nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒09‒19
twenty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Short-Time Work schemes and labour market flows in Europe during COVID By Cristina Lafuente and Astrid Ruland
  2. The role of the financial constraint in STW policy success during and after the Great Recession By Nathan Vieira
  3. Mental health effects of caregivers respite: subsidies or supports? By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  4. Bringing Them In or Pushing Them Out? The Labor Market Effects of Pro-cyclical Unemployment Assistance Changes By Gerard Domènech-Arumí; Silvia Vannutelli
  5. Education expansion, college choice and labour market success By Federica Braccioli; Paolo Ghinetti; Simone Moriconi; Michele Pellizzari; Costanza Naguib
  6. Monopsony in labor markets: Empirical evidence from Italian firms By Filippo Passerini
  7. Patent collateral and access to debt By Bracht, Felix; Czarnitzki, Dirk
  8. Feeling discriminated means poor self-perceived health: a gender analysis using SHARE By Pinillos-Franco, Sara; Cantarero-Prieto, David; Lera, Javier
  9. Does Performance Pay Influence Hours of Work? By Green, Colin P.; Heywood, John S.
  10. Personality Traits, Remote Work and Productivity By Gavoille, Nicolas; Hazans, Mihails
  11. Identity in Court Decision-Making By Ahrsjö, Ulrika; Niknami, Susan; Palme, Mårten
  12. Risk factors for repeat abortions and their spacing: Evidence from registry data in Spain By Catia Nicodemo; Sonia Oreffice; Climent Quintana-Domeque
  13. Lifetime Consequences of Lost Instructional Time in the Classroom: Evidence from Shortened School Years By Kamila Cygan-Rehm
  14. Staff engagement, coworkers’ complementarity and employee retention: Evidence from English NHS hospitals By Moscelli, G.;; Sayli, M.;; Mello, M.;
  15. Intergenerational Spillover Effects of Language Training for Refugees By Mette Foged; Linea Hasager; Giovanni Peri; Jacob N. Arendt; Iben Bolvig
  16. The Effects of Electronic Monitoring on Offenders and their Families By Grenet, Julien; Grönqvist, Hans; Niknami, Susan
  17. Regional diversification and intra-regional wage inequality in the Netherlands By Nicola Cortinovis; Dongmiao Zhang; Ron Boschma
  18. Economic Recession, Parental Unemployment and Adolescents’ Health-Related Quality of Life and Mental Health Outcomes in Greece By Drydakis, Nick
  19. Do Non-monetary Interventions Improve Staff Retention? Evidence from English NHS Hospitals By Sayli, Melisa; Moscelli, Giuseppe; Blanden, Jo; Bojke, Chris; Mello, Marco
  20. Neutralizing the Tentacles of Organized Crime. Assessment of an Anti-Crime Measure in Fighting Mafia Violence By Anna Laura Baraldi; Erasmo Pagani; Marco Stimolo
  21. The impact of parents' health shocks on children's health behaviors By Jérémy Tanguy

  1. By: Cristina Lafuente and Astrid Ruland
    Abstract: In this paper we investigate the impact that Short-Time Work schemes (STWs) had on employment and labour market flows during the COVID emergency of 2020 in four of the five largest economies of the EU. Most European countries used STWs at this time to alleviate the negative impact of sanitary measures like lockdowns. Looking at labour market stocks and flows, we document that these schemes were widely adopted and likely prevented substantial job losses. However, they failed to protect temporary workers. Moreover, in all countries, transitions from employment to non-participation reached unprecedented levels. These flows are reverted in subsequent quarters, which implies that many workers postponed job search during the lockdown. We do not observe permanent increases in non-participation, but we document a large fall in flows between temporary and permanent jobs. We interpret this as a drop in labour market mobility. We find that vacancy posting and firm dynamics may be able to explain part of the observed differences between countries.
    Keywords: labour market flows; short-time work; inactivity; labour force survey
    JEL: C82 E24 J21 J60
    Date: 2022
  2. By: Nathan Vieira (Aix-Marseille Université, AMSE)
    Abstract: Just one year after the subprime crisis, and despite being one of the most impacted countries in the world, Germany displayed the highest GDP growth rate among EU countries and maintained it at its level for two years. Combined with a surprisingly small variation in unemployment rates over this period, some press articles have nicknamed the impressive German economic recovery the "second German miracle". In this presentation, I produce empirical evidence of the role played by short-time work in the "German miracle". By exploiting firm-level data, I show that short-time work programs should target firms facing huge financial constraints and difficult business conditions. To these conditions, short-time work programs can preserve employment during a crisis and allow a greater take-up afterward.
    Date: 2022–08–01
  3. By: Costa-Font, Joan; Vilaplana-Prieto, Cristina
    Abstract: We study the effect the effect of a policy intervention that universalized previously means-tested subsidies in Spain, and document causal evidence of the effect of the receipt of caregiving supports and subsidies on unpaid spousal/partners caregivers mental health. Our estimates suggest that caregiving supports improve the mental health of caregivers among those providing more than 50 hours of care. In contrast, a subsidy gives rise to a reduction of 14.2pp. in the probability of depressive symptoms among individuals receiving less than 50 hours of care. Consistently, we find evidence of an increase in life satisfaction (15%) upon the receipt of subsidies and home supports (11%). We further document that evidence of a reduction in the probability of depression which is higher among part-time caregivers who spend between 20-50 caregiving hours/week compared to those providing more intensive care, which is explained by behavioural changes after the receipt of caregiving benefits. Finally, we estimate that a ‘hypothetical caregiving’ subsidy amount that would have fully compensated caregivers’ for their wellbeing losses (compared to non-caregivers) should lie between 800 and 850 euros/month, which is a magnitude well above the actual subsidy.
    Keywords: caregiving; long-term subsidies; long term care supports; mental health; caregiver's mental health; Spain; Elsevier deal
    JEL: I18 J22
    Date: 2022–10–01
  4. By: Gerard Domènech-Arumí; Silvia Vannutelli
    Abstract: We exploit an unanticipated labor market reform in 2012 Spain to estimate the effects of pro-cyclical changes in long-term unemployment assistance (UA). The reform raised the minimum age to receive unlimited-duration UA from 52 to 55. Using a dfference-in-differences design, we document that shorter benefits caused (i) shorter non-employment duration, especially among younger workers; (ii) higher labor force exit and other programs' take-up, especially among older workers; (iii) lower reemployment wages. The reform induced moderate government savings. Our results highlight how considering the interplay with labor market conditions is crucial when designing long-term beneffit schedules affecting workers close to retirement.
    Keywords: Unemployment, Unemployment Insurance, Wages
    Date: 2022–07
  5. By: Federica Braccioli; Paolo Ghinetti; Simone Moriconi; Michele Pellizzari; Costanza Naguib
    Abstract: We apply the unordered monotonicity setting of Heckman and Pinto (2018) to estimate the distribution of response types and the counterfactual outcomes associated with the choice of a STEM or non-STEM college. Instrumental variation is induced by the proximity to universities offering STEM and/or non-STEM degrees. The empirical analysis uses confidential survey data for Italy, combined with administrative information about the founding dates of all Italian universities and faculties. We find that about 2.4% of individuals in our sample would choose a STEM college if there was one in their province of residence. The corresponding share of non-STEM switchers is 1.1%. We simulate the effects on a number of labour market outcomes of various reforms improving the geographical distribution of colleges and we find sizeable impacts, particularly for women
    Keywords: Monotonicity, Returns to Education, Human Capital
    JEL: I23 I26 I28 J24 J31
    Date: 2022–08
  6. By: Filippo Passerini (Catholic University of Milan)
    Abstract: I leverage on a matched employer-employee database drawn by an INPS archive representative of the universe of Italian private sector workers to investigate how labor market concentration affects wages and employment. I compute concentration measures relying on new hires, finding that LMs aren’t on average concentrated, despite showing relevant heterogeneity. I then investigate the relationship between concentration and wages and employment, finding negative correlations. I then develop an IV strategy based on M&As to explore whether mergers increase concentration at a market-level and to find a reliable source of variation to identify their effect. First-stage estimates indicate that only mergers raise concentration significantly, while other events don’t. Estimated elasticities with different IVs range between -0.09 and -0.14 p.p for wages and between -0.68 and -0.77 p.p for hires.
    Date: 2022–08–01
  7. By: Bracht, Felix; Czarnitzki, Dirk
    Abstract: We investigate how intangible capital in form of intellectual property, such as patents, might mitigate financing constraints. While scholars have already argued that patents might have a signalling value reducing information asymmetries between borrowers and lenders, we quantify the value of using patents as collateral with regard to capital access. Although this mechanism of patents in financing further R&D is not new, we are the first to provide a treatment effects study of patent collateral and access to capital. We make use of mandatory collateral registry data in Sweden and the Netherlands to construct panels combining firm-level financial data and patent measures. Estimating conditional difference-in-difference regressions on firms' debt allows deducting treatment effects of using patents as collateral. We find that patent pledging enables Swedish (Dutch) firms to borrow about 21% (26%) more than in the counterfactual situation in which no patents would have been used as collateral. We also find that the collateral value of patents is higher than their signalling value, and a back-of-the-envelope scenario calculation shows that Dutch (Swedish) firms could raise more than € 7 (€ 10) billion additional debt capital if the complete patent portfolios would be pledged, all else constant.
    Keywords: Financing Constraints,Collateral,Intangible Assets,Patents,Treatment Effects Estimation
    JEL: O30 O34 G31
    Date: 2022
  8. By: Pinillos-Franco, Sara; Cantarero-Prieto, David; Lera, Javier
    Abstract: Most part of the literature has highlighted the detrimental effects of discrimination on health. However, the influence of past and perceived discrimination on older workers’ self-assessed health has been understudied. We aim to study whether reported discrimination is associated with self-assessed health among old men and women of working ages (50-65 years of age). Data was retrieved from the seventh wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) to obtain the regular panel of questions, and the third and seventh waves of the SHARELIFE questionnaire, that includes information about discrimination (n=30,019). We first used Latent Class Analysis (LCA) to detect groups of individuals in our sample and afterward, we used logistic regression models to determine the impact of discrimination on old men and women workers’ health separately. The results show that 49.0% of our sample was composed of highly discriminated old women, while the remaining percentage covered old men and women (42.3% males and 8.7% females) that reported lower levels of discrimination. Our estimations reveal a significant association between discrimination and poor health status, especially in the case of old men ranging from OR=1.807 (95% CI 1.497 – 2.182) to OR=1.619 (95% CI 1.356 – 1.933). In the case of women our results range from OR= 1.729 (95% CI 1.456 – 2.055) to OR= 1.197 (95% CI 0.981 – 1.462). These findings are essential to highlight the importance of tackling discrimination as a determinant of health that negatively affects both sexes, men and women.
    Keywords: Discrimination; Mental Health; Physical Health; self-assessed health; SHARE; LCA
    JEL: D63 I14 J14
    Date: 2022
  9. By: Green, Colin P. (Norwegian University of Science and Technology (NTNU)); Heywood, John S. (University of Wisconsin, Milwaukee)
    Abstract: A large body of research links performance pay to poorer worker health. The exact mechanism generating this link remains in doubt. We examine a common suspect, that performance pay causes employees to work longer hours in pursuit of higher pay. Using representative data for the UK, we demonstrate that performance pay is associated with more work hours and a higher probability of working long hours. Yet approximately two thirds of these differences reflect worker sorting rather than behavioral change. The remaining influence appears too small to generate the differences in health except for blue-collar occupations that we isolate.
    Keywords: performance related pay, working hours
    JEL: J22 J33
    Date: 2022–08
  10. By: Gavoille, Nicolas (Stockholm School of Economics, Riga); Hazans, Mihails (University of Latvia)
    Abstract: The future of teleworking ultimately depends on its impact on workers' productivity and wellbeing, yet the effect of remote working on productivity is not well understood. This paper investigates the link between personality traits and workers' productivity when working from home. We exploit a survey providing measures of the "Big Five" personality traits for more than 1700 recent teleworkers. We document strong links between personality, productivity, and willingness to work from home post-pandemic. Ceteris paribus, Conscientiousness and Openness to Experience are positively associated with a higher productivity from home, especially for females. On the other hand, the link between Extraversion and preference for teleworking is negative. These results suggest that a one-size-fits-all policy is unlikely to maximize neither firms' productivity nor workers' satisfaction.
    Keywords: personality traits, teleworking, work from home, productivity, COVID-19
    JEL: J24 J32 J81
    Date: 2022–08
  11. By: Ahrsjö, Ulrika (Department of Economics, Stockholm University); Niknami, Susan (Swedish Institute for Social Research, Stockholm University); Palme, Mårten (Department of Economics, Stockholm University)
    Abstract: We explore the role of identity along multiple dimensions in high-stakes decisionmaking. Our data contain information about demographic and socioeconomic indicators for randomly assigned jurors and defendants in a Swedish court. Our results show that defendants are 15 percent less likely to get a prison sentence if they and the jurors belong to the same identity-forming groups. Socioeconomic background and demographic attributes are at least as important, and combining several identities produces stronger effects.
    Keywords: Crime
    Date: 2022–07–01
  12. By: Catia Nicodemo; Sonia Oreffice; Climent Quintana-Domeque
    Abstract: Using administrative data on all induced abortions recorded in Spain in 2019, we analyze the characteristics of women undergoing repeat abortions, as well as the spacing with the previous abortion. We find that, compared to women who experience their first abortion, women who undergo a repeat abortion tend to be less educated and are more likely to have dependent children, live alone or be foreign-born, while we estimate a non-monotonic relationship with age. We also report that being low educated, not having an employment, having dependent children, or being foreign-born are all strongly related to a higher number of repeat abortions. Finally, being low educated, foreign-born, or not having an employment is also correlated with a shorter time interval in between the last abortions.
    Date: 2022–08
  13. By: Kamila Cygan-Rehm
    Abstract: This study estimates the lifetime effects of lost instructional time in the classroom on labor market performance. For identification, I use historical shifts in the school year schedule in Germany, which substantially shortened the duration of the affected school years with no adjustments in the core curriculum. The lost in-school instruction was mainly compensated for by assigning additional homework. Applying a difference-in-differences design to social security records, I find adverse effects of the policy on earnings and employment over nearly the entire occupational career. Unfavorable impacts on human capital are a plausible mechanism behind the deteriorated labor market outcomes. The earnings losses are driven by men, for whom the policy also elevated income inequality due to larger harm occurring at the bottom of the income distribution.
    Keywords: instructional time, education, earnings, skills, Germany
    JEL: I21 I26 J24 J17
    Date: 2022
  14. By: Moscelli, G.;; Sayli, M.;; Mello, M.;
    Abstract: Retention of skilled workers is essential for labour-intensive organisations like hospitals, where an excessive turnover of doctors and nurses can reduce the quality and quantity of services to patients. In the public sector, where salaries are often not negotiable at individual level, workers increasingly care about the non-pecuniary aspects of their jobs. We empirically investigate the role played by two such aspects, staff engagement and the retention of complementary coworkers, in affecting employee retention within the public hospital sector. We exploit a unique and rich panel dataset based on employee-level payroll and staff survey records from the universe of English NHS hospitals, and estimate dynamic panel data models to deal with the bias due to reverse causality. We find that nurses’ retention is positively associated with their engagement, whereas doctors’ retention is positively associated with nurses’ retention. This heterogeneous response of employee retention can be explained by the hierarchy of workers’ professional roles within the organisation.
    Keywords: employee retention; staff engagement; job complementarities; coworkers; hospitals; endogeneity;
    JEL: C33 C36 I11 J22 J28 J63
    Date: 2022–08
  15. By: Mette Foged; Linea Hasager; Giovanni Peri; Jacob N. Arendt; Iben Bolvig
    Abstract: Children of refugees are among the most economically disadvantaged youth in several European countries. They are more likely to drop out of school and to commit crime. We show that a reform in Denmark in 1999, that expanded language training for adult refugees and improved their economic integration, had significant intergenerational spillover effects in terms of higher completion rates from lower secondary school and lower juvenile crime rates. The effects on crime are driven by boys who were below school-starting age when their parents were treated.
    JEL: I21 J24 J30 J6
    Date: 2022–08
  16. By: Grenet, Julien (Paris School of Economics, CNRS); Grönqvist, Hans (Linnaeus University, IFAU); Niknami, Susan (Swedish Institute for Social Research, Stockholm University)
    Abstract: Electronic monitoring (EM) is a popular instrument to reduce large prison populations. Evidence on the effects of EM on criminal recidivism is, however, limited and it is unclear how this alternative to incarceration affects the labor market outcomes of offenders. Moreover, little is known about potential spillover effects on family members. We study the introduction of EM in Sweden in 1997 wherein offenders sentenced to up to three months in prison were given the possibility to avoid entering prison by substituting to EM. Our difference-in-differences estimates comparing the change in the prison inflow rate of eligible offenders to that of non-eligible offenders with slightly longer sentences show that the reform dramatically decreased incarcerations. Our main finding is that EM lowers criminal recidivism and improves offenders’ labor market outcomes. There is also some evidence of improvements in the short and intermediate run outcomes of the children of the offenders. The main channels through which EM operates seem to be by allowing offenders to maintain regular work and potentially also by reducing employer discrimination. Our calculations suggest that the social benefits of EM are at least six to nine times larger than the fiscal savings from reduced prison expenditure. This makes the welfare improvements from EM potentially much greater than what has been previously recognized.
    Keywords: Electronic monitoring; Incarceration; Labor supply; Crime; Spillovers
    JEL: K42
    Date: 2022–08–01
  17. By: Nicola Cortinovis; Dongmiao Zhang; Ron Boschma
    Abstract: The literature has drawn little attention to the relationship between industrial dynamics (i.e. the rise and fall of industries) and intra-regional wage inequality. This explorative study examines the relationship between industry dynamics and wage inequality in NUTS-3 regions in the Netherlands in the period 2010-2019. While the literature has shown that related diversification in more complex industries enhances economic growth in regions but also inequality between regions, our study shows that related diversification in less complex industries tends to reduce wage inequality within a region. This implies it remains a policy challenge to combine smart and inclusive growth in regions. Our study also showed that there is no significant relationship between exit of industries and regional inequality, with one exception: unrelated low-complex exits tend to increase intra-regional wage inequality. Overall, these findings suggest that related diversification in less complex industries tends to bring benefits in terms of inclusive growth, while unrelated exits in less complex industries tend to do the opposite.
    Keywords: intra-regional inequality, regional inequality, relatedness, structural change, inclusive growth
    JEL: O18 O31 O33 R11
    Date: 2022–08
  18. By: Drydakis, Nick (Anglia Ruskin University)
    Abstract: This study examines whether an association exists between parental unemployment and health-related quality of life and mental health for adolescents aged 15-18 in Athens, Greece. The gathered dataset covers the same upper high schools in two periods, 2011-2013 and 2017-2019. The study finds that parental unemployment bears an association with decreased health-related quality of life and increased adverse mental health symptoms for adolescents. Moreover, the 2011-2013 period, a period of increased parental unemployment, saw a decrease in health-related quality of life and increased adverse mental health symptoms for adolescents. In addition, parental unemployment proved more detrimental to adolescents’ health-related quality of life and mental health in 2011-2013 than in 2017-2019. The present research ranks among the first studies to examine whether parental unemployment could be associated with worse health-related quality of life and mental health for adolescents during periods of increased parental unemployment. Public policies that can reduce the adverse effects of parental unemployment on adolescents’ health-related outcomes require consideration. This approach proves critical because deteriorated health-related quality of life and mental health can negatively impact on adolescents’ human capital, progression, income, and future health.
    Keywords: parental unemployment, adolescents, health-related quality of life, mental health, recession, economic crisis
    JEL: E24 J13 I10 I14
    Date: 2022–07
  19. By: Sayli, Melisa (University of Surrey); Moscelli, Giuseppe (University of Surrey); Blanden, Jo (University of Surrey); Bojke, Chris (University of Leeds); Mello, Marco (University of Surrey)
    Abstract: Excessive turnover reduces the stock of an organization's human capital. In the public sector, where wage increases are often constrained, managers need to leverage non-monetary working conditions to retain their workers. We investigate whether workers are responsive to improvements in non-wage aspects of their job by evaluating the impact on nurse retention of a programme that encouraged public hospitals to increase staff retention through data monitoring and improving the non-pecuniary aspects of nursing jobs. Employing rich employee-level administrative data from the universe of English NHS hospitals, and a staggered difference-in-difference design, we find that the programme has improved nursing retention within hospitals and decreased exits from the public hospital sector. Our results indicate that a light-touch intervention can shift management behavior and improve hospital workforce turnover. These findings are important in sectors affected by labor supply shortages, and they are especially policy-relevant in the health care context, where such shortages have potentially negative effects on patient outcomes.
    Keywords: labor supply, workforce retention, non-monetary incentives, hospital care, staggered difference-in-differences
    JEL: J32 J38 J45 J63 I11 C22
    Date: 2022–08
  20. By: Anna Laura Baraldi (Department of Economics, University of Campania); Erasmo Pagani (Department of Law, University of Naples Federico II); Marco Stimolo (Department of Economics, University of Campania)
    Abstract: Organized crime reinforces its corrupting influence on politics through violent intimidation. Anti-crime measures that increase the cost of corruption but not of the exercise of violence might accordingly lead mafia-style organizations to retaliate by resorting to violence in lieu of bribery. On the other hand, anti-corruption measures might also induce criminal clans to go inactive, owing to the higher “entry barriers” to the “business” of influencing politics, which would reduce violence. To determine which of these possible effects is prevalent, we undertake an empirical assessment of the impact of city council dissolution for mafia influence as prescribed by Decree Law 164/1991 in discouraging violence against politicians in the period 2010-2019. Our difference-in-differences analysis shows that in the dissolved municipalities the enforcement of the Law reduces violence, the effect persisting for two electoral rounds. Also, we find spillover effects moderating violence in undissolved neighboring municipalities. These findings are robust to a series of endogeneity tests.
    Keywords: Organized Crime, Violence, Anti-corruption measures, Spillovers
    JEL: C25 D73 D78 I38 K42
    Date: 2022–07
  21. By: Jérémy Tanguy (Université Savoie Mont Blanc)
    Abstract: I evaluate whether parents’ health shocks in early childhood, adolescence, or adulthood impact their children’s risky health behavior. I use a French epidemiological cohort. Two types of health shocks are considered: lung cancer and smoking-related cancer. First, I exploit heterogeneity in the age of the individual at the moment of the parent’s health shock to analyze the influence of the cancer diagnosis on the offspring's smoking behavior. Second, I propose a Cox proportional hazards model to study the impact of the age of the offspring at the date of the diagnosis on the probability of quitting smoking. Finally, I use the individual's smoking history to build a retrospective panel and estimate an individual fixed-effects model to identify the impact of the parent’s diagnosis on the probability of smoking. In line with the existing literature, I find in all cases very limited impact of the parent’s health shock on the offspring's behavior.
    Date: 2022–08–01

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