nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒07‒11
fifteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Globalization, Fertility and Marital Behavior in a Lowest-Low Fertility Setting By Osea Giuntella; Lorenzo Rotunno; Luca Stella
  2. Variation in Parenthood Wage Effect: A human capital approach By Maria Petrillo
  3. Job Satisfaction, Structure of Working Environment and Firm Size By Aysit Tansel; Saziye Gazioglu
  4. Job Location Decisions and the Effect of Children on the Employment Gender Gap By Albanese, Andrea; Nieto, Adrián; Tatsiramos, Konstantinos
  5. The impact of German public support transfers on firm finance: Evidence from the Covid-19 crisis By Gärtner, Leo; Marek, Philipp
  6. Off to a bad start: youth nonemployment and labor market outcomes later in life By Filomena, Mattia; Giorgetti, Isabella; Picchio, Matteo
  7. Tax morale and social capital: an empirical investigation among European citizens By Alessandro Cascavilla Author-Name-First Alessandro; Jordi Ripollés; Andrea Morone
  8. Corporate training and skill gaps: Did Covid-19 stem EU convergence in training investments? By Pouliakas, Konstantinos; Wruuck, Patricia
  9. Workplace Skills as Regional Capabilities: Relatedness, Complexity and Industrial Diversification of Regions By Duygu Buyukyazici; Leonardo Mazzoni; Massimo Riccaboni; Francesco Serti
  10. The causal effects of education on age at marriage and marital fertility By Cummins, Neil
  11. Happy to help: The welfare effects of a nationwide micro-volunteering programme By Paul Dolan; Christian Krekel; Helen Lee; Claire Marshall; Ganga Shreedhar; Allison Smith
  12. Income–well-being gradient in sickness and health By Kanninen, Ohto; Böckerman, Petri; Suoniemi, Ilpo
  13. Are EU firms climate-ready? Micro evidence from EIBIS By Kalantzis, Fotios; Dominguez, Sofia
  14. Industrial Robots, and Information and Communication Technology: The Employment Effects in EU Labour Markets By Stefan Jestl
  15. Learning Loss and Students’ Social Origins During the Covid-19 Pandemic in Italy By Nicola Bazoli; Sonia Marzadro; Antonio Schizzerotto; Loris Vergolini

  1. By: Osea Giuntella; Lorenzo Rotunno; Luca Stella
    Abstract: Using longitudinal data from the German Socio-Economic Panel, we analyze the effects of exposure to globalization on the fertility and marital behavior in Germany, until recently a lowest-low fertility setting. We find that exposure to greater import competition from Eastern Europe led to worse labor market outcomes and lower fertility rates. In contrast, workers in industries that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated, married men, and full-time workers and reflect changes in the likelihood of having any child (extensive margin). While there is evidence of some fertility postponement, we find significant effects on completed fertility. There is instead little evidence of any significant impact on marital behavior.
    Keywords: globalization, labor market outcomes, fertility, marriage
    JEL: F14 F16 J13
    Date: 2022
  2. By: Maria Petrillo
    Abstract: Using German Socio-Economic Panel (GSOEP) microdata this paper contributes new empirical evidence by examining the implications of motherhood and fatherhood for wages of a sample of women and men between 2005-2015. Making use, for the first time for this research question, of a difference-in-differences approach, the study uncovers inequalities among women and men in terms of parenthood wage effects. Moreover, the study takes this analysis a step further and investigates additional possible correlations between educational background (vocational versus general background) and motherhood wage gaps by exploiting, for the first time, the difference between skills acquired through a vocational educational path versus those developed following a general one, as one of the keys factors to help to shed light on the motherhood wage gap. Results support the idea that women with a vocational background suffer from a wider motherhood wage penalty if compared to those women having a general background, which is likely due to the higher rate of vocational skills depreciation.
    Keywords: motherhood, fatherhood, wage penalty, gender, inequality, education.
    Date: 2022–05–05
  3. By: Aysit Tansel (Middle East Technical University); Saziye Gazioglu (Department of Economics, Middle East Technical University, Ankara, Turkey)
    Abstract: Employees’ wellbeing is important to the firms. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. Little empirical work has been done on the relationship between structure of working environment and job satisfaction. This paper investigates the relationship between working environment, firm size and worker job satisfaction. We use a unique data of 28,240 British employees, Workplace Employee Relations Survey. In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. They are all negatively related to the firm size implying lower levels of job satisfaction in larger firms. The firm size in return is negatively related to the degree of flexibility in the working environment. The small firms have more flexible work environments. We further find that, contrary to the previous results lower levels of job satisfaction in larger firms can not necessarily be attributed to the inflexibility in their structure of working environment.
    Keywords: Job Satisfactions, Firm Size, Working Environment, Linked Employer-Employee data, Britain
    JEL: J21 J28 J29 J81
    Date: 2022–06
  4. By: Albanese, Andrea; Nieto, Adrián; Tatsiramos, Konstantinos
    Abstract: We study the effect of childbirth on local and non-local employment dynamics for both men and women using Belgian social security and geo-location data. Applying an eventstudy design that accounts for treatment effect heterogeneity, we show that 75 percent of the effect of the birth of a first child on the overall gender gap in employment is accounted for by gender disparities in non-local employment, with mothers being more likely to give up non-local employment compared to fathers. This gender specialisation is mostly driven by opposing job location responses of men and women to individual, household and regional factors. On the one hand, men do not give up non-local employment after childbirth when they are employed in a high-paid job, have a partner who is not participating in the labour market or experience adverse local labour market conditions, suggesting that fathers trade off better employment opportunities with longer commutes. On the other hand, women give up non-local jobs regardless of their earnings level, their partner's labour market status and local economic conditions, which is consistent with mothers specialising in childcare provision compared to fathers.
    Keywords: gender gap,childbirth,job location,cross-border employment,specialisation
    JEL: J13 J16 J61 C21 C23 J22 R23
    Date: 2022
  5. By: Gärtner, Leo; Marek, Philipp
    Abstract: The economic policy response to COVID-19 lockdowns included a variety of measures. Their effects on non-financial firms, however, remain unclear. To shed light on the effect of transfers, we investigate the effect of German emergency aid transfers (November-December aid), a program designed for small and medium sized firms. Using novel survey data, we exploit variation in application status to estimate its effects on the financial situation of firms. We distinguish between firms that had already used aid transfers and those firms with a pending application. Our results show that firms substantially benefited from the November-December aid program. The provision of transfers improved liquidity and access to credit for distressed firms, while decreasing credit demand. The estimates suggest that firms that had received an approval of their application for November-December aid faced a 5-percentage point lower probability of being confronted with a low liquidity buffer. We also find strong evidence, that firms substituted aid with credit, since firms with a pending application status faced an 8-percentage point higher likelihood of starting credit negotiations. Moreover, the provision of November-December aid improved the creditworthiness of firms. We can show that receiving these transfers increased the probability of obtaining a loan at the desired conditions by 14 to 18 percentage points.
    Keywords: SMEs,emergency aid,treatment effects,COVID-19,firm finance
    JEL: C14 G32 G33 H84 L25 J68
    Date: 2022
  6. By: Filomena, Mattia; Giorgetti, Isabella; Picchio, Matteo
    Abstract: We estimate the effect of nonemployment experienced by Italian youth after leaving secondary school on subsequent labor market outcomes. We focus on the impact on earnings and labor market participation both in the short- and in the long-term, up to 25 years since school completion. By estimating a factor analytic model which controls for time-varying unobserved heterogeneity, we find that the negative effect of nonemployment on earnings is especially persistent, being sizeable and statistically significant up to 25 years after school completion, for both men and women. Penalties in terms of participation last instead shorter; they disappear by the 10th year after school completion. Hence, early nonemployment operates by persistently locking the youth who get off to a bad start into low-wage jobs.
    Keywords: youth nonemployment,scarring effects,earnings,labor market participation,factor analytic model
    JEL: J01 J08 J31 J64
    Date: 2022
  7. By: Alessandro Cascavilla Author-Name-First Alessandro (Department of Economics, Universitat Jaume I, Castellón, Spain and Department of Economics, Management and Business Law, University of Bari “Aldo Moro”, Italy); Jordi Ripollés (Institute of International Economics and Department of Economics, Universitat Jaume I, Castellón, Spain); Andrea Morone (Department of Economics, Management and Business Law, University of Bari “Aldo Moro”, Italy)
    Abstract: Despite the extensive literature examining determinants of tax morale, little is still known about the relationship between the associational involvement of citizens and their willingness to pay taxes. Given the insights offered by the social capital literature regarding the role of voluntary organisations in shaping civic engagement, this study sets out to empirically investigate how membership of different types of associations could influence individual tax morale in Europe. With this in mind, we exploit the information available in the fifth wave of the European Values Study (EVS, 2017) for citizens of 34 countries. Unlike previous studies on tax morale, we classify the types of voluntary associations depending on their potential to build out-group “bridging” or in-group “bonding” social ties. In this study, to carry out the classification, three alternative approaches are considered which are based on the socio-demographic heterogeneity within associations, the interconnections between them, and a combination of both. Our findings show that, after controlling for different individual characteristics and country-specific unobserved heterogeneity, those survey respondents involved in bridging associations tend to exhibit higher levels of tax morale, while the opposite is found for bonding associations. The results are quite robust for the three approaches and different estimation strategies, including an instrumentalvariables methodology. In view of our findings, policies aimed at incentivising volunteering activities in more connected associations and in those that include more heterogeneous members seem appropriate to promote the public spiritedness of citizens.
    Keywords: tax morale; social capital; volunteering
    JEL: C25 H26
    Date: 2022
  8. By: Pouliakas, Konstantinos; Wruuck, Patricia
    Abstract: European firms have increasingly invested in training of employees but differences across countries and types of firms remain - and the COVID-19 shock may have exacerbated them. This report analyses European firms' investment in training over the last six years examining trends, factors supporting training investment as well as the impact of the COVID-19 shock. We base the empirical analysis on a unique dataset, the European Investment Bank's Investment Survey (EIBIS), which allows tracking corporate training investment on a yearly basis. To understand dynamics underpinning firms' decision to invest in their workforce, we examine transition patterns and employ dynamic panel data estimation. Finally, we analyze the impact of the COVID-19 pandemic on firms' investment in workforce training and transitions in and out of training. We find that despite a slow upward trend in training investment observed in recent years, supported by labour market recovery, differences across firms and countries have persisted. The pandemic risks aggravating these, through its asymmetric impact on labour markets and differences in corporate innovation, firm structure and resilience. While firm training can be an important element for firms and their workforce to adjust to the post-pandemic environment, asymmetries in training investment could make it harder for those already lagging. The paper concludes with a discussion of policy implications.
    Date: 2022
  9. By: Duygu Buyukyazici; Leonardo Mazzoni; Massimo Riccaboni; Francesco Serti
    Abstract: The literature reaches a unanimous agreement that industrial diversification is path-dependent because new industries build on preexisting capabilities of regions that are partly embodied and reflected in the skills of regions’ workforce. This paper explicitly accounts for regional capabilities as workforce skills to build skill relatedness and complexity measures, skill-spaces, for 107 Italian regions for the period 2013-2019. Data-driven techniques we use reveal that skill-spaces form two highly polarised clusters into social-cognitive and technical-physical skills. We show that industries have a higher (lower) probability of developing comparative advantage if their required skill set is (not) similar to those available in the region regardless of the skill type. We find evidence that similarity to technical-physical skills and higher complexity in social cognitive skills yields the highest probabilities of regional competitive advantage.
    Keywords: Skill relatedness; Economic complexity; Industrial specialisation; Regional capabilities; Regional diversification.
    JEL: J24 O18 R10 R23
    Date: 2022–06
  10. By: Cummins, Neil
    Abstract: The negative association of education and fertility, over time and between countries, is a central stylized fact of social science. Yet we have scant evidence on whether this is, or is not, causal. Using the universe of vital registration index data from England, 1912 to 2007, I first show that it is possible, using unique names, to construct a demographically and socioeconomically representative sample of 1.5 million women. Historical record linkage of women is typically not attempted but is possible here because of the unique characteristics of English civil registration. I then exploit the natural experiment of sharp discontinuities in who was affected by compulsory schooling law changes in 1947 and in 1972, which exogenously and effectively raised the minimum school leaving age. A Regression Discontinuity design, executed on the individual data, identifies the causal effect of education on age at marriage and fertility. Education may have raised age at marriage in 1972. However one extra year of education at 15 or 16 has a zero causal effect on marital fertility.
    Keywords: fertility; education; causal effects; demography; economic history; labor economics
    JEL: N0
    Date: 2022–06
  11. By: Paul Dolan; Christian Krekel; Helen Lee; Claire Marshall; Ganga Shreedhar; Allison Smith
    Abstract: There is a strong suggestion from the existing literature that volunteering improves the wellbeing of those who give up their time to help others, but much of it is correlational and not causal. In this paper, we estimate the wellbeing benefits from volunteering for England's National Health Service (NHS) Volunteer Responders programme, which was set up in response to the Covid-19 pandemic. Using a sample of over 9,000 volunteers, we exploit the oversubscription of the programme and the random assignment of volunteering tasks to estimate causal wellbeing returns, across multiple counterfactuals. We find that active volunteers report significantly higher life satisfaction, feelings of worthwhileness, social connectedness, and belonging to their local communities. A social welfare analysis shows that the benefits of the programme were at least 140 times greater than its costs. Our findings advance our understanding of the ways in which pro-social behaviours can improve personal wellbeing as well as social welfare.
    Keywords: subjective wellbeing, volunteering, pro-social action, quasi-natural experiment, social welfare analysis, Covid-19
    Date: 2021–05–31
  12. By: Kanninen, Ohto; Böckerman, Petri; Suoniemi, Ilpo
    Abstract: We propose a method of studying the value of insurance. For this purpose, we analyze well-being of the same individuals, comparing sick and healthy years in German panel survey data on life satisfaction. To impose structure on the income–wellbeing gradient, we fit a flexible utility function to the data, focusing on the differences in marginal utility in the sick and the healthy state, by allowing for a “fixed cost of sickness”. We find that marginal utility of income is higher in the sick state. We use our estimates to gauge the value of sickness insurance for Baily-Chetty type optimal policy calculations. We also show that the income–wellbeing gradient has steepened over time in Germany and we use the fitted model to characterize this change.
    Keywords: life satisfaction state dependence risk aversion social insurance optimal benefits sickness absence
    JEL: C13 H55 I13
    Date: 2022–06–02
  13. By: Kalantzis, Fotios; Dominguez, Sofia
    Abstract: This study uses unique firm-level data from EIBIS to identify EU firms' climate strategies and their associated factors. To do so, we initially run a clustering analysis that results in five distinct clusters in line with the literature and then investigate the role of various firms' characteristics in their adoption based on a multi-logit regression. Our findings show that almost half of the EU firms adopt either "wait-and-see" strategies or plan to invest in tackling climate change risks. More climate-friendly strategies appear to be positively associated with the awareness of climate-related risks, especially with firms that see the transition to a lowcarbon future as an opportunity. Similarly, those strategies are followed by large firms that are innovative, face fewer credit constraints and operate in an environment where there is a strong push for climate actions from various stakeholders. These findings are valuable as they can guide policymakers on supporting firms' transformation to play their part, as an integral part of our society, in the road to a clean, affordable, and secure energy future.
    Keywords: EIBIS,climate strategies,climate change risks,perception analysis,clustering analysis
    Date: 2022
  14. By: Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper explores the effects of industrial robots and information and communication technology (ICT) on regional employment in EU countries. The empirical analysis relies on a harmonised comprehensive regional dataset, which combines business statistics and national and regional accounts data. This rich dataset enables us to provide detailed insights into the employment effects of automation and computerisation in EU regions for the period 2001-2016. The results suggest relatively weak effects on regional total employment dynamics. However, employment effects differ between manufacturing and non-manufacturing industries. Industrial robots show negative employment effects in local manufacturing industries, but positive employment effects in local non-manufacturing industries. While the negative effect is concentrated in particular local manufacturing industries, the positive effect operates in local service industries. IT investments show positive employment effects only in local manufacturing industries, while CT investments are shown to be irrelevant for employment dynamics. In contrast, software and database investments have had a predominantly negative impact on local employment in both local manufacturing and non-manufacturing industries.
    Keywords: Industrial robots, ICT, EU labour markets, employment effects
    JEL: J23 L60 O33 R11
    Date: 2022–06
  15. By: Nicola Bazoli; Sonia Marzadro; Antonio Schizzerotto; Loris Vergolini
    Abstract: The aim of this paper is twofold. First, it is intended to establish the intensity of learning loss in reading and mathematics experienced in Italy by fifth, eighth and thirteenth graders because of school closures owing to the Covid-19 pandemic. Second, it aims to demonstrate whether school closures have or have not affected the educational inequalities associated with the social position of the students’ families, their geographic area of residence, their migrant status and their high school track. To estimate these two possible effects, we exploit INVALSI data collected in school years 2018/2019 and 2020/2021 and rely on a counterfactual approach based on coarsened exact matching, where students belonging to the 2020/21 cohort represent the treated group and those of the 2018/19 cohort make up the control group. Our results indicate that the learning loss is definitely severe among students attending grade thirteen and eight, while it is less pronounced and involves only mathematics among fifth graders. Moreover, according to our hypotheses, the intensity of the learning loss turns out to be substantially the same across social strata of students’ origins and their remaining ascriptive traits.
    Keywords: Learning loss, Social inequalities, Covid-19, Italy
    JEL: I21 I24
    Date: 2022–06

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