nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒02‒06
seventeen 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. Home alone: Widows' well-being and time By Maja Adena; Daniel Hamermesh; Michał Myck; Monika Oczkowska
  3. Employment effect of citizenship acquisition:Evidence from the Belgian labour market By Sousso Bignandi; Céline Piton
  4. Ability composition in the class and the school performance of immigrant students By Meschi, Elena; Pavese, Caterina
  5. Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany By Albarosa, Emanuele; Elsner, Benjamin
  6. Pension Reforms, Longer Working Horizons and Absence from Work By Brunello, Giorgio; De Paola, Maria; Rocco, Lorenzo
  7. Do Role Models Matter in Large Classes? New Evidence on Gender Match Effects in Higher Education By Maurer, Stephan; Schwerdt, Guido; Wiederhold, Simon
  8. Does grant funding foster research impact? Evidence from France By Alberto Corsini; Michele Pezzoni
  9. Gender quotas, board diversity and spillover effects. Evidence from Italian banks By Silvia Del Prete; Giulio Papini; Marco Tonello
  10. The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing By Kuosmanen, Natalia; Maczulskij, Terhi
  11. The Long-Run Earnings Effects of Winning a Mayoral Election By Bertoni, Marco; Brunello, Giorgio; Cappellari, Lorenzo; De Paola, Maria
  12. Job Ladders by Firm Wage and Productivity By Bertheau, Antoine; Vejlin, Rune Majlund
  13. Works Councils and Workers' Party Preferences in Germany By Jirjahn, Uwe; Le, Thi Xuan Thu
  14. A Hard Pill to Swallow? Parental Health Shocks and Children's Mental Health By Felix Glaser; Gerald Pruckner
  15. Monopsony, Job Tasks, and Labor Market Concentration By Samuel Dodini; Michael F. Lovenheim; Kjell G. Salvanes; Alexander Willén
  16. Understanding Sibling Correlations in Education: Molecular Genetics and Family Background By Fletcher, Jason M.; Lu, Qiongshi; Mazumder, Bhashkar; Song, Jie
  17. Families, labor markets and policy By Stefania Albanesi; Claudia Olivetti; Barbara Petrongolo

  1. By: Eve Caroli (Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres, 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); 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)
    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, itincreases health expense claims, in particular in the lower part of the expenditure distribution.
    Keywords: Pension reform, Retirement age, Health, Health-care consumption
    Date: 2022–12–15
  2. By: Maja Adena (Wissenschaftszentrum Berlin (WZB), 10785 Berlin, Germany); Daniel Hamermesh (University of Texas at Austin, Austin, TX, 78712, USA); Michał Myck (Centre for Economic Analysis, 71441 Szczecin, Poland); Monika Oczkowska (Centre for Economic Analysis, 71441 Szczecin, Poland)
    Abstract: Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE, 2004-17) and time diaries from Poland (2013), the U.S. (2006-16), the U.K. (2014-15) and France (2009-10), we examine differences between widowed and partnered older women in well-being and its development in widowhood. Most importantly, our analysis accounts for time use, an aspect which has not been studied previously. We trace the evolution of well-being of women who become widowed by comparing them with their matched non-widowed ‘statistical twins’ and examine the role of an exceptionally broad set of potential moderators of widowhood’s impact on well-being. We confirm a dramatic decrease in mental health and life satisfaction after the loss of partner, followed by a slow partial recovery over a five-year period. An extensive set of controls recorded prior to widowhood, including detailed family ties and social networks, provides little help in explaining the deterioration in well-being. Unique data from time-diaries kept by older women in several European countries and the U.S. tell us why: the key factor behind widows’ reduced well-being is increased time spent alone.
    Keywords: widowhood; well-being; social networks; time use;
    JEL: I31 I19 J14
    Date: 2023–01–20
  3. By: Sousso Bignandi (: ULiège (HEC-Liege & CEDEM)); Céline Piton (Economics and Research Department, NBB and and Université libre de Bruxelles (SBS-EM, CEBRIG, DULBEA))
    Abstract: This paper investigates whether citizenship acquisition affects immigrants’ employment in Belgium. To do so, we rely on a longitudinal database, over the period 2008-2014, coupling administrative data from the Crossroads Bank for the Social Security (CBSS) and survey data from the Labour Force Surveys (LFS). During this period, citizenship was open to all immigrants who have been legally resident for at least 7 years, without any language or integration requirements. This allows us to study naturalisation in a liberalised context, avoiding part of the selection bias. The econometric analysis has been carried out using panel data fixed effects techniques applied to a programme evaluation model. We find that citizenship acquisition increases immigrants’ employment by 7 percentage points after naturalisation. This effect persists even after controlling for endogeneity by exploiting an instrument for naturalisation and thus confirms the existence of citizenship premium in Belgium. Furthermore, the analysis by type of employment shows that citizenship has a positive effect on migrants' entrepreneurship as well as on their probability of finding a better and more stable job. Finally, using cross-section administrative data from the CBSS, covering the entire population, we find that citizenship effect is stronger for individuals with a non-EU origin.
    Keywords: Employment, Immigration, citizenship, labour market integration, Belgium
    JEL: J15 J16 J18 J21
    Date: 2022–12
  4. By: Meschi, Elena; Pavese, Caterina
    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
  5. By: Albarosa, Emanuele (University College Dublin); Elsner, Benjamin (University College Dublin)
    Abstract: A commonly expressed concern about immigration is that it undermines social cohesion in the receiving country. In this paper, we study the impact of a large and sudden inflow of asylum seekers on several indicators of social cohesion. In 2015/16, over one million asylum seekers from Syria, Afghanistan, and elsewhere arrived in Germany. Anecdotal evidence suggests that this inflow changed the public opinion on hosting asylum seekers, from being highly welcoming to fairly negative within a few months. Using individual- and county-level panel data, we test whether the evidence supports this apparent shift in attitudes. In a difference-in-differences design, we compare the attitudes of individuals in areas with large vs. small local inflows before and after the inflow. In individual survey data, we find mixed evidence of an impact on social cohesion. In a representative sample, we find no evidence that the inflow undermined social cohesion, except for a negative effect on donations to charity. In areas with high vote shares for the populist party AfD, we find that the inflow led to greater anti-immigrant sentiment and a greater concern about crime. We also show that areas with larger increases in the number of asylum seekers experienced a significant increase in anti-immigrant violence, which lasted for about two years before returning to its pre-inflow level. This effect was larger in areas with higher unemployment and greater support for AfD.
    Keywords: forced migration, social attitudes, anti-immigrant violence
    JEL: J15 J61
    Date: 2023–01
  6. By: Brunello, Giorgio (University of Padova); De Paola, Maria; Rocco, Lorenzo (University of Padova)
    Abstract: Using matched employer-employee data for Italy and newly available information on sick leaves certificates, we study the effect of an exogenous increase in the length of the residual work horizon – triggered by a pension reform that increased minimum retirement age - on middle-aged employees' absence from work due to sick leaves. We find that this effect is positive for females and negative for males. After excluding health as a plausible mechanism, we argue that the intertemporal substitution of leisure prevailed on the fear of job loss for females, while the opposite happened to males. Sick leaves increased only for females working in firms paying smaller wage premia to female than to male workers, suggesting that, in these firms, females exchange lower pay with higher flexibility in their work schedule.
    Keywords: absences from work, retirement, Italy
    JEL: J22 J26
    Date: 2023–01
  7. By: Maurer, Stephan (University of Konstanz); Schwerdt, Guido (University of Konstanz); Wiederhold, Simon (Ifo Institute for Economic Research)
    Abstract: We study whether female students benefit from being taught by female professors, and whether such gender match effects differ by class size. We use administrative records of a German public university, covering all programs and courses between 2006 and 2018. We find that gender match effects on student performance are sizable in smaller classes, but do not exist in larger classes. This difference suggests that direct and frequent interactions between students and professors are important for the emergence of gender match effects. Instead, the mere fact that one's professor is female is not sufficient to increase performance of female students.
    Keywords: gender gap, role models, tertiary education, professors
    JEL: I21 I23 I24 J16
    Date: 2023–01
  8. By: Alberto Corsini (UCA - Université Côte d'Azur); Michele Pezzoni (UCA - Université Côte d'Azur, Observatoire des Sciences et Techniques - HCERES - Haut Conseil de l'Evaluation de la Recherche et de l'Enseignement Supérieur, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, ICRIOS - ICRIOS, Bocconi University, Italy - Bocconi University [Milan, Italy])
    Abstract: Over the last fifteen years, European countries have increasingly relied on competitive grants to allocate research funding, replacing the more traditional block funding model. Policymakers are interested in assessing the effectiveness of the grant funding model in producing impactful research. However, the literature aiming to quantify the effect of grants on the resulting research's impact is scant. In the French context, we compare the impact of scientific articles resulting from the support of competitive grants from the main national funding agency with the impact of articles not supported by grants. We rely on publication acknowledgments to retrieve funding information and on citation data to assess the articles' impact. We find that articles supported by competitive grants receive more citations than articles not supported by grants in the long run, while the difference is not statistically significant in the short run. We find heterogeneity in the effect of grant funding on citations across fields.
    Keywords: Competitive funding, Research impact, French funding agency
    Date: 2022–12–24
  9. By: Silvia Del Prete (Bank of Italy); Giulio Papini (Bank of Italy); Marco Tonello (Bank of Italy)
    Abstract: We study the impact of a 2011 law on the diversity of bank boards. The law required all listed companies in Italy (including banks) to increase the share of female representatives on their boards up to one third of total seats. We look at listed banks (the ones directly targeted by the law), but also test whether the law led to spillover effects on non-listed banks belonging to listed groups. Using administrative data on board composition between 2007 and 2019, we compare some measures of diversity of boards of listed and unlisted banks belonging to listed groups with those of institutions included in non-listed groups, before and after the introduction of the law. We find that female representation increased only for listed banks, with no spillover effects of the law on those belonging to listed groups, while the economic performance of listed banks remained broadly unchanged.
    Keywords: bank board composition, diversity, gender, corporate governance
    JEL: G21 G38 J48 J78
    Date: 2022–12
  10. By: Kuosmanen, Natalia (ETLA - The Research Institute of the Finnish Economy); Maczulskij, Terhi (ETLA - The Research Institute of the Finnish Economy)
    Abstract: This paper explores the importance of firm dynamics, including entry and exit and the allocation of carbon emissions across firms, on the green transition. Using the 2000–2019 firm-level register data on greenhouse gas emissions matched with the Financial Statement data in the Finnish manufacturing sector, we examine the sources of carbon-productivity growth and assess the relative contributions of structural change and firm dynamics. We find that continuing firms were the main drivers of carbon productivity growth whereas the contribution of entering and exiting firms was negative. In addition, the allocation of emissions across firms appeared to be inefficient, with a negative impact on carbon productivity growth over the study period. Our analysis also revealed a positive relationship between labor-intensive firms and carbon productivity, but firms with a larger market share tended to be less productive in terms of carbon use.
    Keywords: carbon productivity, decomposition analysis, firm dynamics, firm-level data, manufacturing sector
    JEL: D24 L60 Q54
    Date: 2023–01
  11. By: Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); De Paola, Maria
    Abstract: We estimate the effect of winning a mayoral election on long-run licit earnings, which plays a key role in the selection of local political leaders. We use Italian administrative social security data from 1995 to 2017 and a sharp regression discontinuity design based on close elections. Over a 15-year horizon, the average present discounted value of winning an election is equal to 35, 000€, or 85 percent of the annual labor and social security earnings for the average candidate in our sample, a modest effect driven by the compensations for political service and concentrated during the first five years after the election. Net of compensations for service, this effect is negative during the first ten years after the election, and almost fades away afterwards. Differences in the political careers of winners and runners-up and a two-term limit rule on mayors' office contribute to explain our results.
    Keywords: returns to office, political selection, revolving door, rent-seeking, close elections
    JEL: D72 J44 J45
    Date: 2023–01
  12. By: Bertheau, Antoine (University of Copenhagen); Vejlin, Rune Majlund (Aarhus University)
    Abstract: We investigate whether workers reallocate up firm productivity and wage job ladders, and the cyclicality of this process. We document that productivity is a better measure of the job ladder than the average wage, since high productivity firms relative to low poach more workers than high wage firms relative to low. Employment cyclicality over the business cycle differs between the firm wage and productivity ladders. In recessions, employment decreases more in low than in high productivity firms. Low productivity firms fire more workers in recessions and stop hiring unemployed workers. Thus, there is a cleansing effect of recessions from the point of view of productivity reallocation. Oppositely, employment decreases more in high than in low wage firms, and the poaching channel of employment growth explains the difference. In recessions separations to other firms slow down more in low wage firms relative high wage firms and thus reallocation up the wage job ladder breaks down - a sullying effect of recessions. Thus recessions speed up productivity-enhancing reallocation but impede progression on the wage ladder.
    Keywords: job creation rate, firm heterogeneity, employment fluctuations
    JEL: E24 E32
    Date: 2023–01
  13. By: Jirjahn, Uwe; Le, Thi Xuan Thu
    Abstract: Research on the consequences of works councils has been dominated by economic aspects. Our study provides evidence that works councils have nonfinancial consequences for civic society that go beyond the narrow boundaries of the workplace. Using panel data from a large sample of male workers, the study shows that works councils have an influence on workers' party preferences. The presence of a works council is negatively associated with preferences for extreme right-wing parties and positively associated with preferences for the Social Democratic Party and The Left. These results holds in panel data estimations including a large set of controls and accounting for unobserved individual-specific factors. Our findings fit the notion that workplace democracy increases workers' generalized solidarity and their awareness of social and political issues.
    Keywords: Workplace democracy, worker participation, political spillover, party identification
    JEL: D72 J51 J52 J58
    Date: 2023
  14. By: Felix Glaser (Johannes Kepler Universtiy Linz); Gerald Pruckner
    Abstract: Based on comprehensive administrative health record data from Austria, this study examines how children’s mental health responds to a severe parental health shock. To account for the endogeneity of a serious parental illness, our sample is restricted to children who experience the health shock of a parent at some point in time and we exploit the timing of shocks in a dynamic DID setting. We find a positive causal effect of parental health shocks on children’s mental health care utilization. Affected children have higher medical attendance for the treatment of mental illnesses, consume more psychotropic drugs, and are more likely to be hospitalized with mental and behavioral disorders. A significant increase in the utilization of antidepressants, anxiolytics, and sedatives can be observed for older children, girls and children with a white-collar family background. Our findings have important policy implications for children’s access to psychotherapies and mental health care after experiencing a traumatic household event.
    Keywords: Mental health of children, parental health shock, difference-in-differences
    JEL: I10 I12 I14 I31
    Date: 2022–12
  15. By: Samuel Dodini; Michael F. Lovenheim; Kjell G. Salvanes; Alexander Willén
    Abstract: This paper extends the literature on monopsony and labor market concentration by taking a task-based approach and estimating the causal effect of concentration in the demand for skills on labor market outcomes. The prior literature has focused on industry and occupation concentration and likely overstates the degree of monopsony power, since worker skills are substitutable across different firms, occupations, and industries. Exploiting linked employer-employee data that cover the universe of Norwegian workers over time, we find that our job task-based measure shows lower degrees of concentration than the conventional industry-and occupation-based measures. We also find that the gender gap in concentration is substantially larger using this measure. Exploiting mass layoffs and establishment closures as exogenous shocks to local labor demand, we show that workers who experience a mass separation have substantially worse subsequent labor market outcomes when they are in more concentrated labor markets defined by skill clusters. Our results point to the existence of employer market power in the economy that is driven by the concentration of skill demand across firms.
    JEL: J23 J24 J42 J63
    Date: 2023–01
  16. By: Fletcher, Jason M. (University of Wisconsin-Madison); Lu, Qiongshi (University of Wisconsin-Madison); Mazumder, Bhashkar (Federal Reserve Bank of Chicago); Song, Jie (University of Wisconsin-Madison)
    Abstract: Sibling correlations in socioeconomic status are one of the key measures of equality of opportunity and social mobility, providing an omnibus examination of the importance of family background. Typically, these correlations are interpreted as the combined effects of shared sibling background and experiences, including genetics and family environments. The UK Biobank allows us to specifically control for sibling and parental genetics (polygenic scores, PGS) in order to gauge their relative importance compared with broader family background effects. We use >17, 000 sibling pairs from the UK Biobank in order to further decompose standard sibling correlations of educational attainment found in the literature. In general, we find modest (up to 20%) contributions of molecular genetics to the similarity of sibling outcomes, suggesting a large amount of the observed similarity in sibling educational outcomes are due to parents and environments of children.
    Keywords: sibling correlations, educational mobility, genetics
    JEL: J62 J12 J24
    Date: 2023–01
  17. By: Stefania Albanesi; Claudia Olivetti; Barbara Petrongolo
    Abstract: Using comparable data for 24 countries since the 1970s, we document gender convergence in schooling, employment and earnings, marriage delay and the accompanying decline in fertility, and the large remaining gaps in labor market outcomes, especially among parents. A model of time allocation illustrates how the specialization of spouses in home or market production responds to preferences, comparative advantages and public policies. We draw lessons from existing evidence on the impacts of family policies on women’s careers and children’s wellbeing. There is to date little or no evidence of beneficial effects of longer parental leave (or fathers’ quotas) on maternal participation and earnings. In most cases longer leave de lays mothers’ return to work, without long-lasting consequences on their careers. More generous childcare funding instead encourages female participation whenever subsidized childcare replaces maternal childcare. Impacts on child development de pend on counterfactual childcare arrangements and tend to be more beneficial for disadvantaged households. In-work benefits targeted to low-earners have clear positive impacts on lone mothers’ employment and negligible impacts on other groups. While most of this literature takes policy as exogenous, political economy aspects of policy adoption help understand the interplay between societal changes, family policies and gender equality.
    Date: 2022–11–30

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