nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒10‒31
25 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Immigrants and Trade Union Membership: Does Integration into Society and Workplace Play a Moderating Role? By Bedaso, Fenet Jima; Jirjahn, Uwe; Goerke, Laszlo
  2. Long-Term Effects of Hiring Subsidies for Unemployed Youths - Beware of Spillovers By Albanese, Andrea; Cockx, Bart; Dejemeppe, Muriel
  3. Pension Wealth and the Gender Wealth Gap By Cordova, Karla; Grabka, Markus M.; Sierminska, Eva
  4. Earnings Dynamics, Inequality and Firm Heterogeneity By Paul Bingley; Lorenzo Cappellari
  5. Another battle of the have-nots? The Impact of Immigration on the Poverty Risk of Western European By Martina Bazzoli; Joan E. Madia; Federico Podestà
  6. First Generation Elite: The Role of School Networks By Cattan, Sarah; Salvanes, Kjell G.; Tominey, Emma
  7. Emergency-Aid for Self-employed in the Covid-19 Pandemic: A Flash in the Pan? By Jörn Block; Alexander S. Kritikos; Maximilian Priem; Caroline Stiel
  8. Regional Institutional Quality and Territorial Equity in LTC Provision By Marenzi, A.;; Rizzi, D.;; Zanette, M.;; Zantomio, F.;
  9. The Incidence of Housing Allowances: Quasi-Experimental Evidence By Eerola, Essi; Lyytikäinen, Teemu; Saarimaa, Tuukka; Vanhapelto, Tuuli
  10. Long-term returns to local health-care spending By Jakub Cerveny; Jan C. van Ours
  11. Early retirement provision for elderly displaced workers By Herman Kruse; Andreas Myhre
  12. Labor Supply and the Pension Contribution-Benefit Link By French, E.; Lindner, A.; O'Dea, C.; Zawisza T.
  13. What wages do people expect for vocational and academic education backgrounds in Switzerland? By Maria A. Cattaneo
  14. Taxing Households Energy Consumption in the EU: the Tax Burden and its Redistributive effect By AMORES Antonio F; MAIER Sofia; RICCI Mattia
  15. Are Immigrants more Left leaning than Natives? By Simone Moriconi; Giovanni Peri; Riccardo Turati
  16. Educational field, economic uncertainty, and fertility decline in Finland in 2010–2019 By Julia Hellstrand; Jessica Nisén; Mikko Myrskylä
  17. Skill shortages and industry clusters – Empirical evidence from German establishment data By tobias König; thomas Brenner
  18. Organisational Leadership: How Much Does It Matter? By Haile, Getinet Astatike
  19. Evaluating the effects of short and medium-term temporary work reduction schemes: the case of Spain’s ERTEs during the COVID-19 outbreak By Garcia-Clemente, Javier; Rubino, Nicola; Congregado, Emilio
  20. The Opportunity Driven Entrepreneurship in the Context of Innovation Systems in Europe in the Period 2010-2019 By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  21. The Intergenerational Transmission of Housing Wealth By N. Meltem Daysal; Michael F. Lovenheim; David Wasser
  22. Can the child penalty be reduced?. Evaluating multiple policy interventions By Martin Eckhoff Andresen; Emily Nix
  23. The effect of fertility timing on women’s earnings at midlife in the UK By Jessica Nisén; Johanna Tassot; Francesco Iacoella; Peter Eibich
  24. Wage expectation, information and the decision to become a nurse By Philipp Kugler;
  25. Isolating nature from nurture: Does exposure to business and economics education make students more self-interested? By Sundemo, Mattias; Löfgren, Åsa

  1. By: Bedaso, Fenet Jima; Jirjahn, Uwe; Goerke, Laszlo
    Abstract: We hypothesize that incomplete integration into the workplace and society implies that immigrants are less likely to be union members than natives. Incomplete integration makes the usual mechanism for overcoming the collective action problem less effective. Using data from the Socio-Economic Panel, our empirical analysis confirms a unionization gap for first-generation immigrants in Germany. Importantly, the analysis shows that the immigrant-native gap in union membership indeed depends on immigrants' integration into the workplace and society. The gap is smaller for immigrants working in firms with a works council and having social contacts with Germans. Our analysis also confirms that the gap is decreasing in the years since arrival in Germany.
    Keywords: Union membership,migration,works council,social contacts with natives,years since arrival
    JEL: J15 J52 J61
    Date: 2022
  2. By: Albanese, Andrea; Cockx, Bart; Dejemeppe, Muriel
    Abstract: We use (donut) regression discontinuity design and difference-in-differences estimators to estimate the impact of a one-shot hiring subsidy targeted at low-educated unemployed youths during the Great Recession recovery in Belgium. The subsidy increases job-finding in the private sector by 10 percentage points within one year of unemployment. Six years later, high school graduates accumulated 2.8 quarters more private employment. However, because they substitute private for public and self-employment, overall employment does not increase but is still better paid. For high school dropouts, no persistent gains emerge. Moreover, the neighboring attraction pole of Luxembourg induces a complete deadweight near the border.
    Keywords: Hiring subsidies,youth unemployment,cross-border employment,regression discontinuity design,difference-in-differences,spillover effects,displacement
    JEL: C21 J08 J23 J24 J64 J68 J61
    Date: 2022
  3. By: Cordova, Karla (Pomona College); Grabka, Markus M. (DIW Berlin); Sierminska, Eva (LISER (CEPS/INSTEAD))
    Abstract: We examine the gender wealth gap with a focus on pension wealth and statutory pension rights. By taking into account employment characteristics of women and men, we are able to identify the extent to which the redistributive effect of pension rights reduces the gender wealth gap. The data for our analysis come from the German Socio-Economic Panel (SOEP), one of the few surveys collecting information on wealth and pension entitlements at the individual level. Pension wealth data are available in the SOEP for 2012 only. While the relative raw gender wealth gap is about 35% (or 31,000 euros) when analysing the standard measure of net worth, it shrinks to 28% when pension wealth is added. This reduction is due to redistributive elements such as caregiver credits provided through the statutory pension scheme. Results of a recentered influence functions (RIF) decomposition show that pension wealth reduces the gap substantially in the lower half of the distribution. At the 90th percentile, the gender wealth gap in net worth and in augmented wealth remains more stable at roughly 27-30%.
    Keywords: gender wealth gap, pension entitlements, Germany, redistribution, SOEP
    JEL: H55 D31 J16
    Date: 2022–09
  4. By: Paul Bingley; Lorenzo Cappellari
    Abstract: Studies of individual earnings dynamics typically ignore firm heterogeneity, whereas worker and firm decompositions of earnings inequality abstract from the life-cycle. We study firm effects in individual earnings dynamics for the Italian private sector population, leveraging the covariance structure of co-workers earnings for identification. Our model allows for dynamics of both worker and firm effects, worker-firm sorting, worker segregation and correlation of firm effects among connected firms. While firms explain most of the earnings inequality when workers are young, workers explain most over the life cycle. Sorting of workers across firms is substantial, especially for younger workers. Standard earnings dynamics models overstate the relevance of individual heterogeneity.
    Keywords: earnings inequality; earnings dynamics; co-workers' covariance
    JEL: J24 J31
    Date: 2022–10
  5. By: Martina Bazzoli; Joan E. Madia; Federico Podestà
    Abstract: This paper examines the impact of immigration on natives’ poverty risk in Western European countries. In doing so, it contributes to the academic debate on immigration impact in two manners. First, it introduces a novel outcome in this debate, i.e. natives’ poverty risk. Second, it brings together two strands of literature: that of the immigration impact on labour market outcomes and the one on the relationship between immigration and public finance. In fact, since poverty risk significantly varies in consequence of work attachment and public programs access, the impact of immigration on the poverty risks of European natives can be coherently investigated by combining the labour market channel with the public-finance channel. Empirically, we estimate to which extent immigrants affect poverty risk of natives, measured in terms of income poverty and material deprivation. Our analysis focuses on both the overall impact, i.e., how all immigrants affect the poverty risk of all natives, and the more specific skill-composition impact, i.e., how the share of low-skilled immigrants affects the poverty risk of low-skilled natives. To this end, we analysed an aggregate panel dataset composed by EU-15 countries plus Norway and Switzerland, annually observed for the period 2005-2018. Our findings indicate that higher shares of immigration do not increase the risk of poverty and material deprivation among natives.
    Keywords: Poverty risk of natives, Immigration, Western Europe
    JEL: J61 O15 I3
    Date: 2022–10
  6. By: Cattan, Sarah (Institute for Fiscal Studies, London); Salvanes, Kjell G. (Norwegian School of Economics); Tominey, Emma (University of York)
    Abstract: Intergenerational persistence in studying for elite education is high across the world. We study the role that exposure to high school peers from elite educated families ('elite peers') plays in driving such a phenomenon in Norway. Using register data on ten cohorts of high school students and exploiting within school, between cohort variation, we identify the causal impact of elite peers on the probability of enrolling in elite education for students from different socioeconomic (SES) backgrounds. We show that exposure to elite peers in high school does drive enrolment into elite degree programmes, but the effect for low SES students is a third of the size than for high SES students. We explore mechanisms behind this pattern – finding that elite peers have a complex effect on students' GPA which is a key part of the story. Elite peers increase the effort of both low and high SES students, but they also push the rank of other students down and trigger a change in teacher behaviour which disadvantages low SES students. To quantify the contribution of this mechanism, we perform a causal mediation analysis exploiting a lottery in the assessment system in Norway to instrument GPA. We find that the indirect effect of elite peers on enrolment through GPA explains just less than half of the total peer effect. Our concluding analysis shows that elite peers in high school raises intergenerational mobility for poor students, but increases persistence for rich students, thereby simultaneously facilitating first generation elite whilst contributing to the high intergenerational persistence at the top of the education and income distribution.
    Keywords: peers, elite university, subject choice, social mobility, teacher bias
    JEL: I24 J24 J62
    Date: 2022–09
  7. By: Jörn Block (Trier-University, Erasmus-University Rotterdam, The Netherlands, University Witten/Herdecke); Alexander S. Kritikos (DIW Berlin, University of Potsdam, IZA Bonn, IAB Nuremberg); Maximilian Priem (DIW Econ Berlin); Caroline Stiel (DIW Berlin)
    Abstract: The self-employed faced strong income losses during the Covid-19 pandemic. Many governments introduced programs to financially support the self-employed during the pandemic, including Germany. The German Ministry for Economic Affairs announced a €50bn emergency-aid program in March 2020, offering one-off lump-sum payments of up to €15,000 to those facing substantial revenue declines. By reassuring the self- employed that the government ‘would not let them down’ during the crisis, the program had also the important aim of motivating the self-employed to get through the crisis. We investigate whether the program affected the confidence of the self-employed to survive the crisis using real-time online-survey data comprising more than 20,000 observations. We employ propensity score matching, making use of a rich set of variables that influence the subjective survival probability as main outcome measure. We observe that this program had significant effects, with the subjective survival probability of the self- employed being moderately increased. We reveal important effect heterogeneities with respect to education, industries, and speed of payment. Notably, positive effects only occur among those self-employed whose application was processed quickly. This suggests stress-induced waiting costs due to the uncertainty associated with the administrative processing and the overall pandemic situation. Our findings have policy implications for the design of support programs, while also contributing to the literature on the instruments and effects of entrepreneurship policy interventions in crisis situations.
    Keywords: self-employment, emergency-aid, treatment effects, Covid-19, entrepreneurship policy, subjective survival probability
    JEL: C21 H43 L25 L26 J68
    Date: 2022–10
  8. By: Marenzi, A.;; Rizzi, D.;; Zanette, M.;; Zantomio, F.;
    Abstract: We show how regional governments affect the appropriate – in terms of territorial equity - assignment of a national LTC benefit. We analyse a three-layers setting, where eligibility criteria are defined by the central government (which bears the fiscal cost of transfers) but the assignment decision is taken by regional medical commissions, while applications are activated by individual potential beneficiaries. Combining administrative and survey data, and accounting for regional variation in eligibility prevalence, we document large territorial disparities in needadjusted benefit assignment. We investigate the determinants of such disparities both in terms of individuals’ differential propensity to claim, and of regional discretionary behaviour, as shaped by the underlying quality of regional institutions. Regional discretion appears to play a major role, with local institutional quality accounting for about one fifth of explained variation in needadjusted benefit coverage. Lower regional institutional quality results in more opportunistic benefit adjudication decisions, although the relationship is attenuated in highly deprived areas.
    Keywords: territorial equity; regional discretion; multi-level government; institutional quality; long-term care; benefit targeting;
    JEL: C13 H11 H53 H75 J14
    Date: 2022–10
  9. By: Eerola, Essi; Lyytikäinen, Teemu; Saarimaa, Tuukka; Vanhapelto, Tuuli
    Abstract: This paper studies the effects of housing allowances on rents. Our research design is based on a reform that made the allowance more generous for small housing units as a quasi-experimental setting. We find that large increases in housing allowances for small housing units have little or no effect on their rents relative to larger units. Thus, the incidence of the reform is largely on allowance recipients and not on their landlords. Consistent with very moderate rent effects, we do not find evidence of recipient households responding to the increased incentive to choose small units. A possible explanation is that optimization frictions and short expected allowance spell duration limited demand responses to the reform.
    Keywords: rental housing, demand subsidies, housing allowance, rent, incidence, housing demand, Local public finance and provision of public services, Social security, taxation and inequality, H22, R28, fi=Asuntopolitiikka|sv=Bostadspolitik|en=Housing policy|, fi=Sosiaaliturva|sv=Social trygghet|en=Social security|,
    Date: 2022
  10. By: Jakub Cerveny (Ministry of Health of the Slovak Republic); Jan C. van Ours (Erasmus University Rotterdam)
    Abstract: This paper investigates the effects of health-care spending on mortality rates of heart attack patients. We relate in-hospital deaths to in-hospital end-of-life spending and post-discharge deaths to post-discharge health-care spending. In our analysis, we use detailed administrative data on individual personal characteristics and information about health-care expenses at the regional level. To account for potential selectivity in the region of health-care treatment we compare local patients with visitors and stayers with recent movers from a different region. In regions with higher health-care spending mortality after heart attacks is substantially lower. Apparently, there are long-term returns to local health-care spending.
    Keywords: Health-care spending, heart attack, mortality, duration models
    JEL: C41 H75 I11 I18
    Date: 2022–10–10
  11. By: Herman Kruse (Statistics Norway); Andreas Myhre
    Abstract: This paper studies the economic effects on re-employment and program substitution behavior among elderly displaced workers who exogenously lose eligibility for their early retirement option. We use detailed Norwegian matched employer-employee data containing information on bankruptcy dates and individual-level wealth, income, pensions and social security benefits. Our empirical strategy employs a regression discontinuity design, as job displacement before a certain age cut-off results in the loss of eligibility for early retirement benefits between ages 62–67 years in Norway. We find that re-employment rates are indistinguishable between workers who just retain eligibility for early retirement benefits and those who just do not. Meanwhile, those who lose eligibility offset 69% of their lost benefits through take-up of other social security benefits, where 51 percentage points comes from disability insurance and 13 percentage points from unemployment insurance. Our findings are particularly policy relevant as tightening of age-limits for old-age pensions is on the agenda in several OECD countries, while current economic hardship throughout the region may lead to increased job displacement for elderly workers.
    Keywords: early retirement; job displacement; labor supply; benefit substitution; social security
    JEL: H55 I38 J14 J26 J65
    Date: 2022–08
  12. By: French, E.; Lindner, A.; O'Dea, C.; Zawisza T.
    Abstract: We estimate the impact of public pension systems on labor supply far from the normal retirement age by exploiting Poland's switch from a Defined Benefit to a Notional Defined Contribution scheme for men born after 1948. Using the universe of taxpayers and this sharp cohort-based discontinuity in the link between current contributions and future benefits, we estimate an employment elasticity with respect to the return to work of 0.44 for ages 51-54. We estimate a lifecycle model that matches these results. The model implies that the change in the contribution-benefit link from the reform increases employment among those in their 30s but decreases it at older ages, reducing overall labor supply across the lifecycle by 2 months.
    Keywords: Labor supply, pensions, contribution-benefit link, defined benefit, defined contribution
    JEL: D15 H55 J22 J26
    Date: 2022–08–22
  13. By: Maria A. Cattaneo
    Abstract: Correctly anticipating the earnings for different educational profiles is pivotal in making informed education decisions. In this paper, leveraging unique survey data, we study the wage expectations for academic and vocational education backgrounds in Switzerland. We find significant heterogeneity in the expected wage distributions for given educational profiles and strong differences in wage beliefs by gender, age, socioeconomic status, region of residence, and migration background. Personal reference points seem to matter in forming these wage expectations, and more than half of the respondents overestimate the returns to academic versus vocational education, especially the returns expected at younger ages. The latter is vital for education policy because our analyses show that the expected returns determine preferences for specific educational tracks for the own (hypothetical) child. If education decisions are illinformed, this likely leads to educational mismatches and related adverse effects later in life.
    Keywords: wage expectations, educational preferences, biased beliefs
    JEL: I20 D84 J31
    Date: 2022–10
  14. By: AMORES Antonio F (European Commission - JRC); MAIER Sofia (European Commission - JRC); RICCI Mattia (European Commission - JRC)
    Abstract: The taxation of energy consumption is a central topic in the current policy debate of the European Union. While raising energy taxation is part of the European Commission's strategy for achieving its 2030/50 climate targets, the ongoing dramatic increases in the price of energy products are raising calls for reducing their taxation. Therefore, a close consideration of the incidence and redistributive effects of energy taxation is crucial to design compensatory measures and to ensure support for the Green transition. In this paper, we employ the EUROMOD microsimulation model to estimate the burden and the redistributive impact of energy consumption taxation on households across Member States. In doing so, we break down the role played by differences in consumption patterns, rates of taxation and their regressivity. We find that countries where energy taxation is the highest are often not the ones where its incidence on household income is the strongest. At the same time, the highest inequality impact is not always taking place in countries with the most regressive energy taxation. We therefore stress the importance of considering, not only the level of energy consumption taxation, but also its regressivity and its incidence over household income when assessing its inequality cost.
    Keywords: Energy consumption taxation, regressivity, redistributive effects, EUROMOD, Europe
    Date: 2022–09
  15. By: Simone Moriconi; Giovanni Peri; Riccardo Turati
    Abstract: We analyze whether second-generation immigrants have different political preferences relative to observationally identical children of citizens in the host countries. Using data on individual voting behavior in 22 European countries between 2001 and 2017, we characterize each vote on a left-right scale based on the ideological and policy positions of the party receiving the vote. In the first part of the paper, we characterize the size of the "left-wing bias" in the vote of second-generation immigrants after controlling for a large set of individual characteristics and origin and destination country fixed effects. We find a significant left-wing bias of second-generation immigrants, comparable in magnitude to the left-wing bias associated with living in urban (rather than rural) areas. We then show that this left-wing bias is associated with stronger preferences for inequality-reducing government intervention, internationalism and multiculturalism. We do not find that second-generation immigrants are biased towards or away from populist political agendas.
    JEL: J61 P16 Z1
    Date: 2022–09
  16. By: Julia Hellstrand (Max Planck Institute for Demographic Research, Rostock, Germany); Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Fertility declined sharply and unexpectedly in Finland in the 2010s. Using detailed Finnish register data, we calculated total fertility rates (TFRs) and the proportion of women expected to have a first birth (TFRp1) in 2010–2019 for 153 fields of education and estimated how the characteristics of each field predicted its fertility decline. As educational field predicts factors related to economic uncertainty, heterogeneity in fertility decline across fields could shed light on the role of economic uncertainty behind the recent fertility decline. In general, women with the highest initial fertility levels (health, welfare, and education) and women in agriculture experienced weaker fertility declines (around -20% or less), while women with the lowest initial fertility levels (ICT, arts and humanities) experienced stronger fertility declines (around -40% or more). The extent of the fertility decline increased with higher unemployment and lower income levels of the field, and with a lower share employed in the public sector. These uncertainty measures together explained one-fourth of the decline in TFR and two-fifths of the decline in first births. The results imply that groups characterized by stable job prospects escaped very strong fertility declines and that objective economic uncertainty fueled the fertility decline in Finland.
    Keywords: Finland, fertility decline
    JEL: J1 Z0
    Date: 2022
  17. By: tobias König; thomas Brenner
    Abstract: Regional and sector-specific skill shortages are either foreseeable or a reality in Germany. It is unclear whether shortages of skilled workers are more apparent in industry-specific agglomerations due to competitive labor poaching or less apparent benefitting labor pooling. This paper analyses the association of skill shortages and the level of industrial clustering in Germany. The results show, that firms located in an industrial cluster have a significantly lower chance of experiencing skill shortages in terms of vacancies for qualified jobs. At the same time, if firms located in industrial clusters face skill shortage, they struggle more to fill such vacancies.
    Keywords: Skill shortage, cluster, location quotient, Establishment panel data
    JEL: J23 J63 R10
    Date: 2022–09–29
  18. By: Haile, Getinet Astatike (University of Nottingham)
    Abstract: We study the influence of leadership on organisational performance and worker wellbeing using data from the 2004 and 2011 Workplace Employment Relations Survey (WERS). Our most conservative estimates from fixed effects regressions on a panel of organisations reveal that virtuous leadership is significantly and positively linked to an upbeat assessment of organisational performance, and an increase in worker wellbeing. Specifically, the estimates reveal that an increase in leadership quality by one standard deviation increases organisational performance and worker job satisfaction by 0.27 and 0.73 standard deviations, respectively, while it leads to a fall in worker job anxiety by 0.13 standard deviations. The results support the hypothesis that good leadership is vital for the success of business including worker wellbeing, which organisational policy makers ought to heed. There is a dearth of evidence on organisational leadership as an institution and its influence on organisational outcomes, which this paper aims to address.
    Keywords: leadership, organisational performance, worker wellbeing, linked data, Britain
    JEL: I31 J28 J5 L2 M5
    Date: 2022–09
  19. By: Garcia-Clemente, Javier; Rubino, Nicola; Congregado, Emilio
    Abstract: This paper presents an average treatment effect analysis of the Spain’s furlough program during the onset of the COVID-19 pandemic, using propensity score matching techniques. Merging 2020 labor force quarterly microdata, we find that the probability to be re-employed after treatment was significantly higher among the treated (furlough granted group) than in the control group (comparable non-furloughed individuals who lost their job). These results seem to be robust across models, having tested a wide range of matching specifications. Furthermore, we also explore if the Spanish furlough scheme had an uniform impact across regions with different industrial structures, concluding that the furlough participation was positively related to the probability of re�employment across any region and economic activity. Nevertheless, a different time arrangement did affect the magnitude of the effect, suggesting that it may decrease with the furlough duration. This finding advises against long lasting schemes under persistent recessions, notwithstanding, short time work schemes still stand as useful strategies to face essentially transitory adverse shocks.
    Keywords: Furlough, short-time work, ERTE, propensity score matching, Covid-19, Spain.
    JEL: J08 J38 J65 J68
    Date: 2022–08–12
  20. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: In this article we have estimated the value of “Opportunity Driven Entrepreneurship” in Europe. We use data from European Innovation Scoreboard-EIS of the European Commission for 36 countries in the period 2010-2019. We use Panel Data with Fixed Effects, Panel Data with Random Effects, WLS, Pooled OLS, and Dynamic Panel. Our results show that “Opportunity Driven Entrepreneurship” is positively associated, among others, to “Innovation Friendly Environment” and “Turnover Share Large Enterprises”, while it is negatively associated, among others, to “Sales Impacts” and “R&D Expenditure Business Sectors”.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation
    JEL: O30 O31 O32 O33 O34
    Date: 2022–09–26
  21. By: N. Meltem Daysal (University of Copenhagen; CEBI; IZA); Michael F. Lovenheim (Cornell University, NBER, and CESifo); David Wasser (Cornell University)
    Abstract: Rising wealth inequality has spurred an increased interest in understanding how and why wealth is correlated across generations. Prior research has found an intergenerational correlation between 0.2 and 0.4 and has emphasized the role of family characteristics in driving this correlation. We contribute to this literature by examining the intergenerational transmission of wealth changes, which allows us to isolate the causal effect of wealth shocks from predetermined parental preferences and household characteristics. Using Danish Register Data, we examine the effect of home price changes that occur between ages 0-5, 6-11, and 12-17 on the value of the home children own at ages 29-33. For the youngest age group, we find that 12.7% of each Krone of home price change is transmitted to housing wealth in adulthood. The transmission rate for the 6-11 age group is higher, at 20.5%, and there is no transmission of home price changes that occur during the teenage years. Examining mechanisms, we find that home price increases in the first two age groups lead to modest increases in home ownership and educational attainment. There also is an increase in non-housing wealth, income, and partner wealth for the middle age group. Income and education can explain only 20-30% of the intergenerational transmission we document. We argue that our results largely reflect changes to parental/household behaviors and preferences that are passed down to children and cause them to accumulate more housing wealth in young adulthood.
    Keywords: Intergenerational wealth transmission, housing wealth
    JEL: J62 R31 I20
    Date: 2022–10–03
  22. By: Martin Eckhoff Andresen (Statistics Norway); Emily Nix
    Abstract: Children cause large earnings drops for mothers but not fathers, a stylized fact known as the “child penalty” that explains a substantial portion of remaining gender income gaps. Can policy reduce the child penalty? We first document how changes in the child penalty over a long time horizon in Norway correlate with major family policy reforms. Next, we evaluate two possible interventions: paternity leave and high-quality childcare. We find no impact of paternity leave on child penalties or a measure of father’s preferences for childcare. In contrast, a year of publicly provided childcare reduces child penalties by 23% during the years of use. These results suggest governments can act to reduce child penalties, but providing alternatives to the mother’s time, such as quality childcare, is more effective than paternity leave.
    Keywords: Gender wage gap; child penalty; paternity leave; childcare
    JEL: J21 J23 J22 J71
    Date: 2022–07
  23. By: Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Johanna Tassot (Max Planck Institute for Demographic Research, Rostock, Germany); Francesco Iacoella; Peter Eibich (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: An extensive body of research shows that motherhood has substantial impacts on women’s earnings, but there is less evidence on the effect of the timing of motherhood, particularly in the long term and from contexts other than the US. This study analyses data from the 1970 British Cohort Study (BCS70) to examine whether the timing of motherhood affects women’s midlife earnings, as well as the role of potential mediators (tertiary education, years in paid work, and number of children). We make use of the occurrence and timing of biological fertility shocks as a source of exogenous variation in the age at first birth. We find evidence for that avoidance of early motherhood may have a positive effect on women’s earnings in midlife in the UK. This effect is likely to be mediated by years in paid work and number of children. These findings call for policies that support early mothers’ employment careers.
    Keywords: United Kingdom, contraception, education, female employment, fertility, income, labor market
    JEL: J1 Z0
    Date: 2022
  24. By: Philipp Kugler;
    Abstract: In light of skilled-labor shortage in nursing, the effect of a change in the wage of nurses on their labor supply is intensely discussed in recent literature. However, most results show a wage elasticity close to zero. Using extensive data of former German 9th graders, I analyze the role of the expected wage as an incentive to become a nurse. To estimate a causal effect, I select controls and their functional form using post-double-selection, which is a data driven selection method based on regression shrinkage via the lasso. Contrary to common perceptions, the expected wage plays a positive and statistically significant role in the decision to become a nurse. Further, understating a nurse's wage decreases the probability of becoming one. Concerning omitted variable bias, I assess the sensitivity of the results using a novel approach. It evaluates the minimum strength that unobserved confounders would need to change the conclusion. The sensitivity analysis shows that potential unobserved confounders would have to be very strong to overrule the conclusions. The empirical results lead to two important policy implications. First, increasing the wage may help to overcome the shortage observed in many countries. Second, providing information on the (relative) wage may be a successful strategy to attract more individuals into this profession.
    Keywords: health professional, expected wage, wage information, machine learning, sensitivity analysis
    JEL: I11 I21 J24 J31
    Date: 2022–01–19
  25. By: Sundemo, Mattias (Department of Economics, School of Business, Economics and Law, Göteborg University); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Does exposure to business and economics education make students more self-interested and less interested in a career that would contribute to a better society? Using a panel dataset of more than 900 individuals from a European Business School we are able to isolate the role of self-election from possible education or nurture-effects on prosocial (altruistic) values and attitudes associated with exposure to business and economics education. The school in this study, as well as many other contemporary business schools in this part of the world, have for many years integrated issues of sustainability, responsibility and ethics into their business and economics education. Still, after all these efforts, our results indicate that business and economics students become significantly less prosocial during their program studies, and importantly, we find no such effect among students from other disciplines. Further, we find that prosocial attitudes significantly correlate with prosocial behavior (measured by donation in an incentivized charity dictator game). We also provide evidence for highly heterogeneous effects with regards to majors (accounting, management, finance, economics etc.). Finally, we find notable and significant gender differences that largely persist throughout university education.
    Keywords: indoctrination; education; selection effect; economics education; business education; gender; prosociality; prosocial behavior; self-interest
    JEL: A22 D91 I23
    Date: 2022–10

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