nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒09‒05
29 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Adjustments of local labour markets to the COVID-19 crisis: The role of digitalisation and working-from-home By Ben Yahmed, Sarra; Berlingieri, Francesco; Brüll, Eduard
  2. ZEW-EviSTA: A microsimulation model of the German tax and transfer system By Buhlmann, Florian; Hebsaker, Michael; Kreuz, Tobias; Schmidhäuser, Jakob; Siegloch, Sebastian; Stichnoth, Holger
  3. New housing investments' effects on gentrification and affordability in Stockholm, Sweden By Ismail, Mohammad; Wilhelmsson, Mats
  4. Local Information and Firm Expectations about Aggregates By Jonas Dovern; Lena Sophia Müller; Klaus Wohlrabe
  5. Firms price discriminate based on suppliers’ relative distances to competitors By Granlund, David; Meens-Eriksson, Sef
  6. Does It Matter Who Cares for You? The Effect of Substituting Informal with Formal Personal Care on the Care Recipients' Health By Hollingsworth, Bruce; Ohinata, Asako; Picchio, Matteo; Walker, Ian
  7. The Distributional Impacts of Worker Reallocation: Evidence from Europe By Mr. John C Bluedorn; Mr. Niels-Jakob H Hansen; Mr. Ippei Shibata; Marina M. Tavares; Francesca Caselli
  8. Testing for Discrimination in Rental Markets: Experimental Evidence from the UK By Koppensteiner, Martin Foureaux; Oliveira, Tania; Rohith, Nikitha
  9. Childcare constraints on immigrant integration By Luis Guirola; María Sánchez-Domínguez
  10. The Effect of Child Care Costs on Gender Inequality By Alessandra Casarico; Elena Del Rey; Jose I. Silva
  11. Help in a Foreign Land: Internationalized Banks and Firms’ Export By Brancati, Emanuele
  12. Sitting Next to a Dropout - Academic Success of Students with More Educated Peers By Daniel Goller; Andrea Diem; Stefan C. Wolter
  13. Income Taxes, Gross Hourly Wages, and the Anatomy of Behavioral Responses: Evidence from a Danish Tax Reform By Kazuhiko Sumiya; Jesper Bagger
  14. Technological Progress, Occupational Structure and Gender Gaps in the German Labour Market By Bachmann, Ronald; Gonschor, Myrielle
  15. Dual returns to experience By Jose Garcia-Louzao; Laura Hospido; Alessandro Ruggieri
  16. Media coverage and pandemic behaviour: Evidence from Sweden By Garz, Marcel; Zhuang, Maiting
  17. The Plight of Female Employment in Germany under School-Related COVID-19 Control Measures By Ezgi Caki
  18. Labor Market Pooling and Job Outcomes of Displaced Workers By Kekezi, Orsa
  19. Gender-specific application behavior, matching, and the residual gender earnings gap By Lochner, Benjamin; Merkl, Christian
  20. Fresh start policies and small business activity: evidence from a natural experiment By Marco Celentani; Miguel García-Posada; Fernando Gómez Pomar
  21. Is the intergenerational transmission of overweight 'gender assortative'? By Costa-Font, Joan; Jofre-Bonet, Mireia
  22. Bargaining for Trade: When Exporting Becomes Detrimental for Female Wages By Halvarsson, Daniel; Lark, Olga; Tingvall, Patrik; Videnord, Josefin
  23. When Reality Bites: Local Deaths and Vaccine Take-up By Giulietti, Corrado; Vlassopoulos, Michael; Zenou, Yves
  24. Selection on moral hazard in the Swiss market for mandatory health insurance: Empirical evidence from Swiss Household Panel data By Francetic, I.N.;
  25. Fairness and the support of redistributive environmental policies By Andor, Mark Andreas; Lange, Andreas; Sommer, Stephan
  26. Selection on moral hazard in the Swiss market for mandatory health insurance: Empirical evidence from Swiss Household Panel data By Francetic Igor
  27. A Note on Evaluating Formal Education for Adults By Stenberg, Anders
  28. Do the Long-Term Unemployed Benefit from Automated Occupational Advice during Online Job Search? By Belot, Michèle; Kircher, Philipp; Muller, Paul
  29. A Lasting Crisis affects R&D decisions of smaller firms: the Greek experience By Ioannis Giotopoulos; Alexander S. Kritikos; Aggelos Tsakanikas

  1. By: Ben Yahmed, Sarra; Berlingieri, Francesco; Brüll, Eduard
    Abstract: Employment responses to the COVID-19 crisis differed widely across German local labour markets at the beginning of the pandemic, with differences in short-time work rates of up to 20 percentage points. We show that digital capital, and to a lesser extent working-from-home, were essential for the resilience of local labour markets. Using an empirical strategy that combines a difference-in-differences approach with propensity score weighting, we find that local exposure to digital capital reduced short-time work usage by up to 4 percentage points and the effect lasted for about 8 months. Working-from-home potential lowered short-time work rates, but only in local labour markets exposed to digital capital, and in the first four months of the pandemic when a strict lockdown was in place. Differences in unemployment rates across local labour markets were at most 2 percentage points and did not depend on digital capital or working-from-home potential.
    Keywords: COVID-19 crisis,Digitalisation,Employment,Information and communication technologies,Local labour markets,Short-time work,Working-from-home
    JEL: J21 O3 R12 R23
    Date: 2022
  2. By: Buhlmann, Florian; Hebsaker, Michael; Kreuz, Tobias; Schmidhäuser, Jakob; Siegloch, Sebastian; Stichnoth, Holger
    Abstract: This article describes ZEW-EviSTA®, the microsimulation model developed and used at ZEW - Centre for European Economic Research in Mannheim. The model simulates the German tax and transfer system using household micro level data. By estimating fiscal effects, labor market outcomes as well as distributional impacts the model allows for a comprehensive ex ante analysis of reform proposals. Heterogeneity analyses targeting specific subgroups of the population are feasible, too. The present article describes which data sources are used for the simulation, how key features of the German tax and transfer system are implemented, which simulation methods are employed to analyze policy changes and how the model is validated against official statistics. Moreover, by providing examples of the outputs which ZEW-EviSTA generates the paper gives an idea of the questions that can be answered using the model.
    Keywords: microsimulation,tax system,tax policy,labour market,labour supply,labourdemand,Germany,policy analysis
    JEL: D58 H20 J22 J23
    Date: 2022
  3. By: Ismail, Mohammad (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Stockholm is constantly changing. New buildings are built, new infrastructure replaces old infrastructure, and the city grows with the addition of new areas. We ask whether specific changes impact surrounding areas in desirable ways. Using difference-in-difference methodology, we have analysed several new construction projects in Stockholm, Sweden, from 2009 to 2014. The outcome variables that we are most interested in are whether the projects themselves affected the socio-economic background of the residents (gentrification) and whether they have affected, or even impaired, affordability. Our results indicate a limited effect of new housing investments on the proportion of people with higher education and on the proportion of younger people. However, we found a positive effect on income and affordability, which may result in more significant gentrification and population displacement over time.
    Keywords: housing investment; gentrification; affordability; difference-in-difference; Stockholm
    JEL: C21 R30 R58
    Date: 2022–08–16
  4. By: Jonas Dovern; Lena Sophia Müller; Klaus Wohlrabe
    Abstract: Using new survey data on quantitative growth expectations of firms in Germany, we show that firms resort to local information when forming expectations about aggregate growth. Firms extrapolate from the economic situation in their county, industry growth and their individual business situation. The effect is particularly strong for small firms and explains part of the high expectation dispersion across firms. Furthermore, we show that growth expectations are correlated with employment and investment decisions of firms, highlighting that differences in expectations do indeed seem to lead to differences in actual firm decisions. Our results confirm predictions of theoretical models with rational inattention.
    Keywords: GDP expectations, expectation heterogeneity, disagreement, rational inattention, ifo business tendency survey
    JEL: D84 E20 E32
    Date: 2022
  5. By: Granlund, David (Department of Economics, Umeå University); Meens-Eriksson, Sef (Department of Economics, Umeå University)
    Abstract: We derive a theoretical model predicting that firms should mark down input prices more the longer distance a supplier has to a competitor’s plant relative to their own plant. We test this prediction using contract-level data on prices of waste burned at energy plants. To the best of our knowledge, we are the first to study whether firms price discriminate based on relative distance to the closest competitor. The empirical results confirm that longer relative distances to competitors’ plants lead to lower prices and show no evidence of additional effects of the distance to the chosen plant.
    Keywords: auction; market power; oligopsony; price discrimination; procurement; spatial competition; transport cost; waste incineration
    JEL: D43 D44 L11 L13 Q53
    Date: 2022–08–17
  6. By: Hollingsworth, Bruce (Lancaster University); Ohinata, Asako (University of Leicester); Picchio, Matteo (Università Politecnica delle Marche, Ancona); Walker, Ian (Lancaster University)
    Abstract: We show that a Scottish policy reform, which introduced free formal personal home care for those aged 65 and above, reduced the probability and the hours of receiving informal personal care. Moreover, we find that the group of individuals that most benefited from the policy introduction, i.e. women aged 75 and above, experienced the largest fall in informal care. We go on to investigate whether such reductions in informal and increases in formal personal care impacted on the care recipients' health outcomes. Our results demonstrate that switching from informal to formal care does very little to the recipients' hospital usage and health outcomes.
    Keywords: long-term elderly care, ageing, financial support, difference-in-differences
    JEL: C21 D14 I18 J14
    Date: 2022–07
  7. By: Mr. John C Bluedorn; Mr. Niels-Jakob H Hansen; Mr. Ippei Shibata; Marina M. Tavares; Francesca Caselli
    Abstract: Using individual-level data for 30 European countries between 1983 and 2019, we document the extent and earning consequences of workers’ reallocation across occupations and industries and how these outcomes vary with individual-level characteristics, namely (i) education, (ii) gender, and (iii) age. We find that while young workers are more likely to experience earnings gains with on-the-job sectoral and occupational switches, low-skilled workers’ employment transitions are associated with an earnings loss. These differences in earnings gains and losses also mask a high degree of heterogeneity related to trends in routinization. We find that workers, particularly low-skilled and older workers during recessions, experience a severe earning penalty when switching occupations from non-routine to routine occupations.
    Keywords: Labor market mobility; Job transitions; Occupational mobility; Routinization; Business cycles; worker reallocation; routine occupation; earnings gain; earnings consequence; occupation transition; Economic recession; Wages; Unemployment; Unskilled labor; Europe
    Date: 2022–06–24
  8. By: Koppensteiner, Martin Foureaux (University of Surrey); Oliveira, Tania (University of Leicester); Rohith, Nikitha (Coventry University)
    Abstract: In this paper we provide novel insights on discrimination against immigrants in the UK rental market. We conducted a randomized-controlled trial close to a real-world setting where inquiries to view a property were made via phone inquiries with rental agencies and immigration background was signalled through non-UK accents. We document substantial discrimination against non-UK applicants with non-UK applicants having a 13 percent lower chance of securing a viewing for a rental. We also document substantial heterogeneous effects, with much more pronounced effects in local areas with a lower share of immigrants. We find that the background of agency managers or the composition of agency staff does not attenuate the effects.
    Keywords: discrimination, rental market, immigration, right-to-rent, UK
    JEL: J15 K37 R30
    Date: 2022–07
  9. By: Luis Guirola (Banco de España); María Sánchez-Domínguez (Universidad Complutense de Madrid)
    Abstract: While motherhood is one of the main reasons for the persistence of gender gaps, its impact on the rising share of immigrant mothers in Europe is less well understood. This paper asks how the burden of childcare affects the labor market integration of immigrants. To identify the contribution of this burden to the native-immigrant employment gap, it exploits European Labor Force Survey (EU-LFS) microdata from 2004 to 2019. This survey collects information on respondents’ counterfactual behaviour, in the event that: a) they had no care responsibilities; b) they could find a job compatible with their care responsibilities; c) they had access to childcare services. This information allows estimates to be obtained of the impact of childcare on labor supply comparable across eleven countries. Our results show that the burden of childcare is the major obstacle to the integration of immigrant mothers. While the employment gap between non-EU immigrant and native mothers in Northern and Southern Europe is 35 and 17 percentage points (pp) respectively, two-thirds (24 pp and 12 pp) of it is explained by childcare motivated inactivity. We reject the hypothesis that the childcare gap is solely driven by immigrants’ sociodemographic traits or traditional parenting norms. Our estimates suggest that at least a quarter (5.8 pp and 2.6 pp) of the gap is due to the higher opportunity cost of paid work faced by immigrant mothers; that equal access to childcare could reduce it by 10 pp and 7 pp; and that immigrants’ exclusion from flexible time arrangements could explain the larger size and higher persistence of the gap in the North. This paper contributes to the literature on immigrant integration, highlighting that the child penalty is the main obstacle to female migrant labor supply and that differences in howEuropean societies handle the burden of care can account for their records on the integration of immigrant households, suggesting that family policies could be central to the integration policy mix and even influence the migration decision.
    Keywords: female labor supply, care burden, immigrant and native women, opportunity cost, Europe
    JEL: J13 J15 J16 J18 J31 J61 J70
    Date: 2022–04
  10. By: Alessandra Casarico; Elena Del Rey; Jose I. Silva
    Abstract: We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an extension of paid maternity leave duration has ambiguous effects on gender inequality. In contrast, child care subsidies, which require higher taxes, and loans, which do not, unambiguously reduce gender inequality. We illustrate the mechanisms at play in a numerical example using Spanish data.
    Keywords: liquidity constraints, gender wage and participation gaps, statistical discrimination, numerical example
    JEL: J16 J18 J13
    Date: 2022
  11. By: Brancati, Emanuele (Sapienza University of Rome)
    Abstract: The lack of information is a relevant obstacle to the export activity of small and medium enterprises. This paper analyzes whether banks can support firms’ export by reducing informational asymmetries about foreign markets. We exploit a large sample of Italian firms for which we merge custom data with information on their lender banks. We identify a shock exogenous to firms’ export decisions by relying on preexisting lending relationships and exploiting the acquisition of a firm’s domestic bank by an internationalized banking group. Our results show that, after the acquisition, firms have a significantly higher probability of starting export in countries where the consolidated bank has a foreign branch, which proxies for the amount of information accumulated that can be shared with client firms. Conversely, the effect on the intensive margins of previously-exporting companies is largely insignificant. We interpret these findings as evidence of information spillovers that mainly reduce firms’ fixed entry costs in a foreign market. The analysis also shows that other channels, such as bank credit availability or trade-finance supply, are unlikely to drive our results.
    Keywords: firms, export, informational barriers, banks
    JEL: F23 F14 G21 G00
    Date: 2022–07
  12. By: Daniel Goller; Andrea Diem; Stefan C. Wolter
    Abstract: We investigate the impact of the presence of university dropouts on the academic success of first-time students. Our identification strategy relies on quasi-random variation in the proportion of returning dropouts. The estimated average zero effect of dropouts on first-time students’ success masks treatment heterogeneity and non-linearities. First, we find negative effects on the academic success of their new peers from dropouts re-enrolling in the same subject and, conversely, positive effects of dropouts changing subjects. Second, using causal machine learning methods, we find that the effects vary nonlinearly with different treatment intensities and prevailing treatment levels.
    Keywords: university dropouts, peer effects, better prepared students, causal machine learning
    JEL: A23 C14 I23
    Date: 2022
  13. By: Kazuhiko Sumiya (Research Institute of Economy, Trade and Industry, RIETI); Jesper Bagger (Royal Holloway London)
    Abstract: This paper provides quasi-experimental evidence on the effects of income taxes on gross hourly wages by utilizing administrative data and a tax reform in Denmark. The reform introduced joint taxation to a middle tax bracket, bringing large changes to the tax system facing married couples. Using variation in spousal income for identification, we present non-parametric graphical evidence based on a difference-in-differences design among working married males. First, we find heterogeneous effects across income levels. For low-income workers, taxes have negative and dynamic effects on wages. Their elasticity of wages (with respect to net-of-marginal-tax rates) is close to one. For higher-income workers, the effects are small and static, with an elasticity of approximately 0.2. Second, wages respond to taxes through human capital accumulation and job changes. Finally, with smaller magnitudes than wages, daily hours worked also respond negatively to taxes, which contrasts with the prediction from a standard labor supply-and-demand model.
    Keywords: income taxation, administrative data, tax reforms, difference-in-differences, gross hourly wages, labor supply, human capital accumulation, job changes
    JEL: H22 H24 J22 J24 J30 J62
    Date: 2022–08–18
  14. By: Bachmann, Ronald (RWI); Gonschor, Myrielle (RWI)
    Abstract: We analyze if technological progress and the corresponding change in the occupational structure have improved the relative position of women in the labour market. We show that the share of women rises most strongly in non-routine cognitive and manual occupations, but declines in routine occupations. While the share of women also rises relatively strongly in high-paying occupations, womens' individual-level wages lag behind which implies within-occupation gender wage gaps. A decomposition exercise shows that composition effects with respect to both individual and job characteristics can explain the rise of female shares in the top tier of the labour market to an extent. However, the unexplained part of the decomposition is sizeable, indicating that developments such as technological progress are relevant.
    Keywords: female labour market participation, occupations, tasks, technological progress
    JEL: J21 J31 O33
    Date: 2022–07
  15. By: Jose Garcia-Louzao (Bank of Lithuania); Laura Hospido (Banco de España and IZA); Alessandro Ruggieri (University of Nottingham)
    Abstract: This paper studies how labor market duality affects human capital accumulation and the wage trajectories of young workers in Spain. Using rich administrative data, we follow workers from their entry into the labor market to measure the experience accumulated under different contractual arrangements and we estimate their wage returns. We document lower returns on experience accumulated under fixed-term contracts compared with permanent contracts and show that this difference is not due to unobserved firm heterogeneity or the quality of the matching. Instead, we provide evidence that the gap in returns is due to lower human capital accumulation while working under fixed-term contracts. This difference widens with worker skill, suggesting that experience and skill-learning are complementary. Our results suggest that the widespread use of fixed-term work arrangements reduces the skill acquisition of highly-skilled workers, holding back life-cycle wage growth by up to 16 percentage points 15 years after their entry into the labor market.
    Keywords: labor market duality, human capital, earnings dynamics
    JEL: J30 J41 J63
    Date: 2022–03
  16. By: Garz, Marcel (Jönköping University); Zhuang, Maiting (Mistra Center for Sustainable Markets (Misum))
    Abstract: We study the effect of media coverage on individual behaviour during a public health crisis. For this purpose, we collect a unique dataset of 200,000 newspaper articles about the Covid-19 pandemic from Sweden – one of the few countries that did not impose mandatory lockdowns or curfews. We show that mentions of Covid-19 significantly lowered the number of visits to workplaces and retail and recreation areas, while increasing the duration of stays in residential locations. Using two different identification strategies, we show that these effects are causal. The impacts are largest when Covid-19 news stories are more locally relevant, more visible and more factual. We find larger behavioural effects for articles that reference crisis managers (as opposed to medical experts) and contain explicit public health advice. These results have wider implications for the design of public communications and the value of the local media.
    Keywords: Covid-19; Mobility; Newspapers; Persuasion; Public health
    JEL: D83 H12 I12 I18 J22 L82
    Date: 2022–08–02
  17. By: Ezgi Caki
    Abstract: This study empirically assesses the impact of school closures on women’s employment in Germany during the COVID-19 pandemic. The study’s objective is to determine whether school closures have adversely and disproportionately affected women's careers. It tests the argument that the longer schools remain closed during the pandemic, the more women than men are forced to reduce their working hours, opt for part-time jobs, or ask for paid or unpaid leave, or otherwise lose their jobs. The case study reveals that, even though the German federal state has been granting financial incentives for employment during the pandemic, women remain disproportionately affected by the pandemic-related containment measures, notably school closures. This study’s finding that more men were unemployed than women at the apex of the pandemic in Germany can be explained by the already higher number of employed men. Overall, the relationship between the demand for women’s part-time work and women not returning to work is stronger and more significant than that of men’s part-time work and men not returning to work, meaning that there is a growing demand for non-standard forms of employment, such as part-time work, for women compared to men. Childcare responsibilities, which are increasing due to the pandemic, are threatening women's significant gains for gender equality. Although the empirical assessments present varying results, gender inequality subsists and requires carefully formulated policies with a focus on enhancing gender equality and women's labor force participation during and after the pandemic.
    Keywords: gender, employment, COVID-19, school closures, Germany
    Date: 2022–05
  18. By: Kekezi, Orsa (Swedish Institute for Social Research, Stockholm University)
    Abstract: This paper studies how labor market pooling, calculated as regional concentrations of employment in related industries and related occupations, affects the job outcomes of displaced workers. Using matched employer-employee data for displaced workers between 2003-2009 in Sweden, the results show that all workers experience a drop in earnings after displacement. However, the earning losses of workers who lose their jobs in markets with higher labor market pooling are lower. Two mechanisms are highlighted to why this is the case - (1) better job match and (2) higher probability of getting a better job than the pre-displacement one.
    Keywords: job matching; labor market pooling; displaced workers; occupational upgrade
    JEL: J24 J62 J65
    Date: 2022–08–12
  19. By: Lochner, Benjamin; Merkl, Christian
    Abstract: This paper opens up the black box of gender-specific application and hiring behavior and its implications for the residual gender earnings gap. To understand the underlying mechanisms, we propose a two-stage matching model with testable implications. Using the German IAB Job Vacancy Survey, we show that the patterns in the data are in line with linear and nonlinear production functions at different jobs. Women's application probability at high-wage firms is much lower than at low-wage firms. By contrast, women have the same probability of being hired as men when they apply at high-wage firms. These patterns are not in line with taste-based discrimination, but they can be rationalized by high-wage firms that ask for more employer-sided flexibility. We show that the share of male applicants increases in various dimensions of employer-sided flexibility requirements. Adding the share of male applicants as a proxy for flexibility requirements to Mincer wage regressions reduces the residual earnings gap by around 50 to 60 percent. Women who match at jobs with a high share of male applicants earn substantially more than women at comparable jobs with only females in the application pool (due to compensating differentials). By contrast, when women with children match at these jobs, they face large earnings discounts relative to men.
    Keywords: Job Search,Application Behavior,Gender Earnings Gap
    JEL: E24 J16 J31
    Date: 2022
  20. By: Marco Celentani (Universidad Carlos III); Miguel García-Posada (Banco de España); Fernando Gómez Pomar (Universitat Pompeu Fabra)
    Abstract: There is no consensus in the academic literature on whether personal bankruptcy laws should be creditor-friendly or debtor-friendly in order to promote entrepreneurship and small business activity. This paper contributes to that literature by analyzing the effect of the introduction of a fresh start policy in Spain in 2015 on the performance of micro-firms as a natural experiment, using Spanish non-micro firms and Portuguese firms as control groups. We find that the reform substantially increased both the probability of filing for bankruptcy by Spanish micro-firms in financial distress (arguably to seek discharge of part of the firm owner’s debt) and the probability of these firms exiting the market, as the fresh start policy requires the liquidation of the debtor’s non-exempt assets. In addition, the reform increased investment and turnover in micro-firms but had no effect on their employment. Finally, the reform also promoted the creation of new micro-firms, especially those involved in innovation activities and in sectors with high productivity.
    Keywords: personal bankruptcy, fresh start, micro-firms, entrepreneurship
    JEL: K35 G33 L25 L26
    Date: 2022–03
  21. By: Costa-Font, Joan; Jofre-Bonet, Mireia
    Abstract: Using almost two decades worth of data from the Health Survey for England, that contain representative records of clinically measured weight and height, this paper studies whether parents and children's overweight (including obesity) is ‘gender assortative’. Our findings suggest that the intergenerational transmission of parent's overweight differs by children's sex and is statistically different for fathers and mothers. Gender assortative overweight is stronger among pre-school age and school-aged children. The parent-child associations are large and precisely estimated, heterogeneous by children's age and sex and stronger among white children and children of older parents. These results suggest there is a gender assortative intergenerational association of overweight.
    Keywords: Gender-assortative transmission; Gender assortative; Child obesity; Child overweight; Role models; Inter-generational transmission
    JEL: I18
    Date: 2020–12–01
  22. By: Halvarsson, Daniel (The Ratio Institute); Lark, Olga (Department of Economics, Lund University); Tingvall, Patrik (The National Board of Trade Sweden, Södertörn University); Videnord, Josefin (Uppsala University)
    Abstract: In this paper we study the link between globalization of firms and gender inequality. Specifically, we examine how the need for interpersonal contacts in trade and gender-specific differences in negotiations are related to the gender wage gap. Our key finding is that export of goods that are intensive in interpersonal contacts widens the gender wage gap. The effect is robust across various specifications and is most pronounced for domestic exporting firms, which do not trade within multinational corporations but with external foreign partners, where the contracting problem is most distinct. We ascribe this result to a male comparative advantage in bargaining.
    Keywords: Export; Gender wage gap; Gender inequality; Contract intensity; Interpersonal contacts; International trade
    JEL: F16 F66 J16 J31
    Date: 2022–08–15
  23. By: Giulietti, Corrado (University of Southampton); Vlassopoulos, Michael (University of Southampton); Zenou, Yves (Monash University)
    Abstract: We investigate whether COVID-19 deaths that occurred before vaccination rollouts impact subsequent vaccination take-up. We use data on local vaccination rates and COVID-19-related deaths from England measured at high geographic granularity. We find that vaccination take-up as of November 2021 is positively associated with pre-vaccine COVID-19-related deaths, controlling for demographic, economic, and health-related characteristics of the localities, while including geographic fixed effects. In addition, the share of ethnic minorities in a locality is negatively associated with vaccination rates, and localities with a larger share of ethnic minorities increase their vaccination rates if they are exposed to more COVID-related-deaths. Further evidence on vaccination intention at the individual level from a representative sample corroborates these patterns. Overall, our evidence suggests that social proximity to victims of the disease triggers a desire to take protective measures against it.
    Keywords: vaccination hesitancy, COVID-19, social interactions, information, behavior change
    JEL: H51 I12
    Date: 2022–07
  24. By: Francetic, I.N.;
    Abstract: Selection on moral hazard represents the tendency to select a specific health insurance coverage depending on the heterogeneity in utilization “slopes†. I explore the extent of selection on moral hazard in the Swiss managed competition system. I use data from the Swiss Household Panel and from publicly available regulatory data. I estimate a Roy-type model to obtain responses in (log) doctor visits at lowest and highest deductible levels. I also explore an instrumental variable approach comparing responses of individuals switching deductible to those maintaining the same level of coverage. Individuals with high propensity to select the highest deductible respond to coverage between two and three times more compared to the average difference in utilisation at highest vs. any lower deductible. This is consistent with individuals who are more likely to select a more comprehensive coverage using substantially more healthcare compared to what is implied by simple adverse selection.
    Keywords: health insurance; moral hazard; adverse selection; cost sharing; Switzerland;
    JEL: I13
    Date: 2022–08
  25. By: Andor, Mark Andreas; Lange, Andreas; Sommer, Stephan
    Abstract: Exemptions from costly policy measures are frequently applied to alleviate financial burdens to specific market participants. Using a stated-choice experiment with around 6,000 German household heads, we test how exemptions for low-income households and energy-intensive companies influence the political acceptability of additional cost for the promotion of renewable energies. We find that the support for the policy is substantially higher when low-income households are exempt rather than the industry. Introducing exemptions for low-income households on top of existing exemptions for the industry increases the acceptability of the policy. We show that the support for exemptions as one example of distributional policy design is associated with individual behavioral measures like inequality aversion and fairness perceptions.
    Keywords: Fairness,distributional effects,environmental policy,exemptions renewable energy,political acceptance,behavioral economics,discrete choice experiment
    JEL: D03 D12 H41 Q20
    Date: 2022
  26. By: Francetic Igor
    Abstract: Selection on moral hazard represents the tendency to select a specific health insurance coverage depending on the heterogeneity in utilization "slopes". I explore the extent of selection on moral hazard in the Swiss managed competition system. I use data from the Swiss Household Panel and from publicly available regulatory data. I estimate a Roy-type model to obtain responses in (log) doctor visits at lowest and highest deductible levels. I also explore an instrumental variable approach comparing responses of individuals switching deductible to those maintaining the same level of coverage. Individuals with high propensity to select the highest deductible respond to coverage between two and three times more compared to the average difference in utilisation at highest vs. any lower deductible. This is consistent with individuals who are more likely to select a more comprehensive coverage using substantially more healthcare compared to what is implied by simple adverse selection.
    Date: 2022–08
  27. By: Stenberg, Anders (SOFI, Stockholm University)
    Abstract: Evaluations of adults in formal education (AE) are typically based on earnings measured 5-10 years after program enrollment. This paper estimates returns up to 24 years after enrollment, and explore results for 15 cohorts of first-time registered in AE in Sweden 1994-2008 with at least a 10-year follow-up period. The results indicate substantially higher payoffs in absolute terms after the maximum length of follow-up compared with after 10 years. There is also weak support that multiplier effects increase the percentage returns to AE over time, regardless of gender or whether the level of AE is college or high school.
    Keywords: adult education, self-selection, propensity score matching
    JEL: H30 H52 I20 J24 O30
    Date: 2022–06
  28. By: Belot, Michèle (Cornell University); Kircher, Philipp (Cornell University); Muller, Paul (Vrije Universiteit Amsterdam)
    Abstract: In a randomized field experiment, we provide personalized suggestions about suitable alternative occupations to long-term unemployed job seekers in the UK. The suggestions are automatically generated, integrated in an online job search platform, and fed into actual search queries. Effects on the primary pre-registered outcomes of “finding a stable job” and “reaching a cumulative earnings threshold” are positive, are significant among those who searched at least once, and are more pronounced for those who are longer unemployed. Treated individuals include more occupations in their search and find more jobs in recommended occupations.
    Keywords: online advice, job search, long-term unemployment, occupational mobility, field experiment
    JEL: D83 J62 C93
    Date: 2022–07
  29. By: Ioannis Giotopoulos (University of Peloponnese); Alexander S. Kritikos (DIW Berlin, University of Potsdam, IAB Nuremberg, IZA Bonn); Aggelos Tsakanikas (National Technical University of Athens)
    Abstract: We use the prolonged Greek crisis as a case study to understand how a lasting economic shock affects the innovation strategies of firms in economies with moderate innovation activities. Adopting the 3-stage CDM model, we explore the link between R&D, innovation, and productivity for different size groups of Greek manufacturing firms during the prolonged crisis. At the first stage, we find that the continuation of the crisis is harmful for the R&D engagement of smaller firms while it increased the willingness for R&D activities among the larger ones. At the second stage, among smaller firms the knowledge production remains unaffected by R&D investments, while among larger firms the R&D decision is positively correlated with the probability of producing innovation, albeit the relationship is weakened as the crisis continues. At the third stage, innovation output benefits only larger firms in terms of labor productivity, while the innovation-productivity nexus is insignificant for smaller firms during the lasting crisis.
    Keywords: Small firms, Large firms, R&D, Innovation, Productivity, Long-term Crisis
    JEL: L25 L60 O31 O33
    Date: 2022–08

This nep-eur issue is ©2022 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.