nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒03‒13
fourteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Is there a union wage premium in Germany and which workers benefit most? By Bonaccolto-Töpfer, Marina; Schnabel, Claus
  2. Scared Straight? Threat and Assimilation of Refugees in Germany By Philipp Jaschke; Sulin Sardoschau; Marco Tabellini
  3. Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany By Emanuele Albarosa; Benjamin Elsner
  4. Labour Mobility in German Establishments during the COVID-19 Crisis: Panel Data Analyses with Special Reference to Short-Time Work and Working from Home By Bellmann, Lisa; Bellmann, Lutz; Hübler, Olaf
  5. Re-partnering and single mothers' mental health and life satisfaction trajectories By Philipp Dierker; Mine Kühn; Mikko Myrskylä
  6. Why life gets better after age 50, for some: mental well-being and the social norm of work By Coen van de Kraats; Titus Galama; Maarten Lindeboom
  7. Efficiency and Well-being at Work – with Knowledge Towards Balanced Work By Kuusi, Tero; Kulvik, Martti; Härmä, Mikko; Ropponen, Annina
  8. Immigrant-native health disparities: an intersectional perspective on the weathering hypothesis By Silvia Loi; Peng Li; Mikko Myrskylä
  9. The Effect of Education Policy on Crime: An Intergenerational Perspective By Costas Meghir; Marten Palme; Marieke Schnabel
  10. High-speed broadband, school closures and educational achievements By Boeri, Filippo
  11. Measuring the effect of cash incentives on migrant integration in Norway: Early results from a quasi-experiment By Meng Le Zhang; Henrik Lindegaard Andersen;
  12. Advanced digital technologies and investment in employee training: Complements or substitutes? By Brunello, Giorgio; Rückert, Désirée; Weiss, Christoph; Wruuck, Patricia
  13. Compensation or accentuation? How parents from different social backgrounds decide to support their children By Philipp Dierker; Martin Diewald
  14. Firms’ financial vulnerabilities during COVID-19: Was the French support package too generous ? By Sarah Guillou; Karsten Mau; Tania Treibich

  1. 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
  2. By: Philipp Jaschke (Institute for Employment Research (IAB)); Sulin Sardoschau (HU Berlin); Marco Tabellini (Harvard Business School)
    Abstract: This paper studies the effects of local threat on cultural and economic assimilation of refugees, exploiting plausibly exogenous variation in their allocation across German regions between 2013 and 2016. We combine novel survey data on cultural preferences and economic outcomes of refugees with corresponding information on German respondents, and construct a threat index that integrates contemporaneous and historical variables. On average, refugees assimilate both culturally and economically. However, while refugees assigned to more hostile regions converge to German culture more quickly, they do not exhibit faster economic assimilation. Our evidence suggests that refugees exert more assimilation effort in response to local threat, but that higher discrimination prevents them from integrating more quickly in more hostile regions.
    Keywords: refugees; cultural change; assimilation; identity;
    JEL: F22 J15 Z10
    Date: 2023–02–10
  3. By: Emanuele Albarosa; Benjamin Elsner
    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.
    Date: 2023
  4. By: Bellmann, Lisa (Institute for Employment Research (IAB), Nuremberg); Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Hübler, Olaf (Leibniz University of Hannover)
    Abstract: Using 21 waves of German high-frequency establishment panel data collected during the COVID-19 crisis, we investigate the effects of short-time work (STW) and working from home (WFH) on hiring, firings, resignations and excess labour turnover (or churning). Thus, we enquire whether STW avoids firings as intended by policymakers and is associated with unintended side effects by subsidising some establishments and locking in some employees. Additionally, where it was feasible, establishments used WFH to continue working without risking an increase in COVID-19 infections and allowing employed parents to care for children attending closed schools. While much of the literature investigating the effects of STW and WFH remains descriptive, we conduct panel data analyses. We apply data and methods that allow for the dynamic pattern of STW and WFH during the pandemic. Furthermore, our data include relevant establishment-level variables, such as the existence of a works council, employee qualifications, establishment size, the degree to which the establishment was affected by the COVID-19 crisis, industry affiliation and a wave indicator for the period the survey was conducted. Our results show the important influences of STW and WFH on employment during the pandemic. By means of STW, establishments are able to avoid an increase in involuntary layoffs, and hiring decreases significantly. In contrast, WFH is associated with a rise in resignations.
    Keywords: short-time work, working from home, labour mobility, COVID-19, panel analysis, high-frequency establishment data
    JEL: C23 J21 J23 J58 J63
    Date: 2023–02
  5. By: Philipp Dierker (Max Planck Institute for Demographic Research, Rostock, Germany); Mine Kühn (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Single mothers are a particularly disadvantaged group in terms of their mental health and life satisfaction. While it is plausible that re-partnering could compensate for these disadvantages by providing social, emotional, and financial resources, the evidence is inconclusive. Using annual panel data from Germany (1984-2020) and the United Kingdom (1991-2020), this study examines the life satisfaction and mental health trajectories around re-partnering transitions among single mothers. The guiding questions are whether re-partnering has positive (resource model) or negative (crisis model) effects on the outcomes, and whether the effects depend on the national context. Fixed-effects regressions reveal effects among 1, 675 single mothers. Results show that life satisfaction is positively affected by re-partnering in both Germany and the UK, mainly driven by income-related factors. The effects on mental health differ more, with an increasing trajectory in Germany and a declining trajectory after the re-partnering transition in the UK. Overall, the findings indicate that re-partnering is beneficial, especially for the life satisfaction of single mothers, and highlight the importance of financial resources and family policies.
    JEL: J1 Z0
    Date: 2023
  6. By: Coen van de Kraats (Erasmus University Rotterdam); Titus Galama (University of Southern California); Maarten Lindeboom (Vrije Universiteit Amsterdam and Monash University)
    Abstract: We provide evidence that the social norm (expectation) of work has a detrimental causal effect on the mental well-being of individuals not able to abide by it. Using SHARE data on men aged 50+ from 10 European countries, we identify the social norm of work effect in a difference-in-differences model that compares mental well-being scores of unemployed/disabled individuals (the treatment group) with those of employed/retired individuals (the control group) at varying levels of the fraction of retirees of comparable age. The initial mental well-being gap at age 50 is large, with unemployed/disabled men experiencing substantially lower levels of mental well-being, comparable to, e.g., the detriment of being widowed. Beyond age 50, the mental well-being of unemployed and disabled men improves as peers of comparable age retire, and full convergence occurs generally at an age that is slightly above the normal retirement age, when everyone has retired.
    Keywords: mental well-being, social norm of work, retirement institutions
    JEL: I10 I31 J60 D63
    Date: 2023–02
  7. By: Kuusi, Tero; Kulvik, Martti; Härmä, Mikko; Ropponen, Annina
    Abstract: Abstract This project investigated how register data on daily working hours and hospital patients can be used to measure the workload of healthcare personnel and to study its relationship with different work features. We used econometric analysis to measure the average labor requirement of different patient mixes in hospital wards. The data was used to analyze the overall difficulty of working days and it was then compared to the available nursing workforce. Finally, we assessed the effects of variation in the workload on well-being at work. We found that the variation in workload was related to surprising changes in work and in the availability of employees. The risk of short sick leave increased over the next week due to the high workload. We also examined the interactions between workload and the working time features for work shift planning.
    Keywords: Health care, Workload, Efficiency, Working time features, Occupational health
    JEL: J28 I11 J45 M50
    Date: 2023–02–14
  8. By: Silvia Loi (Max Planck Institute for Demographic Research, Rostock, Germany); Peng Li (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The weathering hypothesis implies that there is an interaction between age and race or ethnicity that results in disadvantaged groups experiencing a more rapid decline in health than other groups. While the weathering hypothesis has been tested based on racial or ethnic identity, less is known about weathering by immigration status, and about weathering as viewed from an intersectional perspective. We contribute to the literature on weathering by addressing three research questions: Are immigrants, and especially immigrant women, ageing in poorer health? Does education protect immigrants from a faster health decline with age? How do income and marital status affect the health trajectories of immigrants and natives? We focus on Germany and estimate trajectories of declining health at the intersection of age, sex, and nativity, and evaluate the role of education. We estimate the ages at immigrant-native crossover across the health trajectories, and the corresponding health levels. We find that immigrants, and especially immigrant women, age in poorer health than natives. Furthermore, we show that high education explains the differential relationship between age, nativity, and health. We also find that employment and marital status only partly account for the observed gaps, as differences persist even after these factors are considered.
    JEL: J1 Z0
    Date: 2023
  9. By: Costas Meghir (Cowles Foundation, Yale University); Marten Palme (Stockholm University); Marieke Schnabel (University College London)
    Abstract: We study the intergenerational effect of education policy on crime. We use Swedish administrative data that links outcomes across generations with crime records and we show that the comprehensive school reform, gradually implemented between 1949 and 1962, reduced conviction rates both for the generation directly affected by the reform and for their sons. The reduction in conviction rates occurred across many types of crime. Key mediators for this reduction in the child generation are an increase in education and a decline in crime amongst their fathers.
    Date: 2023–02
  10. By: Boeri, Filippo
    Abstract: In this study, I shed new light on the short-run effects of access to high-speed internet on educational disparities, before and after the pandemic shock. By following 3 million students belonging to 6 different cohorts over the period 2012-2022, I estimate the effect of the broadband infrastructure on student performance. While most previous contributions use discontinuous jumps in the available broadband connection speed across space at a given moment in time, this study exploits the actual roll-out of an infrastructural policy associated with an increase in 30 Mbit/s household broadband coverage from 40% to 80% over a 5-year period. The estimation strategy relies on a unique dataset, combining panel data on student performance with a rich set of school- and student-level information and broadband data measured at a very fine spatial scale. Results show an average null effect of high-speed broadband on 8th grade student performance in both numeracy and maths. However, this results masks substantial heterogeneity: lower performers in grade 5 and students with better backgrounds gain from internet speed, whereas the opposite is true for other students. Interestingly, the stronger effect on low-performers tends to disappear during the lockdown, suggesting a negligible mitigating role for high-speed internet during the period of school closure. On the other hand, the broadband infrastructure might have further amplified the gap between students with different socioeconomic background.
    Keywords: ICT; education; economics; internet; broadband; Italy
    JEL: I20 H54 D83
    Date: 2023–02–01
  11. By: Meng Le Zhang (Department of Social Science, University of Sheffield, Sheffield, United Kingdom.); Henrik Lindegaard Andersen (Department of Economic Administrative Studies, Western Norway University of Applied Sciences, Haugesund, Norway.); (Department of Economic Administrative Studies, Western Norway University of Applied Sciences, Haugesund, Norway.)
    Abstract: The Norwegian Introduction Programme (NIP) is a flagship social policy for integrating migrants into Norwegian society. NIP is a two-year programme of full-time education and training. As part of NIP, a special benefit (Introduksjonsstønad) is paid to attendees to incentive participation. The Introduksjonsstønad is substantial, and it increases by 50% when participants reach age 25 (from approx. €12, 860 to €19, 290). Accounting for age, we find that increasing the Introduksjonsstønad results in increased NIP participation. Despite increasing cost and participation, we do not find any evidence of increased labour market outcomes. Norway’s approach to integration is both ambitious and expensive however our early findings show that NIP may not be effective. Given the importance of integration in Norway and the role of NIP, we suggest that further research needs to be done into credible alternatives or improvements to NIP and the Introduksjonsstønad.
    Keywords: Conditional Cash Transfer, Migrants, Integration, Norwegian Introduction Programme, Quasi-experiment, Regression Kink Design
    JEL: C12 I38 J15 J18
    Date: 2023–01
  12. By: Brunello, Giorgio; Rückert, Désirée; Weiss, Christoph; Wruuck, Patricia
    Abstract: Using firm-level data covering the 27 EU countries, the UK and the US, we show that employers tend to reduce investment in training per employee after adopting advanced digital technologies (ADT). We estimate with a control function approach firm-level production functions augmented with two factors, the training stock per employee and digital technology use. We show that ADT use and employee training are substitutes in production, implying that an increase in the former negatively affects the marginal productivity of the latter, and that a decline in the cost of introducing ADT reduces employers' investment in training per employee. These findings point to challenges in realizing high levels of firmsponsored training for employees in increasingly digital economies.
    Date: 2023
  13. By: Philipp Dierker (Max Planck Institute for Demographic Research, Rostock, Germany); Martin Diewald (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Previous research has shown that parents respond to differences in their children’s potential by providing them with different levels of support, and that such support allocation decisions are shaped by socioeconomic status (SES). We extend this observation to the assumption, raised in research on parental compensation and social mobility, that not only the allocation, but also the form of support provided is socially stratified. Specifically, we investigate whether socioeconomically advantaged parents use mechanisms that do not rely directly on cognitive enhancement. Drawing on data from three consecutive waves of the German TwinLife study (N=962), we use twin fixed-effects models to examine how parents respond to their children having different grades. We investigate parental support strategies, including help with schoolwork and school-related communication, encouragement and explicitly formulated expectations, and extracurricular cognitive stimulation. Our findings suggest that high-SES parents tend to compensate for their children’s poor performance by helping them with schoolwork, fostering communication, and formulating academic expectations and encouragement. In contrast, we found no evidence that parents in either high- or low-SES families respond to differences in their children’s school performance by providing them with extracurricular cognitive stimulation.
    Keywords: secondary education, social stratification, twins
    JEL: J1 Z0
    Date: 2023
  14. By: Sarah Guillou (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Karsten Mau (Maastricht University [Maastricht]); Tania Treibich (Maastricht University [Maastricht], OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: We exploit detailed and comprehensive data from France, combining firms' balance sheet information and trade records, to uncover the role of firm characteristics in their exposure to the COVID-19 pandemic. Next, we study the impact of three governmental support policies on firms' liquidity position in 2020: the wage subsidy scheme (AP), the solidarity fund (FSE) and the loan guarantee (PGE). We highlight four dimensions of heterogeneity for policy efficiency in our analysis: the type of liquidity shock, sector and size groups and labor productivity deciles. Our microsimulation exercise shows that aggregate policy support matches very well total liquidity losses. Yet, the compensation scheme was not perfect as these aggregate figures hide heterogeneous policy efficiency across firms and policies. Nearly one fourth of firms were over-compensated, which allowed them to improve their liquidity position, but those that suffered the highest liquidity losses did not receive enough support. Our simulation shows that 7.4 billion (bn) euros of subsidies were given to firms in excess of their liquidity loss. The share of overcompensated firms rises to 39% when we account for the guaranteed loans. We locate them mostly in the wholesale and retail, manufacturing and culture and leisure sectors. Yet, most firms were not fully compensated. This was especially the case for those that became illiquid in 2020, very large firms, highly productive firms, and firms in the hospitality and construction sectors.
    Date: 2023–01–16

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