nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒03‒14
twelve papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Does Over-Education Raise Productivity And Wages Equally ? The Moderating Role Of Workers’ Origin And Immigrants’ Background By Valentine Jacobs; François Rycx; Mélanie Volral
  2. Estimating conditional treatment effects of EIB lending to SMEs in Europe By Alessandro Barbera; Áron Gereben; Marcin Wolski
  3. Market forces in Italian Academia today (and yesterday) By Chiara Zanardello
  4. “Since You’re So Rich, You Must Be Really Smart”: Talent, Rent Sharing, and the Finance Wage Premium By Michael Böhm; Daniel Metzger; Per Strömberg
  5. To Work or Not to Work? Effects of Temporary Public Employment on Future Employment and Benefits By Mörk, Eva; Ottosson, Lillit; Vikman, Ulrika
  6. Leadership skills and completed fertility among males: a study based on data from Swedish registries By Steffen Peters; Kieron J. Barclay
  7. The effect of international accreditations on students’ revealed preferences: Evidence from French Business schools By Julien Jacqmin; Mathieu Lefebvre
  8. Living in Rural Areas and Self-Employment By Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
  9. How does economic policy uncertainty affect corporate debt maturity? By Li, Xiang
  10. Differential Patterns between Private and Public Sector Wages in Spain By de León, Alba Couceiro; Dolado, Juan J.
  11. Limbo or Leverage? Asylum Waiting and Refugee Integration By Aslund, Olof; Engdahl, Mattias; Rosenqvist, Olof
  12. The Covid-19 pandemic and school closure: learning loss in mathematics in primary education By Dalit Contini; Maria Laura Di Tommaso; Caterina Muratori; Daniela Piazzalunga; Lucia Schiavon

  1. By: Valentine Jacobs (Université de Mons (Soci&ter) and Université libre de Bruxelles (CEBRIG and DULBEA)); François Rycx (Université libre de Bruxelles (CEBRIG and DULBEA), GLO, IRES, IZA, Soci&ter); Mélanie Volral (Université de Mons (Soci&ter) and DULBEA)
    Abstract: We provide first evidence of the impact of over-education, among natives and immigrants, on firmlevel productivity and wages. We use Belgian linked panel data and rely on the methodology from Hellerstein et al. (1999) to estimate ORU (over-, required, and under-education) equations aggregated at the firm level. Our results show that the over-education wage premium is higher for natives than for immigrants. However, since the differential in productivity gains associated with over-education between natives and immigrants outweighs the corresponding wage premium differential, we conclude – based on OLS and dynamic GMM-SYS estimates – that over-educated native workers are in fact underpaid to a greater extent than their over-educated immigrant counterparts. This conclusion is refined by sensitivity analyses, when testing the role of immigrants’ background (e.g. region of birth, immigrant generation, age at arrival in the host country, tenure).
    Keywords: Immigrants, over-education, productivity, wages, linked panel data, Belgium
    JEL: J24 J71
    Date: 2022–02–07
  2. By: Alessandro Barbera; Áron Gereben; Marcin Wolski
    Abstract: We estimate heterogeneous treatment effects of the EIB fnancial support on European firms between 2008 and 2015. The relevant control groups are created with propensity score matching and the effects are estimated in a difference-in-differences framework, controlling for firm-level and country-sector-year fixed effects. We find that the positive effects of EIB-supported lending on job creation and investments were larger for smaller and younger firms. Moreover, we find evidence that longer maturities and more advantageous loan pricing are associated with larger employment and investment effects, while no larger impact is observed for larger loan volumes. Overall, the results suggest that benefits of the EIB support are rather observed on an intensive, rather than on an extensive, margin.
    Keywords: SMEs, EIB, intermediated loans, impact assessment, conditional treatment effects, difference-in- differences.
    JEL: G38 G21 G23
    Date: 2022–02
  3. By: Chiara Zanardello (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: I investigate the operation of the academic market in Italy, mapping current scholars’ location choices. I build a new dataset of current professors, associating each scholar with a composite indicator of their quality. The analysis includes the quality of the university and the features of the city where the institution is located. I estimate the strength of different factors: gravity (distance), agglomeration (scholars are attracted to higher quality universities), selection (better scholars travel longer distances), and sorting (the better the scholar, the more the quality of universities is weighted). I find that all of these factors have an effect, and do not vary according to scholars’ gender. I find a greater expected utility for scholars in choosing private universities over public ones, through a consistent nesting procedure. Comparing these forces to historical trends in Italian academia, the sorting effect delineates a new momentum for the current academic market in Italy.
    Keywords: Human capital, Academic market, Universities, Scholars, Sorting, Italy
    JEL: I23 O15 N34 N33
    Date: 2022–02–10
  4. By: Michael Böhm (University of Bonn, IZA, and Swedish House of Finance); Daniel Metzger (Erasmus University of Rotterdam, SHoF, ECGI, and Financial Markets Group); Per Strömberg (Stockholm School of Economics(SSE), SHoF, ECGI, and CEPR)
    Abstract: Financial sector wages have increased extraordinarily over the last decades. We address two potential explanations for this increase: (1) rising demand for talent and (2) firms sharing rents with their employees. Matching administrative data of Swedish workers, which include unique measures of individual talent, with financial information on their employers, we find no evidence that talent in finance improved, neither on average nor at the top. The increase in relative finance wages is present across talent and education levels, which together can explain at most 20% of it. In contrast, rising financial sector profits that are shared with employees account for up to half of the relative wage increase. The limited labor supply response may partly be explained by the importance of early-career entry and social connections in finance. Our findings alleviate concerns about “brain drain” into finance but suggest that finance workers have captured rising rents over time.
    Keywords: Industry Wage Premia; Talent Allocation; Rent Sharing; Earnings Inequality; Compensation in Financial Sector
    JEL: J24 J31 G20
    Date: 2022–02
  5. By: Mörk, Eva (Uppsala University); Ottosson, Lillit (Uppsala University); Vikman, Ulrika (IFAU)
    Abstract: We evaluate a temporary public sector employment program targeted at individuals with weak labor market attachment, applying dynamic inverse probability weighting to account for dynamic selection. We show that the program is successful in increasing employment and reducing social assistance. However, being at a regular workplace seems crucial: we find negative employment effects for participants employed at a workplace created especially for the purpose. The decrease in social assistance is to some extent countered by an increase in the share receiving unemployment insurance benefits, indicating that municipalities are able to shift costs from the local to the central budget.
    Keywords: public sector employment programs, social assistance, cost-shifting, dynamic inverse probability weighting
    JEL: H75 I38 J45
    Date: 2022–02
  6. By: Steffen Peters (Max Planck Institute for Demographic Research, Rostock, Germany); Kieron J. Barclay (Max Planck Institute for Demographic Research, Rostock, Germany)
    JEL: J1 Z0
    Date: 2022
  7. By: Julien Jacqmin (NEOMA - Neoma Business School); Mathieu Lefebvre (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper evaluates how three different international accreditations for business schools (AACSB, EQUIS and AMBA) affect student preferences, expressed via enrollment decisions. Focusing on the French context, we build a relative preference indicator to compare schools using data collected by the central clearinghouse that allocates students to schools. We observe that all three accreditations positively and significantly influence students, but that the impact of the AACSB accreditation is larger than the other two accreditations. Having an AACSB accreditation is equivalent to moving up four places in rankings by L'étudiant magazine, whereas the impact of having EQUIS or AMBA is similar to moving up two places. We also find a sizeable "triple crown" effect, meaning that the three accreditations tend to complement each other. Our results are robust to different ways of assessing potential self-selection into accreditation.
    Keywords: Business schools,Accreditations,Enrollment
    Date: 2021–12
  8. By: Belloc, Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of La Rioja)
    Abstract: This paper examines whether workers living in rural areas are more likely to be self-employed, compared with those in urban areas. We provide evidence for 35 European countries, using the European Working Conditions Survey for the year 2015. We also study the time devoted to market work, and monthly earnings, of self-employed workers in rural and urban areas. Results show that workers in rural areas are more likely to be self-employed than workers in urban areas, although engaging in self-employment in rural areas is associated with significantly lower monthly incomes. We also report differences by welfare state regime. Self-employment is considered a key mechanism to compensate for the difficulty of developing in rural areas, and this paper shows that workers in rural areas in Europe are more likely to be self-employed, despite more challenging working conditions.
    Keywords: rural areas, self-employment, europe, earnings, work hour
    JEL: E24 L26 O18
    Date: 2022–02
  9. By: Li, Xiang
    Abstract: This paper investigates whether and how economic policy uncertainty affects corporate debt maturity. Using a large firm-level dataset for four European countries, we find that an increase in economic policy uncertainty is significantly associated with a shortened debt maturity. Moreover, the impacts are stronger for innovation-intensive firms. We use firms' flexibility in changing debt maturity and the deviation to leverage target to gauge the causal relationship, and identify the reduced investment and steepened term structure as the transmission mechanisms.
    Keywords: capital structure,corporate investment,debt maturity,economic policy uncertainty
    JEL: D81 G32
    Date: 2022
  10. By: de León, Alba Couceiro (Universidad Carlos III de Madrid); Dolado, Juan J. (Universidad Carlos III de Madrid)
    Abstract: This paper studies the wage differentials between the public and private sectors in Spain, as well as its distribution across different educational levels and by gender. To do so, the well-known Oaxaca-Blinder decomposition of mincerian wage regressions is applied for both sectors, breaking down the (public-private) wage gap into a component explained by differences in characteristics and another one capturing differences in returns to those characteristics. Data is drawn from the Wage Structure Survey by INE for 2010, 2014 and 2018. The main findings are: (i) strong wage compression by skills for all workers, and (ii) a female wage premium in the private sector. Both empirical results are rationalised by means of a monopoly-union wage model with monopsonistic features and female statistical discrimination.
    Keywords: public-private wage gap, private sector, public sector, monopsony, unions
    JEL: J31 J38 J42 J45
    Date: 2022–02
  11. By: Aslund, Olof (Uppsala University); Engdahl, Mattias (IFAU); Rosenqvist, Olof (IFAU)
    Abstract: We study the impact of asylum waiting, exploiting a rapid increase in processing times for asylum seekers to Sweden. Longer waiting slows down integration. Accumulated earnings during the first four years after application are 2.3 percent lower per added month of waiting. The impact is due to delay rather than negative effects of waiting per se. There is no evidence of detrimental effects on psychiatric or other forms of health. From the date of asylum, those who have waited longer perform better in the labor market and are more likely to start advanced language training and labor market programs.
    Keywords: asylum waiting, labor market, health
    JEL: F22 J15 J68
    Date: 2022–02
  12. By: Dalit Contini; Maria Laura Di Tommaso; Caterina Muratori; Daniela Piazzalunga; Lucia Schiavon
    Abstract: Italy was the first Western country hit by Covid-19 in February 2020, responding with a tight lockdown and full school closure until the end of the school year. This paper estimates the effect of the pandemic and school closure on the math skills of primary school pupils in Italy. We compare the learning achievements of two cohorts of pupils, the pre-Covid and the Covid cohort. For both cohorts, we match scores on the national standardised assessment in grade 2 with scores on a standardised test delivered by the researchers at the end of grade 3. The pandemic had a large negative impact on the pupils' performance in mathematics (-0.19 standard deviations). Among children of low-educated parents, the learning loss was larger for the best-performing ones (up to -0.51 s.d.) and for girls (-0.29 s.d.).
    Keywords: COVID-19, school closure, learning loss, mathematics, standardised tests, inequality, primary school
    JEL: I21 I24
    Date: 2021

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