nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒01‒23
twelve 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. Is There an Ethnic Pay Gap in Germany? Evidence from a Representative Sample of the Adult Population By Ayaita, Adam
  3. Did the policy responses to COVID-19 protect Italian households’ incomes? Evidence from incomes nowcasting in microsimulation models By Maria Teresa Monteduro; Dalila De Rosa; Chiara Subrizi
  4. The Effect of Pension Wealth on Employment By Becker, Sebastian; Buslei, Hermann; Geyer, Johannes; Haan, Peter
  5. The Subjective Cost of Young Children: A European Comparison By Angela Greulich; Sonja Spitzer; Bernhard Hammer
  6. Turning back the clock: Beliefs about gender roles during lockdown By Anne Boring; Gloria Moroni
  7. Inter-municipal Cooperation in Public Procurement By Giampaolo Arachi; Debora Assisi; Berardino Cesi; Michele G. Giuranno; Felice Russo
  8. The Spillover Effect of Services Offshoring on Local Labour Markets By Magli, Martina
  9. The Labor Demand Effects of Refugee Immigration: Evidence from a Natural Experiment By Berbée, Paul; Brücker, Herbert; Garloff, Alfred; Sommerfeld, Katrin
  10. Differences set in stone: evidence on the inequality-mobility trade off in italy By Francesca Subioli; Michele Raitano
  11. Supranational supervision By Haselmann, Rainer; Singla, Shikhar; Vig, Vikrant
  12. Measuring the adequacy of social protection by looking at those above the poverty line By BAZOLI Nicola; PODESTÀ Federico

  1. By: Eve Caroli (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Catherine Pollak (DREES - Centre de Recherche du DREES - Ministère de l'Emploi et de la Solidarité, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Muriel Roger (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)
    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 nonhospital 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
    Date: 2022–10
  2. By: Ayaita, Adam
    Abstract: This study investigates a disparity in hourly wages (i.e., a pay gap) between employees with an ethnic minority vs. ethnic majority background in Germany. To this aim, a Blinder-Oaxaca decomposition based on a representative survey of the adult population in Germany is used. The analysis is restricted to employees who completed secondary schooling in Germany (N = 9, 304). The results show that, overall, ethnic minority employees receive significantly lower gross hourly wages than ethnic majority employees, and this difference amounts to 13.8%. The larger part of this gap is explained by group differences in demographic, human capital, and occupational characteristics—in particular, education level, work experience, job tenure, the precise employment status, and occupational status. However, there is also a significant unexplained pay gap that amounts to 2.7% lower wages for ethnic minority (vs. ethnic majority) employees, indicating potential wage discrimination against ethnic minority employees. The total, explained, and unexplained ethnic pay gaps appear to be somewhat larger among men than among women. Finally, an exploratory analysis suggests that the part of the ethnic pay gap that has remained unexplained might be largely explained by whether employees hold the German citizenship and whether they were born in Germany.
    Keywords: discrimination, ethnic background, ethnicity, Germany, pay gap, wages
    JEL: J24 J31 J38 J71
    Date: 2023
  3. By: Maria Teresa Monteduro (Ministry of Economy and Finance); Dalila De Rosa (Ministry of Economy and Finance); Chiara Subrizi (Ministry of Economy and Finance)
    Abstract: This paper addresses the economic impact of the COVID-19 pandemic by providing timely and accurate information on Italian households’ income distribution, inequality and poverty risk, assessing the effects of policy responses during 2020. By building a unique and wide database with the latest survey, tax and administrative data at individual and firm level, and by using the micro-simulation model Taxben-DF from the Italian Department of Finance, the analysis nowcasts the income loss due to the economic shutdown since March 2020 and simulates most of the interventions adopted by the Government from March to December 2020. Results suggest that policy measures in response to the first pandemic year have been effective in keeping overall income inequality under control, not being able yet to avoid a concerning polarization of incomes and large heterogeneous effects in terms of both income losses and measures’ compensation.
    Keywords: COVID-19, inequalities, administrative and survey data, microsimulation
    JEL: C63 C81 D31 D63 H31
    Date: 2023–01
  4. By: Becker, Sebastian (DIW Berlin); Buslei, Hermann (DIW Berlin); Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin)
    Abstract: This study provides novel evidence about the pension wealth elasticity of employment. For the identification we exploit reform-induced variation of pension wealth that is related to the number of children but which does not affect the implicit tax rate of employment. We use a difference-in-differences estimator based on administrative data from the German pension insurance and find that, on average, the negative employment effect of pension wealth is significant and economically important. Heterogeneity analyses document a strong age pattern showing that the employment effects are driven by behavioral responses of women close to retirement. The age pattern is partly explained by the positive effect of pension wealth on disability pensions after the age of 60.
    Keywords: pension reform, pension wealth elasticity, female labour supply, retirement, differences in differences
    JEL: H55 J13 J21 J26
    Date: 2022–12
  5. By: Angela Greulich (OSC - Observatoire sociologique du changement (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, IUF - Institut Universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche); Sonja Spitzer (University of Vienna [Vienna], Wittgenstein Centre for Demography and Global Human Capital - Vienna Institute of Demography/Austrian Academy of Sciences); Bernhard Hammer (Technical University of Vienna, VID - Vienna Institute of Demography - OeAW - Austrian Academy of Sciences)
    Abstract: Abstract Understanding child-related costs is crucial given their impact on fertility and labour supply decisions. We explore the subjective cost of young children in Europe by analysing the effect of child births on parents' self-reported ability to make ends meet, and link it to changes in objective economic well-being such as income, benefits, and employment. The study is based on EU-SILC longitudinal data for 30 European countries from 2004 to 2019, enabling comparisons between country groups of different welfare regimes. Results show that newborns decrease subjective economic well-being in all regions, yet with economies of scale for the number of children. Mediation analyses reveal that the substantial labour income losses of mothers (indirect costs) explain only a small part of subjective child costs. In the first year after birth, these losses are mostly compensated for via public transfers or increased labour income of fathers, except in regions where women take extensive parental leave. This suggests that the initial drop in subjective economic well-being after childbirth is caused by increased expenses due to the birth of a child (direct costs) and other drivers such as stress that are reflected in the self-reported indicator.
    Date: 2022–05–15
  6. By: Anne Boring (Erasmus University Rotterdam, Tinbergen Institute - Tinbergen Institute, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Gloria Moroni (Erasmus University Rotterdam, Tinbergen Institute - Tinbergen Institute)
    Abstract: We study the impact of lockdown measures on beliefs about gender roles. We collect data from a representative sample of 1, 000 individuals in France during the first COVID-19 lockdown in 2020. To measure beliefs about gender roles, we use questions from the 2018 wave of the European Values Study, and match respondents from the two surveys to compare beliefs before and during lockdown. We find evidence that the lockdown period was associated with a shift towards more traditional beliefs about gender roles. The effects are concentrated among men from the most time-constrained households and from households where bargaining with a partner over sharing responsibility for household production was likely to be an issue. Finally, we find evidence that beliefs about gender equality may be a luxury good: beliefs in equal gender roles increase with household income. Overall, our results suggest that men are more likely to hold egalitarian beliefs about gender roles when these beliefs are not costly for them.
    Keywords: gender norms, household production, COVID-19, time constraints, bargaining
    Date: 2022–04–05
  7. By: Giampaolo Arachi (Università del Salento); Debora Assisi (Università di Bari); Berardino Cesi (DEF, University of Rome "Tor Vergata"); Michele G. Giuranno (Università del Salento); Felice Russo (Università del Salento)
    Abstract: This paper assesses the effects of intermunicipal cooperation on public procurement (PP) performance, based on the Italian experience. We estimate a fixed effect regression model using a sample of 50, 905 Italian public works contracts awarded both by municipalities and by municipal unions (MU) from 2012 to 2021. Results prove MU are more efficient than single municipalities at the execution, rather than the winning stage, of the tender. Public tenders awarded by MU show lower winning rebates, shorter delivery delays and, for less complex works, lower final execution extra costs. Furthermore, we investigate whether intergovernmental transfers may enhance PP performance.
    Keywords: Public procurement, centralization, local cooperation
    JEL: C13 H57 H77
    Date: 2022–12–19
  8. By: Magli, Martina (LMU Munich)
    Abstract: I provide new empirical evidence on the direct and indirect impact of services offshoring on local employment and wages, using a unique dataset on firms in the UK for the period 2000-2015. Exploiting variation in firms' services offshoring across labour markets, I show positive aggregate local labour employment and wage elasticity to services offshoring. Spillovers from offshoring to non-offshoring firms explain the positive results, and services offshoring complementary to firms' production has a larger effect than the offshoring competing with firms' outputs. Finally, I show that services offshoring widens firms' employment and wage dispersion within local labour markets.
    Keywords: services offshoring; local labour market; spillover effect; quantile analysis;
    JEL: F1 F16 J2
    Date: 2022–12–22
  9. By: Berbée, Paul (ZEW); Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg); Garloff, Alfred (Federal Ministry for Economic Affairs and Climate Action); Sommerfeld, Katrin (ZEW)
    Abstract: We study the labor demand effect of immigration on local labor markets by exploiting the fact that refugees in Germany are banned from working in the first few months after arrival. This natural experiment allows isolating a pure immigration-induced labor demand effect. For empirical identification we rely on the local presence of vacant military bases and on allocation quotas from a dispersal policy. The results are in line with our predictions from a theoretical framework with non-homothetic demand, where an increasing share in the consumption of necessities is associated with rising demand of labor-intensive goods: As the number of recently arrived refugees and thus the demand for locally produced goods increases, local employment increases particularly in non-tradable sectors in the short run. At the same time, unemployment drops while individual wages do not change significantly which can be traced back to widespread labor market rigidities in Germany. The isolation of labor demand effects complements the literature that isolates labor supply shocks from immigration, so as to gain a more comprehensive understanding of how immigration affects labor markets.
    Keywords: labor demand, employment, immigration, refugees, natural experiment
    JEL: J23 J60 H50 R10
    Date: 2022–12
  10. By: Francesca Subioli (Department of Economics and Law - Sapienza University of Rome); Michele Raitano (Department of Economics and Law - Sapienza University of Rome)
    Abstract: Observing individual income dynamics is crucial to assess the characteristics of theprocess shaping income inequality and its consequences on individual and social wellbeing.Given the level of cross-sectional inequality, a mobile society faces differentchallenges than one where people are stuck in their income positions for their wholelife or see their income stagnate. Moreover, people prefer a stable income stream toa fluctuating one, and the policy concern should deal with both the level of incomeand its dynamics. Using Italy as our case study, we characterise the long-run evolutionof intragenerational mobility in the last fifty years and find evidence of a trade-offbetween income inequality and ’good’ mobility, and complementarity with the worstnotions ofmobility related to income instability. Exploiting individual-level estimates ofgood and badmobility, we also uncover patterns of unequalmobility – the concentrationof low upward mobility and frequent fluctuations among the most vulnerable groups.
    Keywords: Earnings inequality, Great Gatsby curve, intragenerational mobility, earnings dynamics, unequal mobility, Italy
    JEL: D31 D63
    Date: 2022–12
  11. By: Haselmann, Rainer; Singla, Shikhar; Vig, Vikrant
    Abstract: We exploit the establishment of a supranational supervisor in Europe (the Single Supervisory Mechanism) to learn how the organizational design of supervisory institutions impacts the enforcement of financial regulation. Banks under supranational supervision are required to increase regulatory capital for exposures to the same firm compared to banks under the local supervisor. Local supervisors provide preferential treatment to larger institutes. The central supervisor removes such biases, which results in an overall standardized behavior. While the central supervisor treats banks more equally, we document a loss in information in banks' risk models associated with central supervision. The tighter supervision of larger banks results in a shift of particularly risky lending activities to smaller banks. We document lower sales and employment for firms receiving most of their funding from banks that receive a tighter supervisory treatment. Overall, the central supervisor treats banks more equally but has less information about them than the local supervisor.
    Keywords: Financial Regulation, Financial Supervision, Banking Union
    JEL: G21 G28
    Date: 2022
  12. By: BAZOLI Nicola; PODESTÀ Federico
    Abstract: This study builds on previous efforts to refine the Monitoring Framework on access to social protection for workers and the self-employed. None of the indicators currently included in the Monitoring Framework aims at measuring the adequacy of social protection when a risk materialises. This gap should not be overlooked given that any type of social programme is aimed at effectively protecting individuals when they face a certain need. Accordingly, new indicators are proposed exploiting the approach ideated by Podestà and Marzadro (2017) to operationalise the decommodification outcomes of different social programmes. The adequacy of a certain social programme can be thus measured through the percentage of individuals not at risk of poverty who interrupt their job activity. The adequacy level was computed for pension and unemployment benefits for EU27 countries over the 2014-2020 period using EU-SILC data. The adequacy of public pension is significantly higher than that guaranteed by unemployment benefits. The adequacy levels were also estimated simulating that retirees and unemployed individuals leave their respective households to live alone in order to capture the sole contribute of pension and unemployment benefits, respectively. The results were not unexpected: neutralising the family role in protecting retirees and unemployed individuals, pension and especially unemployment benefits result much less capable to provide an adequate protection.
    Keywords: social protection, risk materialisation, unemployment benefits, pensions, adequacy, decommodification
    Date: 2022–12

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