nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2022‒12‒12
27 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Skilled Immigration, Task Allocation and the Innovation of Firms By Mayda, Anna Maria; Orefice, Gianluca; Santoni, Gianluca
  2. Pension Reforms, Longer Working Horizons and Depression. Does the Risk of Automation Matter? By Bertoni, Marco; Brunello, Giorgio; Da Re, Filippo
  3. Place-Based Policies and Inequality Within Regions By Lang, Valentin; Redeker, Nils; Bischof, Daniel
  4. Gender Diversity, Labour in the Boardroom and Gender Quotas By Kunze, Astrid; Scharfenkamp, Katrin
  5. Teleworking and Life Satisfaction during COVID-19: The Importance of Family Structure By Senik, Claudia; Clark, Andrew E.; D'Ambrosio, Conchita; Lepinteur, Anthony; Schröder, Carsten
  6. Spillover, Efficiency and Equity Effects of Regional Firm Subsidies By Sebastian Siegloch; Nils Wehrhöfer; Tobias Etzel
  7. Short-Term Rental Bans and Housing Prices: Quasi-Experimental Evidence from Lisbon By Gonçalves, Duarte; Peralta, Susana; Pereira dos Santos, João
  8. Exposure to Past Immigration Waves and Attitudes toward Newcomers By Rania Gihleb; Osea Giuntella; Luca Stella
  9. Buying control? ‘Locus of control’ and the uptake of supplementary health insurance By Bonsang, Eric; Costa-Font, Joan
  10. Labour supply of households facing a risk of job loss By Wouter Gelade; Maud Nautet; Céline Piton
  11. Yardstick Competition in the Digital Age : Unveiling New Networks in Tax Competition By Lockwood, Ben; Porcelli, Francesco; Redoano, Michela; Schiavone, Antonio
  12. Creative Disruption – Technology innovation, labour demand and the pandemic By Erling Barth; Alex Bryson; Harald Dale-Olsen
  13. Narrowing women’s time and income gaps: an assessment of the synergies between working time reduction and universal income schemes By André Cieplinski; Simone D’Alessandro; Chandni Dwarkasing; Pietro Guarnieri
  14. Education Expansion and High-Skill Job Opportunities for Workers: Does a Rising Tide Lift All Boats? By Schultheiss, Tobias; Pfister, Curdin; Gnehm, Ann-Sophie; Backes-Gellner, Uschi
  15. Does Mandatory Saving Crowd Out Voluntary Saving? Evidence from a Pension Reform By Svend E. Hougaard Jensen; Sigurdur P. Olafsson; Arnaldur Stefansson; Thorsteinn Sigurdur Sveinsson; Gylfi Zoega
  16. Firm Consolidation and Labor Market Outcomes By Dobbelaere, Sabien; McCormack, Grace; Prinz, Daniel; Sovago, Sandor
  17. Occupational Tasks and Wage Inequality in Germany: A Decomposition Analysis By Koomen, Miriam; Backes-Gellner, Uschi
  18. Private Tutoring and Academic Achievement in a Selective Education System By Zumbuehl, Maria; Hof, Stefanie; Wolter, Stefan C.
  19. Peer Effects in Active Labour Market Policies By Ulrike Unterhofer
  20. High Speed Internet and the Widening Gender Gap in Adolescent Mental Health: Evidence from Hospital Records By Arenas-Arroyo, Esther; Fernández-Kranz, Daniel; Nollenberger, Natalia
  21. Investment Tax Credits and the Response of Firms By Lerche, Adrian
  22. Heterogeneous employment effects of minimum wage policies By Aleksandra Majchrowska; Paweł Strawiński
  23. Income Tax Credits for Consumer Services: A Tool for Tackling VAT Evasion? By Thiess Büttner; Boryana Madzharova; Orlando Zaddach
  24. Heterogeneous household responses to energy price shocks By Gert Peersman; Joris Wauters
  25. Over-indebtedness and poverty : Patterns across household types and policy effects By Sarah Kuypers; Gerlinde Verbist
  26. Social security pension generosity and the effect on household saving By Elin Halvorsen; Zhiyang Jia; Herman Kruse; Trond C. Vigtel
  27. Does Updating Education Curricula Accelerate Technology Adoption in the Workplace? Evidence from Dual Vocational Education and Training Curricula in Switzerland By Schultheiss, Tobias; Backes-Gellner, Uschi

  1. By: Mayda, Anna Maria (Georgetown University); Orefice, Gianluca (Université Paris-Dauphine); Santoni, Gianluca (CEPII, Paris)
    Abstract: This paper analyses the impact of skilled migrants on the innovation (patenting) activity of French firms between 1995 and 2010, and investigates the underlying mechanism. We present districtlevel and firm-level estimates and address endogeneity using a modified version of the shift-share instrument. Skilled migrants increase the number of patents at both the district and firm level. Large, high-productivity and capital-intensive firms benefit the most, in terms of innovation activity, from skilled immigrant workers. Importantly, we provide evidence that one channel through which the effect works is task specialization (as in Peri and Sparber, 2009). The arrival of skilled immigrants drives French skilled workers towards language-intensive, managerial tasks while foreign skilled workers specialize in technical, research-oriented tasks. This mechanism manifests itself in the estimated increase in the share of foreign inventors in patenting teams as a consequence of skilled migration. Through this channel, greater innovation is the result of productivity gains from specialization.
    Keywords: skilled immigration, innovation, patents
    JEL: F22 J61
    Date: 2022–11
  2. By: Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova); Da Re, Filippo (University of Padova)
    Abstract: We investigate the effect of postponing minimum retirement age on middle-aged workers' depression. Using pension reforms in several European countries and data from the SHARE survey, we find that depression increases with a longer work horizon, but only among workers employed in occupations with a relatively high risk of automation. We rule out alternatives to this risk, including job strenuousness, education, gender, and the degree of routinization of occupations. We explain our results with the higher job insecurity associated with occupations more exposed to automation.
    Keywords: pension reforms, depression, automation, SHARE
    JEL: I1 J24 J26 O33
    Date: 2022–11
  3. By: Lang, Valentin (University of Mannheim); Redeker, Nils; Bischof, Daniel (Aarhus University)
    Abstract: Against the backdrop of rising inequality across regions, place-based policies have become an increasingly popular tool to support “left-behind” places. While existing research provides evidence for average growth effect of such policies, little is known about their distributional effects within regions. We compile a new panel data set on income inequality across and within regions in the European Union (EU), based on household data from more than 2.4 million respondents of national surveys and covering a maximum of 231 European regions in the 1989-2017 period. These data show that inequality within regions is substantial, tends to increase over time and contributes more to inequality in Europe than inequality across regions. We then study the distributional effects of one of the world’s largest placed-based policies, the EU Cohesion Policy, on household incomes. For causal identification we use, first, a discontinuity in disbursed amounts that results from EU eligibility criteria and, second, a difference-in-differences design. We find an economically substantial, positive effect of EU funds on household incomes that is larger at the top of regional income distributions than at the bottom. The place-based policy increases inequality within regions. To understand the policy’s mechanisms, we differentiate by production factors, sectors, and education levels with macro and micro data and find that these effects are driven by higher labor incomes for more highly educated individuals in multiple sectors. In sum, these results suggest that place-based policies can be effective for reducing inequality across regions but the supported regions tend to lift the incomes of the rich rather than those of the poor.
    Date: 2022–08–03
  4. By: Kunze, Astrid (Norwegian School of Economics); 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 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: G3 J16 K3 L21 L25 M54
    Date: 2022–11
  5. By: Senik, Claudia (Paris School of Economics); Clark, Andrew E. (Paris School of Economics); D'Ambrosio, Conchita (University of Luxembourg); Lepinteur, Anthony (University of Luxembourg); Schröder, Carsten (DIW Berlin)
    Abstract: We carry out a difference-in-differences analysis of a representative real-time survey conducted as part of the German Socio-Economic Panel (SOEP) study and show that teleworking had a negative average effect on life satisfaction over the first two years of the COVID-19 pandemic. This average effect hides considerable heterogeneity reflecting genderrole asymmetry: lower life satisfaction is only found for unmarried men and women with school-age children. The negative effect for women with school-age children disappears in 2021, suggesting adaptation to new constraints and/or the adoption of coping strategies.
    Keywords: life satisfaction, teleworking, work from home, gender, childcare, COVID-19, SOEP
    JEL: I31 M5
    Date: 2022–11
  6. By: Sebastian Siegloch (University of Cologne, CEPR, and ZEW); Nils Wehrhöfer (Deutsche Bundesbank and ZEW); Tobias Etzel (Deutsche Bundesbank)
    Abstract: We analyze the effects of a large place-based policy, subsidizing up to 50% of the investment costs of manufacturing firms in East Germany. We show that a one percentage-point decrease in the subsidy rate leads to a 1% decrease in manufacturing employment. We document important local spillovers for untreated construction and retail sectors, counties connected via trade, and local tax rates. There is no evidence for regional reallocation or changes in commuting and residential decisions. The cost per job amount to at most $23000. Last, we show that local subsidies are substantially more effective in curbing regional inequality than place-blind policies.
    Keywords: place-based policies, employment, spillovers, administrative microdata
    JEL: H24 J21 J23
    Date: 2022–11
  7. By: Gonçalves, Duarte (Pompeu Fabra University); Peralta, Susana (Nova School of Business and Economics); Pereira dos Santos, João (RWI)
    Abstract: We estimate the causal impact of a 2018 zoning reform that banned new short-term rental registries in some parts of Lisbon. The short-term rental licence expires when the house is sold, hence the ban removes the option value of short-term renting a property. We rely on two administrative data sets on short-term rental registries and real estate transactions, complemented with Airbnb data on listings and prices. We employ a difference-in-differences estimation taking advantage of the spatial discontinuity in the ban. We document a spike in newly registered housing units, between the announcement and the implementation of the ban. The reform decreases real estate prices by 8%, mostly in two-bedroom dwellings, for which the price drops 20%. We conclude that heterogeneous effects are key to understanding the backlash against short-term rentals.
    Keywords: Airbnb, policy analysis, housing market, short-term rental, Portugal
    JEL: R12 R21 R30
    Date: 2022–11
  8. By: Rania Gihleb; Osea Giuntella; Luca Stella
    Abstract: How does previous exposure to massive immigrant inflows affect concerns about current immigration and the integration of refugees? To answer this question, we investigate attitudes toward newcomers among natives and previous immigrants. In areas that in the 1990s received higher inflows of immigrants of German origin—so-called ethnic Germans—native Germans are more likely to believe that refugees are a resource for the economy and the culture, viewing them as an opportunity rather than a risk. Refugees living in these areas report better health and feel less exposed to xenophobia.
    Keywords: Immigration, refugees, birthplace diversity, public opinion
    JEL: A13 D64 J6 I31
    Date: 2022
  9. By: Bonsang, Eric; Costa-Font, Joan
    Abstract: This paper analyses the relationship between locus of control (LOC) and the demand for supplementary health insurance. Drawing on longitudinal data from Germany, we find robust evidence that individuals having an internal LOC are more likely to take up supplementary private health insurance (SUPP). The increase in the probability to have a SUPP due to one standard deviation increase in the measure of internal LOC is equivalent to an increase in household income by 14 percent. Second, we find that the positive association between health and SUPP becomes small and insignificant when we control for LOC, suggesting that LOC might be an unobserved individual trait that can partly explain advantageous selection into SUPP. Third, we find comparable results using data from Australia, which enhances the external validity of our results.
    Keywords: private health insurance; health care use; risk aversion; locus of control; positive selection; supplementary insurance; Germany; Australia
    JEL: I12 I18
    Date: 2022–12–01
  10. By: Wouter Gelade (: Economics and Research Department, National Bank of Belgium & University of Namur (DeFiPP)); Maud Nautet (Economics and Research Department, National Bank of Belgium); Céline Piton (Economics and Research Department, National Bank of Belgium & Université libre de Bruxelles (SBS-EM, CEBRIG, DULBEA))
    Abstract: The impact of a job loss on partner’s labour supply – often called the added worker effect – is a well-studied phenomenon. However, people might already adjust their labour supply when their partner is at risk of losing his/her job. Using Labour Force Survey (LFS) microdata, we quantify this effect for 16 European countries over the period 2005-2020. When a household member is at risk of losing his/her job, the partner is 30% more likely to enter the labour market (extensive margin) and 52% more likely to (want to) increase working hours (intensive margin). These effects are almost as big as those of an actual job loss for the intensive margin, and a bit more than half of those for the extensive margin. Fear of job loss is thus an important additional factor influencing households’ labour supply. This is particularly true in periods of crisis, in which the effects of fear of job loss and actual job loss are equally big. Heterogeneity analysis shows that different households adjust their labour supply at different moments, with low-educated people already adjusting when fearing job loss, while the high-educated wait for this risk to materialise.
    Keywords: Labour supply, household decisions, risk, added worker effect.
    JEL: J22 D13
    Date: 2022–10
  11. By: Lockwood, Ben (University of Warwick, Department of Economics); Porcelli, Francesco (University of Bari and CAGE); Redoano, Michela (University of Warwick, Department of Economics); Schiavone, Antonio (University of Bologna, Department of Economics)
    Abstract: We exploit a data disclosure project by the Italian government (OpenCivitas) which allowed mayors to view each other’s detailed expenditure data through a dedicated website. We interpret views on the website as generating a directed network. Mayors in the network are on average younger, more educated, they are more likely to come from larger cities which more often are in the northern regions and are more likely to be affliated to traditional parties, although populist parties usually rely more on the web for communication and political activities. Using directed dyadic models we find that mayors tend to form links with mayors of similar age who manage similar-sized cities and most often in their same region. However, links are more likely to be formed when mayors don’t share the same gender, education and party affliation. Mayors in this network do not engage in yardstick competition with neighbouring municipalities while all the other mayors do, and rather compete with each other, despite the physical distance. We show that this network existed before the website opened, but we find that after data disclosure yardstick competition within the network becomes strongly driven by mayors who are up for re-election. This was not the case before data disclosure. For the other municipalities, yardstick competition between neighbours remains uncorrelated with mayors’ term limits.
    Keywords: yardstick competition ; tax competition ; network ; open data ; property tax ; municipalities ; italy JEL Codes: H11 ; H71 ; H77
    Date: 2022
  12. By: Erling Barth (Institute for Social Research, Oslo, and ESOP, Department of Economics, University of Oslo); Alex Bryson (University College London, IZA, NIESR); Harald Dale-Olsen (Institute for Social Research, Oslo, and IZA)
    Abstract: We utilize a new survey on Norwegian firms’ digitalization and technology investments, linked to population-wide register data, to show that the pandemic massively disrupted the technology investment plans of firms, not only postponing investments, but also introducing new technologies. More productive firms innovated, while less productive firms postponed investments. Most innovations were permanent, not due to acceleration of existing plans, thus the pandemic yields long-term influence in directions unanticipated before the pandemic. The new technologies are associated with increased labour demand for skilled workers, and reduced demand for unskilled workers, particularly for the more productive firms
    Keywords: Technology investments, Digitalization, Labour demand, Pandemic, COVID-19
    JEL: D22 D24 F14 L11 L60
    Date: 2022–11–01
  13. By: André Cieplinski (Department of Economics and Management, University of Pisa); Simone D’Alessandro (Department of Economics and Management, University of Pisa); Chandni Dwarkasing (Department of Economics, SOAS University of London); Pietro Guarnieri (Department of Economics and Management, University of Pisa)
    Abstract: The COVID-19 crisis re-opened a discussion on the gendered nature of time-poverty and income inequality. We compare two policy combinations that assess the synergies between working time reduction and two universal income schemes: basic income and care income programmes. While the former provides every individual with an equal monetary benefit, the latter ties monetary benefits to the amount of unpaid and care work performed by individuals. We assess the impact of these policy combinations applying Eurogreen, a macrosimulation model tailored to Italy. Results suggest that while working time reduction directly improves the distribution of unpaid work and alleviates time-poverty, its impact on income inequality is limited. By contrast, the universal income schemes promote a similar and significant reduction of income inequality but differ in terms of gender equality outcomes. When it comes to improvements in women’s employment, labour force participation and real wages, working time reduction in combination with basic income outperforms care income. Meanwhile, care income outperforms basic income in terms of women’s income gap. Finally, regarding time-use, the adverse labour market effects of a care income on women’s participation rates compromises the redistribution of unpaid work from women to men.
    Keywords: inequality; time-use, unpaid work, care work, working time reduction, basic income
    JEL: C63 B54 J22 E24
    Date: 2022–04
  14. By: Schultheiss, Tobias (University of Zurich); Pfister, Curdin (University of Zurich); Gnehm, Ann-Sophie (University of Zurich); Backes-Gellner, Uschi (University of Zurich)
    Abstract: We examine how education expansions affect the job opportunities for workers with and without the new education. To identify causal effects, we exploit a quasi-random establishment of Universities of Applied Sciences (UASs), bachelor-granting three-year colleges that teach and conduct applied research. By applying machine-learning methods to job advertisement data, we analyze job content before and after the education expansion. We find that, in regions with the newly established UASs, not only job descriptions of the new UAS graduates but also job descriptions of workers without this degree (i.e., middle-skilled workers with vocational training) contain more high-skill job content. This upskilling in job content is driven by an increase in high-skill R&Drelated tasks and linked to employment and wage gains. The task spillovers likely occur because UAS graduates with applied research skills build a bridge between middle-skilled workers and traditional university graduates, facilitating the integration of the former into R&D-related tasks.
    Keywords: educational expansion, worker demand, upskilling, spillover effects, vocational training
    JEL: I23 J23 J24
    Date: 2022–10
  15. By: Svend E. Hougaard Jensen; Sigurdur P. Olafsson; Arnaldur Stefansson; Thorsteinn Sigurdur Sveinsson; Gylfi Zoega
    Abstract: Recently, mandatory pension contributions in the private sector in Iceland were increased substantially while remaining unchanged in the public sector. This constituted a large natural experiment. We study the effects of this experiment on households’ voluntary saving using administrative micro data with comprehensive third-party reported information on taxpayers’ income, assets and debt for all taxpayers in the country. Using difference-in-differences, we find that households do not reduce voluntary saving when faced with a rise in mandatory saving. Our results are confirmed by the finding that workers who move between the public and the private sector, which have different mandatory saving rates, do not change their voluntary saving behavior. Our survey evidence suggests that these findings may be explained by widespread ignorance about the pension system.
    Keywords: pension reform, occupational pensions, saving, retirement
    JEL: E21 E24
    Date: 2022
  16. By: Dobbelaere, Sabien (Vrije Universiteit Amsterdam); McCormack, Grace (University of Southern California); Prinz, Daniel (World Bank); Sovago, Sandor (University of Groningen)
    Abstract: Using rich administrative data from the Netherlands, we study the consequences of firm consolidation for workers. For workers at acquired firms, takeovers are associated with a 8.5% drop in employment at the consolidated firm and a 2.6% drop in total labor income. These effects are persistent even four years later. We show that the primary mechanism for this job loss is labor restructuring at consolidating firms. Specifically, workers with higher-than-expected pay relative to their human capital and workers with skills that are likely already present at acquirers are less likely to be retained.
    Keywords: takeovers, labor market outcomes, labor restructuring
    JEL: G34 J2 J3 M51
    Date: 2022–11
  17. By: Koomen, Miriam (Swiss National Bank); Backes-Gellner, Uschi (University of Zurich)
    Abstract: We study the role of occupational tasks as drivers of West German wage inequality. We match administrative wage data with longitudinal task data, which allows us to account for within-occupation changes in task content over time. We run RIF regression-based decompositions to quantify the contribution of changes in the returns to tasks to overall changes in the wage distribution from 1978 to 2006. We find that changes in the returns to tasks explain up to half of the increase in wage inequality since the 1990s, both at the top and the bottom of the wage distribution. Specifically, abstract tasks drive the upper wage gap, while interactive and routine tasks drive the lower wage gap. Importantly, we find low-wage occupations to have the highest routine task intensity. The association between occupational tasks and West German wage inequality is thus both stronger and different than prior research has found.
    Keywords: wage inequality, skills, tasks, routine-biased technical change, decomposition analysis, RIF regression
    JEL: C55 D63 E24 J31
    Date: 2022–11
  18. By: Zumbuehl, Maria (CPB Netherlands Bureau for Economic Policy Analysis); Hof, Stefanie (University of Basel); Wolter, Stefan C. (University of Bern)
    Abstract: Decisions about admission to selective schools usually rely on performance measures. To reach a required achievement threshold students may make use of additional resources, such as private tutoring. We investigate how the use of private tutoring relates to the transition probability to an academically demanding post compulsory school and the probability to successfully pass through this school, controlling for the students competencies after tutoring, but before the transition. Using PISA and linked register data from Switzerland, we find that students who had private tutoring before the transition are more likely to fail in the selective school than students who had the same level of competencies without tutoring.
    Keywords: private tutoring, educational achievment, PISA, Switzerland
    JEL: D82 I21 I24
    Date: 2022–10
  19. By: Ulrike Unterhofer
    Abstract: This paper studies peer effects in the context of public sponsored vocational training for jobseekers in Germany. Using rich administrative data, I investigate how individual labour market outcomes of program participants are affected by the peer "quality" in the course, focusing on the employability of the peers. To identify a causal effect, I exploit quasi-random variation in the peer group composition within courses offered by the same training providers over time. I find strong evidence that peer composition matters. Greater average exposure to highly-employable peers has a moderate positive impact on job stability after program participation. Peer effects on earnings are large and differ by program type. They are positive, and long-lasting in classic vocational training and negative but of short duration in retraining. Jobseekers with an individual employability below the median benefit comparatively more across all programs. Overall, the results suggest that peer effects depend on specific program features.
    Date: 2022–11
  20. By: Arenas-Arroyo, Esther (Vienna University of Economics and Business); Fernández-Kranz, Daniel (IE Business School, Madrid); Nollenberger, Natalia (IE University)
    Abstract: Increases in mental health problems among adolescents have been concurrent with increased use of digital media, with bigger changes among girls after the mid-2010s. This study exploits exogenous variation in the deployment of optic fiber across Spanish provinces between 2007 and 2019 to analyze the effect of access to high-speed Internet (HSI) on hospital discharge diagnoses of behavioral and mental health cases among adolescents. We find a positive and significant impact on girls but not on boys. Exploring the mechanism behind these effects, we show that HSI increases addictive Internet use and significantly decreases time spent sleeping, doing homework, and socializing with family and friends. Girls again power all these effects. We find no evidence of an increase in online bullying. Finally, we show that fiber expansion harms the quality of the relationship between fathers and daughters, especially when that relationship suffers from a previous conflict. Our results help explain the observed widening gender gap in mental health among adolescents and are robust to various sensitivity tests.
    Keywords: high-speed internet, adolescents, mental health
    JEL: J13 J16 I10 I12 I18 H31 L86
    Date: 2022–11
  21. By: Lerche, Adrian (LMU Munich)
    Abstract: This paper estimates the direct effects of investment tax credits on firms' production behavior and the additional indirect effects arising from agglomeration economies. Exploiting a change in tax credit rates by firm size in Germany, I find that manufacturing firms increase capital and employment, with labor demand in information and communication technology-intensive industries shifting towards college-educated workers. Using geolocation data, I show that agglomeration benefits lead to a sizable further firm production expansion with these benefits materializing within distances of 5 kilometers. Worker flows from the service sector and from non-employment, rather than between manufacturing firms, explain the employment effects.
    Keywords: investment tax incentives, capital, labor demand, agglomeration
    JEL: D22 H25 H32 J23 R11
    Date: 2022–10
  22. By: Aleksandra Majchrowska (University of Lodz, Chair of Macroeconomics); Paweł Strawiński (University of Warsaw, Faculty of Economic Sciences)
    Abstract: We explain the variations in the employment effects with respect to minimum wage changes among different groups of workers. Prior analyses considered only two dimensions, investigating employment effects over time across groups of workers or regions. We propose a multidimensional panel data approach to simultaneously analyze the heterogeneous employment effects of minimum wage changes across age groups, economic sectors, and regions over time. Latent heterogeneities in regional employment reactions are discovered, indicating that the employment effect in the regional labor market is the result of a combination of specific labor market features related to the composition of workers and employers.
    Keywords: Employment elasticity, minimum wage, regional labor markets, latent heterogeneities, intra-regional differences, Poland
    JEL: R23 J21 J31 J38
    Date: 2022
  23. By: Thiess Büttner; Boryana Madzharova; Orlando Zaddach
    Abstract: This paper analyzes the effects of an income tax credit for hard-to-tax consumer services on evasion of the value-added-tax (VAT). Based on the individual tax files of the universe of VAT payers in Germany, our analysis shows that harnessing incentives for consumers through tax credits fosters firms’ compliance with VAT by bringing in an element of third-party reporting at the last VAT stage. Our results point at strong stimulating effects of the introduction of the tax credit on reported sales as well as on the ratio of reported sales to inputs. We find limited price effects. While two thirds of the revenue losses in the income tax are recovered by an increase in VAT revenues, up to half of the revenue gain is associated with a response at the VAT evasion margin. The policy thus fosters considerable formalization effects.
    Keywords: tax compliance, value-added tax, income tax credit, third-party reporting
    JEL: H26 H25 H24
    Date: 2022
  24. By: Gert Peersman (: Ghent University); Joris Wauters (National Bank of Belgium)
    Abstract: We use survey evidence on reported spending in hypothetical energy price shock scenarios to study novel features of the price elasticity of energy demand and the marginal propensity to consume (MPC) after paying the energy bill. We document several nonlinearities depending on the sign and magnitude of the energy price shock that are economically relevant, including at the extensive and intensive margins. There is also considerable heterogeneity across households. For price increases, the elasticity of energy demand appears to be significantly larger for households that will likely undertake major home renovations over the next months, and smaller for families with more appetite to consume. In contrast, MPCs depend on households’ income, saving buffer, financial uncertainty, appetite to consume, and gender of household head. Yet household characteristics hardly matter when energy prices decline; we only find smaller MPCs for households with a greater saving buffer and younger families. Finally, we show that targeted price subsidies on energy for Belgian low-income households have been much more effective in supporting non-energy consumption than the general VAT reduction on energy prices.
    JEL: D12 E21 H31 Q41 Q43
    Date: 2022–10
  25. By: Sarah Kuypers (: Herman Deleeck Centre for Social Policy, University of Antwerp); Gerlinde Verbist (Herman Deleeck Centre for Social Policy, University of Antwerp)
    Abstract: Household debt has increased significantly since the second half of the 20th century, making it one of the cornerstones of household financial behaviour. It is, however, necessary to monitor that indebtedness does not spiral out of control, as it can have negative consequences both at the micro and macro level. In this paper, we measure over-indebtedness in the poverty framework, while also taking into account the (potential) leverage by assets. We focus on a case study of Belgium, using data from four waves of the Eurosystem Household Finance and Consumption Survey (HFCS). Our results are relevant both in terms of the levels of over-indebtedness measured as well as from the point of household heterogeneity and policy relevance. While the classical indicators mainly identify those who initially borrow large amounts as over-indebted, our analyses point towards the importance of low disposable income and the ownership of non-mortgage debt in explaining over-indebtedness, poverty and financial vulnerability. We also simulate two potential policy reforms which address these two main risk factors.
    Keywords: debt, over-indebtedness, poverty, social policy, Belgium
    JEL: G51 I32
    Date: 2022–10
  26. By: Elin Halvorsen; Zhiyang Jia; Herman Kruse; Trond C. Vigtel (Statistics Norway)
    Abstract: This paper examines the substitution between pension wealth and household saving by studying Norway’s 2011 pension reform. The analysis identifies the effect of reductions in social security pension generosity on household saving using cohort, time and sector variation in pension wealth induced by the reform. Our study focuses on saving behavior between ages 57-61 for the 1954-1956 birth cohorts, who are the first three birth cohorts affected by a reduction in future pension wealth due to the reform. We find that they increased their saving rate around 1.2 percentage points (annually) after the reform, which corresponds to a five-year increase in household saving of about 27,000 NOK. When taking into account the remaining life-cycle changes to household saving, this corresponds to an offset effect of about 56 percent of the total loss in pension wealth.
    Keywords: Pension reform; household saving; difference-in-difference; quasi-natural experiment
    JEL: D14 E21 H55
    Date: 2022–09
  27. By: Schultheiss, Tobias (University of Zurich); Backes-Gellner, Uschi (University of Zurich)
    Abstract: In an environment of accelerating technological change and increasing digitalization, firms need to adopt new technologies faster than ever before to stay competitive. This paper examines whether updates of education curricula help to bring new technologies faster into firms' workplaces. We study technology changes and curriculum updates from an early wave of digitalization (i.e., computernumerically controlled machinery, computer-aided design, and desktop publishing software). We take a text-as-data approach and tap into two novel data sources to measure change in educational content and the use of technology at the workplace: first, vocational education curricula and, second, firms' job advertisements. To examine the causal effects of adding new technology skills to curricula on the diffusion of these technologies in firms' workplaces (measured by job advertisements), we use an event study design. Our results show that curriculum updates substantially shorten the time it takes for new technologies to arrive in firms' workplaces, especially for mainstream firms.
    Keywords: technological change, digitalization, curricula updates, technology diffusion, text-as-data
    JEL: O33 I25 J23
    Date: 2022–10

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