nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒03‒06
fourteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Firm-level productivity growth returns of social capital: Evidence from Western Europe By Roberto Ganau; Andres Rodriguez-Pose; ;
  2. The impact of alternative childcare policies on mothers' employment in selected EU countries By Edlira Narazania; Ana Agundez Garcia; Michael Christl; Francesco Figari
  3. Low pay and household poverty in Italy By Chiara Mussida; Dario Sciulli
  4. Do role models matter in large classes? New evidence on gender match effects in higher education By Maurer, Stephan; Schwerdt, Guido; Wiederhold, Simon
  5. Integration Vs Cultural Persistence: Fertility and Working Time among Second-Generation Migrants in France By Thomas Baudin; Keiti Kondi
  6. The Fertility Response to Cutting Child-Related Welfare Benefits By Malte Sandner; Frederik Wiynck
  7. Exposure to OFDI and regional labour markets: evidence for routine and non-routine jobs in Great Britain By Gagliardi, Luisa; Iammarino, Simona; Rodríguez-Pose, Andrés
  8. Measuring Access and Inequality of Access to Health Care: a Policy-Oriented Decomposition By Antonio Abatemarco; Massimo Aria; Sergio Beraldo; Michela Collaro
  9. The future geography of industries and occupations By Chiara Burlina; Andres Rodriguez-Pose; ;
  10. Does income transparency affect support for redistribution? Evidence from Finland's tax day By Maurice Dunaiski; Janne Tukiainen
  11. Heterogeneous Adjustments of Labor Markets to Automation Technologies By Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
  12. Training in Late Careers: A Structural Approach By Backhaus, Teresa
  13. Marital Sorting and Inequality: How Educational Categorization Matters By Almar, Frederik; Friedrich, Benjamin; Reynoso, Ana; Schulz, Bastian; Vejlin, Rune Majlund
  14. Income insecurity and mental health in pandemic times By Dirk Foremny; Pilar Sorribas-Navarro; Judit Vall Castelló

  1. By: Roberto Ganau; Andres Rodriguez-Pose; ;
    Abstract: We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.
    Keywords: Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe.
    JEL: C36 D24 R10 Z13
    Date: 2023–02
  2. By: Edlira Narazania (JRC Sevilla); Ana Agundez Garcia (JRC Sevilla); Michael Christl (JRC Sevilla); Francesco Figari (University of Eastern Piedmont)
    Abstract: This paper contributes to the debate on the revision of the Barcelona targets on childcare, as promoted by the European Commission in 2022, that aims to provide childcare for children below the age of 3. Using EUROLAB, a structural model of labour supply that can also accounts for labour demand constraints, we estimate female labour market participation reactions to alternative scenarios of formal childcare policies in European countries with very low child care provision for children below 3. We quantify the potential increases in the labour supply of mothers (at the extensive and intensive margins) in the case of fulfilling potential new targets of childcare provision (40%, 50%, 60% and 65%). Achieving these targets would lead to significantly increased labour supply of mothers especially in countries like Hungary and Poland where the current share of formal childcare and/or female labour participation is low. In countries like Portugal, that are far beyond the existing childcare target, changes in labour supply incentives are instead expected to be moderate. We further show that when accounting for labour demand, the expected final employment effects will be less pronounced, but still positive.
    Keywords: Labour market equilibrium, labour supply, labour demand, structural models, discrete choice, childcare
    JEL: J20 J22 J23 J13
    Date: 2023–02
  3. By: Chiara Mussida (Università Cattolica del Sacro Cuore); Dario Sciulli (University of Chieti-Pescara)
    Abstract: This paper explores how low-pay conditions of household heads and partners affect the risk of poverty in Italy. We assume low-pay work is possibly pre-determined by past poverty status, thus allowing for feedback effects from poverty to future labour market outcomes. Our analysis, based on the 2016-2019 EU-SILC panel data, reveals that low-pay work increases the risk of poverty with respect to high-pay conditions. Notably, the effect of low-pay work on poverty with respect to non-employment (both unemployment and inactivity) differs between household heads and partners. It is greater for the former and smaller for the latter. This stresses the leading role of household heads for income formation in Italy and suggests that their earnings are scarcely competitive with non-labor income, and highlights the added-worker role of partners in the Italian households.We find evidence of feedback effects from poverty to future labor market outcomes, thus indicating the existence of a vicious circle between poverty and poor labor conditions.
    Keywords: poverty, low-pay work, feedback effects, panel data
    JEL: C33 I32 J21
    Date: 2023–02
  4. By: Maurer, Stephan; Schwerdt, Guido; Wiederhold, Simon
    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
  5. By: Thomas Baudin (I´ESEG School of Management, LEM UMR 9221 and IRES, Université Catholique de Louvain); Keiti Kondi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: We study whether cultural norms in the origin country, measured at different times, affect fertility and labor force participation of second-generation migrant women in France. We investigate empirically and follow an epidemiological approach to test that the culture of origin affects people’s behavior and decisions. We use the dataset TeO (Trajectoires et Origines) on population diversity in France in 2008. We find that: 1) cultural norms affect people’s fertility and labor working time decisions, confirming the results of Fernandez and Fogli (2009) also for the French context; 2) the timing when the norm is measured is crucial. The later the norm is measured in time, the most powerful its effect, suggesting that the effect of the norms transmitted from peers is stronger than that of norms transmitted from parents. The explanatory power of norms holds also when controlling for socio-economic characteristics such as age, siblings, education of the respondent, spouse, and parents; 3) the feeling of being French moderates the persistence of cultural norms differently for fertility and labor force participation, while the perceived feeling of being discriminated does not alter the persistence of the cultural norms.
    Keywords: second generation migrants, culture, fertility, labor force participation, discrimination, integration
    JEL: J1
    Date: 2023–01–13
  6. By: Malte Sandner (Technical University Nürnberg); Frederik Wiynck (Nuremberg Institute of Technology & Institute for Employment Research)
    Abstract: Despite long-term interest in whether welfare benefits motivate fertility, evidence from research has not been consistent. This paper contributes new evidence to this debate by investigating the fertility effect of a German welfare reform. The reform decreased the household income of families on welfare by 18% in the first year after the birth of a baby. Using exclusive access to German social security data on over 460, 000 affected women, our analysis finds that the reform leads to a fertility reduction of 6.8%. This result implies that for mothers on welfare, fertility has an income elasticity of 0.38, which is much smaller than that of general populations reported in the literature. Our findings suggest that welfare recipients' fertility reacts less strongly to financial incentives than the fertility of overall populations.
    Keywords: welfare benefits, fertility, parental leave
    JEL: J13 I38 C54
    Date: 2023–01
  7. By: Gagliardi, Luisa; Iammarino, Simona; Rodríguez-Pose, Andrés
    Abstract: This article explores the role of subnational geography in the analysis of the consequences of Outward Foreign Direct Investment (OFDI) for workers performing different typologies of jobs. We qualify jobs according to their knowledge content, degree of tradability and response to agglomeration economies. While the former two dimensions are key to signal the intensity to OFDI exposure of different typologies of jobs, the latter contributes to explain the unequal spatial distribution of benefits and losses from OFDI in terms of job creation/destruction. We theorise areas that are more severely exposed to OFDI experience job losses in routine occupations, whereas they do not necessarily benefit from job creation in non-routine jobs. To test our hypothesis, we make use of a balanced panel dataset at the local labour market level, exploiting variations in OFDI exposure and in the job composition of local areas. Our findings—robust to numerous checks, including unobserved global and local trends—indicate that job losses concentrate in regions that were more exposed to OFDI based on their initial industry mix, and affect individuals performing mainly routine tasks. In these same areas, however, no significant effects are found when looking at job creation in non-routine occupations.
    Keywords: OFDI; local labour markets; Routine and non-routine occupations; Home impact of MNEs
    JEL: R14 J01
    Date: 2021–09–01
  8. By: Antonio Abatemarco (University of Salerno and CELPE); Massimo Aria (Università di Napoli Federico II); Sergio Beraldo (Università di Napoli Federico II and CSEF); Michela Collaro (Università di Napoli Federico II)
    Abstract: We propose an approach for the measurement of health care inequalities inspired by the ideal of equal universal access. The approach assesses the chances of access to health treatments of appropriate quality, for any given realization of socially relevant characteristics an individual may have. It allows to assess supply-side (cost-specific) and demand-side (resource-specific) determinants of health care inequality. An empirical exercise using Italian data shows that the methodology can be employed to improve the design of policies addressing health care inequalities.
    Keywords: health care, equality of opportunity, factor-decomposition, health policy
    JEL: I14 I18 D63
    Date: 2023–02–03
  9. By: Chiara Burlina; Andres Rodriguez-Pose; ;
    Abstract: COVID-19 is mostly considered to have ravaged places with high levels of inequality and poverty. Yet, in the case of Europe, the evidence for this is limited. In this paper we address this gap in our knowledge by exploring how regional variations in poverty, wealth, and inter-personal inequality have shaped COVID-19-related excess mortality. The results show that during the first 18 months of the pandemic there is no link between inequality and poverty, on the one hand, and the lethality of the disease, on the other. The geographical concentration of wealthy people is related to more, not less, excess mortality.
    Keywords: COVID-19, pandemic, inequality, poverty, institutions, regions, Europe
    JEL: D31 O43 R58
    Date: 2023–02
  10. By: Maurice Dunaiski (UNODC Research); Janne Tukiainen (Department of Economics, University of Turku.)
    Abstract: This paper examines whether income transparency - the public release of citizens' income information - affects support for redistribution. We leverage a quasi-experiment in Finland, where every year on the so-called tax day, the authorities release income information on Finland's top earners to the public. To identify causal effects we compare respondents who took part in the European Social Survey shortly before and after the event. We find that the tax day increases perceptions that earnings of the top 10% are unfair, but that public support for redistribution remains largely unaffected. A notable exception are top earners, who decrease their support for redistribution, and young people, who increase their support for redistribution. Our results highlight the scope conditions of previous experimental studies, and suggest that increasing exposure to inequality through a real-world policy, rather than experimental treatments, may trigger only marginal changes in support for redistribution.
    Keywords: income transparency, inequality, redistribution, taxes
    JEL: D31 D63 D72 D80 H20 H23 H24 H31
    Date: 2023–02
  11. By: Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
    Abstract: This paper examines the labor market adjustments to four automation technologies (i.e. robots, communication technology, information technology, and software/database) in 227 regions across 22 European countries from 1995 to 2017. By constructing a measure of technology penetration, we estimate changes in regional employment and wages affected by automation technologies along with the reallocation of workers between sectors. We find that labor market adjustments to automation technologies differ according to i) the technology involved, ii) the sector of penetration, iii) the sectoral composition of the region, and iv) the region’s technological capabilities. These adjustments are driven largely by the reallocation of low-paid workers across sectors.
    Keywords: automation technology, labor market, employment reallocation, sectoral composition
    JEL: J21 O33 R23
    Date: 2023
  12. By: Backhaus, Teresa (University of Bonn)
    Abstract: This study investigates the role of on-the-job training in the employment outcomes of less educated men in their late careers. Using survey data from the German National Education Panel Study adult cohort, I estimate a structural dynamic discrete-choice model reflecting the trade-offs of the employees' training participation decision. The data set enables me to distinguish whether non-participation is due to lack of availability of training or due to individual cost-benefit considerations. As a consequence, I can investigate whether future policy interventions should target the provision of training or the individual participation incentives. I find that on-the-job training has a positive impact on the employees' employment prospects. Counterfactual simulations show that a reduction of the individual training costs would increase training participation and positively affect the employment rate near retirement. In contrast, an increase in the general availability of training would not be effective.
    Keywords: on-the-job training, late career, less educated, structural model
    JEL: E24 J14 J22 J24 M53
    Date: 2023–01
  13. By: Almar, Frederik (Aarhus University); Friedrich, Benjamin (Northwestern University); Reynoso, Ana (University of Michigan); Schulz, Bastian (Aarhus University); Vejlin, Rune Majlund (Aarhus University)
    Abstract: This paper revisits the link between education-based marriage market sorting and income inequality. Leveraging Danish administrative data, we develop a novel categorization of marriage market types based on the starting wages and wage growth trajectories associated with educational programs: ambition types. We find a substantial increase in sorting by educational ambition over time, which explains more than 40% of increasing inequality since 1980. In contrast, sorting trends are flat with the commonly used level of education. Hence, the mapping between education and marriage-market types matters crucially for conclusions about the role of marital sorting in rising income inequality.
    Keywords: marital sorting, inequality, education
    JEL: D13 D31 I24
    Date: 2023–01
  14. By: Dirk Foremny (Universitat de Barcelona & IEB); Pilar Sorribas-Navarro (Universitat de Barcelona & IEB); Judit Vall Castelló (Universitat de Barcelona & IEB & CRES-UPF)
    Abstract: This paper provides novel evidence of the mental health effects of the Covid-19 outbreak. Between April 2020 and April 2022, we run four waves of a large representative survey in Spain, which we benchmark against a decade of pre-pandemic data. We document a large and sudden deterioration of mental health at the beginning of the pandemic, as the share of people reporting being depressed increased from 16% before the pandemic to 46% in April 2020. This effect is persistent over time, which translates into important and irreversible consequences, such as a surge in suicides. The effect is more pronounced for women, younger individuals and those with unstable incomes. Finally, using mediation analysis, event studies and machine learning techniques, we document the role of the labor market as an important driver of these effects, as women and the young are more exposed to unstable income sources.
    Keywords: Mental health, Gender, Inequality, Labor markets, Pandemic, Covid-19
    JEL: I14 H2 H12 E24
    Date: 2022

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