nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒01‒30
twenty-two papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Labour market concentration, wages and job security in Europe By Andrea Bassanini; Giulia Bovini; Eve Caroli; Jorge Casanova Ferrando; Federico Cingano; Paolo Falco; Florentino Felgueroso; Marcel Jansen; Pedro S. Martins; António Melo; Michael Oberfichtner; Martin Popp
  2. Heterogeneity or consistency across life domains? An analysis of disparities between second-generation migrants and the Swedish majority population By Rosa Weber; Louisa Vogiazides
  3. Fundamentally Reforming the DI System: Evidence from German Notch Cohorts By Bjoern Fischer; Johannes Micha Geyer; Nicolas R. Ziebarth
  5. Ability composition in the class and the school performance of immigrant students By Elena Meschi; Caterina Pavese
  6. Past Exposure to Macroeconomic Shocks and Populist Attitudes in Europe By Despina Gavresi; Anastasia Litina; Sofia Tsitou
  7. Model-based recursive partitioning to estimate unfair health inequalities in the United Kingdom Household Longitudinal Study By Brunori, Paolo; Davillas, Apostolos; Jones, Andrew M.; Scarchilli, Giovanna
  8. The Gender Gap in Earnings Losses after Job Displacement By Hannah Illing; Johannes Schmieder; Simon Trenkle
  9. Spillover effects of employment protection By Pierre Cahuc; Pauline Carry; Franck Malherbet; Pedro S. Martins
  10. The value of formal host-country education for the labour market position of refugees: evidence from Austria By Ludolph, Lars
  11. Who is mobilized to vote by short text messages? Evidence from a nationwide field experiment with young voters. By Salomo Hirvonen; Maarit Lassander; Lauri Sääksvuori; Janne Tukiainen
  12. Climate change and winter tourism: evidence from Italy By Gioia Maria Mariani; Diego Scalise
  13. Working from Home in the Netherlands: Looking Inside the Blackbox of Work and Occupations By Emil Mihaylov
  14. Encouraging and Directing Job Search: Direct and Spillover Effects in a Large Scale Experiment By Luc Behaghel; Sofia Dromundo; Marc Gurgand; Yagan Hazard; Thomas Zuber
  15. Determinants of Financial Literacy and Behavioral Bias among Adolescents By Marco Aschenwald; Armando Holzknecht; Michael Kirchler; Michael Razen
  16. Vax Populi: The Social Costs of Online Vaccine Skepticism By Matilde Giaccherini; Joanna Kopinska
  17. Employing the unemployed of Marienthal: Evaluation of a guaranteed job program By Lehner, Lukas; Kasy, Maximilian
  18. The Scale and Nature of Neighborhood Effects on Children: Evidence from a Danish Social Housing Experiment By Stephen B. Billings; Mark Hoekstra; Gabriel Pons Rotger
  19. Effects of an Online Self-Assessment Tool on Teachers’ Digital Competencies By Giovanni Abbiati; Davide Azzolini; Anja Balanskat; Katja Engelhart; Daniela Piazzalunga; Enrico Rettore; Patricia Wastiau
  20. Public sector wage compression and wage inequality: Gender and geographic heterogeneity By Jørn Rattsø; Hildegunn E Stokke
  21. Eclipse of Rent-Sharing: The Effects of Managers' Business Education on Wages and the Labor Share in the US and Denmark By Daron Acemoglu; Alex Xi He; Daniel le Maire
  22. Optimal Retirement with Disability Pensions By Hans Fehr; Adrian Fröhlich

  1. By: Andrea Bassanini; Giulia Bovini; Eve Caroli; Jorge Casanova Ferrando; Federico Cingano; Paolo Falco; Florentino Felgueroso; Marcel Jansen; Pedro S. Martins; António Melo; Michael Oberfichtner; Martin Popp
    Abstract: We investigate the impact of labour market concentration on two dimensions of job quality, namely wages and job security. We leverage rich administrative linked employer-employee data from Denmark, France, Germany, Italy, Portugal and Spain in the 2010s to provide the first comparable cross-country evidence in the literature. We show that the elasticities of wages with respect to labour market concentration are strikingly similar across countries. Increasing labour market concentration by 10% reduces wages by 0.19% in Germany, 0.22% in France, 0.25% in Portugal and 0.29% in Denmark. We find greater elasticities for job security. An increase in labour market concentration by 10% reduces the probability of being hired on a permanent contract by 0.46% in France, 0.51% in Germany and 2.34% in Portugal. In Italy and Spain, while not affecting this probability, labour market concentration has a strong negative effect on conversions to a permanent contract once hired on a temporary one. Using German and Portuguese data, we provide suggestive evidence that the similarity of our wage elasticities across countries and the greater sensitivity of job security to labour market concentration may be explained by the fact that sector-level collective bargaining is dominant in the countries we study and that it sets wages but usually not contract type.
    Keywords: Labour market concentration, Monopsony, Wages, Job security, Collective bargaining
    JEL: J31 J42 J52 L41
    Date: 2023
  2. By: Rosa Weber (INED - Institut national d'études démographiques, Stockholm University); Louisa Vogiazides (Stockholm University)
    Abstract: Migrant integration is theoretically conceived as a multidimensional process where integration in one life domain does not necessarily imply integration in another domain. An expanding literature analyses several aspects of the lives of migrants and their children. However, to date research has mainly assessed how attainment in one life domain influences attainment in another domain. This study analyses the extent to which attainment across multiple life domains–socioeconomic, social and residential–coincides among second-generation migrants. Using Swedish register data, we compare 10, 450 children of migrants from six regions of origin, who were aged 30–40 in 2015, to individuals born in Sweden with two Swedish-born parents. Multigenerational linkages moreover allow us to control for parental socioeconomic status as well as residential characteristics when growing up. Our analyses reveal considerable disparities in social and residential outcomes between second-generation migrants and the Swedish majority group, as well as across origin groups. Differences in socioeconomic attainment are comparatively small once we account for parental characteristics and residential background. Second-generation Turkish and Middle Eastern migrants differ in terms of their social and residential outcomes when compared to the Swedish majority group, but have commensurate socioeconomic attainment. In contrast, we find overall consistency across domains for Polish, ex-Yugoslav and Latin American second-generation migrants. Our findings underline the importance of studying outcomes in multiple domains in order to gain a more comprehensive understanding of the life situation of second-generation migrants.
    Keywords: attainment, second-generation migrants, integration, socioeconomic background, register data, Sweden
    Date: 2023
  3. By: Bjoern Fischer; Johannes Micha Geyer; Nicolas R. Ziebarth
    Abstract: We study a fundamental reform of the public Disability Insurance (DI) system in Germany. Effective 2001, cohorts born after 1960 are no longer eligible for “occupational DI.” Occupational DI (ODI) implies benefit eligibility when health shocks prevent employees from working in their previous occupation. For the affected “notch cohorts”, the new DI eligibility rules require work disability in any job. Using administrative data, we first show that the reform significantly reduced the inflow of new DI beneficiaries by more than 30% in the long-run. Next, we validate these findings using representative SOEP household panel data comprised of the entire underlying population. The second part studies interaction effects with the private ODI market. Using representative data, we do not find much evidence that the notch cohorts purchased individual private ODI policies at significantly higher rates to compensate for the reduced generosity of the public DI system. To explain such low take-up, we employ a general equilibrium model featuring the roles of the social safety net, administrative costs, and asymmetric information. These driving forces help explain three stylized facts in the individual experience-rated private market for ODI policies: (1) low private ODI take-up and interaction effects with the public system---despite a high lifecycle work disability risk, (2) strong and positive income and health gradients in private ODI take-up, and (3) inversely related income and health gradients in the lifecycle work disability risk. Simulations illustrate that policy reforms to lower administrative costs have the greatest potential to foster take-up and flatten its income and health gradients.
    JEL: H53 H55 I10 I14 I18 J14 J21 J26
    Date: 2022–12
  4. By: Francesco Aiello (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Lidia mannarino (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Valeria Pupo (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy))
    Abstract: This study revises the moderating effect of size and age on the relationship between family ownership and innovation. The research hypotheses are tested on a large sample of Italian firms observed over the 2010–2017 period, using a zero-inflated non-linear count model. Results from a three-way interaction approach suggest that the patenting gap between family firms (FFs) and non-family firms is sensitive to size and age. Compared to non-FFs, FFs underperform when they are small and young or large and old, while there are no substantial differences for other types of firms. Much of the evidence is driven by the founder effect which differs over the firm life.
    Keywords: innovation, patent, family firms, size, age
    JEL: D22 L25 L60 O30
    Date: 2023–01
  5. By: Elena Meschi; Caterina Pavese
    Abstract: Using longitudinal data from the Italian National Institute for the Evaluation of the Education System (INVALSI), this paper investigates whether the ability of classmates affects the educational attainment of immigrant students. We focus not only on the average quality of peers in the class, but we further investigate which part of the ability distribution of peers drives the effect, by assessing the role played by the extreme tails of the ability distribution. Our empirical strategy addresses students’ endogenous sorting into classes by exploiting the within-student across-subjects variation in achievements and the simultaneity problem by using predetermined measures of peers’ ability. We show that peers’ ability matters. While native students are mostly influenced by the average quality of their peers, immigrant children are detrimentally affected by the fraction of very low achievers in the classroom. Our findings provide valuable guidance to policymakers concerning the allocation of students to classes in order to foster immigrant students’ integration and learning.
    Keywords: Peer effects, Immigrant students, Education.
    JEL: J15 I21
    Date: 2023–01
  6. By: Despina Gavresi (University of Ioannina); Anastasia Litina (Department of Economics, University of Macedonia); Sofia Tsitou (Department of Economics, University of Macedonia)
    Abstract: This paper explores the interplay between two dimensions of trust i.e., political and interpersonal trust, and the spread of COVID-19 in European regions. To undertake our analysis we combine sub-national (NUTS 1 regions) data for trust from ten consecutive rounds of the European Social Survey and data on COVID-19 measures, derived from the COVID-19 European Regional Tracker. Exploiting regional variation, we empirically establish that in places with a higher degree of political and interpersonal trust, the number of confirmed cases and deaths due to COVID-19 spread is lower. Our underlying hypothesis is that due to this higher level of trust, individuals tend to comply more with the policies promoted by national governments, thereby diminishing the COVID-19 spread and mortality rates in societies.
    Keywords: COVID-19, Political Trust, Interpersonal Trust, Culture
    JEL: I10 O4 Z12
    Date: 2023–01
  7. By: Brunori, Paolo; Davillas, Apostolos; Jones, Andrew M.; Scarchilli, Giovanna
    Abstract: We measure unfair health inequality in the UK using a novel data-driven empirical approach. We explain health variability as the result of circumstances beyond individual control and health-related behaviours. We do this using model-based recursive partitioning, a supervised machine learning algorithm. Unlike usual tree-based algorithms, model-based recursive partitioning does identify social groups with different expected levels of health but also unveils the heterogeneity of the relationship linking behaviors and health outcomes across groups. The empirical application is conducted using the UK Household Longitudinal Study. We show that unfair inequality is a substantial fraction of the total explained health variability. This finding holds no matter which exact definition of fairness is adopted: using both the fairness gap and direct unfairness measures, each evaluated at different reference values for circumstances or effort.
    Keywords: health equity; inequality of opportunity; machine learning; unhealthy lifestyle behaviours; Understanding Society is an initiative funded by the Economic and Social Research Council and various Government Departments; with scientific leadership by the Institute for Social and Economic Research; University of Essex; and survey delivery by NatCen Social Research and Kantar Public.
    JEL: D63
    Date: 2022–12–01
  8. By: Hannah Illing; Johannes Schmieder; Simon Trenkle
    Abstract: study design combined with propensity score matching and reweighting to administrative data from Germany. After a mass layoff, women's earnings losses are about 35% higher than men's, with the gap persisting five years after displacement. This is partly explained by women taking up more part-time employment, but even women's full-time wage losses are almost 50% higher than men's. Parenthood magnifies the gender gap sharply. Finally, displaced women spend less time on job search and apply for lower-paid jobs, highlighting the importance of labor supply decisions.
    Keywords: Labor Supply, Labor Demand, Economics of Gender
    JEL: J22 J23 J16
  9. By: Pierre Cahuc; Pauline Carry; Franck Malherbet; Pedro S. Martins
    Abstract: Estimates of the impact of employment protection heavily rely on reduced-form methods, assuming that there are no indirect effects between firms. This paper exploits a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts for large firms above a specific size threshold, to investigate and quantify spillover effects. Standardreduced-form estimates based on the hypothesis of the absence of spillover towards firms for which the reform does not apply yield a negative impact on employment of about 1.5%. However, we find evidence of significant spillovers. The estimation of the macroeconomic effects of the reform with a search and matching model accounting for spillovers yields an almost negligible employment impact of the reform, more than ten times smaller than that obtained with the reduced form estimates. This result underlines that the numerous reduced-form estimates of the impact of employment protection that rely on firm size thresholds must be interpreted with caution.
    Keywords: Employmentprotection legislation, Spillover effects, Directed search and matching
    JEL: J23 J41 J63
    Date: 2023
  10. By: Ludolph, Lars
    Abstract: Refugees hosted in countries with advanced economies often work in low quality jobs, regardless of the education they obtained in their home countries. In this paper, I analyse the long-term impact of formal host-country education for refugees on labour market outcomes, using 22 years of microcensus data on Bosnians arriving in Austria during the 1992–1995 Bosnian war. I estimate local average treatment effects using age at the time of forced migration as an instrument for the probability of receiving education in Austria instead of Bosnia. I find that receiving a formal degree in Austria significantly reduced the probability of work below educational attainment and low-skill employment for two decades after arrival. There are visible income differences between holders of Austrian and Bosnian degrees beyond this period. Female refugees benefited significantly more from obtaining host-country education than males.
    Keywords: Employment quality; Human capital; Labour market integration; Refugees; Elsevier deal
    JEL: F22 J15
    Date: 2023–02–01
  11. By: Salomo Hirvonen (Department of Economics, University of Turku.); Maarit Lassander (Prime Minister's Office, Finland.); Lauri Sääksvuori (Finnish Institute for Health and Welfare, Finland.); Janne Tukiainen (Department of Economics, University of Turku.)
    Abstract: We conduct a large-scale randomized controlled trial to evaluate the effectiveness of short text messages (SMS) as a tool to mobilize young voters, and thus, ameliorate the stubborn gap in political participation between younger and older citizens. We find that receiving an SMS reminder before the Finnish county elections in 2022 increases the probability of voting among 18-29 year-old voters by 0.9 percentage points. Moreover, we observe that the most simplified message is more effective than messages appealing to expressive or rational motivations to vote. Using comprehensive administrative data and data-driven machine learning methods, we also examine treatment effect heterogeneity and spillover effects. We document that SMS based mobilization of voters does not only reduce existing social inequalities in voting between the age cohorts but also among the young citizens. Moreover, we remarkably find that over 100 percent of the direct treatment effect spilled over to non-treated household members. Our results highlight the importance of understanding spillover effects and treatment effect heterogeneities in the evaluation of get-out-the-vote interventions.
    Keywords: Get-out-the-vote, Field experiments, Spillover effects, Voter turnout
    JEL: C93 D72
    Date: 2023–01
  12. By: Gioia Maria Mariani (Banca d'Italia); Diego Scalise (Banca d'Italia)
    Abstract: Increasing temperatures and snow-scarce winter seasons challenge the winter tourism industry, one of the most weather-sensitive economic sectors. In this paper we assemble a novel dataset matching weather conditions and tourism flows in a sample of 39 Italian ski resorts in the last 20 years. We study the relationship between snow conditions, ski passes and overnight stays at ski resort level by means of a panel estimator with double fixed effects to quantify the risk of tourism losses due to climate change. We estimate a positive and significant relationship between snowfall conditions and winter tourism flows in Italian Alpine resorts. According to our estimates and to consensus projections on climate variables, in the coming years the impacts of climate change on ski passes and overnight stays could be significant, especially at lower altitudes. We also find evidence that providing artificial snow only has a weak effect on winter tourism flows, pointing toward the need for a more comprehensive approach to adaptation strategies.
    Keywords: Climate change, winter tourism
    JEL: Q51 Q54
    Date: 2022–12
  13. By: Emil Mihaylov (Vrije Universiteit Amsterdam)
    Abstract: The paper provides new evidence on the ability to work from home (WFH) for hundreds of Dutch occupations and examines how WFH is related to various occupation-specific characteristics. This is done by linking several publicly available datasets from Statistics Netherlands, which contain different occupation-specific information (e.g., tasks descriptions, measures of physical and socio-psychological workload, autonomy of work, computer use at work, workplace accidents and injuries, job satisfaction and job turnover, actual WFH, etc.). The paper finds that WFH is possible only in high and mid-skilled occupations such as managers, professionals, technicians and associate professionals, and clerical support workers, while it is nearly impossible in low-skilled professions such as plant and machine operators and elementary occupations. Around 16% of the employed persons in the Netherlands work in occupations that cannot be done from home, 24% work in occupations that can be performed entirely from home, and 54% are employed in occupations with significant possibilities to WFH (i.e., their occupations contain 50% or more teleworkable tasks). Furthermore, the ability to WFH is negatively related to physical work, repetitive work, and dangerous work and positively related to working on screens and independence at work. The potential to WFH is also positively correlated with job satisfaction and negatively correlated with victimisation at work (i.e., intimidation, violence, bullying, unwanted sexual attention), incidence and duration of sick leave, and work-related reasons for sick leave. The analyses in the paper are of a descriptive nature.
    Keywords: working from home, occupations, job tasks, Netherlands, Covid-19
    JEL: J21 J22 J24 J29 J81
    Date: 2022–12–22
  14. By: Luc Behaghel; Sofia Dromundo; Marc Gurgand; Yagan Hazard; Thomas Zuber
    Abstract: We analyze the employment effects of directing job seekers' applications towards establishments likely to recruit, building upon an existing Internet platform developed by the French public employment service. Our two-sided randomization design, with about 1.2 million job seekers and 100, 000 establishments, allows us to measure precisely the effects of the recommender system at hand. Our randomized encouragement to use the system induces a 2% increase in job finding rates among women. This effect is due to an activation effect (increased search effort, stronger for women than men), but also to a targeting effect by which treated men and women were more likely to be hired by the firms that were specifically recommended to them. In a second step, we analyze whether these partial equilibrium effects translate into positive effects on aggregate employment. Drawing on the recent literature on the econometrics of interference effects, we estimate that by redirecting the search effort of some job seekers outside their initial job market, we reduced congestion in slack markets. Estimates suggest that this effect is only partly offset by the increased competition in initially tight markets, so that the intervention increases aggregate job finding rates.
    Keywords: Search and Matching, Occupational Mobility, Displacement Effects
    JEL: E24 J60 J62 J64
    Date: 2022
  15. By: Marco Aschenwald; Armando Holzknecht; Michael Kirchler; Michael Razen
    Abstract: Building on cross-sectional data for Austrian high school students from fifth to twelfth grade, we investigate the correlations between socio-economic background variables and a comprehensive set of variables related to financial decision-making (i.e., financial knowledge, behavioral consistency, economic preferences, field behavior, and perception of financial matters). We confirm the findings of previous literature that the male gender is positively associated with financial knowledge and risk-taking and that there is a strong and beneficial correlation between math grades and healthy financial behavior (e.g., saving). Moreover, we find that students’ behavioral consistency is positively correlated with measures of financial attitude (e.g., self-assessed future financial well-being and financial education received from parents). Finally, our results indicate that financial education, as perceived by the students, is primarily provided by parents.
    Keywords: financial literacy, behavioral biases, economic preferences, field behavior, perception, experiment, adolescents
    Date: 2023–01
  16. By: Matilde Giaccherini; Joanna Kopinska
    Abstract: We quantify the effects of online vaccine skepticism on vaccine uptake and health complications for individuals not targeted by immunization campaigns. We collect the universe of Italian vaccine-related tweets for 2013-2018, label anti-vax stances using NLP, and match them with vaccine coverage and vaccine-preventable hospitalizations at the most granular level (municipal-ity and year). We propose a model of opinion dynamics on social networks that matches the observed data and shows that a vaccine mandate increases the average vaccination rate, but it also increases the controversialness around the topic, endogenously fueling polarization of opinions among users. We then leverage the intransitivity in network connections with “friends of friends” to isolate the exogenous source of variation for users’ vaccine-related stances and implement an IV strategy. We find that a 10pp increase in the municipality anti-vax stance causes a 0.43pp de-crease in coverage of the Measles-Mumps-Rubella vaccine, 2.1 additional hospitalizations every 100k residents among individuals untargeted by the immunization (newborns, the immunosup-pressed, pregnant women) and an excess expenditure of 7, 311 euro, representing an 11% increase in health expenses.
    Keywords: social media, Twitter, vaccines, controversialness, polarization, text analysis
    JEL: I18 L82 Z18
    Date: 2022
  17. By: Lehner, Lukas; Kasy, Maximilian
    Abstract: We evaluate a guaranteed job program that was piloted, starting in October 2020, in the municipality of Gramatneusiedl in Austria. This program provided individually tailored, voluntary jobs to all long-term unemployed residents. Our evaluation is based on three estimation approaches. The first approach uses pairwise matched randomization of participants into waves for program adoption. The second approach uses a pre-registered synthetic control at the municipality level. The third approach compares program participants to observationally similar individuals in control municipalities. These different approaches allow us to separate out direct effects of program participation, anticipation effects of future participation, and municipality-level equilibrium effects. We find strong positive impacts of program participation on participants' economic (employment, income, security) and non-economic wellbeing (social recognition, time structure, social interactions, collective purpose). We do not find effects on physical health, or risk- and time-preferences. At the municipality level, we find a large reduction of long-term unemployment, and a slightly attenuated reduction of total unemployment. Comparing participants to similar individuals in control towns, we obtain estimates that are very close to the estimates from the experimental comparison. There is evidence of positive anticipation effects in terms of subjective wellbeing, status and social inclusion for future program participants, relative to ineligible control-town individuals.
    JEL: I38 J08 J45
    Date: 2022–12
  18. By: Stephen B. Billings; Mark Hoekstra; Gabriel Pons Rotger
    Abstract: Recent research documents a causal impact of place on the long-run outcomes of children. However, little is known about which neighborhood characteristics are most important, and at what scale neighborhood effects operate. By using the random assignment of public housing along with administrative data from Denmark, we get inside the “black box” of neighborhood effects by defining neighborhoods using various characteristics and scales. Results indicate effects on mental health and especially education are large but local, while effects on drug possession operate on a much broader scale. Additionally, unemployment and education are better predictors of outcomes than neighborhood income.
    JEL: I38 K42 R23
    Date: 2022–12
  19. By: Giovanni Abbiati; Davide Azzolini; Anja Balanskat; Katja Engelhart; Daniela Piazzalunga; Enrico Rettore; Patricia Wastiau
    Abstract: We evaluate the effects of an online self-assessment tool on teachers’ competencies and beliefs about ICT in education. The causal impact of the tool is evaluated through a randomized encouragement design, involving 7, 391 lower secondary teachers across 11 European countries. Short-run impact estimates show that the use of the tool led teachers to critically revise their technology-enhanced teaching competencies (-0.14 standard deviations) and their beliefs about ICT in education (-0.35 s.d.), while there is no impact on their probability of taking specific training. The effects are concentrated among teachers in the top-end tail of the distribution of pre-treatment outcomes. We provide suggestive evidence that the feedback score provided by the tool triggered such results by providing a negative information shock.
    Keywords: ICT, technology-enhanced teaching, self-assessed competencies, experimental design, teaching practices
    JEL: I21 C93
    Date: 2023–01
  20. By: Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology); Hildegunn E Stokke (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Studies of wage inequality concentrate on private wages. Public sector wages are typically assumed to contribute to overall wage equality. We challenge this understanding in an analysis of the relative skill premium in public versus private sectors. The analysis of heterogeneity across gender and geography is based on rich register data for Norway. The raw data confirm the relative wage compression in the public sector. However, this is a male phenomenon and only prevalent in large cities when unobserved worker and firm characteristics are taken into account. With identification based on shifters between private and public sectors and movers between city-size groups, wage setting for female workers in the public sector increases wage inequality in all regions, particularly in the periphery. The result is consistent with policies promoting recruitment of high-educated female workers and expansion of public services in the periphery counterbalancing the desired equality effect of public wages.
    Keywords: Wage inequality, skill premium, geography, private-public wages
    JEL: J31 J45 R23
    Date: 2022–12–20
  21. By: Daron Acemoglu; Alex Xi He; Daniel le Maire
    Abstract: This paper provides evidence from the US and Denmark that managers with a business degree (“business managers") reduce their employees' wages. Within five years of the appointment of a business manager, wages decline by 6% and the labor share by 5 percentage points in the US, and by 3% and 3 percentage points in Denmark. Firms appointing business managers are not on differential trends and do not enjoy higher output, investment, or employment growth thereafter. Using manager retirements and deaths and an IV strategy based on the diffusion of the practice of appointing business managers within industry, region and size quartile cells, we provide additional evidence that these are causal effects. We establish that the proximate cause of these (relative) wage effects are changes in rent-sharing practices following the appointment of business managers. Exploiting exogenous export demand shocks, we show that non-business managers share profits with their workers, whereas business managers do not. But consistent with our first set of results, these business managers show no greater ability to increase sales or profits in response to exporting opportunities. Finally, we use the influence of role models on college major choice to instrument for the decision to enroll in a business degree in Denmark and show that our estimates correspond to causal effects of practices and values acquired in business education--rather than the differential selection into business education of individuals unlikely to share rents with workers.
    Keywords: business education, labor share, management, rent sharing, wages
    JEL: J30 J31 J53 M52 G30
    Date: 2022–12
  22. By: Hans Fehr; Adrian Fröhlich
    Abstract: This paper develops a general equilibrium life-cycle model with endogenous retirement and disability risk, in order to quantify the impact of recent pension reforms in Germany. At certain ages households may either apply for disability pensions (DP) or old-age pensions (OAP), de-pending on eligibility rules and the generosity of the two programs. Our policy analysis focus on the increase in the normal retirement age (NRA) from age 65 to 67 (Reform 2007) and the recent increase in the maximum assessment age (MAA) for DP benefits (Reform 2018). In contrast to the first reform, the second reform received hardly any attention in the public pension debate in Germany. Our simulation results indicate that with current eligibility and benefit rules, the second reform will almost neutralize the financial and economic benefits of the first reform. Consequently, securing the financial stability of the system will require a tightening of eligibility rules and/or a reduction of early retirement benefits in the future.
    Keywords: overlapping generations, stochastic general equilibrium, endogenous retirement, disability pensions
    JEL: C68 D91 H55 J24
    Date: 2022

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