nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒08‒15
23 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Second-generation immigrants and native attitudes toward immigrants in Europe By Oscar Barrera; Isabelle Bensidoun; Anthony Edo
  2. Refugees, Right-Wing Populism and Propaganda: Evidence from the Italian Dispersal Policy By Francesco Campo; Sara Giunti; Mariapia Mendola
  3. Job Satisfaction, Structure of Working Environment and Firm Size By Tansel, Aysit
  4. Caring for Carers? The Effect of Public Subsidies on the Wellbeing of Unpaid Carers By Costa-Font, Joan; D’Amico, Francesco; Vilaplana-Prieto, Cristina
  5. One step forward and three steps back: pros and cons of a flat tax reform By Di Caro, Paolo; Figari, Francesco; Fiorio, Carlo; Manzo, Marco; Riganti, Andrea
  6. Does Your Doctor Matter? Doctor Quality and Patient Outcomes By Rita Ginja; Julie Riise; Barton Willage; Alexander Willén
  7. How does intrahousehold bargaining power impact labor supply? European cross-country evidence (2004-2019) By Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
  8. Digital adoption and productivity: understanding micro drivers of the aggregate effect By Natália Barbosa; Ana Paula faria
  9. Biased survival expectations and behaviours: does domain specific information matter? By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  10. Market Participation:comparing the secondgeneration of migrants fromEU countries and East Europe By Rinaldo Naci
  11. Off to a Bad Start: Youth Nonemployment and Labor Market Outcomes Later in Life By Filomena, Mattia; Giorgetti, Isabella; Picchio, Matteo
  12. Job Creation and Destruction in the Digital Age: What about Portugal? By Anabela M. Santos; Javier Barbero Jimenez; Andrea Conte
  13. Creditworthiness and buildings' energy efficiency in the Italian mortgage market By Billio, Monica; Costola, Michele; Pelizzon, Loriana; Riedel, Max
  14. Identifying Risk-based Selection in Social Insurance: New Approaches and Findings By Mette Ejrnæs; Stefan Hochguertel
  15. The Long-Term Effects of Hospitalization on Health Care Expenditures: An Empirical Analysis for the Young-Old Population. By Irene Torrini; Claudio Lucifora; Antonio Russo
  16. Cultural Origins of Investment Behavior By Andreas Ek; Gunes Gokmen; Kaveh Majlesi
  17. Personality Traits and Cognitive Ability in Political Selection By Markus Jokela; Jaakko Meriläinen; Janne Tukiainen; Åsa von Schoultz
  18. Do school reforms shape study behavior at university? Evidence from an instructional time reform By Jakob Schwerter; Nicolai Netz; Nicolas H\"ubner
  19. Can decentralisation help address poverty and social exclusion in Europe? By Vassilis Tselios; Andres Rodriguez-Pose
  20. Is digital government facilitating entrepreneurship? A comparative statics analysis By Joana Costa; Luís Carvalho
  21. The Optimal Number of Tax Audits: Evidence from Italy By Daniele Spinelli; Paolo Berta; Alessandro Santoro
  22. Working Hour Reform, Labor Demand and Productivity By Kentaro Asai
  23. It ain’t where you’re from it’s where you’re at: firm effects, state dependence, and the gender wage gap By Sabrina Di Addario; Patrick Kline; Raffaele Saggio; Mikkel Soelvsten

  1. By: Oscar Barrera; Isabelle Bensidoun; Anthony Edo
    Abstract: This paper investigates the role played by immigrants and their children in shaping native attitudes toward immigrants in the European Union. By exploiting the 2017 Special Eurobarometer on immigrant integration, we show that countries with a relatively high share of immigrants are more likely to believe that immigrants are a burden on the welfare system and worsen crime. In contrast, native opinions on the impact of immigration on culture and the labor market are unrelated to the presence of immigrants. We also find that the effects of second-generation immigrants on pro-immigrant attitudes toward security and fiscal concerns are positive (as opposed to first-generation immigrants). Finally, we find no impact of the immigrant share on the attitudes of natives supporting far-left or left political parties, while it is the most negative among respondents affiliated with far-right parties.
    Keywords: Immigration;Second-generation Immigrants;Attitudes toward Immigrants;Public Opinion
    JEL: J15 F22 P16
    Date: 2022–06
  2. By: Francesco Campo; Sara Giunti; Mariapia Mendola
    Abstract: This paper examines how the 2014-2017 ‘Refugee Crisis’ in Italy affected voting behavior and the rise of right–wing populism in national Parliamentary elections. We collect novel administrative data across all Italian municipalities and leverage exogenous variation in refugee resettlement induced by the Dispersal Policy. We find a positive and significant effect of the share of asylum seekers on support for radical-right anti-immigration parties. The effect is heterogeneous across municipality characteristics, yet robust to dispersal policy features. We provide causal evidence that the anti–immigration backlash is not rooted in adverse economic effects, while it is triggered by radical–right propaganda.
    Keywords: Immigration, Refugee Crisis, Voting Behavior, Dispersal Policy, Propaganda.
    JEL: D72 F22 O15 P16
    Date: 2022–04
  3. By: Tansel, Aysit
    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. This is the first study that explore the effect of work amenities. 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
  4. By: Costa-Font, Joan (London School of Economics); D’Amico, Francesco (CEP, London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia)
    Abstract: We study the effect of long-term care (LTC) subsidies and supports on the wellbeing of unpaid caregivers. We draw on evidence from a policy intervention, that universalized previously means-tested caregiving supports in Scotland, known as free personal care (FPC). We document causal evidence of an increase in the well-being (happiness) of unpaid carers after the introduction of FPC. Our estimates suggest economically relevant improvements in the happiness (12pp increase in subjective wellbeing) among caregivers exposed to FPC and that provide at least 35 hours of care per week. Consistently, these results are larger among women and non-actively employed caregivers (17pp increase in happiness). Estimates are not driven by selection into caregiving (we find similar wellbeing effects among caregivers at baseline and caregivers throughout the sample), and are driven by income effects of FPC among caregivers.
    Keywords: caregiver's wellbeing, subjective wellbeing, long-term care subsidies, caregiving, Scotland
    JEL: J22
    Date: 2022–06
  5. By: Di Caro, Paolo; Figari, Francesco; Fiorio, Carlo; Manzo, Marco; Riganti, Andrea
    Abstract: We use a rich administrative dataset on individual tax returns from 2008 to 2015 to analyse the behavioural and distributive effects of a flat tax (FT) reform introduced in 2011 for residential property income in Italy replacing the progressive personal income tax. Linking a panel of individual tax data with cadastral property records, and using a difference-in-difference identification strategy, we address five research questions: (i) does the FT increase the probability of declaring a positive rental income to the tax authorities? (ii) does the FT increase the declared tax base? (iii) is the reduced tax burden shared with the tenant? (iv) does the FT affect the overall tax revenue? (v) who are the gainers of the policy? The estimated intention-to-treat effects suggest that the decrease of tax evasion is limited whereas tax burden reduction is large, it is not shared with tenants and it mostly benefits top-income taxpayers. Overall, top 1% of property owners reap about 20% of the overall lost tax revenues.
    Keywords: Flat tax reform; administrative data; tax evasion; income distribution
    JEL: D12 H24 H25
    Date: 2022–07–01
  6. By: Rita Ginja (University of Bergen); Julie Riise (University of Bergen); Barton Willage (University of Colorado--Denver); Alexander Willén (Norwegian School of Economics, CESifo, and UCLS)
    Abstract: We estimate doctor value-added and provide evidence on the distribution of physician quality in an entire country, combining rich population-wide register data with random assignment of patients to general practitioners (GPs). We show that there is substantial variation in the quality of physicians, as measured by patients’ post-assignment mortality, in the primary care sector. Specifically, a one standard deviation increase in doctor quality is associated with a 12.2-percentage point decline in a patient’s two-year mortality risk. While we find evidence of observable doctor characteristics and practice styles influencing a GP’s value-added, a standard decomposition exercise reveals that most of the quality variation is driven by unobserved differences across doctors. Finally, we show that patients are unable to identify who the high-quality doctors are, and that patient-generated GP ratings are uncorrelated with GP value-added. Using a lower bound of the predicted value of an additional life year in Norway ($35,000), our results demonstrate that replacing the worst performing GPs (bottom 5 percent of the VA distribution) with GPs of average quality generates a social benefit of $27,417 per patient, $9.05 million per GP, or $934 million in total. At the same time, our results show that higher-quality GPs are associated with a lower per-patient cost.
    Keywords: value-added, health behaviors, mortality rate
    JEL: H75 I11 I14 J18
    Date: 2022–06
  7. By: Belloc, Ignacio; Molina, José Alberto; Velilla, Jorge
    Abstract: This paper analyzes how intrahousehold bargaining power impacts labor supply, for seventeen European countries. To that end, we estimate a collective model using the European Union Statistics on Income and Living Conditions for the period 2004-2019, and we study the validity of several potential distribution factors; that is to say, variables that impact labor supply only through intrahousehold bargaining power. Results show some degree of heterogeneity in the responses of labor supply to intrahousehold bargaining power. Spouses' education and the age gap operate as distribution factors in central European countries, such as Austria, Belgium, France, Luxembourg, and Switzerland. On the other hand, in the Mediterranean South countries, the share of unearned income of the wife operates as a distribution factor in Italy, Portugal, and Spain, and in countries of Eastern Europe (Czech Republic, Hungary, Latvia, and Lithuania), the sex ratio, wives' non-labor income share, spouses' age and education gap, and the fertility rate all operate as distribution factors. In northern economies, such as Denmark and Estonia, we find evidence for share of unearned income, age gap, and fertility rate, while in islands, such as Ireland and the United Kingdom, the sex ratio, the share of unearned income, the age and education gap, and the fertility rate are suitable bargaining power variables. The results are consistent with theoretical sharing rules, and distribution factors that empower a given spouse are mainly positively correlated with increases in the share of income they attract from intrahousehold bargaining.
    Keywords: household labor supply,collective model,distribution factors,EU-SILC
    JEL: D13 J22
    Date: 2022
  8. By: Natália Barbosa (Universidade do Minho); Ana Paula faria (Universidade do Minho)
    Abstract: Digital technologies have the scope to engender positive effects on productivity at firm and aggregate level. However, empirical evidence and theoretical contributions are ambiguous as mixed findings and diverse explanations have been put forward. We use a rich and representative sample of Portuguese firms over the period 2014-2019 to empirically assess the relationship between digital technologies adoption and productivity. Based on estimations over the entire distribution of firm’s productivity, we find that heterogeneous digital technologies affect differently the dynamics of productivity and the convergence to the frontier. This leads to mixed findings with scope to diverse impact in the aggregate productivity. Moreover, positive and significant effects on productivity require an upgrading on the degree of sophistication and complementarity among digital technologies and benefit from the ability of firms to interact and learn with digitalised peers in the same industry.
    Keywords: Digital technologies, Productivity, Spillover effects
    JEL: L20 H81 L25
    Date: 2022–06
  9. By: Costa-Font, Joan; Vilaplana-Prieto, Cristina
    Abstract: We study biased survival expectations across two domains and examine whether such biased expectations influence health and financial behaviors. Combining individual-level longitudinal data, retrospective, and end of life data from several European countries for more than a decade, we estimate time-varying individual level bias in ‘survival expectations' (BSE) at the individual level and compare it biased ‘meteorological expectations' (BME). We exploit variation in an individual's family history (parental age at death) to estimate the effect of BSE on health and financial behaviors and compare it to BME, and other tests to discuss whether the effect of BSE results from the effect of private information. We find that BSE increases the probability of adopting less risky behaviors and financial behaviors. We estimate that a one standard deviation increase in BSE reduces the average probability of smoking by 48% and holding retirement accounts by 69%. In contrast, BME barely affects healthy behaviors, and is only associated with a change in some financial behaviors.
    Keywords: biased expectations; survival expectations; meteorological expectations; longevity optimism; private information; health behaviour; financial behaviour; Springer deal
    JEL: I18 D14 G22
    Date: 2022–07–25
  10. By: Rinaldo Naci (Department of Economics, University Of Venice CÃ Foscari)
    Abstract: This paper compares and evaluates the second generation of immigrants participating in the financial market with respect to their country of origin and in comparison to natives. Financial market participation differs significantly across countries, and the cultural dimensions could be a potential factor for that. In order to assess if this dimension matters, we exploited the influence that the socialist regime has had on the citizen of the East European countries. These individuals have grown a particular institutional context that has shaped a different culture regarding Western European countries. We rely on this heterogeneity and its intergenerational transmission to look for differences in the financial market participation. We show how simple theoretical models include in their specification coefficient for risk aversion, time preference, and trust. They can be the channel through which the cultural dimensions matter in the financial market participation. We show no difference in the financial market participation between the second generation of immigrants from EU countries and natives. At the same time, this difference is present when we compare them to the second generation from East European countries. Risk aversion and labor income seems to play the primary role in this heterogeneity in the financial market participation.
    Keywords: Financial market, Portfolio choice, Immigration, Culture, SHARE
    JEL: G11 G41 J15
    Date: 2022
  11. By: Filomena, Mattia (Marche Polytechnic University); Giorgetti, Isabella (Marche Polytechnic University); Picchio, Matteo (Università Politecnica delle Marche, Ancona)
    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: 2022–06
  12. By: Anabela M. Santos (Comissão Europeia); Javier Barbero Jimenez (Comissão Europeia Author-3-Name: Simone Salotti; Comissão Europeia); Andrea Conte (Comissão Europeia)
    Abstract: We assess the effect of digitalisation on employment for the European Union countries, and Portugal in particular, using data for the 1995-2019 period. We estimate an augmented labour demand function derived from a Constant Elasticity of Substitution (CES) cost function to test for a capital-labour substitution effect, distinguishing between digital and traditional capital. The results point towards a positive impact of digital investments on total employment, but the effects are heterogeneous depending on the different employment categories. In particular, high-skilled jobs benefit from digitalisation at the expense of medium- and low-skilled ones. Results for Portugal also show evidence of an overall positive effect of digital investments on employment, showing that an increase of €100.000 in the stock of digital technologies is associated with an increase of 4.6 jobs.
    Keywords: Digitalisation; Employment; Skills; Europe; Portugal
    JEL: O33 J24 O52
    Date: 2022–06
  13. By: Billio, Monica; Costola, Michele; Pelizzon, Loriana; Riedel, Max
    Abstract: Energy efficiency represents one of the key planned actions aiming at reducing greenhouse emissions and the consumption of fossil fuel to mitigate the impact of climate change. In this paper, we investigate the relationship between energy efficiency and the borrower's solvency risk in the Italian market. Specifically, we analyze a residential mortgage portfolio of four financial institutions which includes about 70,000 loans matched with the energy performance certificate of the associated buildings. Our findings show that there is a negative relationship between a building's energy efficiency and the owner's probability of default. Findings survive after we account for dwelling, household, mortgage, market control variables, and regional and year fixed effect. Additionally, a ROC analysis shows that there is an improvement in the estimation of the mortgage default probability when the energy efficiency characteristic is included as a risk predictor in the model.
    Date: 2022
  14. By: Mette Ejrnæs (University of Copenhagen); Stefan Hochguertel (Vrije Universiteit Amsterdam)
    Abstract: We study risk-based selection into a voluntary unemployment insurance (UI) scheme. To disentangle behavioral effects from selection, we exploit variation in the sign-up induced by an early retirement scheme embedded into the UI system. We combine an event study with a difference-in-difference approach applied to Danish register data to quantify the selection. We find that individuals who sign up for UI are negatively selected in terms of subsequent unemployment. However, we find important heterogeneity across education and gender. In addition, life cycle events (such as buying a first home) point to effects consistent with dynamic selection on moral hazard.
    Keywords: Unemployment, insurance, selection
    JEL: J64 D82 J65
    Date: 2022–05–19
  15. By: Irene Torrini; Claudio Lucifora (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Antonio Russo
    Abstract: We investigate the short- and long-term e ects of hospitalization on different types of health care expenditures (HCE). A dynamic DID model with variation in treatment timing is specified and estimated using register data of individuals aged 50-70 residing in Milan, Italy, and observed over the period 2008-2017. We analyze on the entire population and carry out heterogeneous analysis by leading cause of hospitalization and presence of chronicity or disability. We find evidence of a large and persistent effect of hospitalization on total HCE, with future medical expenses mostly accounted for by inpatient care. Considering all health treatments, the overall effect is sizable, accounting for approximately twice the cost for any single hospital admission. We show that chronic and disabled individuals require greater post-discharge medical assistance especially for inpatient care and that cardiovascular and oncological diseases account together for more than half of expenditures on future hospitalizations. Alternative out-of-hospital management practices are discussed as a post-admission cost-containment measure.
    Keywords: Health Care Expenditures, Hospitalization E ect, Health Shocks, Chronic Disease, Cardiovascular Disease, Cancer.
    JEL: H51 I11 I18
    Date: 2022–07
  16. By: Andreas Ek (Lund University); Gunes Gokmen (Lund University); Kaveh Majlesi (Monash University, Lund University, IZA, and CEPR)
    Abstract: There are large cross-country differences in the portfolio composition of individual investors. In this paper, we study the role of cultural heritage in explaining these differences by combining data on the asset allocation of second-generation immigrants in Sweden with the cultural attributes of their parents' countries of origin. Descendants of more risk-loving and less patient cultures take more idiosyncratic risk by keeping a higher share of their financial wealth in directly held stocks. They are also less likely to delegate their equity investment, as they assign a lower share of their wealth to mutual funds. We show that these findings are not driven by the selection of migrating parents, other country of origin attributes, or individual socio-economic characteristics. Our findings also provide an alternative explanation for under-diversification and lack of delegation among many individual investors.
    Keywords: culture, cultural transmission, delegation, diversification, investment behaviour
    JEL: G11 G40 G50 G51 Z10
    Date: 2022–07
  17. By: Markus Jokela (Department of Psychology and Logopedics, University of Helsinki.); Jaakko Meriläinen (Centro de Investigación Económica and Department of Economics, ITAM.); Janne Tukiainen (Department of Economics, University of Turku; VATT Institute for Economic Research.); Åsa von Schoultz (Faculty of Social Sciences, University of Helsinki.)
    Abstract: We present the first comprehensive evidence on the role of cognitive ability and personality traits in the selection of electoral candidates and election of politicians. Using unique data that combine population registers and election statistics from local government elections in Finland with tests of cognitive and non-cognitive ability of men administered by the Finnish Defense Forces, we document two main findings. First, political parties select candidates who fare better than the office-eligible population in both intelligence and personality tests that capture three dimensions of cognitive and seven dimensions of non-cognitive ability. Second, elected politicians possess more desirable traits than nonelected candidates. Our results show that a voter-oriented open-list system is able to select competent, motivated, and honest representatives. We also assess the relative importance of cognitive abilities and personality traits, present evidence of no trade-offs between politician quality and descriptive representation, and illustrate that political competition may be an important contextual factor shaping selection.
    Keywords: candidate entry, cognitive ability, election, open-list PR system, personality, political selection
    JEL: D72 J24
    Date: 2022–07
  18. By: Jakob Schwerter; Nicolai Netz; Nicolas H\"ubner
    Abstract: Early-life environments can have long-lasting developmental effects. Interestingly, research on how school reforms affect later-life study behavior has hardly adopted this perspective. Therefore, we investigated a staggered school reform that reduced the number of school years and increased weekly instructional time for secondary school students in most German federal states. We analyzed this quasi-experiment in a difference-in-differences framework using representative large-scale survey data on 71,426 students who attended university between 1998 and 2016. We found negative effects of reform exposure on hours spent attending classes and on self-study, and a larger time gap between school completion and higher education entry. Our results support the view that research should examine unintended long-term effects of school reforms on individual life courses.
    Date: 2022–07
  19. By: Vassilis Tselios; Andres Rodriguez-Pose
    Abstract: Poverty reduction and the tackling of social exclusion are overarching goals of development and welfare policies. This paper explores the extent to which decentralisation contributes to poverty and social exclusion alleviation in European countries and regions. We find evidence that increases in central government transfers of political, administrative, and fiscal authority to subnational tiers of government reduce poverty and address social exclusion at an aggregate level. This, however, mainly happens in countries with a high degree of governance quality and, fundamentally, in urban areas. The link between decentralisation and poverty and social exclusion alleviation is more uniform at the regional level, as greater regional autonomy is connected to lower poverty and social exclusion, regardless of the quality of regional government. Hence, when regional governments have the capacity to design their own independent policies, a reduction of poverty and social exclusion and improvements in well-being generally ensue.
    Keywords: decentralisation; poverty; social exclusion; quality of governance; urban areas; Europe
    JEL: H11 H53 I32 R11
    Date: 2022–07
  20. By: Joana Costa (Universidade de Aveiro); Luís Carvalho (Universidade do Porto)
    Abstract: Promoting entrepreneurship has become a government priority worldwide. At the same time, digital technology has been embraced by governmental authorities, particularly focusing on digital infrastructure and online service provision. In this paper, we explore whether there might be a connection between both policy ambitions – notably at the local level. To do so, we empirically assess the relationship between different dimensions of government digitalization and entrepreneurial dynamics, using panel data from 278 Portuguese municipalities between 2014 and 2019, primarily drawn from the Portuguese survey on government ICT deployment (IUTIC) and analyzed through compared regression models. Results suggest an overall positive effect of digital government efforts on entrepreneurship. However, digital openness, a user-focus and transparency initiatives seem to matter more to entrepreneurship than internally-oriented digitalization measures. The results provide evidence of the positive effect of government digitalization on entrepreneurship, suggesting that the digital transition may generate relevant social returns for local economies and thus an additional mechanism for the promotion of smart and sustained growth.
    Keywords: e-government, digital transition, entrepreneurship, local government
    JEL: H79 L26 M13
    Date: 2022–06
  21. By: Daniele Spinelli; Paolo Berta; Alessandro Santoro
    Abstract: Tax audits are the main tool adopted by tax administrations to collect taxes. Their optimal number depends on two parameters, i.e. the enforcement elasticity of tax revenue with respect to the audit effort and the sum of private compliance costs and public administrative costs entailed by audits. In turn, the enforcement elasticity critically depends on audit selection criteria actually chosen by tax authorities. In this paper, we apply a machine learning approach to Italian data and we provide evidence that, in 2010 and 2011, audited taxpayers are those whose reporting behaviour in between the report year and the audit year has deviated from the business cycle. We use these audit criteria to match audited taxpayers to non-audited ones and we obtain an estimate of the enforcement elasticity that allows us to characterize the optimal number of tax audits as a function of the ratio between private compliance and public administrative costs.
    Keywords: Optimal Tax Administration, Enforcement Elasticity of Tax Revenue.
    JEL: H26 C55
    Date: 2022–04
  22. By: Kentaro Asai (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper examines the employment and productivity effects of the working hour reform in Portugal that reduced the standard hours from 44h to 40h in 1996-7. Using the variation across establishments in the intensity of treatment, I find that the establishments that were more treated experienced lower post-reform employment growth, although to a modest degree. Despite of the large reduction in the labor hour input, there is no statistically significant negative effect on sales, leading to a large improvement in labor efficiency measured by sales per hour. However, these overall effects mask substantial heterogeneity in responses: establishments in capital intensive sectors reduced employment without decline on sales, while those in labor intensive sector rather attempted to maintain employment, but their sales were negatively affected. These results provide indirect evidence consistent with the theories that highlight the role of scale effects and capital substitution effects.
    Keywords: Working Hour,Labor Demand,Productivity,Labor Market Working Hour,Labor Market Imperfections
    Date: 2022–07
  23. By: Sabrina Di Addario (Bank of Italy); Patrick Kline (University of California, Berkeley); Raffaele Saggio (University of British Columbia, Canada); Mikkel Soelvsten (University of Wisconsin, Madison)
    Abstract: Sequential auction models of labour market competition predict that the wages required to successfully poach a worker from a rival employer will depend on the productivities of both the poached and the poaching firms. We develop a theoretically grounded extension of the two-way fixed effects model of Abowd et al. (1999) in which log hiring wages include a worker fixed effect, a fixed effect for the ‘destination’ firm hiring the worker, and a fixed effect for the ‘origin’ firm, or labour market state, from which the worker was hired. Fitting the model to Italian social security records, origin effects only explain 0.7 per cent of the variance of hiring wages, while destination effects explain about 23 per cent of the variance. Studying a cohort of workers entering the Italian labour market in 2005, we find that differences in origin effects yield essentially no contribution to the evolution of the gender gap in hiring wages, while differences in destination effects explain the majority of the gap at the time of labour market entry. These results suggest that where a worker is hired from tends to be relatively inconsequential for their wages in comparison to where they are currently employed.
    Keywords: hiring wages, sequential auctions, firm effects, bargaining, gender wage gap
    JEL: J31 D22
    Date: 2022–06

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