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on Microeconomic European Issues |
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Issue of 2022‒10‒03
fifteen papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Claus Thustrup Kreiner (University of Copenhagen, CEBI, CESifo, and CEPR); Isabel Skak Olufsen (University of Copenhagen and CEBI) |
| Abstract: | This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in wellbeing already in early adulthood, where differences in economic outcomes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach. |
| Keywords: | Subjective well-being, inequality, intergenerational mobility |
| JEL: | I31 J62 D30 D63 |
| Date: | 2022–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2210&r= |
| By: | Mikkel Aagaard Houmark (Department of Economics and Business Economics and TrygFonden’s Centre for Child Research, Aarhus University); Cecilie Marie Løchte Jørgensen (Department of Economics and Business Economics, Aarhus University); Ida Lykke Kristiansen (Department of Economics and CEBI, University of Copenhagen); Miriam Gensowski (Rockwool Foundation Research Unit, and IZA, Bonn) |
| Abstract: | We study how children’s socio-emotional skills and well-being in adolescence are affected by an increase in the duration of parental care during infancy. Exploiting a Danish reform that extended paid parental leave in 2002 and effectively delayed children’s entry into formal out-of-home care, we show that longer leave increases adolescent well-being, conscientiousness and emotional stability, and reduces school absenteeism. The effects are strongest for children of mothers who would have taken short leave in absence of the reform. This highlights how time spent with a parent is particularly productive during very early childhood. |
| Keywords: | Parental Leave, Early Childhood, Skill Formation, Parental Investments, Socio-Emotional Skills, Personality, Well-Being, Adolescence |
| JEL: | J13 J18 J24 I31 |
| Date: | 2022–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2214&r= |
| By: | Lea Nassal (Lea Nassal); Marie Paul (Marie Paul) |
| Abstract: | We investigate the effects of long-distance moves of married couples on both spouses’ earnings, employment and job characteristics based on a new administrative dataset from Germany. Employing difference-in-difference propensity score matching and accounting for spouses’ pre-move employment biographies, we show that men’s earnings increase significantly after the move, whereas women suffer large losses in the first years. Men’s earnings increases are mainly driven by increasing wages and switches to slightly larger and better paying firms. Investigating effect heterogeneity with respect to pre-move relative earnings or for whose job opportunity couples move, confirms strong gender asymmetries in gains to moving. |
| Keywords: | Long-distance moves, labour market careers, gender gap |
| JEL: | J61 J16 R23 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2220&r= |
| By: | Nicolas Frémeaux (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - Université Paris-Panthéon-Assas); Marion Leturcq (INED - Institut national d'études démographiques) |
| Abstract: | This paper examines wealth accumulation among couple-headed households and investigates changes in within-household inequality over time and across couple statuses. Going beyond previous research that mostly studies wealth accumulation within marriages by comparing married with unmarried individuals, we consider the legal statuses of couples (cohabitation, civil union, and marriage) and property regimes (community and separate property). We apply multivariate regression analysis to high-quality longitudinal data from the French wealth survey (2015–2018) and find no differences in net worth accumulation between couples' legal statuses when property regimes are not accounted for. However, couples with a separate property regime accumulate more wealth than couples with a community property regime, and married couples with a separate property regime drive this association. Our results show that the gender wealth gap is larger for couples with a separate property regime, but it is partially compensated by accumulated wealth. Our results highlight the importance of legal statuses and property regimes in explaining the dynamics of between- and within-household inequality in France, specifically within a context of increasingly diversified marital trajectories. |
| Keywords: | wealth,gender inequality,marriage,marital property regime,civil union,France |
| Date: | 2022–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03763819&r= |
| By: | Halvarsson, Daniel (The Ratio Institute); Lark, Olga (Lund University); Tingvall, Patrik (Stockholm School of Economics); 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: | 2022–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0361&r= |
| By: | Giovanni Busetta (Department of Economics - Universita' di Messina) |
| Abstract: | Economic theory splits discrimination into statistical and tastebased. While the logic underlying the first one consists of using information on a group of individuals as proxy of a specific worker. In the case of taste-based, the discrimination against a group of individuals, is connected to a personal preference of the employer rather than any lack of information. This second kind of discrimination is incompatible with the maximization of entrepreneur's profits. To assess the difference between the two, we constructed a specific index of ethnic discrimination, capable to separate the two kinds of discrimination using native, first- and second- generation immigrants (Busetta et al., 2018; Busetta et al., 2020). The aim of this paper is to apply this Index, previously used only in the Italian context, to several European countries, using the dataset "Condition and Social Integration of Foreign Citizens, SCIF 2011-2012", to compare the levels of statistical and taste-based discrimination in different societies. |
| Keywords: | Labor market discrimination, First- and second-generation immigrants, Statistical and taste-based discrimination. |
| JEL: | C43 J15 J23 J64 J71 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:470&r= |
| By: | Philipp Jaschke; Sulin Sardoschau; Marco Tabellini |
| Abstract: | This paper studies the effects of threat on convergence to local culture and economic assimilation of refugees, exploiting plausibly exogenous variation in their allocation across German regions between 2013 and 2016. We combine novel survey data on cultural preferences and economic outcomes of refugees with corresponding information on locals, and construct a threat index that integrates contemporaneous and historical variables. On average, refugees assimilate both culturally and economically. However, while refugees assigned to more hostile regions converge to local culture more quickly, they do not exhibit faster economic assimilation. Our evidence suggests that refugees exert more assimilation effort in response to local threat, but do not integrate faster because of higher discrimination in more hostile regions. |
| JEL: | F22 J15 Z10 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30381&r= |
| By: | Jozef Konings; Glenn Magerman; Dieter Van Esbroeck |
| Abstract: | We analyze the impact of Covid-19 rescue policies on both firm-level and aggregate productivity growth and reallocation. Using administrative data on the universe of firms’ subsidies in Flanders, we estimate the causal impact of these subsidies on firm-level outcomes. Firms that received subsidies saw a 7% increase in productivity, compared to firms that applied for, but did not obtain subsidies. Furthermore, the propensity to exit the market was 43% lower for treated firms. Aggregate productivity growth, a share-weighted sum of firms’ productivity evolutions, amounted to 6% in 2020. While within-firm productivity growth was similar for both subsidized and non-subsidized firms, there is a reallocation of market shares from subsidized firms to non-subsidized firms. These results suggest that Covid rescue policies helped firms to sustain and preserve productivity, while not obstructing allocative efficiency gains to non-subsidized firms. |
| Keywords: | Productivity, productivity growth, aggregate productivity, allocative efficiency |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/349952&r= |
| By: | Juliana Bernhofer (Department of Economics, Ca' Foscari University of Venice, Italy); Alessandro Fedele (Free University of Bozen-Bolzano, Italy); Mirco Tonin (Free University of Bozen-Bolzano, Italy) |
| Abstract: | Health systems around the world face an increasing shortage of workers. It is thus important to understand what motivates people to enter the sector. We study how financial incentives affect the performance on the entry test into medical and healthcare schools, a crucial step for aspiring healthcare professionals. To this end, we conduct a randomized information experiment with Italian applicants. We first elicit applicants' expectations about the starting wage of the healthcare job they want to study for. We then inform the treatment group about the true starting wages, while we provide no information to the control group. We finally collect the test scores obtained by applicants. Correcting wage expectations enhances the test scores when expectations are lower than the true wage level, while no significant effects occur when expectations are higher. The treatment does not induce negative selection in terms of ability and altruism. Our findings provide novel experimental evidence that wages matter for prospective students in the health sector and suggest an impact of prospective financial rewards also at a very early stage of careers. |
| Keywords: | Information Experiment; Applicants to Medical and Healthcare Schools; Wage Expectations; Admission Test Scores. |
| JEL: | I1 I23 J3 C9 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps95&r= |
| By: | Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio |
| Abstract: | In this article we investigate the determinants of “New Doctorate Graduates” in Europe. We use data from the EIS-European Innovation Scoreboard of the European Commission for 36 countries in the period 2010-2019 with Pooled OLS, Dynamic Panel, WLS, Panel Data with Fixed Effects and Panel Data with Random Effects. We found that “New Doctorate Graduates” is positively associated, among others, with “Human Resources” and “Government Procurement of Advanced Technology Products” and negatively, associated among others, with “Total Entrepreneurial Activity” and “Innovation Index”. We apply a clusterization with k-Means algorithm either with the Silhouette Coefficient either with the Elbow Method and we found that in both cases the optimal number of clusters is three. Furthermore, we use the Network Analysis with the Distance of Manhattan, and we find the presence of seven network structures. Finally, we propose a confrontation among ten machine learning algorithms to predict the value of “New Doctorate Graduates” either with Original Data-OD either with Augmented Data-AD. Results show that SGD-Stochastic Gradient Descendent is the best predictor for OD while Linear Regression performs better for AD. |
| Keywords: | Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation. |
| JEL: | O3 O30 O32 |
| Date: | 2022–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114452&r= |
| By: | Jeppe Druedahl (Department of Economics, University of Copenhagen and CEBI); Emil Bjerre Jensen (Department of Economics, University of Copenhagen, CEBI and Nykredit); Søren Leth-Petersen (Department of Economics, University of Copenhagen, CEBI and CEPR) |
| Abstract: | To analyze the effectiveness of stabilization policies which includes effects on households future income it is central to account for anticipation effects on consumption. We investigate this using high-frequency spending and balance sheet data from a major Danish bank. We examine the behavior of borrowers with adjustable rate mortgages, and exploit that the bank sends a letter before the annual reset containing advance information on the expected change in mortgage payments. We find that unconstrained households respond immediately, while liquidity constrained households instead wait and respond around the time the cash-flow-arrives. The cumulative response is similar across the liquidity distribution. This is in line with a standard buffer-stock consumption model, and implies that it is less effective to target stimulus to low liquidity households when the effect on household income is partly in the future. |
| Keywords: | Consumption, anticipation effects, intertemporal MPC, persistent shocks, mortgages, monetary policy, heterogeneous agent models |
| JEL: | D12 D14 D91 E21 E44 E52 G21 |
| Date: | 2022–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2213&r= |
| By: | Margherita Bottero (Bank of Italy); Stefano schiaffi (Bank of Italy; Bank of Italy) |
| Abstract: | We study how firms’ cash balances affect the supply of bank credit and the transmission of monetary policy via the bank-lending channel in Italy using bank- and firm-level data. From a theoretical perspective, there is no agreement on whether, for a given level of credit demand, cash-rich companies enjoy better access to credit, as an abundance of cash may reveal both positive and negative information about the firm. According to our analysis, based on a sample of 430,000 Italian non-financial corporations over the period 2006-2018, banks view firm liquidity favourably since it is associated, on average, with cheaper bank funding and with a credit composition tilted towards term loans, at all maturities and non-collateralized. We also show that firms reallocate their liquidity in and out of their deposits following changes in the slope of the yield curve, which proxies the opportunity cost of cash. For this reason, changes in monetary policy that alter the slope of the term structure impact the cost of credit not only via the traditional channels but also indirectly, as they prompt a reallocation of firm liquidity that banks anticipate and price into the credit contracts they offer. |
| Keywords: | firm liquidity, bank financing, monetary policy transmission |
| JEL: | E51 E52 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1378_22&r= |
| By: | Andrew Caplin (New York University and NBER); Minjoon Lee (Carleton University); Søren Leth-Petersen (University of Copenhagen); Johan Sæverud (University of Copenhagen); Matthew D. Shapiro (University of Michigan and NBER) |
| Abstract: | How worker productivity evolves with tenure and experience is central to economics, shaping, for example, life-cycle earnings and the losses from involuntary job separation. Yet, worker-level productivity is hard to identify from observational data. This paper introduces direct measurement of worker productivity in a firm survey designed to separate the role of on-the-job tenure from total experience in determining productivity growth. Several findings emerge concerning the initial period on the job. (1) On-the-job productivity growth exceeds wage growth, consistent with wages not being allocative period-by-period. (2) Previous experience is a substitute, but a far less than perfect one, for on-the-job tenure. (3) There is substantial heterogeneity across jobs in the extent to which previous experience substitutes for tenure. The survey makes use of administrative data to construct a representative sample of firms, check for selective non-response, validate survey measures with administrative measures, and calibrate parameters not measured in the survey. |
| Keywords: | Productivity, Wages, Tenure, Experience, Firm survey |
| JEL: | E24 J24 J30 |
| Date: | 2022–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2211&r= |
| By: | Arendt, Jacob Nielsen (Rockwool Foundation Research Unit); Dustmann, Christian (University College London); Ku, Hyejin (University College London) |
| Abstract: | Denmark has accepted refugees from a large variety of countries and for more than four decades. Denmark has also frequently changed policies and regulations concerning integration programs, transfer payments, and conditions for permanent residency. Such policy variation in conjunction with excellent administrative data provides an ideal laboratory to evaluate the effects of different immigration and integration policies on the outcomes of refugee immigrants. In this article, we first describe the Danish experience with refugee immigration over the past four decades. We then review different post-arrival refugee policies and summarize studies that evaluate their effects on the labor market performance of refugees. Lastly, we discuss and contrast these findings in the context of international studies of similar policies and draw conclusions for policy. |
| Keywords: | refugee integration, immigration policies, labor supply, employment, language |
| JEL: | J22 J24 J61 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15497&r= |
| By: | Carin van der Cruijsen; Maurice Doll; Jakob de Haan |
| Abstract: | Abstract: Using a survey among more than 2,000 consumers in the Netherlands, we examine the drivers of trust in the financial sector supervisor. Trust in De Nederlandsche Bank (DNB) declined sharply during the financial crisis and has not yet completely recovered. Our results suggest that consumers’ knowledge about supervision is positively associated with their trust in the supervisor. Assessing the fitness and propriety of top managers of financial institutions and supervising financial institutions enlarge trust in DNB. The same holds for the execution of the deposit guarantee system. Finally, we find that communicating about supervisory activities also increases trust. |
| Keywords: | Trust; financial sector supervisor; financial literacy; communication |
| JEL: | D12 D84 E58 G21 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:750&r= |