productivity may react by reducing the number of their em-ployees or even by exiting the market. Finally, we defined that an optimal minimum wage, which minimises the negative effect and maximises the positive effect for the economy, ranges between 8.25 and 9.65 euro per hour.
    Date: 2021
  24. By: Mr. Raphael A Espinoza
    Abstract: In this paper, we estimate the aggregate and sectoral fiscal multipliers of EU Structural Investment (ESI) Funds and of public investment at the EU level. We complement these results with a specific application to the case of Slovenia. We first analyze aggregate data and find large and significant multipliers and strong crowding-in of private investment. Our main findings show that positive shocks to ESI Funds are followed by an increase in output that ranges from 1.2 percent on impact, to 1.8 percent after 1 year, and by an increase in private investment between 0.7 and 0.8 percent of GDP. We address country heterogeneity by dividing countries according to key characteristics that have been known to affect multipliers. In particular, we find higher multipliers in a group of CEE countries that are important recipients of European funds and are characterized by fixed exchange rate regimes and sound public investment governance (e.g. Croatia and Slovenia). We also complement the aggregate analysis by estimating the effect of different types of public investment and the effect of public investment on different sectors of the economy.
    Keywords: aggregate multiplier; sectoral multiplier; aggregate analysis; public investment; impact multiplier; Public investment spending; Private investment; Public employment; Manufacturing; Employment; Eastern Europe
    Date: 2021–04–30
  25. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Blekinge Institute of Technology); Arenius, Pia (RMIT University)
    Abstract: Geographical clustering (colocation) influences new firm survival; however, not all new firms within a cluster are impacted equally. In this paper, we elaborate on how the colocation of local entrepreneurs may have different influences on new firm founder’s learning depending on his/her fit, in terms of his/her experiential relatedness, to that of local entrepreneurs. We then associate such founder’s learning with the higher survival of his/her new firm. We test our hypotheses using a matched founder-firm dataset that covers the population of the knowledge-intensive business service sector in Sweden during 2001-2012. We find support for our propositions concerning the relatedness of new firm founders’ experiential background to that of local entrepreneurs. Specifically, we find that high level of relatedness to local entrepreneurs enhances the survival rate of a new firm started by a novice founder, whereas intermediate level of relatedness suits better for a new firm started by an experienced founder.
    Keywords: Colocation; Entrepreneurial learning; New firm survival; Experiential relatedness; Entrepreneurial performance
    JEL: M13
    Date: 2021–11–24
  26. By: Werner, Katharina (Ifo Institute for Economic Research); Woessmann, Ludger (University of Munich)
    Abstract: If school closures and social-distancing experiences during the Covid-19 pandemic impeded children's skill development, they may leave a lasting legacy in human capital. To understand the pandemic's effects on school children, this paper combines a review of the emerging international literature with new evidence from German longitudinal time-use surveys. Based on the conceptual framework of an education production function, we cover evidence on child, parent, and school inputs and students' cognitive and socio-emotional development. The German panel evidence shows that children's learning time decreased severely during the first school closures, particularly for low-achieving students, and increased only slightly one year later. In a value-added model, learning time increases with daily online class instruction, but not with other school activities. The review shows substantial losses in cognitive skills on achievement tests, particularly for students from disadvantaged backgrounds. Socio-emotional wellbeing also declined in the short run. Structural models and reduced-form projections suggest that unless remediated, the school closures will persistently reduce skill development, lifetime income, and economic growth and increase inequality.
    Keywords: COVID-19, school closures, education, schools, students, educational inequality
    JEL: I20 H52 J24
    Date: 2021–10
  27. By: Fabian Bald, Marcel Henkel
    Abstract: We assess the role of local public goods provision for gender gaps in the labour market. We find that higher fiscal revenues of local governments are associated with decreasing gender employment gaps in German labour market areas because it decreases labour supply for male workers at a higher rate than for female workers. The results are robust when we include instrumental variables that address the endogeneity of local public goods provision. To assess the impact of fiscal transfers across regions on gender gaps we quantify a spatial general equilibrium model with multiple types of workers, who are differently affected by local public goods provision in their labour supply decision. We find that transfers reduce disparities across regions. This goes along with smaller gender gaps in employment in treated regions because female workers are disproportionately pulled into market work and regions with low productivity.
    Keywords: gender, local public goods, labor force participation, taxes, transfers
    JEL: H4 H7 J1 J2 J6 R2 R5
    Date: 2021–09
  28. By: Suveg, Melinda (Research Institute of Industrial Economics (IFN))
    Abstract: This paper examines how changes in product market concentration, specifically firm exit, affect prices. I develop a model where firms have variable markups to show that the remaining firms increase their markups and prices after their competitors’ exit. The model predictions are tested using micro-data on Swedish firms. I use the exposure of firms to a bank, which was severely affected by the financial crisis abroad, as an instrument to identify the causal relationship between firm exit and prices. I find that the remaining firms increase their prices by 0.3 percent when firms with a combined market share of one percent exit.
    Keywords: Price setting; Market structure; Financial shocks; Firm exit
    JEL: D43 E31 E32 L13 L16 L60
    Date: 2021–11–08
  29. By: Katrin Hussinger (Department of Economics and Management, Université du Luxembourg); João N. Carvalho (Universidade NOVA de Lisboa)
    Abstract: A major source of research funding for university professors are competitive research grants. With focus on Luxembourg, we present results from a difference-in-difference analysis which show that research grants by the Luxembourg National Research Fund (FNR), the central research funding agency in Luxembourg, increase the scientific output of university professors by 31% which corresponds to one additional publication. We further show that the scientific output drops again around five years after the grant receipt. We, however, find that those university professors who realize a quality increase of their journal publications in the years following the grant receipt benefit from a long-lasting publication quality effect. benefit from a long-lasting publication quality effect.
    Keywords: competitive research grants, university professors, scientific output, difference-in-difference estimation
    JEL: I23 O38
    Date: 2021
  30. By: Plamen Nikolov; Leila Salarpour; David Titus
    Abstract: Upon arrival to a new country, many immigrants face job downgrading, a phenomenon describing workers being in jobs below the ones they have based on the skills they possess. Moreover, in the presence of downgrading immigrants receiving lower wage returns to the same skills compared to natives. The level of downgrading could depend on the immigrant type and numerous other factors. This study examines the determinants of skill downgrading among two types of immigrants - refugees and economic immigrants - in the German labor markets between 1984 and 2018. We find that refugees downgrade more than economic immigrants, and this discrepancy between the two groups persists over time. We show that language skill improvements exert a strong influence on subsequent labor market outcomes of both groups.
    Date: 2021–10
  31. By: Florio, Erminia
    Abstract: We analyze whether (correct) information provision on immigration is more effective than contact in shaping attitudes towards immigration. We collect data from a randomized experiment in 18 middle- and high-school classes in the city of Rome. Half of the classes meet a refugee from Mauritania and read a book about his story, whereas the rest of them attend a lecture on figures and numbers on immigration in Italy and the world. On average, students develop better attitudes towards immigration (especially in the case of policy preferences and the perceived number of immigrants in their country) and somewhat improve their feelings associated with immigrants after the information treatment more than they do after the contact treatment. Also, students having received the information treatment strongly adjust their knowledge on immigration. However, students' individual characteristics (sex and, to a lesser extent, age) affect treatments' relative effectiveness.
    Keywords: Attitudes towards immigration,Information Provision,Contact Theory,Randomized Experiment
    Date: 2021
  32. By: Elmallakh, Nelly
    Abstract: This paper examines fertility and labor supply responses to a French policy reform that consisted in conditioning the amount of child allowances on household income. Relying on Regression Discontinuity Design and administrative income data, the paper finds that restricting family allowance eligibility criteria decreases fertility. The results also highlight that receiving half the amount of the allowances or not receiving any leads to an increase in both male and female labor supply. Auxiliary regressions show that at least part of the decline in fertility is due to timing effects, as the fertility impact declines as women's age increases.
    Keywords: family policy,child allowances,fertility,labor supply,France
    JEL: H53 J21 J22
    Date: 2021
  33. By: Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland); Dagmara Nikulin (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This paper uses a sample of over 9.5 million workers from 22 European countries to study the intertwined effects of digital technology and cross-border production links on workers' wellbeing. We compare the social effects of technological change exhibited by three types of innovation: computerisation (software), automation (robots) and artificial intelligence (AI). To fully quantify work-related wellbeing, we propose a new methodology that corrects the information on remuneration by reference to such non-monetary factors as the work environment (physical and social), career development prospects, or work intensity. We show that workers' wellbeing depends on the type of technological exposure. Employees in occupations with high software or robots content face worse working conditions than those exposed to AI. The impact of digitalisation on working conditions depends on participation in global production. To demonstrate this, we estimate a set of augmented models for determination of working conditions, interacting technological factors with Global Value Chain participation. GVC intensification is accompanied by deteriorating working conditions - but only in occupations exposed to robots or software, not in AI-intensive jobs. In other words, we find that AI technologies differ from previous waves of technological progress - also in their impact on workers' wellbeing within global production structures.
    Keywords: digital technologies, working conditions, GVC, Global Value Chains, artificial intelligence, AI
    JEL: F1 F6 J8 O3
    Date: 2021–11
  34. By: Pagan, Ricardo; Malo, Miguel
    Abstract: In this article, we analyse loneliness trajectories for older people aged 50 or more in selected European countries by gender. We focus on the relationship between disability and disability trajectories and loneliness trajectories. We use three waves of the longitudinal SHARE database. We find that permanent loneliness is not generalised, but 31 per cent of older males and 44 per cent of females suffer from loneliness in at least one of the three waves. Disability increases loneliness persistence, especially for women. Improvements in disability decrease the risk of loneliness persistence, but this effect is smaller than for disability status and there are no clear differences by gender. The rankings of the country effects on loneliness persistence by gender provide only partial support, with Mediterranean and Eastern European countries having the highest persistence, while the lowest rates are found in Northern countries, as in the previous comparative literature on loneliness.
    Keywords: Loneliness persistence; disability persistence; disability dynamics; aging; cross-national comparison
    JEL: J10 J14 J18
    Date: 2021–11–10
  35. By: Marie-Hélène BROIHANNE (LaRGE Research Center, Université de Strasbourg)
    Abstract: This article examines the gender gap in subjective financial literacy of retail clients of a large European bank. Using a database of banking records and questionnaire answers of more than 50,000 retail clients, the gender gap in subjective financial literacy was found to be significantly higher for individuals living as part of a couple. To distinguish the respective impact of financial responsibility and subjective literacy between partners in households, the study was based on 7,382 dual-income couples for which data was matched since spouses hold a joint bank account. The findings suggest that the gender gap in subjective financial literacy between spouses is reduced because of couple consensus during spouses' joint decision-making. As 70% of couples exhibit no gender gap in subjective financial literacy, the couple characteristics that explain either a classical or an inverse subjective financial literacy gender gap are identified. We show that the heterogeneity in the gender gap in subjective financial literacy of couples is related to that of spouses' financial management styles.
    Keywords: Subjective financial literacy, Gender gap, Spouses' financial decision-making, Spouse dominance, Financial management styles
    JEL: G02 G11 G28
    Date: 2021

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