nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒11‒14
27 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The health-Consumption Effects of Increasing Retirement Age Late in the Game By Eve Caroli; Catherine Pollak; Muriel Roger
  2. Gender diversity, labour in the boardroom and gender quotas By Kunze, Astrid; Katrin Scharfenkamp, Katrin
  3. Long-Term Effects of Hiring Subsidies for Unemployed Youths—Beware of Spillovers By Andrea Albanese; Bart Cockx; Muriel Dejemeppe
  4. Is Longer Maternal Care Always Beneficial? The Impact of a Four-Year Paid Parental Leave By Bicakova, Alena; Kaliskova, Klara
  5. Unburdening regulation: the impact of regulatory simplification on photovoltaic adoption in Italy By Federica Daniele; Alessandra Pasquini; Stefano Clò; Enza Maltese
  6. Immigrant bilingualism in the German labour market: Between human capital, social networks, and ethnic marginalisation By Markowsky, Eva; Wolf, Fridolin; Schäfer, Marie
  7. Long-Term Effects of Hiring Subsidies for Unemployed Youths - Beware of Spillovers By Andrea Albanese; Bart Cockx; Muriel Dejemeppe
  8. "The Double Dividend of Training" – Labor Market Effects of Work-Related Continuous Education in Switzerland By Denzler, Stefan; Ruhose, Jens; Wolter, Stefan C.
  9. The Effect of a Universal Preschool Programme on Long-Term Health Outcomes: Evidence from Spain By Laia Bosque-Mercader
  10. Employer Cooperation, Productivity, and Wages: New Evidence from Inter-Firm Formal Network Agreements By Devicienti, Francesco; Grinza, Elena; Manello, Alessandro; Vannoni, Davide
  11. Lost Mind, Lost Job? Unequal Effects of Corporate Downsizings on Employees By Böckerman, Petri; Haapanen, Mika; Johansson, Edvard
  12. The Timing of Parental Job Displacement, Child Development and Family Adjustment By Pedro Carneiro; Kjell G. Salvanes; Barton Willage; Alexander L.P. Willén
  13. The Role of Within-Occupation Task Changes in Wage Development By Bachmann, Ronald; Demir, Gökay; Green, Colin P.; Uhlendorff, Arne
  14. The Usual Suspects: Offender Origin, Media Reporting and Natives’ Attitudes Towards Immigration By Sekou Keita; Thomas Renault; Jérôme Valette
  15. The heterogeneous effects of bank mergers and acquisitions on credit to firms: evidence from Italian macro-regions By Silvia Del Prete; Cristina Demma; Iconio Garrí; Marco Piazza; Giovanni Soggia
  16. Temporal Discounting in Later Life By Kulati, Ellam; Myck, Michal; Pasini, Giacomo
  17. German Financial State Aid during COVID-19 Pandemic: Higher Impact among Digitalized Self-Employed By Bertschek, Irene; Block, Jörn; Kritikos, Alexander S.; Stiel, Caroline
  18. The diffusion of digital skills across EU regions: Structural drivers and polarization dynamics By Caravella, Serenella; Cirillo, Valeria; Crespi, Francesco; Guarascio, Dario; Menghini, Mirko
  19. Do Immigrants Push Natives towards Safer Jobs ? Exposure to COVID-19 in the European Union By Bossavie,Laurent Loic Yves; Garrote Sanchez,Daniel; Makovec,Mattia; Ozden,Caglar
  20. The Future of Work and Consumption in Cities after the Pandemic: Evidence from Germany By Jean-Victor Alipour; Oliver Falck; Simon Krause; Carla Krolage; Sebastian Wichert
  21. The Financial literacy of micro-entrepreneurs: evidence from Italy By Paolo Finaldi Russo; Ludovica Galotto; Cristiana Rampazzi
  22. Inflation Expectations and Corporate Borrowing Decisions: New Causal Evidence By Ropele, Tiziano; Gorodnichenko, Yuriy; Coibion, Olivier
  23. The Curious Incidence of Monetary Policy Across the Income Distribution By Broer, Tobias; Kramer, John; Mitman, Kurt
  24. Marriage as Insurance: Job Protection and Job Insecurity in France By Clark, Andrew E.; D’Ambrosio, Conchita; Lepinteur, Anthony
  25. Will We Ever Be Able to Track Offshore Wealth? Evidence from the Offshore Real Estate Market in the UK By Jeanne Bomare; Ségal Le Guern Herry
  26. Municipal building codes and the adoption of solar photovoltaics By Carattini, Stefano; Figge, Béla; Gordan, Alexander; Löschel, Andreas
  27. Housing Inequality and how Fiscal Policy shapes it: Evidence from Belgian Real Estate By Gerard Domènech-Arumí; Paula Eugenia Gobbi; Glenn Magerman

  1. By: Eve Caroli (LEDa - Université Paris Dauphine - PSL and IZA); Catherine Pollak (DRESS and LEDa - Université Paris Dauphine - PSL); Muriel Roger (Centre d'Economie de la Sorbonne - Université Paris 1 Panthéon-Sorbonne and LIEPP)
    Abstract: Using the differentiated increase in retirement age across cohorts introduced by the 2010 French pension reform, we estimate the health-consumption effects of a 4-month increase in retirement age. We focus on individuals who were close to retirement age but not retired yet by the time the reform was passed. Using administrative data on individual sick-leave claims and non-hospital health-care expenses, we show that the probability of having at least one sickness absence increases for all treated groups, while the duration of sick leaves remains unchanged. Delaying retirement does not increase the probability of seeing a GP, except for men in the younger cohorts. In contrast, it raises the probability of having a visit with a specialist physician for all individuals, except men in the older cohorts. Delaying retirement also increases the probability of seeing a physiotherapist among women from the older cohorts. Overall, it increases health expense claims, in particular in the lower part of the expenditure distribution
    Keywords: pension reform; retirement age; health; health-care consumption
    JEL: I10 J14 J18 J26
    Date: 2022–10
  2. By: Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration); Katrin Scharfenkamp, Katrin (University of Bielefeld)
    Abstract: This study investigates boards of (non-executive) directors and whether employee representation has a positive effect on gender diversity on boards. We exploit rich, newly assembled board–director matched panel data for Norway and Germany, which contain unique information on whether a director represents shareholders or employees during the period around 2008, when a Norwegian board gender quota came into effect. We present two novel results that challenge previous thinking about the effects of board gender quotas on women directors. First, we find a positive impact of employee representation before the gender quota reform on gender diversity. Second, although the Norwegian gender quota has increased the probability of a director being female, the effect through employee representation has relatively decreased after and the implementation of the reform. We discuss potential mechanisms and implications for the design of co-determination laws and gender quotas.
    Keywords: Affirmative action; employee representation; shared governance; co-determination; women; boards of directors; firm size
    JEL: G30 J16 K30 L21 L25 M54
    Date: 2022–10–31
  3. By: Andrea Albanese; Bart Cockx; Muriel Dejemeppe
    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
  4. By: Bicakova, Alena (CERGE-EI); Kaliskova, Klara (CERGE-EI)
    Abstract: We study the impact of an extension of paid family leave from 3 to 4 years on child long- term outcomes. Using a difference-in-differences design and comparing the first-affected with the last-unaffected cohorts of children, we find that an additional year of maternal care at the age of 3, which primarily crowded out enrollment into public kindergartens, had an adverse effect for children of low-educated mothers on human capital investments and labor-market attachment in early adulthood. The affected children were 12 p.p. more likely not to be in education, employment, or training (NEET) at the age of 21-22. The impact on daughters was larger and driven by a lower probability of attending college and higher probability of home production. Sons of low-educated mothers, on the other hand, were less likely to be employed. The results suggest that exposure to formal childcare may be more beneficial than all-day maternal care at the age of 3, especially for children with a lower socio-economic background.
    Keywords: family leave, maternal care, subsidized childcare, child outcomes, human capital, labor-market attachment
    JEL: J13 J18 J21 J24
    Date: 2022–10
  5. By: Federica Daniele (Bank of Italy); Alessandra Pasquini (Bank of Italy); Stefano Clò (University of Florence); Enza Maltese (Bank of Italy)
    Abstract: This paper measures the impact of a series of reforms enacted by a subset of Italian regions from 2009 to 2013 that dramatically simplified the authorization procedure for investment in medium-sized photovoltaic (PV) plants, i.e. plants with an installed capacity of between 20 and 200 kW. We rely on georeferenced administrative data on nearly all of the PV plants built in Italy, and employ a stacked border diff-in-diff method. We compare the change in PV installations following the implementation of the simplification reforms between municipalities located close to the border in regions where the reforms were introduced and those located in neighbouring regions that did not implement the reforms. We find that simplification reforms increased the installed capacity in medium-sized plants by 29 percentage points. This resulted in 12 extra MW installed per quarter, which equates to about 10% of the average quarterly installed capacity for the same category of plants during 2009-2013.
    Keywords: photovoltaic investment, regulatory simplification, regions
    JEL: H23 K32 L51 Q42
    Date: 2022–10
  6. By: Markowsky, Eva; Wolf, Fridolin; Schäfer, Marie
    Abstract: We compare the earnings of monolingual and competent bilingual immigrants in Germany. A joint discussion of language skills as human capital or social capital and theories of ethnic marginalisation leads us to expect heterogeneous returns to bilingualism. To track this potential divergence, we differentiate effects by gender, language group, immigrant density in respond- ents' areas of residence, and communication intensity of their occupations. Doing so reveals sizeable differences in the returns to bilingualism. We find positive effects for the largest immigrant community in Germany, the Turkish population, while other language groups do not seem to benefit from retaining their heritage language. Individuals with a Turkish migration background have higher earnings when proficient in their heritage language and German. We discuss how the size of the immigrant community and the bilingualism premium might be related and pursue two alternative explanations: Specialised labour demand due to the wide dissemination of the Turkish-speaking population in Germany and ethnic social networks that are open only to those with proficiency in the heritage language. Our data indicate that both are important but operate in gender-specific ways. Turkish bilingual men experience an earnings premium only in occupations with high communication intensity, while there is no statistical relationship for women. The social capital channel is also much more potent for men, while bilingual German-Turkish women do not seem to profit from heritage-language networks for labour market success to the same degree. We discuss differences by gender in activating social capital and cultural influences as drivers of this gap.
    Date: 2022
  7. By: Andrea Albanese; Bart Cockx; Muriel Dejemeppe
    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; spillover effects; youth unemployment; displacement; cross-border employment; regression discontinuity design
    JEL: C32 J08 J23 J24 J61 J64 J68
    Date: 2022–10
  8. By: Denzler, Stefan (Swiss Co-ordination Center for Research in Education); Ruhose, Jens (University of Kiel); Wolter, Stefan C. (University of Bern)
    Abstract: This paper presents the first longitudinal estimates of the effect of work-related training on labor market outcomes in Switzerland. Using a novel dataset that links official census data on adult education to longitudinal register data on labor market outcomes, we apply a regression-adjusted matched difference-in-differences approach with entropy balancing to account for selection bias and sorting on gains. We find that training participation increases yearly earnings and reduces the risk of unemployment two years after the treatment. However, the effects are heterogeneous as to gender, age, education, and regional labor market context. The gains are highest for middle-aged men with formal vocational education working in either depressed or booming labor markets.
    Keywords: continuous education, wages, unemployment, entropy balancing, Switzerland
    JEL: I21 I26 J24 M53
    Date: 2022–10
  9. By: Laia Bosque-Mercader
    Abstract: Early childhood education programmes are expected to improve child conditions including educational attainment, labour, and health outcomes. This study evaluates the effect of a Spanish universal preschool programme, which implied a large-scale expansion of full-time high-quality public preschool for three-year-olds in 1991, on long-term health. Using a difference-in-differences approach, I exploit the timing of the policy and the differential initial speed of implementation of public preschool expansion across regions. I compare long-term health of cohorts aged three before to those aged three after the start of the policy residing in regions with varying initial implementation intensity of the programme. The results show that the policy does not affect long-term health outcomes and use of healthcare services, except for two outcomes. A greater initial intensity in public preschool expansion by 10 percentage points decreases the likelihood of being diagnosed with asthma by 2.1 percentage points, but hospitalisation rates increase by 2.7%. The findings indicate that the effect on asthma is larger for men, hospitalisation rates are higher for pregnant women, and disadvantaged children benefit the most in terms of a lower probability of taking medicines and being diagnosed with asthma and mental health disorders.
    Date: 2022–10
  10. By: Devicienti, Francesco (University of Turin); Grinza, Elena (University of Milan); Manello, Alessandro (University of Turin); Vannoni, Davide (University of Turin)
    Abstract: Using uniquely rich administrative matched employer-employee data, we investigate the impact of formal network agreements (FNAs) among firms under two perspectives. First, we assess the impact of joining a FNA on several indicators of firm performance, and total factor productivity. Second, we investigate whether and how such effects are transmitted to the workers, in terms of wage changes. On the firm-level side, we find an overall significant and economically relevant positive effect of FNAs on firm performance, which resists a large set of robustness tests. However, such a positive effect on firms does not translate into tangible benefits for the workers, on average. After estimating an array of multiple-way fixed effects wage regressions, we find a negative, though small, wage effect. Moreover, we detect a rather marked heterogeneity in the impacts on both firms and workers. The estimation of rent-sharing equations, as well as other tests that exploit unionization data, suggest that the negative effects on wages might be explained by a decrease in workers' bargaining power following the introduction of FNAs.
    Keywords: Inter-firm cooperation, formal network agreements, firm performance, total factor productivity (TFP), wages, matched employer-employee data
    JEL: L14 D24 J31
    Date: 2022–10
  11. By: Böckerman, Petri (Labour Institute for Economic Research); Haapanen, Mika (Jyväskylä University School of Business and Economics); Johansson, Edvard (Abo Akademi University)
    Abstract: We analyze whether employees with diagnosed mental health disorders have a higher probability of being laid off during corporate downsizing. Our analysis is based on nationwide administrative data on all private sector firms and their employees in Finland over the period 2005–2017. We focus on firms with at least 20 employees that lay off at least 20% of their total workforce between two consecutive years. We estimate whether those who have been laid off have more diagnosed mental health disorders before downsizing happens than those who have not been laid off. In our baseline specification, controlling for a rich set of employee characteristics, we find that having had any mental health disorder diagnosis in the three years that preceded the downsizing increases the probability that an employee is laid off by 6 percentage points. The results highlight that those with underlying mental health disorders are more vulnerable to losing their jobs, even in the event of a mass layoff.
    Keywords: unemployment, health, mental heath, job displacement, corporate downsizing, mass layoff
    JEL: I10 I12 J64
    Date: 2022–10
  12. By: Pedro Carneiro; Kjell G. Salvanes; Barton Willage; Alexander L.P. Willén
    Abstract: This paper examines if the effect of parental labor market shocks on child development depends on the age of the child at the time of the shock. To address this question, we leverage rich Norwegian population-wide register data and exploit mass layoffs and establishment closures as a source of exogenous variation in parental labor market shocks. We find that, even though displacement episodes early in children’s lives have the largest impacts on household income (because they persist for many years), displacement episodes occurring in the children’s teenage years have the largest effects on human capital accumulation. We show that most of the effects operate through the intensive margin of schooling, and that children – across childhood – are significantly more influenced by maternal labor shocks compared to paternal labor shocks. In terms of mechanisms, we show that the heterogeneous effects across child age likely are driven by short-term increases in maternal stress rather than by differences in how the parents respond to the shocks.
    Keywords: job displacement, labor market shocks, intergenerational transmission, human capital
    JEL: I20 J12 J13 J63 D10
    Date: 2022
  13. By: Bachmann, Ronald (RWI); Demir, Gökay (RWI); Green, Colin P. (Norwegian University of Science and Technology (NTNU)); Uhlendorff, Arne (CREST)
    Abstract: We examine how changes in task content over time condition occupational wage development. Using survey data from Germany, we document substantial heterogeneity in within-occupational changes in task content. Combining this evidence with administrative data on individual employment outcomes over a 25-year period, we find important heterogeneity in wage penalties amongst initially routine intensive jobs. While occupations that remain (relatively) routine intensive generate substantial wage penalties, occupations with a decreasing routine intensity experience stable or even increasing wages. These findings cannot be explained by composition or cohort effects.
    Keywords: technological progress, polarization, tasks, routine workers, training
    JEL: J31 J24 E24
    Date: 2022–10
  14. By: Sekou Keita; Thomas Renault; Jérôme Valette
    Abstract: This paper analyses whether the systematic disclosure of criminals’ origins in the press affects natives’ attitudes towards immigration. It takes advantage of the unilateral change in reporting policy announced by the German newspaper Sächsische Zeitung in July, 2016. Combining individual-level panel data from the German Socio-Economic Panel from 2014 to 2018 with 402,819 crime-related articles in German newspapers and those newspapers’ market shares, we find that systematically mentioning the origins of criminals increases the relative salience of natives’ criminality and reduces natives’ concerns about immigration, breaking the implicit link between immigration and crime.
    Keywords: Immigration;Crime;Media Bias
    JEL: F22 K42 L82
    Date: 2022–10
  15. By: Silvia Del Prete (Bank of Italy); Cristina Demma (Bank of Italy); Iconio Garrí (Bank of Italy); Marco Piazza (Bank of Italy); Giovanni Soggia (Bank of Italy)
    Abstract: The literature has shown that in the short- and medium-term bank mergers and acquisitions (M&As) may generate a temporary reduction in firm credit. Using bank-firm matched data, this paper investigates the impact of M&As involving Italian banks over the period 2009-2019 on credit to firms, exploring possible heterogeneities across several dimensions. During a 3-year time window after each deal, we detect a reduction in loans to firms financed by target banks, in line with the existing evidence. The drop is smaller for infra-group mergers, when the target is healthy or is the firm’s main bank, while is larger for southern firms, independently of bank location. Other things being equal, we suggest that this “South effect†is mainly related to the negative externalities that characterize the business environment in Southern Italy, for which southern firms are more likely to be subject to a severe selection after a bank reorganization.
    Keywords: business lending, mergers and acquisitions, banking system’s structure, North-South divide
    JEL: D40 G10 G21 G34 L10
    Date: 2022–10
  16. By: Kulati, Ellam (Warsaw University); Myck, Michal (Centre for Economic Analysis, CenEA); Pasini, Giacomo (Ca' Foscari University of Venice)
    Abstract: We explore intertemporal decision-making in later life by looking at temporal preference heterogeneity among older individuals. Using choice tasks responses from Poland collected as part of the Survey of Health, Ageing, and Retirement in Europe (SHARE), we elicit individual time preferences using competing discounting specifications. With the formulation that best fits our data, we examine which individual characteristics drive the estimated heterogeneity in later life time preferences. Individual numerical abilities, labour and marital status, as well as household income turn out to be significant correlates of patience. Our analysis also provides methodological guidance for instrument design with the aim of eliciting time preferences in a general survey setting.
    Keywords: time preferences, discount rate, present bias, survey methodology, old age
    JEL: D12 D15 C83 J14
    Date: 2022–10
  17. By: Bertschek, Irene (ZEW Mannheim); Block, Jörn (University of Trier); Kritikos, Alexander S. (DIW Berlin); Stiel, Caroline (DIW Berlin)
    Abstract: In response to strong revenue and income losses that a large share of the self-employed faced during the COVID-19 pandemic, the German federal government introduced a €50bn emergency aid program. Based on real-time online-survey data comprising more than 20,000 observations, we analyze the impact of this program on the subjective survival probability. In particular, we investigate how the digitalization level of the self-employed influences the program's effectiveness. Employing propensity score matching, we find that the emergency aid program had only moderately positive effects on the confidence of the self-employed to survive the crisis. However, the self-employed whose businesses were highly digitalized, benefitted much more from the state aid compared to those whose businesses were less digitalized. This holds true only for those self-employed in advanced digitalization stages, who started the digitalization processes already before the crisis. Moreover, taking a regional perspective, we find suggestive evidence that the quality of the regional broadband infrastructure matters in the sense that it increases the effectiveness of the emergency aid program. Our findings show the interplay between governmental support programs, the digitalization levels of entrepreneurs, and the regional digital infrastructure. The study helps public policy to increase the impact of crisis-related policy instruments.
    Keywords: self-employment, emergency aid, treatment effects, COVID-19, entrepreneurship, digitalization, resilience
    JEL: C14 H43 L25 L26 J68 O33
    Date: 2022–09
  18. By: Caravella, Serenella; Cirillo, Valeria; Crespi, Francesco; Guarascio, Dario; Menghini, Mirko
    Abstract: The digital transformation is an important driver of long-run productivity growth and, as such, it has the potential to promote a more inclusive and sustainable growth. However, digital capabilities, crucial to develop and govern new digital technologies, are unevenly distributed across European regions increasing the risk of divergence and polarization. By taking advantage of a set of original indicators capturing the level of digital skills in the regional workforce, this work analyzes the factors shaping the process of digital skill accumulation in the EU over the period 2011-2018. Relying on transition probability matrices and dynamic random effects probit models, we provide evidence of a strong and persistent regional polarization in the adoption and deployment of digital skills. Further, we investigate whether European Funds (European Regional Development Fund, Cohesion Funds, and European Social Funds) are capable to shape the digitalization process and to favor regional convergence.
    Keywords: Digital transition,Skills,Labour markets,Persistence,Regional development,EU policies
    JEL: O14 O30 O38
    Date: 2022
  19. By: Bossavie,Laurent Loic Yves; Garrote Sanchez,Daniel; Makovec,Mattia; Ozden,Caglar
    Abstract: This paper assesses the impact of immigration to Western Europe on the exposure of native-born workers to economic and health risks created by the COVID-19 pandemic. Using various measures of occupational risks, it first shows that immigrant workers, especially those coming from lower-income member countries of the European Union or from outside the European Union, are more exposed to the negative income shocks relative to the natives. The paper then examines whether immigration has an impact on the exposure of natives to COVID-19-related risks in Western Europe. A Bartik-type shift share instrument is used to control for potential unobservable factors that would lead migrants to self-select into more vulnerable occupations across regions and bias the results. The results of the instrumental variable estimates indicate that the presence of immigrant workers had a causal impact in reducing the exposure of natives to COVID-19-related economic and health risks in European regions. Estimated effects are stronger for high-skilled native workers than for low-skilled natives and for women relative to men. The paper does not find any significant effect of immigration on wages and employment, which indicates that the effects are mostly driven by a reallocation from less safe jobs to safer jobs.
    Keywords: Labor Markets,Indigenous Peoples Law,Indigenous Peoples,Indigenous Communities,Health Care Services Industry,Human Migrations&Resettlements,International Migration,Migration and Development
    Date: 2020–12–16
  20. By: Jean-Victor Alipour; Oliver Falck; Simon Krause; Carla Krolage; Sebastian Wichert
    Abstract: We estimate the impact of Covid-induced working from home (WFH) on offline consumer spending in urban agglomerations. Our analysis draws on postcode-level data on card transactions and WFH patterns in major German cities between January 2019 and May 2022. We address endogeneity in WFH uptake by estimating intention-to-treat effects based on “untapped WFH potential”, i.e. the share of employees with a teleworkable job who did not WFH pre-pandemic. This measure approximates the local scope to expand WFH and explains both observed WFH growth during the pandemic as well as prospective employer plans and employee desires. Difference-in-differences estimates show that local spending increases by 2–3 percent per standard deviation higher untapped WFH potential. The effects are only significant in non-lockdown periods and after Covid restrictions are permanently lifted. Null effects during lockdowns are consistent with temporary shifts toward online spending when business closures preclude regional relocation of offline consumption.
    Keywords: Covid-19, geography of consumption, consumer spending, work from home, Germany
    JEL: D10 E20 G20 J00
    Date: 2022
  21. By: Paolo Finaldi Russo (Banca d'Italia); Ludovica Galotto (Banca d'Italia); Cristiana Rampazzi (Banca d'Italia)
    Abstract: Entrepreneurs, including those who run very small businesses or sole proprietorships, are often assumed to have sound financial skills as they make frequent financial decisions. This paper explores the issue by analysing the level of financial literacy (FL) of Italian micro-entrepreneurs in comparison with other countries and other Italian adults. The results, based on the 2020 Survey on the Financial Literacy of Italian Adults conducted by the Bank of Italy according to the OECD/INFE methodology, are threefold. First, Italian micro-entrepreneurs have quite low levels of FL by international standards. Second, compared with other Italians, business owners have only a slightly higher level of FL; this is mainly attributable to their higher income and more frequent use of financial services. Third, thanks to their slightly more advanced financial skills, micro-entrepreneurs are more likely to make better financial decisions than other adults. These findings suggest that strengthening the financial literacy of micro-entrepreneurs can have a positive impact on their ability to make better financial decisions and ultimately on the resilience and growth of their businesses.
    Keywords: financial literacy, financial behaviour, micro-entrepreneurs, SMEs
    JEL: G53 L26 J24
    Date: 2022–10
  22. By: Ropele, Tiziano (Bank of Italy); Gorodnichenko, Yuriy (University of California, Berkeley); Coibion, Olivier (University of Texas at Austin)
    Abstract: We match survey data of Italian firms that includes a repeated experiment in which information about inflation is randomly provided to firms over time with detailed credit data that covers the borrowing decisions of firms. This allows us to study how exogenous variation in inflation expectations causally affects the borrowing decisions of Italian firms. We document a number of new results. Firms with exogenously higher inflation expectations end up paying higher interest rates on average but do not change the overall demand of loans. Instead, we find a significant rebalancing of firms' borrowing decisions away from lower-interest long-term loans and toward higher-interest short-term loans. In anticipation of rising future interest rates linked to higher expected inflation, firms also take on new long-term loans to pay down existing loans, thereby locking in interest rate savings. Firms that are relatively more knowledgeable about financial tools engage in the latter particularly strongly.
    Keywords: inflation expectations, surveys, inattention
    JEL: E02 E03
    Date: 2022–10
  23. By: Broer, Tobias (Paris School of Economics, IIES, Stockholm University, and CEPR); Kramer, John (IIES, Stockholm University); Mitman, Kurt (IIES, Stockholm University, CEPR and IZA)
    Abstract: We use high-frequency administrative data from Germany to study the effects of monetary policy on income and employment across the earnings distribution. Earnings growth at the bottom of the distribution is substantially more elastic to policy shocks. This unequal incidence is driven by differences in the response of employment risk across the distribution: job loss is more countercyclical for lower-earnings households. Viewed through the lens of a standard incomplete-markets model, the heterogeneous incidence substantially amplifies the equilibrium response of aggregate consumption to shocks.
    Keywords: Inequality; Monetary Policy; Heterogeneous agents
    JEL: D31 E52 J64
    Date: 2022–08–01
  24. By: Clark, Andrew E.; D’Ambrosio, Conchita; Lepinteur, Anthony
    Abstract: Job insecurity is one of the risks that workers face on the labour market. As with any risk, individuals can choose to insure against it, and we here consider marriage as one potential source of this insurance. The 1999 rise in the French Delalande tax, paid by larger private firms when they laid off workers aged 50 or over, led to an exogenous rise in job insecurity for the uncovered (younger workers) in these larger firms. A difference-in-differences analysis using French panel data reveals that this greater job insecurity for the under-50s led to a significant rise in their probability of marriage, and especially when the partner had greater job security, consistent with marriage providing insurance against labour-market risk.
    Keywords: Insurance; Employment Protection; Difference-in-Differences.
    Date: 2022–10
  25. By: Jeanne Bomare (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ségal Le Guern Herry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper provides evidence of the growing importance of real estate assets in offshore portfolios. We study the implementation of the first multilateral automatic exchange of information norm, the Common Reporting Standard (CRS), which introduces cross-border reporting requirements for financial assets but not for real estate assets. Exploiting administrative data on property purchases made by foreign companies in the UK, we show that the implementation of the CRS led to a significant increase of real estate investments from companies incorporated in the tax havens that were the most exposed to the policy. We confirm that this increase comes from company owners of countries committing to the new standard by identifying the residence country of a sub-sample of buyers using the Panama Papers and other leaked datasets. We estimate that between £16 and £19 billion have been invested in the UK real estate market between 2013 and 2016 in reaction to the CRS, suggesting that at the global scale between 24% and 27% of the money that fled tax havens following this policy were ultimately invested in properties.
    Date: 2022–06–05
  26. By: Carattini, Stefano; Figge, Béla; Gordan, Alexander; Löschel, Andreas
    Abstract: Conflicting societal goals can lead to national and local policies that are at odds with each other. National policies promoting the adoption of solar photovoltaics may be counteracted by local policies defining the aesthetics of the built environment. As solar photovoltaic energy approaches grid parity globally, non-pecuniary barriers to the adoption of this important renewable energy source become increasingly salient. Using a unique survey of municipalities regarding such building codes and administrative data on all solar installations in Germany, a leader in solar adoption, we document the impact that municipalities amending their building codes to restrict solar installations, often with an eye toward preserving the historical nature of the town, has on solar adoption. We find that municipalities that implement solar policies have 10.4 percent less solar photovoltaic capacity than municipalities in the control group. We confirm our results when applying spatial techniques and analyzing the impact of such policies on regulated areas within municipalities.
    Keywords: building codes; solar photovoltaics; policy evaluation; NIMBY
    JEL: D62 H77 Q48 Q58 R52
    Date: 2022–10–10
  27. By: Gerard Domènech-Arumí; Paula Eugenia Gobbi; Glenn Magerman
    Abstract: We use detailed information on all real estate stock and transactions since 2006 to study housing inequality in Belgium and how a recent policy shaped it. We use the transactions to predict the market value of all dwellings in the country, to then estimate inequality in value or space at different levels of aggregation - from the federal to the local neighborhood level. Overall inequality is relatively low (Gini of 0.25), but significant heterogeneity exists across and within municipalities. Using a dfferences-in-differences framework, we study how Flanders's recent 3% reduction in registration fees affected house prices and inequality. We estimate that the policy increased prices by 3% on average and reduced inequality in Flanders by 0.8% by compressing the price distribution from below. We argue that the primary winners of the policy are low-value homeowners, who see their estate's valuation increase. The main losers are low-value renters, who might see rent increases in the short term. Both parts of the paper reveal signiffcant geographic heterogeneities, thus highlighting the importance of granularity in the data for studying inequality.
    Keywords: inequality, housing market, fiscal policy
    Date: 2022–10

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