nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒04‒10
33 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 Caroli, Eve; Pollak, Catherine; Roger, Muriel
  2. Health System Trust and Compliance with Covid-19 Restrictions By Joan Costa-i-Font; Cristina Vilaplana-Prieto
  3. Do Incompetent Politicians Breed Populist Voters? Evidence from Italian Municipalities By Federico Boffa; Vincenzo Mollisi; Giacomo A.M. Ponzetto
  4. Robots, occupations, and worker age: A production-unit analysis of employment By Deng, Liuchun; Müller, Steffen; Plümpe, Verena; Stegmaier, Jens
  5. Parental labor market penalties during two years of COVID-19 By Maria De Paola; Salvatore Lattanzio
  6. Reverse procedure in public procurement By Audinga Baltrunaite; Tommaso Orlando; Ivano Pizzolla; Valerio Ragozini; Gabriele Rovigatti
  7. Creation, destruction and reallocation of jobs in italian firms: an analysis based on administrative data By Luca Citino; Edoardo Di Porto; Andrea Linarello; Francesca Lotti; Enrico Sette
  8. Health Implications of Building Retrofits: Evidence from a Population-Wide Weatherization Program By Künn, Steffen; Palacios, Juan
  9. Housing Policy Impacts on Poverty and Inequality in Europe By Guillaume BERARD; Alain Trannoy
  10. The changes to the Italian tax and welfare system implemented in 2022: fairness and efficiency profiles By Emanuele Dicarlo; Pasquale Recchia; Antonella Tomasi
  11. Labour market tightness and matching efficiency in different labour market segments – do differences in education and occupation matter? By Alka Obadić; Mislav Viktor Viljevac
  12. The complex regional effects of macro-institutional shocks: Evidence from EU economic integration over three decades By Mitze, Timo; Breidenbach, Philipp
  13. Child Mental Health: Impact of Introducing Earlier Compulsory School Grades By Linder, Anna; Gerdtham, Ulf-G; Heckley, Gawain
  14. Effects of access to universities on education and migration decisions By Markus, Philipp
  15. The Impact of Minimum Wages on Income Inequality in the EU By Stefano Filauro; Klaus Grünberger; Edlira Narazani
  16. Employment effects of investment grants and firm heterogeneity: Evidence from a staggered treatment adoption approach By Dettmann, Eva; Titze, Mirko; Weyh, Antje
  17. Fiscal Reform in Spanish Municipalities: Gender Differences in Budgetary Adjustment By Israel García; Bernd Hayo
  18. Family Affair? Long-Term Economic and Mental Effects of Spousal Cancer By Böckerman, Petri; Kortelainen, Mika; Salokangas, Henri; Vaalavuo, Maria
  19. Agglomerations, tasks and wage growth By Perl, Maximilian
  20. Was the German fuel discount passed on to consumers? By Mats Petter Kahl
  21. Natives' Attitudes and Immigration Flows to Europe By Di Iasio, Valentina; Wahba, Jackline
  22. Retrieving the Returns to Experience, Tenure, and Job Mobility from Work Histories By John T. Addison; Pedro Portugal; Pedro Raposo
  23. What about the others? Conditional cooperation, climate change perception and ecological actions By Leonardo Becchetti; Gianluigi Conzo; Francesco Salustri
  24. Changing Tracks: Human Capital Investment after Loss of Ability By Humlum, Anders; Munch, Jakob R.; Plato, Pernille
  25. Gender-targeted transfers by default? Evidence from a child allowance reform in Sweden By Lindahl, Erica; Rosenqvist, Olof; Selin, Håkan
  26. Precautionary Fertility: Conceptions, Births, and Abortions around Employment Shocks By Bárdits, Anna; Adamecz-Völgyi, Anna; Bisztray, Márta; Weber, Andrea; Szabó-Morvai, Agnes
  27. Non-survival to pension age in Denmark and Sweden: a sub-national investigation By Kashnitsky, Ilya
  28. The role of gender and coauthors in academic publication behavior By Schmal, W. Benedikt; Haucap, Justus; Knoke, Leon
  29. Don't Downsize This! Social Reactions to Mass Dismissals on Twitter By Bassanini, Andrea; Caroli, Eve; Chaves Ferreira, Bruno; Reberioux, Antoine
  30. A Lost Generation? Impact of COVID-19 on High School Students' Achievements By Contini, Dalit; Di Tommaso, Maria Laura; Muratori, Caterina; Piazzalunga, Daniela; Schiavon, Lucia
  31. Educational Consequences of a Sibling's Disability: Evidence from Type 1 Diabetes By Eriksen, Tine Louise Mundbjerg; Gaulke, Amanda; Skipper, Niels; Svensson, Jannet; Thingholm, Peter Rønø
  32. The geography of refugee shocks By Glitz, Albrecht; Hörnig, Lukas; Körner, Konstantin; Monras, Joan
  33. Place-Based Policies: Opportunity for Deprived Schools or Zone-and-Shame Effect? By Manon Garrouste; Miren Lafourcade

  1. By: Caroli, Eve (Université Paris-Dauphine); Pollak, Catherine (New York University); Roger, Muriel (INRA-CORELA)
    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 non-hospital health-care expenses, we show that the probability of having at least one sickness absence increases for all treated groups, while the overall number of sick days remains unchanged, conditional on having a sick leave. 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, it increases health expense claims, in particular in the lower part of the expenditure distribution.
    Keywords: pension reform, retirement age, health, health-care consumption
    JEL: I10 J14 J18 J26
    Date: 2023–03
  2. By: Joan Costa-i-Font; Cristina Vilaplana-Prieto
    Abstract: We examine the extent to which exposure to higher relative COVID-19 mortality (RM), influences health system trust (HST), and whether changes in HST influence the perceived ease of compliance with pandemic restrictions during the COVID-19 pandemic. Drawing on evidence from two representative surveys covering all regions of 28 European countries before and after the first COVID-19 wave and using a difference in differences strategy together with Coarsened Exact Matching (CEM), we document that living in a region with higher RM during the first wave of the pandemic increased HST. However, the effect is driven by individuals over 45 years of age, and the opposite is true among younger cohorts. We find that a higher HST reduces the costs of complying with COVID-19 restrictions, but only so long as excess mortality does not exceed the average by more than 20%, at which point the ease of complying with COVID-19 restrictions significantly declines, offsetting the positive effect of trust in the healthcare system. Our interpretation of the estimates is that RM is interpreted as a risk signal among those over 45, and as a signal of health-care system failure among younger age individuals.
    Keywords: healthcare system trust, mortality, lockdown, Eurobarometer, difference in differences, Covid-19
    JEL: I13 Z10
    Date: 2023
  3. By: Federico Boffa; Vincenzo Mollisi; Giacomo A.M. Ponzetto
    Abstract: Poor performance by the established political class can drive voters towards anti-establishment outsiders. Is the ineffectiveness of incumbent politicians an important driver of the recent rise of populist parties? We provide an empirical test exploiting a sharp discontinuity in the wage of local politicians as a function of population in Italian municipalities. We find that the more skilled local politicians and more effective local government in municipalities above the threshold cause a significant drop in voter support for the populist Five-Star Movement in regional and national elections. Support for incumbent governing parties increases instead.
    Keywords: populism, government efficiency, politician quality, political agency
    JEL: D72 D73 H70
    Date: 2023–03
  4. By: Deng, Liuchun; Müller, Steffen; Plümpe, Verena; Stegmaier, Jens
    Abstract: We analyse the impact of robot adoption on employment composition using novel micro data on robot use in German manufacturing plants linked with social security records and data on job tasks. Our task-based model predicts more favourable employment effects for the least routine-task intensive occupations and for young workers, with the latter being better at adapting to change. An event-study analysis of robot adoption confirms both predictions. We do not find adverse employment effects for any occupational or age group, but churning among low-skilled workers rises sharply. We conclude that the displacement effect of robots is occupation biased but age neutral, whereas the reinstatement effect is age biased and benefits young workers most.
    Keywords: automation, employment, industrial robots, occupation, worker age, workforce composition
    JEL: D22 J23 J24 O33
    Date: 2023
  5. By: Maria De Paola (University of Calabria); Salvatore Lattanzio (Bank of Italy)
    Abstract: We use a matched employer-employee dataset covering the universe of employees in the Italian private sector to compare labor market outcomes for mothers and fathers during the pandemic. We find that mothers experienced a larger penalty in terms of reduced labor market earnings compared to fathers (-17.4 vs -8.6 percent) in 2020 and the first half of 2021. In contrast, starting from July 2021, we observe similar trends in mothers' and fathers' earnings. Evidence highlighting differences in penalties according to the sector of activity (essential vs non-essential), the type of contract, the age of children, and the pre-pandemic mother-father pay gap suggests that both demand and supply factors have played a role in explaining the gendered impact of COVID-19.
    Keywords: COVID-19, parenthood, recession
    JEL: J16 J31 J70
    Date: 2023–03
  6. By: Audinga Baltrunaite (Bank of Italy); Tommaso Orlando (Bank of Italy); Ivano Pizzolla (Bank of Italy); Valerio Ragozini (Bank of Italy); Gabriele Rovigatti (Bank of Italy)
    Abstract: Verifying the paperwork of public tender bidders can be one of the most challenging phases of public procurement awarding procedures in terms of the time and resources needed. The so-called reverse procedure (‘inversione procedimentale’ in Italian) defers the verification of documents until after the ranking of bidders has been completed, so that only the eligibility of the winner needs to be verified. In this paper, we analyse the use and effectiveness of this procedure in Italian public tenders from 2019-22, after its temporary introduction in the regulatory system. Drawing from data on tenders for public works commissioned by municipal administrations, we find that the use of the reverse procedure has increased over time, especially in larger municipalities and in Central and Northern Italy, significantly reducing the duration of awarding procedures.
    Keywords: public procurement, public contracts
    JEL: H57 M4
    Date: 2023–03
  7. By: Luca Citino (Bank of Italy); Edoardo Di Porto (INPS); Andrea Linarello (Bank of Italy); Francesca Lotti (Bank of Italy); Enrico Sette (Bank of Italy)
    Abstract: We study the creation, destruction and reallocation of jobs in Italy over a period of almost forty years, until 2021. The size of gross job flows was large and in line with other developed economies. Every year, around 13 per cent of jobs are created and 12 per cent are destroyed. Most of this creation and destruction occurs within narrowly defined sectors, highlighting the crucial role that firm heterogeneity – rather than sectoral shocks – plays in driving job flows. Although employment at incumbent firms is more influenced by the business cycle, the entry and exit of firms both contribute, respectively, to one third of job creation and destruction. During the pandemic, and contrary to what has been documented for the US and the UK, Italy experienced a decline in excess job reallocation, entirely due to within-sector flows, while between-sector reallocation increased only slightly. ICT services and the construction sector received larger inflows of workers. The former did so as a result of the opportunities brought about by the shift to a digital economy, while the latter was prompted by hefty fiscal incentives targeted at the industry.
    Keywords: reallocation, job creation, job destruction, COVID-19, recession, pandemic
    JEL: E24 E32 J63 O4
    Date: 2023–03
  8. By: Künn, Steffen (Maastricht University); Palacios, Juan (Massachusetts Institute of Technology)
    Abstract: What is the impact of housing upgrades on occupant health? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or else only based on small-scale experiments in developing countries. This study provides the first population-representative quasi-experimental estimates based on a large-scale refurbishment program that renovated half of the East German housing portfolio in the aftermath of German reunification. During the 1990s, the German government devoted significant financial resources to upgrading the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual demand for the healthcare of occupants using the German Socio-Economic Panel (SOEP) as well as administrative records of universal hospital admissions in Germany. Exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable age groups. Evidence from hospital records suggests that reductions in hospitalization were due to a lower risk of cardiovascular problems for older individuals (45 years or older) which were mainly driven by days with extremely hot and cold ambient temperatures. Our findings have strong policy implications and can enrich the cost-benefit analysis of public investments in weatherization programs.
    Keywords: housing quality, renovation program, health
    JEL: H54 I18 R21 R23 R38
    Date: 2023–03
  9. By: Guillaume BERARD (Luxembourg Institute of Socio-Economic Research (LISER)); Alain Trannoy (AMSE)
    Abstract: Poor housing conditions are detrimental to household members' health, schooling, and social interactions. Developed countries have responded to the challenge of improving housing for the poor using two main instruments: cash housing benefits and/or social housing. In this paper, we assess how effective they are in reducing households' housing poverty and inequality by comparing them separately and combined, with a counterfactual situation with no housing policies, examining 27 European countries by using harmonized data from the EU-SILC. We find that (1) cash housing benefits are more effective than in-kind housing benefits (social housing) and more effective in reducing poverty than inequality. (2) Some countries, and especially Finland, achieve a higher reduction in inequality and poverty while spending only half of the UK. (3) Based on an econometric estimate, we show evidence that in almost all countries outright ownership is the most advantageous tenure status. (4) Inequality in housing expenses is comparable to that in consumption expenditure (excluding housing costs), which is, in turn, much higher than inequality in housing services (a difference of 10 Gini points on average).
    Keywords: Housing policy, Housing consumption, Inequality, Poverty
    JEL: D63 I32 D31 H23
    Date: 2023–03
  10. By: Emanuele Dicarlo (Bank of Italy); Pasquale Recchia (Bank of Italy); Antonella Tomasi (Bank of Italy)
    Abstract: The paper presents the effects of two revision interventions of the Italian tax and benefits system implemented in 2022: (i) the introduction of the single and universal allowance for children (AUU); (ii) changes to the structure of personal income tax (IRPEF). Using BIMic, the static microsimulation model of the Bank of Italy, the analysis shows how the combined effect of the two interventions increases the progressivity of the system and reduces inequality (these effects are mainly attributable to the introduction of the AUU). The two changes - and in particular the intervention on personal income tax - also contribute to reducing the monetary disincentives to the supply of labour both at the extensive margin and at the intensive margin and contribute to mitigating the irregular trend of the effective marginal rates.
    Keywords: family policies, personal income tax, redistribution, efficiency, microsimulation
    JEL: H22 H23 H24 H31 C15 C63 H2 D31
    Date: 2023–03
  11. By: Alka Obadić (Faculty of Economics and Business, University of Zagreb); Mislav Viktor Viljevac (Faculty of Economics and Business, University of Zagreb)
    Abstract: This paper analyses the existing educational and occupational structures of several EU member countries and their alignment with the needs of the labour market. Such a situation may indicate a structural mismatch in labour market in which the mismatch between the skills taught in schools and universities and the skills needed in the workplace appears. To evaluate this mismatch, the paper investigates the matching needs of employers and unemployed job seekers by disaggregating the registered employment office data by education and occupation groups in selected EU countries separately. More educated workers, as well as workers in more complex and better-paid occupations, might fare better when it comes to the aggregate labour market trends. For example, economic downturns and increases in unemployment might be felt more heavily by workers with lower education and those who work in professions requiring fewer skills. In this paper, we analyse the data for a selected group of countries (Austria, Croatia, Estonia, Slovenia, and Spain) from 2010 till 2022, using the Beveridge curves and estimate the labour market tightness and matching efficiency for different education and occupation groups. Our results show that differences in education levels and occupation result in relatively small deviations from aggregate trends in the labour market. Aggregate labour market trends therefore strongly impact all groups in the labour market, whether the market is segmented by education levels or by occupation. In other words, both the improvements in the labour market conditions and the worsening of labour market conditions have similar effects across different labour market segments.
    Keywords: educational structure, structural unemployment, Beveridge curve, matching efficiency, labour market tightness, EU
    JEL: J21 J22 J23 J63
    Date: 2023–03–27
  12. By: Mitze, Timo; Breidenbach, Philipp
    Abstract: We use four subsequent EU enlargement waves over three decades (1980s, 1990s, 2000s) to assess the regional effects of macro-institutional changes. Our focus is set on EU internal border regions which are specifically exposed to international integration, but it remains unclear how they benefit from this exposure. Treatment effects for different outcomes (per capita GDP, labor productivity, employment, population, night light emissions) are estimated by comparing the performance of EU internal border regions to overall regional development trends in the EU. We find significant border effects that build up over time and decay with spatial distance to the enlargement border. While per capita GDP, labor productivity levels and night light emissions develop positively on average, negative effects are found for the employment rate in border regions. However, effects can be specific to enlargement waves and country groups considered: Border regions in established member countries mainly gain from EU enlargement in terms of increasing their GDP per capita and labor productivity levels but face lower employment rates and population decline. However, border regions in new member countries, particularly in 2004 and 2007, most significantly gain through population and employment increases. This complex pattern of effects makes a straight 'winner-loser' categorization difficult and poses challenges to policy support for EU border regions.
    Keywords: Economic integration, EU enlargement, internal border regions, regional development, treatment effect estimation
    JEL: C23 F15 O47 R11
    Date: 2023
  13. By: Linder, Anna (Health Economics Unit, Department of Clinical Science, Lund University); Gerdtham, Ulf-G (Department of Economics, Lund University); Heckley, Gawain (Health Economics Unit, Department of Clinical Science, Lund University)
    Abstract: The prevalence of mental ill-health is increasing among young people in many developed countries, raising concerns about their well-being. Experts have pointed to several potential contributing factors, including a heightened emphasis on educational achievement and performance evaluation, as well as shifting demands in the high-skilled job market. In this paper, we study the effect of introducing earlier grades in compulsory school on child mental health in Sweden. To do so, we exploit a grading reform in Swedish compulsory schools in which grades were introduced at an earlier age, in 6th grade instead of 8th grade as was previously the case. The reform provides a situation where the age at which children receive their first grade is arbitrary depending on if the child is born before or after the year-end. We show that girls who are exposed to one year earlier grades are more likely to be diagnosed with depression or anxiety by the end of compulsory school, controlling for potential age effects in a difference-in-discontinuities setup. We do not find similar effects among boys. Overall, these results imply that girls’ mental well-being may be particularly responsive to educational assessment through grades at earlier ages.
    Keywords: education policy; school grades; mental health; human capital development
    JEL: I10 I21 I28
    Date: 2023–03–13
  14. By: Markus, Philipp
    Abstract: The paper examines the effect of access to universities on education and migration decisions of young adults. So far, studies on the causal effect of education on mobility have mainly focused on labor market mobility of high-skilled workers after finishing their educational career, due to the lack of suitable data or the problem of endogeneity between education and mobility. I exploit the exogenous variation induced by a large-scale tertiary education expansion reform beginning in the 1970s in Sweden to investigate the impact of the change in access to universities on college participation rates and migration patterns of high school graduates. Using individual administrative data, I find that if a new higher education institution opens in a municipality, the high school graduates of that location are 6.6% more likely to attend college. At the same time, their propensity to move out of the municipality in the four years after finishing secondary education decreases by 10.1%. In contrast, high school graduates in the catchment area of the new institution show no change in college participation rates and, if anything, an increased propensity to leave the municipality of high school graduation. My results indicate that the effects on education and migration are mainly local and non-linear in geographical distance.
    Keywords: Education economics, migration economics, university expansion reform, mobility ofhigh school graduates
    JEL: I23 I28 J11 R23 R58
    Date: 2023
  15. By: Stefano Filauro (European Commission – DG ECFIN); Klaus Grünberger (European Commission - JRC); Edlira Narazani (European Commission - JRC)
    Abstract: A number of studies documents that minimum wage policies have the potential to reduce income inequality. The recently adopted EU Commission’s proposal for a Directive on adequate minimum wages was supported by a detailed analysis of the social impacts of hypothetical minimum wage levels in countries with a statutory minimum wage. This paper extends these country-level analyses by exploring the impact of minimum wage policies on EU-level income inequality. To our knowledge, this is the first study that uses a microsimulation model such as EUROMOD to assess the impact of EU-promoted policies on the distribution of income in the EU, beyond their national effects. Assuming no employment effects, static simulation results show that a hypothetical minimum wage corresponding to 60% of the national median wage would bring about a small but significant reduction in EU-level disposable income inequality (by 0.75% in 2019 as measured through the Gini index). This result stems primarily from a reduction in the within-country component of income inequality as the effect on inequality between countries is rather muted. The reduction in EU-level income inequality is the highest in disposable incomes, but some reduction is detectable also in market incomes. In turn, the withdrawal of social benefits because of higher minimum wages seems to neutralise part of this inequality reduction.
    Keywords: Minimum wage, Microsimulation, European Union, Income inequality, EUROMOD
    JEL: H31 I32 J31
    Date: 2023–02
  16. By: Dettmann, Eva; Titze, Mirko; Weyh, Antje
    Abstract: This study estimates the establishment-level employment effects of investment grants in Germany. In addition to the average treatment effect on the treated, we analyse the influence of establishment's characteristics and economic environment on the magnitude of the effect. We apply a modification of Heckman's matching and difference-in-differences approach to consider time-varying treatment and different treatment durations. Our results suggest that investment grants positively impact employment. Moreover, we find strong evidence for effect heterogeneity regarding firms' internal characteristics as well as the economic environment.
    Keywords: causal inference, heterogeneous effects, place-based policy, staggered adoption design, variation in treatment timing
    JEL: A11 D61 H20 Z0
    Date: 2023
  17. By: Israel García; Bernd Hayo
    Abstract: Do gender differences matter for politicians’ budgetary behaviour when confronted with an exogenous change in the institutional framework? After the 2013 Spanish municipal reform, municipalities with more than 20, 000 inhabitants were no longer responsible for managing the provision of social services. Using a difference-in-differences estimator in a sample of municipalities from the Madrid region for 2010−2019, we compare gender differences in social services spending before and after the reform between municipalities below 20, 000 inhabitants (control group) and above 20, 000 inhabitants (treatment group). Although social spending was, on average, significantly reduced in the treatment group post-reform, we observe significant differences between municipalities conditional on the gender composition of local governments, i.e. council and mayor. Whereas male-dominated governments cut social expenditure by about 20% of the total budget, gender-balanced and female-dominated governments did not. Moreover, gender-balanced governments combined with female mayors increased social services spending by 40% more than gender-balanced governments combined with male mayors. This finding supports the claim that social spending is, on average, of particular importance to female politicians, as they are willing to bend the law to uphold their interests.
    Keywords: gender, difference-in-differences, exogenous reform, political budget cycles, Spanish municipalities, Madrid region
    JEL: C23 E61 D72 H75 I38 J16
    Date: 2023
  18. By: Böckerman, Petri (Labour Institute for Economic Research); Kortelainen, Mika (VATT, Helsinki); Salokangas, Henri (University of Turku); Vaalavuo, Maria (National Institute for Health and Welfare)
    Abstract: Emerging strands of research have examined the family spillover effects of health shocks, usually focusing on labour market outcomes. However, the results have been inconclusive and there is only little evidence on the longer term consequences of health shocks or the mechanisms behind the spillover effects. We analyse the short- and long-term effects of cancer on the healthy spouse's labour supply and mental health by gender and relative income status within the couple (i.e., the breadwinner type). We use full population register data on all cancer patients and their cohabiting partners in Finland over the period 1995-2019. Our identification strategy is based on the quasi-random variation in the timing of the cancer diagnosis and a dynamic difference-in-differences approach. We find two main results. First, cancer increases female spouses' employment. This result is consistent with the added worker effect, although we find the magnitude of the increase in annual earnings to be negligible. By contrast, among male spouses, earnings decrease as a consequence of a spouse's cancer. Second, among women, there is heterogeneity in the effects in terms of the breadwinner status, which is especially notable in the long-term. The results show that the added worker effect is visible only among secondary earners and the effect seems to hold only when the cancer patient dies. Secondary earner women also suffer more from psychiatric symptoms during bereavement. Consequently, we argue that the breadwinner status before the health shock is a neglected factor influencing the effects of health shocks in families, and that family-level specialisation between spouses alters substantially over time in response to a health shock.
    Keywords: health shock, cancer, family spillover effects, employment, earnings, household division of labour, event study, difference-in-differences
    JEL: I10 J12 J17 J22
    Date: 2023–03
  19. By: Perl, Maximilian
    Abstract: Wage growth is stronger in larger cities, but this relationship holds exclusively for non-manual workers. Using rich German administrative data, I study the heterogeneity in the pecuniary value of big city experience, a measure of dynamic agglomeration economies, and its consequences for the city-size wage gap. After 15 years of work experience in Munich the cumulative earnings premium relative to a median-sized city is 15% for workers in the most manual occupations, 25% for workers in the least manual occupations and 30% for workers in the most analytical occupations. This cumulative wage premium is 3 to 5 times the magnitude of the static city-size wage gap.
    Keywords: Cities, agglomeration, tasks, wages, wage growth, Germany
    JEL: R10 J31 R23
    Date: 2023
  20. By: Mats Petter Kahl (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre)
    Abstract: In this article, I analyze whether German gasoline stations passed on the gasoline tax reduction to consumers. I use a difference-in-differences approach with France as the control group, as well as data for all countries in the European Union. The German fuel discount was in effect from June to August 2022. It was intensely debated in the general public whether German gasoline stations had increased prices before the tax reduction. Such a price increase would have made it easier for gasoline stations to disguise a price increase. Further questions follow: How long did it take for the full tax reduction to be passed on to consumers? Did gasoline stations reduce the pass-on after a few weeks? As I am the first to use complete French and German high-frequency data for the entire treatment period, I can examine how the pass-through of the tax cut evolved over time. I find substantial variance in pass-through rates over time. The average pass-through is very high but remains incomplete for all fuel types.
    Keywords: pass-through, gasoline market, tax reduction, fuel taxes, petrol prices
    JEL: H22 L13 L41
    Date: 2023–03
  21. By: Di Iasio, Valentina (University of Southampton); Wahba, Jackline (University of Southampton)
    Abstract: This paper examines the effects of natives' anti-immigration attitudes on migration flows to EU countries. We use panel data for migration to the EU between 1995-2018. We address the potential endogeneity between public attitudes and migration flows using instrumental variable techniques. We also control for the dependence between the attractiveness of alternative EU destinations. Our findings suggest that there is a negative causal relationship between anti-immigration attitudes and migration inflows to the EU from both EU and non-EU countries; i.e. natives' hostility discourages immigration. However, the elasticity of immigration to public attitudes is higher than the elasticity of immigration to economic factors for EU migrants.
    Keywords: EU migration, public attitudes, migration drivers
    JEL: J61 F22
    Date: 2023–02
  22. By: John T. Addison; Pedro Portugal; Pedro Raposo
    Abstract: Using a unique Portuguese linked employer-employee dataset, this paper offers an extension of the standard Mincerian model of wage determination by allowing for different returns to experience and tenure over the sequence of jobs that constitute a career. We also consider the possibility of distinct wage hikes each time workers change jobs, where such uplifts reflect the returns to job search investments over the life cycle and shape the curvature of the earnings profile. We further investigate how worker, firm, and job match heterogeneity influence the returns to mobility, experience, and tenure. The returns to job mobility are found to reflect sorting into better job matches. Moreover, the estimated returns to experience are upwardly biased because more productive workers tend to be more experienced.
    Keywords: returns to tenure, returns to experience, job mobility, high-dimensional fixed effects, job match fixed effect, job match quality effect
    JEL: J31 J63
    Date: 2023
  23. By: Leonardo Becchetti; Gianluigi Conzo; Francesco Salustri
    Abstract: Climate challenge can be modelled as a multiplayer prisoner’s dilemma where ecological action – e.g., purchasing an electric car or adopting sustainable life-styles – is costly in terms of economic resources, time, and effort. Even though social benefit is maximised with everyone taking ecological actions, no actions from all players is a Nash equilibrium assuming players are self-interested. In this paper we analyse how this ecological dilemma is affected by people’s perception. Using the European Social Survey, we study how urgent the climate threat is perceived by respondents and their beliefs about other countries’ actions. Theoretical predictions suggest that the former increases, while the latter does not affect individual willingness to act ecologically. Our empirical findings however show that both factors positively affect willingness to act. We interpret the positive effect of country action on responsibility to act as conditional cooperation and show that the effect is weaker as social capital increases.
    Keywords: climate change, perception, ecological actions, social dilemma, conditional cooperation
    JEL: H41 Q54 Q58
    Date: 2023–03
  24. By: Humlum, Anders (University of Chicago Booth School of Business); Munch, Jakob R. (University of Copenhagen); Plato, Pernille (University of Copenhagen)
    Abstract: We provide the first evidence on how workers invest in human capital after losing ability. Using quasi-random work accidents in Danish administrative data, we find that workers enroll in bachelor's programs after physical injuries, pursuing degrees that build on their work experiences and provide pathways to cognitive occupations. Exploiting differences in eligibility driven by prior vocational training, we find that higher education moves injured workers from disability benefits to full-time employment. Reskilled workers earn 25% more than before their injuries and do not end up on antidepressants. Without higher education, by contrast, these workers end up entirely on disability benefits and often resort to taking antidepressants. Reskilling subsidies for injured workers pay for themselves four times over, and current rates of reskilling are substantially below the social optimum, especially for middle-aged workers.
    Keywords: workplace injury, human capital investment, employment, disability insurance
    JEL: I26 J24 J62
    Date: 2023–03
  25. By: Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy); Rosenqvist, Olof (IFAU - Institute for Evaluation of Labour Market and Education Policy); Selin, Håkan (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We exploit a sharp birthday discontinuity in a large and universal Swedish cash transfer program, creating plausibly exogenous variation in the default disbursement option, while holding entitlements and other financial incentives constant. When the cash transfer is paid out to the mother by default, instead of a 50/50 default, it has a huge effect on the probability that the transfer is deposited in the mother’s bank account also in the long run. Surprisingly, we find that the default policy redistributes resources to separated low-income mothers. We find no indications that the 100%-to-the-mother default induces mothers to work less or to take more responsibility for the children.
    Keywords: Gender targeting; family transfers; default; child allowance; gender equality;
    JEL: D91 H31 J12
    Date: 2023–03–09
  26. By: Bárdits, Anna (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics); Adamecz-Völgyi, Anna (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics); Bisztray, Márta (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics); Weber, Andrea (Central European University); Szabó-Morvai, Agnes (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics)
    Abstract: We study fertility responses to employment shocks. Using unique Hungarian administrative data that allow linking firm-level mass layoff and closure events to individual-level records on births and abortions, we show that the main response happens in anticipation of the shock. Responses differ by the availability of dismissal protection. While pregnancies increase in anticipation of all events, births only rise in case of mass layoffs when pregnant women are protected from layoffs. If the firm closes protection is lost and we find an increase in abortions. We interpret these results as evidence for precautionary fertility behavior. Women threatened by job displacement bring births forward to exploit dismissal protection, a strategy that breaks down if the firm closes permanently.
    Keywords: abortion, birth, pregnancy, mass layoff, firm closure
    JEL: I12 J13 J65
    Date: 2023–03
  27. By: Kashnitsky, Ilya (University of Southern Denmark)
    Abstract: Mortality keeps improving even in the most developed countries. Deaths before senior age become more and more occasional and thus are increasingly considered unnecessary and perhaps even avoidable. Denmark belongs to the most developed countries of the world in terms of progress in lowering human mortality levels. Yet there is still much room for large improvements – compared to Sweden, Danish population has almost the same survival profile up to age 50 but then there are striking differences in later ages. Between ages 50 and 65 about 10% of Danish males die while in Sweden this proportion is only about 7%. This paper explores the regularities of non-survival to pension age across Danish municipalities and compares them to ones in Sweden. The main focus of this exploration is identification of the spatial patterns based on the mortality characteristics of the population that are studied using the advanced spatial clustering algorithm that utilizes tree edge removal technique. The methodological challenge resolved along the way is the construction of reliable life table estimates for the small municipal populations. The results suggest that the main reason for the observed gap between Danish and Swedish municipalities, especially for males, is the lagging behind development of the most deprived areas, which corresponds with the results on widening gaps along socioeconomic dimensions.
    Date: 2023–02–21
  28. By: Schmal, W. Benedikt; Haucap, Justus; Knoke, Leon
    Abstract: We use the negotiations for large-scale open-access agreements between German research institutions and leading academic publishers to study how changes in the attractiveness of various journals affect the publication behavior of researchers in economics and adjacent fields. First, as German universities canceled their subscriptions to Elsevier, we study how this affected German economists' incentives to publish in its journals. Second, Springer and Wiley entered into open-access agreements so that researchers in Germany are eligible to publish articles open-access without additional charges for them. Using 243, 757 articles published between 2015 and 2022, we find a shift toward included journals, which is most pronounced among women. For Elsevier, the effect is negative and women have a higher tendency to opt out than men. In mixed teams, the dominant gender drives behavior. We conclude that men tend to seek reputation, women visibility. Thereby, female researchers contribute more to the public good of open science. Our findings provide a new explanatory channel of the academic gender gap.
    Keywords: academic publishing, journal choice, gender differences, DEAL, Elsevier, Springer Nature, Wiley, transformative agreements
    JEL: A14 I23 J16 L86 Z11
    Date: 2023
  29. By: Bassanini, Andrea; Caroli, Eve; Chaves Ferreira, Bruno; Reberioux, Antoine
    Abstract: We study social reactions to job destructions on Twitter. We use information on large-scale restructuring events announced in the United Kingdom over the period 2013-2018. We match it with data collected on Twitter regarding the number and sentiments of the tweets posted around the time of the announcement and involving the company name. We show that jobdestruction announcements immediately elicit numerous and strongly negative reactions. These reactions are almost five times larger than the positive reactions to job-creation announcements. We also show that the negative reactions triggered by job-destruction announcements are associated with significant losses in the market value of the downsizing firms. This suggests that the damage to the firms' image triggered by the negative social reactions following job destructions entail a financial cost for firms that adds to the standard adjustment costs of dismissals.
    Keywords: job destructions, firm value, social media, sentiment analysis, mass dismissals
    JEL: J63 L82 M21 M51
    Date: 2023
  30. By: Contini, Dalit (University of Turin); Di Tommaso, Maria Laura (University of Turin); Muratori, Caterina (University of Torino); Piazzalunga, Daniela (University of Trento); Schiavon, Lucia (University of Torino)
    Abstract: This paper estimates the effect of a full year of the COVID-19 pandemic on school performance, focusing on students at the end of upper secondary school who are about to enter the labour market or start university without having had the opportunity to recover. Using longitudinal data from standardised tests for the student population nationwide, we use difference-in-differences models to analyse the performance of two cohorts of students in Italy: a cohort that has never been exposed to the pandemic and a cohort that graduated in 2021. We find that the pandemic had a huge negative impact on students' performance in mathematics and reading (approximately 0.4 s.d. in both domains). Low-achieving pupils suffered the most, increasing the gap between strong and poor performers. The relative position of girls improved compared to boys. Different from the findings from the existing literature, inequalities by parental education remained largely unchanged.
    Keywords: COVID-19, school closure, learning loss, standardised tests, inequality
    JEL: I21 I24 I18 I28
    Date: 2023–03
  31. By: Eriksen, Tine Louise Mundbjerg (VIVE - The Danish Centre for Social Science Research); Gaulke, Amanda (Kansas State University); Skipper, Niels (Aarhus University); Svensson, Jannet (Copenhagen University Hospital); Thingholm, Peter Rønø (Aarhus University)
    Abstract: While there is a growing literature on family health spillovers, questions remain about how sibling disability status impacts educational outcomes. As disability is not randomly assigned this is an empirical challenge. In this paper we use Danish administrative data and variation in the onset of type 1 diabetes to compare education outcomes of focal children with a disabled sibling to outcomes of focal children without a disabled sibling (matched on date of birth of the focal child, sibling spacing and family size). We find that having a disabled sibling significantly decreases 9th grade exit exam GPAs, while having no impact on on-time completion of 9th grade. However, educational trajectories are impacted, as we find significant decreases in high school enrollment and significant increases in vocational school enrollment by age 18. Our results indicate that sibling disability status can generate economically meaningful inequality in educational outcomes.
    Keywords: sibling spillovers, health, diabetes, educational performance, SES
    JEL: I1 I2 J1
    Date: 2023–03
  32. By: Glitz, Albrecht; Hörnig, Lukas; Körner, Konstantin; Monras, Joan
    Abstract: This paper studies how refugee inflows affect receiving communities using highly disaggregated German administrative data at a 1km × 1km resolution. We develop a novel spatial equilibrium model that features two geographic levels, small neighborhoods and more aggregated local labor markets (LLMs). In the model, local displacement effects and impacts on house prices are closely linked to immigration-induced changes in neighborhood-level amenities and LLM-level productivity. Our empirical results show that refugee inflows lead to a less than one-for-one relative population relocation in neighborhoods, indicating that refugees have a positive impact on local amenities. We also find relocation on the LLM-level to be less than one-for-one, suggesting that refugees also positively impact local productivity.
    Keywords: Immigration, refugees, spatial equilibrium
    JEL: J15 R1
    Date: 2023
  33. By: Manon Garrouste (Univ. Lille, CNRS, IESEG School of Management); Miren Lafourcade (Université Paris-Saclay (RITM), Universitat de Barcelona - IEB, Paris School of Economics and CEPR)
    Abstract: Even though place-based policies involve large transfers toward low-income neighborhoods, they may also produce territorial stigmatization. This paper appeals to the quasi-experimental discontinuity in a French reform that redrew the zoning map of subsidized neighborhoods on the basis of a sharp poverty cut-off to assess the effect of place-based policies on school enrollment into lower secondary education. Using a difference-in-differences approach, we find strong evidence of stigma from policy designation, as public middle schools in neighbourhoods below the policy cut-off, which qualified for place-based subsidies, saw a significant 3.5pp post-reform drop in pupil enrollment, compared to their counterfactual analogues in unlabeled areas lying just above the poverty threshold. This "zone-and-shame" effect is immediate but does not persist, as it is only found for the first pupil-entry cohort in middle schools immediately after the reform. We show that it was triggered by the behavioral reactions of parents from all socioeconomic backgrounds, who avoided public schools in policy areas and shifted to those in other areas or, only for richer parents, to private schools. We uncover, on the contrary, only weak evidence of stigma reversion after an area loses its designation, suggesting hysteresis in bad reputations.
    Keywords: School choices, Territorial stigmatization, Redlining, Urban segregation, Sorting
    JEL: I24 I28 R23 R58
    Date: 2023

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