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on Microeconomic European Issues |
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Issue of 2023‒02‒20
twenty-one papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Bonaccolto-Töpfer, Marina; Schnabel, Claus |
| Abstract: | Using representative data from the German Socio-Economic Panel (SOEP), this paper finds a statistically significant union wage premium in Germany of almost three percent which is not simply a collective bargaining premium. Given that the union membership fee is typically about one percent of workers' gross wages, this finding suggests that it pays off to be a union member. Our results show that the wage premium differs substantially between various occupations and educational groups, but not between men and women. We do not find that union wage premia are higher for those occupations and workers which constitute the core of union membership. Rather, unions seem to care about disadvantaged workers and pursue a wider social agenda. |
| Keywords: | union wage premium, collective bargaining, union membership, Germany |
| JEL: | J31 J53 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:022023&r=eur |
| By: | Maciej Albinowski; Iga Magda; Agata Rozszczypała |
| Abstract: | We investigate the role of education in creating employment opportunities for persons with disabilities across the European Union. We use the European Union Statistics on Income and Living Conditions (EU-SILC) for 2011-2019. We find that educational attainment is a major factor determining the probability of employment among persons with disabilities. In particular, the employment effects of tertiary education are much larger among persons with disabilities than among non-disabled people: that is, having a disability is a greater disadvantage for less-educated than for better-educated people. We provide evidence that the endogeneity of educational attainment does not drive these findings. We also uncover substantial heterogeneity in the role of education between countries. In more developed countries, the employment status of persons with disabilities is generally less dependent on their educational attainment. Overall, we estimate that 20% of the disability employment gap in the 25-34 age group can be attributed to the gap in education between individuals with and without disabilities. |
| Keywords: | Disability, Employment, Educational attainment, European Union |
| JEL: | I26 I14 C21 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp012023&r=eur |
| By: | Milene Tessarin; Deyu Li; Sergio Petralia; Ron Boschma |
| Abstract: | In this report we evaluate the opportunities for regional diversification in Europe over the last decade. We use microdata from the European Labour Force Survey to empirically test the entry and exit of occupational specializations at the regional level. Our results show that NUTS 2 regions are more likely to diversify into new occupations that are related to their existing local labour markets. So, the new opportunities for diversification are path-dependent, that is, they depend on the previous (occupational) production structure of the regions. Relatedness is especially important for diversifying toward complex occupations, thus increasing the potential economic benefits of the regions. However, there are significant regional heterogeneities in this related diversification process. Relatedness is positively associated with occupational specialization, but it loses strength as GDP per capita increases among European regions. Finally, we point out some policy orientations that can guide the paths of occupational diversification for European regions. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2302&r=eur |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03912647&r=eur |
| By: | Vera Baye (University of Osnabrueck); Valeriya Dinger (University of Osnabrueck and Leeds University Business Schoo) |
| Abstract: | We empirically document that the effectiveness of the German rent control introduced in 2015 in achieving rental housing affordability is limited. Exploring the reasons for this limited effectiveness we focus on the impact of the rent control on the yield on rental housing investments proxied by rent-price ratios which we derive by matching micro-level quotes on similar objects offered for rent and for sale. Exploiting the temporal, regional, and objectspecific variation generated by the design of the rent control we identify a causal negative effect of the rent control on the yield of rental objects subject to the regulation. Further, we zoom into the spillovers across regulated objects and objects in the affected markets that were exempt from the regulation and find rising yields for the exempted objects, suggesting that the regulation contributed to gentrification via a shift of rental housing supply away from the regulated segment. |
| Keywords: | rent control, micro data, rent-price ratio, housing affordability, housing supply |
| JEL: | R38 R31 E65 R21 R23 R10 |
| Date: | 2023–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:iee:wpaper:wp0122&r=eur |
| By: | Mazzoni Leonardo; Pinelli Fabio; Riccaboni Massimo |
| Abstract: | With the increasing pervasiveness of ICTs in the fabric of economic activities, the corporate digital divide has emerged as a new crucial topic to evaluate the IT competencies and the digital gap between firms and territories. Given the scarcity of available granular data to measure the phenomenon, most studies have used survey data. To bridge the empirical gap, we scrape the website homepage of 182 705 Italian firms, extracting ten features related to their digital footprint characteristics to develop a new corporate digital assessment index. Our results highlight a significant digital divide across dimensions, sectors and geographical locations of Italian firms, opening up new perspectives on monitoring and near-real-time data-driven analysis. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2301.04925&r=eur |
| By: | Fjaellegaard Jensen, Mathias; Manning, Alan |
| Abstract: | On average, children born in Denmark with immigrant parents (first-generation locals) have lower earnings, higher unemployment, less education, more welfare transfers, and more criminal convictions than children with local-born parents. This is different from the US where first-generation locals often have better unconditional outcomes. However, like the US, when we condition on parental socio-economic characteristics, first-generation locals generally perform as well or better than the children of locals. There is little distinctive about being a child of immigrants, other than the fact that they are more likely to come from deprived backgrounds. |
| JEL: | J15 J61 J62 N34 |
| Date: | 2022–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118005&r=eur |
| By: | Resce, Giuliano; Vaquero-Piñeiro, Cristina |
| Abstract: | We investigate the role of local favoritism in the Geographical Indications (GIs) quality scheme, one of the main pillars of agri-food policy in the EU. Taking advantage of a rich and unique municipalities' geo-referenced database over the 2000-2020 period, we evaluate whether the birthplaces of Regional council members are favored in the acknowledgment of GIs in Italy. To address the potential confounding effects and selection biases, we combine a Difference in Difference strategy with machine learning methods for counterfactual analysis. Results reveal that councilors' birth municipalities are more likely to obtain their products certified as GIs. The birth town bias is more substantial in areas where the level of institutional quality is lower, there is higher corruption, and lower government efficiency, suggesting that the mediation of politicians is determinant where the formal standardized procedures are muddled. |
| Keywords: | Political Economy; Geographical Indications; Political representation; Electoral success; Local Development. |
| JEL: | D72 L66 Q18 R11 |
| Date: | 2023–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:mol:ecsdps:esdp23089&r=eur |
| By: | Becchetti, Leonardo; Conzo, Gianluigi; Salustri, Francesco |
| Abstract: | Climate challenge can be modelled as a multiplayer prisoner's dilemma where any ecological action - i.e., purchasing an electric car or adopting sustainable life styles - is a costly action in terms of economic resources, time, and effort for individuals. According to the well-known embedded social dilemma, even though the social benefit is maximised when everyone takes ecological actions, the Nash equilibrium of the game if all players have standard self-interested preferences is not acting. In this paper we analyse how this ecological prisoner's dilemma is affected by people's perception. Using the European Social Survey, we look at how urgent the climate threat is perceived by respondents and what they think about other countries' willingness to take ecological actions. Theoretical predictions suggest that the former increases, while the latter does not affect willingness to take ecological actions. Our empirical findings on a large sample of European citizens however show that both factors positively affect willingness to take actions. We interpret the positive effect of other country action on the individual responsibility to take actions in terms of conditional cooperation and show that the effect is weaker in countries and regions with higher social capital. |
| Keywords: | climate change, perception, ecological actions, social dilemma, conditional cooperation |
| JEL: | H41 Q54 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1231&r=eur |
| By: | Marco Fongoni (École d'Économie d'Aix-Marseille, Aix-Marseille Université); Daniel Schaefer (Institut für Volkswirtschaftslehre, Johannes-Kepler-Universität Linz); Carl Singleton (Department of Economics, University of Reading) |
| Abstract: | We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace. |
| Keywords: | Wage rigidity, Reciprocity, Workplace relations, Employer-employee data |
| JEL: | E24 E70 J31 J41 |
| Date: | 2023–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2023-03&r=eur |
| By: | Mayer, Maximilian |
| Abstract: | This paper studies the role of social connections in shaping individuals' concerns about climate change. I combine granular climate data, region-level social network data and survey responses for 24 European countries in order to document large information spillovers. Individuals become more concerned about climate change when their geographically distant friends living in sociallyconnected regions have experienced large increases in temperatures since 1990. Exploring the heterogeneity of the spillover effects, I uncover that the learning via social networks plays a central role. Further, results illustrate the important role of social values and economic preferences for understanding how information spillovers affect individual concerns. |
| Keywords: | beliefs, climate change, information spillovers, social networks |
| JEL: | D01 D62 D64 D8 Q5 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:22023&r=eur |
| By: | Alabrese, Eleanora (University of Warwick); Liberini, Federica (QMUL); Porcelli, Francesco (University of Bari); Redoano, Michela (University of Warwick); Russo, Antonio (University of Sheffield) |
| Abstract: | We study the provision of information by local governments that supports individual compliance with nationwide regulation, and how this provision relates to the electoral process. We use information about individual mobility (compliance with the lockdown) and Facebook posts by Italian local governments during the Covid 19 pandemic. We show that in municipalities where mayors were up for reelection, local governments provided significantly more covid-related information. This information caused a significant decrease in mobility and excess mortality. However, these effects seem to arise only in the northern regions of the country, where the impact of the pandemic was more severe. JEL Codes: TBD |
| Keywords: | Covid ; Elections ; Facebook |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1448&r=eur |
| By: | Cetin, Sefane (Université catholique de Louvain, LIDAM/CORE, Belgium); Jousten, Alain (Université de Liège) |
| Abstract: | This paper investigates the retirement patterns of married couples in Belgium. To forecast retirement behavior, we use administrative Social Security data from 2003 to 2017 and a discrete choice random utility model. In particular, we concentrate on the spousal bonus of pension payments to comprehend how financial incentives resulting from the social security system’s structural design affect both partners’ retirement decisions. We simulate the effect of the elimination of the spousal bonus and find that a small portion of women delay their retirement whereas the rest substitute into alternative social security benefits. Our results not only highlight the significance of cross-program spillovers between various Social Security benefits, but also the heterogeneity in preferences for retirement and asymmetry of retirement behavior between husbands and wives. |
| Keywords: | Old-Age Labor Supply ; Retirement Incentives ; Spousal Bonus ; Pension Reforms |
| JEL: | D10 H55 J26 |
| Date: | 2022–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2022024&r=eur |
| By: | Fuad Hasanov; Reda Cherif; Christoph Grimpe; Wolfgang Sofka |
| Abstract: | We investigate the effect of R&D subsidies on firms’ innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms while it does not differ substantially by firm size. Domestic firms have a larger response in R&D spending in low-tech manufacturing, knowledge-intensive services, and technological services while the response of domestic and foreign MNCs is broadly similar and is greater in medium-tech and high-tech manufacturing. Foreign MNC subsidiaries’ response in terms of patents is greater than that of domestic MNCs in most industries. |
| Keywords: | Innovation; patents; research and development; R&D; subsidies; multinationals; investment; technology policy; R&D subsidy; high-tech manufacturing; subsidiaries' response; low-tech manufacturing; R&D spending; Transnational corporations; Manufacturing; Services sector; Government subsidies; Investment policy; Global |
| Date: | 2022–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/192&r=eur |
| By: | Lebastard, Laura; Matani, Marco; Serafini, Roberta |
| Abstract: | This paper provides an analysis of the impact of the COVID-19 pandemic on exporting firms, fo-cusing on the role of supply bottlenecks. Based on monthly transaction-level data for the universe of French exporters over the period January 2020-December 2021, we find that participation in global value chains increased firms’ vulnerability to the COVID-19 shock, in terms of both export perfor-mance and probability of survival in the export market, the negative impact of supply disruptions being higher for relatively more downstream firms. At the same time, the results suggest that export-ing firms benefited from sourcing of core inputs from different countries, supporting the hypothesis that diversification in global value chains fosters supply-chain resilience. JEL Classification: D22, F14, F61 |
| Keywords: | Diversification, Global Value Chains, Pandemic, Shock Transmission, Upstreamness |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232766&r=eur |
| By: | João Cerejeira (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; and CIPES – Centre for Research in Higher Education Policies); Rita Sousa (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Carolina Bernardo (University of Minho, Portugal); António Bento-Gonçalves (CECS – Communication and Society Research Centre, University of Minho) |
| Abstract: | Fire intensity and size incite visitation decrease and recreational losses, relevant tourism variables for European economies. As a result of climate change, this reality is becoming more evident. Due to significant gaps in analyzing the relationship between wildfires and tourism demand, this paper aims to explain how tourism demand reacts to wildfires in Portugal. We use a novel approach in these studies and estimate a spatial econometric model to analyze the relationship between total burned areas and overnight stays in a touristic establishment in a given municipality and its neighbouring municipalities. Our results show that wildfires negatively affect the overnight stays in the same location but also cause spillover effects in neighbouring municipalities. Also, the wildfire occurrences are positively related to the number of overnight stays after three months, suggesting a delay in tourism activities. |
| Keywords: | tourism, wildfires, spatial econometrics |
| JEL: | O13 Q54 Q56 L83 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:01/2023&r=eur |
| By: | Philippe Aghion (INSEAD - Institut Européen d'administration des Affaires, LSE - London School of Economics and Political Science, Collège de France - Chaire Economie des institutions, de l'innovation et de la croissance - CdF (institution) - Collège de France); Céline Antonin (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, Collège de France - Chaire Economie des institutions, de l'innovation et de la croissance - CdF (institution) - Collège de France); Simon Bunel (Institut national de la statistique et des études économiques (INSEE), Centre de recherche de la Banque de France - Banque de France, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Xavier Jaravel (LSE - London School of Economics and Political Science) |
| Abstract: | We use comprehensive micro data in the French manufacturing sector between 1995 and 2017 to document the effects of a fall in the cost of investments in modern manufacturing capital, including modern automation technologies, on employment, wages, sales, prices, and business stealing. Causal effects are estimated with event studies and a shift-share IV design leveraging predetermined supply linkages and productivity shocks across foreign suppliers of manufacturing capital. At all levels of analysis-plant, firm, and industry-the estimated impact of capital investments on employment is positive, even for unskilled industrial workers. Furthermore , we find that capital investments lead to higher sales and exports, higher profits, and lower consumer prices, while wages and wage inequality remain unchanged. We estimate a positive industry-level employment response to manufacturing capital investments only in industries that are exposed to import competition, due to business-stealing across countries. Thus, typical investments in modern manufacturing capital lead to an increase in domestic labor demand and promote competitiveness in international markets. |
| Keywords: | modern manufacturing capital investments productivity France, modern manufacturing capital, investments, productivity, France |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03943312&r=eur |
| By: | Wiedner, Jonas; Schaeffer, Merlin (WZB Berlin Social Science Center) |
| Abstract: | Social science research demonstrates that dispersal policies and restrictions on the freedom of residence have inhibited refugees’ socio-economic integration. The dominant explanation is that such policies prevent refugees from moving to places where they can employ their skills most fruitfully. However, previous studies of refugees’ actual residential choices in Europe provide little evidence that refugees move to places with good employment prospects. The combination of negative effects of residence restrictions and emerging evidence of disadvantaging secondary migration forms what we call the ‘refugee mobility puzzle’. In this study, we address this puzzle and ask: What attracts refugees to deprived areas, and can their seemingly unfortunate residential choices be understood as moves to labor market opportunity after all? Empirically, we draw on the IAB-BAMF-SOEP Survey of Refugees, track the location of more than 2, 500 refugee respondents, and estimate discrete choice models across all German counties and postcodes. Our results confirm the existence of the refugee-mobility puzzle and complicate recent critiques of dispersal policies and restrictions by suggesting that refugees’ need for affordable housing and their desire to be close to (co-ethnic) friends and family may turn into an unintended lock-in factor in the mid- and long-run. |
| Date: | 2023–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:rnzbc&r=eur |
| By: | Beatriz Gonz‡lez L—pez-Valc‡rcel (International Center for Public Policy); Guillem Lopez-Casasnovas (International Center for Public Policy) |
| Abstract: | We focus the analysis on the regional factors meddling through the effects of Covid 19 on a territorial basis. In the first part of the paper, we explore mortality COVID rate from the outbreak of the pandemic up to September 2020, when uncertainty was global on how to react to the virus, across the European regions. The main objective of this part is to explore the influence on Covid mortality of the nature of the Health Systems and the role of the regions in responding the pandemic. In the second part we translate some of the hypothesis in the empirical arena. We use for this purpose a rich data set of NUTS-2 from Eurostat . We adjust for the Social Insurance (SIS) or the National Health Service nature (NHS) of the Health systems, and the Regional Authority index (RAI) on the degree of decentralization from the OECD fiscal federalism network. In addition, we correlate to mortality EQI, the quality of the regional government index (basically the sense of corruption). Other than these institutional country aspects we delve into the impact of variables such as the size of the population, age structure, per capita GDP, the density of the NUTS and some other spatial factors. We find that at the beginning of the health crisis, with the chaotic irruption of the infection, the uncertainty of the policies to be applied and with some regional random responses, those richer, more populated NUTS and countries with a hierarchical NHS did show worse mortality ratios, with low significance for RAI. We focus on the differences in the global mortality in our NUTS2 sample between 2020 and 2021. In 2021, started massive vaccination, the Covid evolution was better understood, and decentralization-based policies were instrumented in some countries. In these models, RAI is statistically significant, but not the nature of the systems anymore. It looks like an idiosyncratic, close to the problem, regional answer to the pandemics diluted the differences of the national health systems. The quality index of the regional government is also highly correlated to mortality changes. In the third part of the paper, we zoom in the reality of a single country (Spain) by analyzing territorial heterogeneity. We compute for the Spanish provinces (NUTS3) the total number of Quality Adjusted Life Years calculated the QALYs lost in the three defined periods (initial lockdown, centralized management and decentralized management) given the gender and the age structure of each province. We calculate then the number of QALYs lost with coronavirus, given absolute mortality and provincial relative age-related health damage. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper2302&r=eur |
| By: | Lilith Burgstaller; Annabelle Doerr; Sarah Necker |
| Abstract: | We study the causal effects of household tax credits on the willingness to demand legally provided services using two survey experiments with 1.974 German homeowners. Participants choose between hypothetical offers of service providers and are randomly assigned to a policy scenario 1) without a tax credit, 2) a tax credit households can claim through the annual tax return, or 3) a tax credit granted by the seller at source. We also vary the refund rate of the tax credit (20/30%) and whether the price including the tax reduction is displayed. All tax credits increase the willingness to pay for offers with invoice as well as the probability to select an offer with invoice. The effectiveness of the tax credit is significantly higher when two attractive features (at source+30%) are combined or when the reduction is made salient. We estimate that about two thirds of respondents who would use the tax credit would have demanded an offer without invoice also without the tax credit. |
| Keywords: | tax credit, financial rewards for compliance, tax evasion, tax compliance, third-party reporting, survey experiment, discrete choice experiment |
| JEL: | H26 C93 E26 J22 O17 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10211&r=eur |
| By: | Carlsson, Mikael (Uppsala universitet); Clymo, Alex (University of Essex); Joslin, Knut-Eric (Kristiania University College) |
| Abstract: | We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than productivity dispersion in recessions. Productivity shocks pass through incompletely to prices and have limited effect on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneous-firm model matching the micro facts, demand dispersion has unambiguously negative effects on output via increased uncertainty and a “wait and see” channel. Productivity dispersion does not generate “wait and see” effects, but affects output negatively by inducing markup dispersion. |
| Keywords: | demand estimation; productivity; variable markups; business cycles; dispersion; uncertainty; passthrough; adjustment costs |
| JEL: | D21 D22 D81 E32 L11 |
| Date: | 2023–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2023_001&r=eur |