nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒04‒17
twenty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Long-Term Impact of Paid Parental Leave on Maternal Health and Subjective Well-Being By Katharina Heisig
  2. Heterogeneous regional university funding and firm innovation: An empirical analysis of the German excellence initiative By Krieger, Bastian
  3. Feminization, ageing and occupational change in Europe in the last 25 years By MARISCAL-DE-GANTE Álvaro; PALENCIA ESTEBAN Amaia; GRUBANOV-BOSKOVIC Sara; FERNANDEZ MACIAS Enrique
  4. Gender Segregation: Analysis across Sectoral-Dominance in the UK Labour Market By Riccardo Leoncini; Mariele Macaluso; Annalivia Polselli
  5. Working Longer, Working Stronger? The Forward-Looking Effects of Increasing the Retirement Age on (Un)employment Behaviour By Niklas Gohl
  6. Can universal preschool education intensities counterbalance parental socioeconomic gradients? Repeated international evidence from Fourth graders skills achievement By Pierre Lefebvre; Claude Felteau
  7. Unequal care provision: evidence from the Share-Corona Survey By Elena Bassoli; Agar Brugiavini
  8. The Effect of Centrally Bargained Wages on Firm Growth By Bustos, Emil
  9. How does the regional presence of foreign-owned multinational enterprises affect local start-up performance By Grillitsch, Markus; Martynovich, Mikhail; Nilsson, Magnus; Schubert, Torben
  10. Scaling up efforts towards the localisation of SDGs. An Italian experience By GAZZARRI Maurizio
  11. The Causal Impact of Ballot Order on Voting Behaviour: Evidence from a Natural Experiment in Italy By Tommaso Giullla
  12. Does social trust determine social progress? Evidence for the European regions By Jesús Peiró-Palomino; Lisa Gianmoena; Andrés J. Picazo-Tadeo; Vicente Ríos
  13. Poor air at school and educational inequalities by family socioeconomic status By Fabrizio Bernardi; Risto Conte Keivabu
  14. Lord, How I Want to Be in That Number! On the Blessing of UNESCO World Heritage Listing By Enrico Bertacchini; Federico Revelli; Roberto Zotti
  15. Job Competition in Civil Servant Public Examinations and Sick Leave Behavior By Grace Armijos Bravo; Judit Vall Castelló
  16. Relatedness, Cross-relatedness and Regional Innovation Specializations: An Analysis of Technology, Design and Market Activities in Europe and the US By Carolina Castaldi; Kyriakos Drivas;
  17. Strapped for cash: The role of financial constraints for innovating firms By Esther Ann Boler; Andreas Moxnes; Karen Helene Ulltveit-Moe
  18. Noisy signals: do ratings’ volatility depend on the length of the consumption span? By David Boto-García; Veronica Leoni
  19. Preferences and Attitudes towards Debt Collection: A Cross-Generational Investigation By Minou Goetze; Christina Herdt; Ricarda Conrad; Stephan Stricker
  20. Welcome on board? Appointment dynamics of women as directors By Schoonjans, Eline; Hottenrott, Hanna; Buchwald, Achim
  21. Homophily and Transmission of Behavioral Traits in Social Networks By Palaash Bhargava; Daniel L. Chen; Matthias Sutter; Camille Terrier

  1. By: Katharina Heisig
    Abstract: This paper studies the long-term impact of a paid parental leave reform in former East Germany in 1986 on maternal physical and mental health and subjective well-being. The reform extended paid leave for first-time mothers by six months to a maximum of twelve months. I use representative survey data from the German Socio-Economic Panel and a difference-in-differences design in a quasi-experimental setting. Results show that the effects of the reform were negligible on maternal long-term physical and mental health and subjective well-being. There is weak, but not robust, evidence for increased satisfaction with household activities, income, and work.
    Keywords: social policy, parental leave, mental health, physical health, subjective well-being
    JEL: I12 J13 J16
    Date: 2023
  2. By: Krieger, Bastian
    Abstract: This paper estimates the effect of heterogeneous university funding stemming from the German Excellence Initiative on a regional firm's probability to innovate by using a multi-valued two-way fixed effects difference-in-differences model. The estimations show that funding an additional Excellence Cluster focused on internationally competitive research within a labor market region increases a regional firm's probability to innovate between 0.3 and 0.9 percentage points. This effect is driven by firms within labor market regions receiving a high number of Excellence Clusters. There is no statistically significant effect for receiving a low number of Excellence Clusters. Moreover, we find no consistent statistically significant effect of funding Graduate Schools concentrating on training scientists nor of funding University Strategies promoting the overall long-term plan of a university.
    Keywords: University funding, Firm innovation, Knowledge transfer
    JEL: O32 O33 O38
    Date: 2023
  3. By: MARISCAL-DE-GANTE Álvaro; PALENCIA ESTEBAN Amaia (European Commission - JRC); GRUBANOV-BOSKOVIC Sara; FERNANDEZ MACIAS Enrique (European Commission - JRC)
    Abstract: This paper presents new evidence on the interaction between demographic and occupational change in Europe over the last 25 years. We use data from the European Union Labour Force Survey covering six European countries to make the results representative of the different EU institutional families. The analysis is based on a cross-sectional comparison between the population and employment distributions in 1995 and 2019. This strategy allows us to study the changing demographic dynamics, which have brought a more feminised, aged and educated working population, in a context of structural employment change, where higher job polarisation or occupational upgrading are the main patterns. The results indicate that the increasing female participation has been accompanied by job polarisation, driven especially by the expansion of low-paid jobs among women. Although educational upgrading was particularly relevant for females, a multinomial logistic regression shows that occupational returns to education have declined more for women than men. Finally, despite the fact that the share of young (old) workers has decreased (increased), the occupational profile has changed similarly for both groups and the gender-based differences remain regardless of their age.
    Keywords: demographic change, labour markets, European Union, gender gap
    Date: 2023–03
  4. By: Riccardo Leoncini; Mariele Macaluso; Annalivia Polselli
    Abstract: Although the degree of gender segregation in the UK has decreased over time, women's participation in traditionally "female-dominated" sectors is disproportionately high. This paper aims to evaluate how changing patterns of sectoral gender segregation affected women's employment contracts and wages in the UK between 2005 and 2020. We then study wage differentials in gender-specific dominated sectors. We found that the differences in wages and contractual opportunities result mainly from the propensity of women to be distributed differently across sectors. Hence, the disproportion of women in female-dominated sectors implies contractual features and lower wages typical of that sector, on average, for all workers. This difference is primarily explained by persistent discriminatory constraints, while human capital-related characteristics play a minor role. However, wage differentials would shrink if workers had the same potential wages as men in male-dominated sectors. Moreover, this does not happen at the top of the wage distribution, where wage differentials among women in female-dominated sectors are always more pronounced than men.
    Date: 2023–03
  5. By: Niklas Gohl (University of Potsdam, Berlin School of Economics, DIW)
    Abstract: Leveraging two cohort-specific pension reforms, this paper estimates the forward-looking effects of an exogenous increase in the working horizon on (un)employment behaviour for individuals with a long remaining statutory working life. Using difference-in-differences and regression discontinuity approaches based on administrative and survey data, I show that a longer legal working horizon increases individuals’ subjective expectations about the length of their work life, raises the probability of employment, decreases the probability of unemployment, and increases the intensity of job search among the unemployed. Heterogeneity analyses show that the demonstrated employment effects are strongest for women and in occupations with comparatively low physical intensity, i.e., occupations that can be performed at older ages.
    Keywords: retirement policies, employment, DiD
    JEL: J24 J26 H21
    Date: 2023–03
  6. By: Pierre Lefebvre (Department of Economics, University of Quebec in Montreal); Claude Felteau (Department of Economics, University of Quebec in Montreal)
    Abstract: This study estimates the average multivalued treatment effects (ATET), of preschool attendance measured in years, on students’ international reading, math and science test z-scores in Grade 4. The causal treatment effects come from multiple-years observational data on three levels of preschool duration before entering Grade 1. Among European countries that participated in five international education surveys, PIRLS (2006, 2011, 2016) and TIMSS (2015, 2019), those renowned for having adopted early childhood education (ECE) programs starting at a young age, growing in intensity and improving the number of qualified child-care providers were selected. In addition to four Nordic countries (Denmark, Finland, Norway, Sweden), France, two Belgium jurisdictions (French, Flemish), and two participating Canadian provinces, Ontario and Québec, were retained. The approach exploits the repeated surveys and cross-national comparative international z-scores tests. The data sets besides their test scores provide unique information from a parent questionnaire on their education and occupation levels, literacy and numeracy preschool activities, on child preschool educational childcare span in years and two program types (for some years; before and after age 3). Four key findings can be identified from the data sets and estimations. First, there are large differences in the average scale score and percentiles deviation when converted into the z-score metric, for all categories of test scores across jurisdiction participants, and over time. Second, the estimates of the preschool treatment effects display rather heterogeneous impacts on z-scores with increasing significant and positive achievements over year surveys. Third, in general, preschool treatment effects are scattered in function of duration, programs types, and parental education. Four, results highlight stark gaps in scores related to parental education, socioeconomic statuses, and home learning resources for all year-samples. Evidence from a diversity of estimated gradients suggests established social inequalities in education achievement at ages 9-10 in Grade 4 could be difficult to reverse, even in cases where preschool education and care are implemented at a very young age in rich countries with very generous family policies.
    Keywords: Preschool education years intensities; fourth graders reading, math and science tests scores; multivalued treatment effects; PIRLS (2006, 2011, 2016); TIMSS (2015, 2019); Denmark, Finland, Norway, Sweden, Belgium French, Belgium Flemish, France; Canadian provinces of Québec and Ontario
    JEL: I2
    Date: 2023–02
  7. By: Elena Bassoli (Paris School of Economics); Agar Brugiavini (Department of Economics, University Of Venice CÃ Foscari; Institute for Fiscal Studies)
    Abstract: This paper brings new evidence on the differences in informal care provision across individuals, supporting the hypothesis that women and the “young old†people are more likely to be caregivers. We exploit exogenous changes in the demand for care following the COVID-19 outbreak and make use of variations in lockdown policies across Europe. We use the SHARE Corona survey, which involves about 50000 respondents of age 50 and over in 28 countries and has detailed information on the provision of care, characteristics of the caregiver and of the care recipient. We link the SHARE Corona Survey data with an individual specific “stringency index†, which measures the intensity of the lockdown policies and the degree of individual’s exposure to these restrictions. We propose a new methodology to measure the degree of rationing of care that older people experienced during the pandemic (and after) and find that women and people in the age group 50-65 were indeed more likely to provide help/care, and also document the multi-facet interaction with the labour market status of caregivers.
    Keywords: informal care, care provision, caregiver, gender, women, COVID-19, SHARE data, SHARE-COVID-19
    JEL: D1 I14 I18 J14 J16
    Date: 2023
  8. By: Bustos, Emil (Research Institute of Industrial Economics (IFN))
    Abstract: I study how firms adapt to exogenous changes in labor costs induced by collective bargaining agreements. I use data on collective bargaining agreements in Sweden and study the impact of the nationwide bargaining that took place in 2004. I make a difference-in-differences analysis and compare firms in the same industry that have a different initial skill composition of their workers and thus face different bargained wage increases. Higher centralized wage increases cause the average firm to increase average wages (1.3%) and to grow faster (2.7%) both in terms of employment and sales, while profitability decreases. Firms increase both investments and substitute low-skilled for high-skilled labor. Moreover, the effects are more pronounced for firms with more labor market power and easier access to external finance. This suggests that the results are affected by labor market power, and the ease of input factor substitution.
    Keywords: Collective Wage Bargaining; Firm Growth; Labor Market Power; Job Polarization
    JEL: D22 J23 J31 J42 J51
    Date: 2023–03–31
  9. By: Grillitsch, Markus (CIRCLE, Lund University); Martynovich, Mikhail (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University); Schubert, Torben (CIRCLE, Lund University)
    Abstract: This paper analyses how the presence of foreign-owned multinational enterprises (MNEs) affects the performance of start-ups in the same region. Focusing on the population of Swedish start-ups and MNEs between 2007 and 2015, we investigate the relationship between start-up productivity and regional share of MNE employment. We find effects that differ by sectoral belonging of start-ups and MNEs. Notably, while the effects of the local presence of foreign-owned MNEs are negative when start-ups and local MNEs belong to the same sector, they are positive for the local presence of MNEs in related and (to some weaker extent) unrelated sectors. Moreover, we find that as start-ups mature the effect of the local presence of foreign-owned MNEs on start-up productivity increases, irrespective of their sectoral belonging. We interpret this as evidence of age-dependent processes of learning, legitimacy building, and resource accumulaton allowing start-ups to reap the benefits while mitigating negative effects of MNE proximity. Interestingly, we show that the documented effects are more pronounced for service firms, particularly in the knowledge-intensive sectors.
    Keywords: Productivity; start-ups; MNE
    JEL: M13 M16 R11
    Date: 2023–03–27
  10. By: GAZZARRI Maurizio
    Abstract: This report analyses the experience of Italian municipalities monitoring the Sustainable Development Goals (SDGs), using the Sustainable Municipalities Network’s indicator set. In particular, the report explores the ways in which Italian municipalities have been involved in the identification of data sources to locally monitor the SDGs. It synthetises how those data have been analysed and how the results have been disseminated. The report also describes how the indicator set has been defined, tested and under which conditions a similar experience could be replicated in other European countries. The analysis covers both the implementation of the Sustainable Municipalities Network’s indicator set and the local contribution to the achievement of the SDGs in the Italian municipalities of the Network. According to the results, the Network of Sustainable Municipalities was able to involve in the monitoring of SDGs a number of local administrations that were not yet localising the SDGs. From the point of view of the contents of the 2030 Agenda, the 24 analysed municipalities achieved good results with respect to the localisation and progress toward the achievement of the goals. The report was compiled by an external expert to the European Commission as part of the URBAN 2030-II project developed by the Joint Research Centre to support local governments in monitoring the achievement of the 2030 Agenda for Sustainable Development.
    Keywords: SDG, municipalities, monitoring, indicators, data, localisation, 2030 Agenda, Italy
    Date: 2023–03
  11. By: Tommaso Giullla (Department of Economics, Universidad de San Andres)
    Abstract: The study of ballot design has gained salience in political science. The very procedure voters need to carry out in order to vote affects electoral outcomes, on top of the more direct effects of electoral rules. I focus on a specific channel through which such effects might realise: the order in which parties appear in the voting paper. Exploiting a natural experiment in the 2018 Italian general election, I estimate the electoral gain obtained by parties by virtue of being assigned the first (top-left) position in the voting paper. I use the fact that in Italy the party order in ballots is determined independently for the two elected chambers, thus exposing voters to two different exogenously determined lists. I find that, within a same municipality, parties which are assigned the first position in one chamber obtain a vote share between 0.1 and 0.2 p.p. higher relative to the other chamber. On average, this means that roughly 1 voter every 500 is influenced by the order in which party appears on the voting paper.
    Keywords: Electoral Institutions
    Date: 2023–02
  12. By: Jesús Peiró-Palomino (Universiy of Valencia and INTECO); Lisa Gianmoena (University of Pisa); Andrés J. Picazo-Tadeo (Universiy of Valencia and INTECO); Vicente Ríos (Universiy of Pisa)
    Abstract: Social trust is a heavily rooted element whose positive impact on economic performance has been widely corroborated for many contexts. However, the understanding of social progress disparities in aspects other than income is attracting increasing attention and is a key goal for the European Commission. European regions present notable disparities in many non-economic aspects that characterize advanced societies such as personal rights, freedom, tolerance and inclusion and access to advanced education. This paper provides fresh evidence on the impact of social trust on a wide array of aspects categorized as advanced features of social progress in the framework of the European Social Progress Index 2020 (EU-SPI). The results show a positive impact of social trust on most of the indicators, which is robust to endogeneity issues. These insights help to understand the enormous differences in terms of social progress across European regions and provide useful information for the design of future policies that pursue a more equal Europe.
    Keywords: European regions; European Social Progress Index; Social trust
    JEL: R11 Z10
    Date: 2023–04
  13. By: Fabrizio Bernardi; Risto Conte Keivabu (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In this paper we study social stratification in the impact of poor air quality on educational achievement. We address two main questions. First, are students from socioeconomically disadvantaged families more likely to attend schools with poor air quality? Second, is the effect of bad air quality for school results the same for children from high and low socioeconomic status families? We use a novel data set with test scores in math and reading for 456, 508 students in 8th grade in a test administered nationally in Italy in 2019. We geocode the location of 6, 882 schools based on their addresses and link the level of air pollution of the area around the school, using data on fine particulate matter provided by the Atmospheric Composition Analysis Group. To deal with possible confounders we use municipality fixed effects and control for an indicator of the characteristics of the school neighbourhood, using administrative fiscal data of the real estate values of the area around the school. We have three main findings. First, there is no SES gradient in the exposure to poor air at school. Second, we find a small but robust negative effect of particulate matter 2.5 (PM2.5) on test scores in math but not in reading. Third, this effect is mostly concentrated among low SES students. Conversely, high SES students are largely unaffected by exposure to poor air quality at school. We conclude that exposure to air pollution can exacerbate inequalities in education and the intergenerational transmission of disadvantage.
    JEL: J1 Z0
    Date: 2023
  14. By: Enrico Bertacchini; Federico Revelli; Roberto Zotti
    Abstract: This paper studies the impact of UNESCO World Heritage List (WHL) inscription on income and property values in the Italian municipalities that had their sites inscribed during the past two decades. To address the selection bias and identify the causal impact of inscription, we focus on sites included in the national ‘tentative list’ (i.e., list of candidates for subsequent nomination) and exploit the plausibly exogenous timing of inscription conditional upon entering the list. The evidence from an event study analysis suggests that WHL listing has a significant impact on the level and distribution of income. Possible underlying mechanisms are discussed.
    Keywords: UNESCO World Heritage List, economic impact, real estate market, tourism
    JEL: H24 H71 H73
    Date: 2023
  15. By: Grace Armijos Bravo (Universitat de Barcelona & IEB & ESAI Business School - Universidad Espíritu Santo); Judit Vall Castelló (University of Barcelona, IEB &CRES-UPF)
    Abstract: In several countries the entry system to access public service positions is the traditional public examination procedure. In this setting, candidates have to take passing exams that require a huge load of material to study, and therefore time. Candidates who are working while preparing the public exam may find it difficult to devote enough time to both tasks. Thus, they might experience increased stress/anxiety related to high stakes civil service recruitment testing. In this paper, we investigate the impact of new openings of civil servant positions on sickness absences. Using a unique administrative dataset on the universe of sickness absences and civil servant positions offered in Spain from 2009 to 2015, we find a significant increase in health-related absences several months before the examination date. In particular, this effect is stronger for individuals working in the educational sector as well as for calls offering a large number of positions. This effect is mostly driven by stress related absences. Finally, using data on medical visits (GP and specialist) we find evidence consistent with a deterioration in públic sector workers’ health. Our results are important from a policy perspective as they highlight the existence of important negative consequences of the civil service recruitment process that have been previously overlooked.
    Keywords: Public Examinations, Sick Leave; Negative Externalities, Absenteeism
    JEL: I13 J22 J45
    Date: 2023
  16. By: Carolina Castaldi; Kyriakos Drivas;
    Abstract: This paper examines how regions develop new innovation specializations, covering different activities in the whole process from technological invention to commercialization. We develop a conceptual framework anchored in two building blocks: first, the conceptualization of innovation as a process spanning technology, design and market activities; second, the application and extension of the principle of relatedness to understand developments within and between the different innovation activities. We offer an empirical investigation where we operationalize the different innovation activities using three intellectual property rights (IPRs): patents, industrial designs and trademarks. We provide two separate analyses of how relatedness and cross-relatedness matter for the emergence of new specializations: for 259 NUTS-2 European regions and for 363 MSAs of the US. While relatedness is significantly associated with new regional specializations for all three innovation activities, cross-relatedness between activities also plays a significant role. Our study has important policy implications for developing and monitoring Smart Specialization regional strategies.
    Keywords: innovation, relatedness, regional specialization, patents, trademarks, designs, NUTS-2 regions, Metropolitan Statistical Areas.
    JEL: O34 O38 R11
    Date: 2023–03
  17. By: Esther Ann Boler; Andreas Moxnes; Karen Helene Ulltveit-Moe
    Abstract: This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation and productivity. Using matched firm-bank data for Norway, we find that bank borrowing increased for firms affected by the reform relative to the control group. We also find an increase in the capital stock, employment and innovation as well as equity funding. We interpret the results through the lens of a model of monopolistic competition with potentially collateral constrained heterogeneous firms. Parameterizing the model using well-identified moments from the reduced form exercise, we find quantitatively large gains in output per worker in the sectors in the economy dominated by constrained (and intangible-intensive) firms. The gains are primarily driven by capital deepening, whereas within-industry misallocation plays a smaller role.
    Keywords: intangible capital, patents, credit constraints, misallocation, productivity
    Date: 2023–03–14
  18. By: David Boto-García; Veronica Leoni
    Abstract: This paper investigates the informational content of online reviews. For the case of hotels, we model how the length of the stay shapes the variance of review scores. Grounded on violations of temporal monotonicity, errors in recall and hedonic adaptation theories, we first present a characterization of how the consumption span affects the non-deterministic component of consumer satisfaction. Next, we conduct an empirical analysis using more than 525, 000 individual reviews from in 5 major European cities. Under a heteroskedastic framework, we document that individual ratings’ volatility decreases with the length of the stay. This implies that online ratings from short stayers (short consumption episodes) are noisy signals of the underlying hotel quality. Furthermore, we show that greater volatility in hotel ratings translates into a lower share of useful reviews for subsequent consumers. Our findings offer relevant insights for platform design operators about the sources of ratings’ volatility and how this affects social learning.
    JEL: D12 D83 Z30
    Date: 2023–03
  19. By: Minou Goetze; Christina Herdt; Ricarda Conrad; Stephan Stricker
    Abstract: Preliminary research indicated that an increasing number of young adults end up in debt collection. Yet, debt collection agencies (DCAs) are still lacking knowledge on how to approach these consumers. A large-scale mixed-methods survey of consumers in Germany (N = 996) was conducted to investigate preference shifts from traditional to digital payment, and communication channels; and attitude shifts towards financial institutions. Our results show that, indeed, younger consumers are more likely to prefer digital payment methods (e.g., Paypal, Apple Pay), while older consumers are more likely to prefer traditional payment methods such as manual transfer. In the case of communication channels, we found that older consumers were more likely to prefer letters than younger consumers. Additional factors that had an influence on payment and communication preferences include gender, income and living in an urban area. Finally, we observed attitude shifts of younger consumers by exhibiting more openness when talking about their debt than older consumers. In summary, our findings show that consumers' preferences are influenced by individual differences, specifically age, and we discuss how DCAs can leverage these insights to optimize their processes.
    Date: 2023–03
  20. By: Schoonjans, Eline; Hottenrott, Hanna; Buchwald, Achim
    Abstract: Increasing the participation of women in top-level corporate boards is high on the agenda of policymakers. Yet, we know little about director appointment dynamics and the drivers and impediments of women appointments. This study builds on organizational and group-level behavior theories and empirically investigates how ex-ante board structures and gender-specific board dynamics impact the representation of women on corporate boards. We study boards of listed firms in Europe between 2002 and 2019 and find a declining appointment probability for every additional woman, i.e. the share of women already on the board negatively predicts the likelihood of additional women appointments. Further, we find evidence of a replacement effect, i.e. the likelihood of a woman being appointed as director is significantly larger when a woman, compared to when a man, leaves the board. We do not find spillover effects from non-executive to executive boards. These results are robust to econometric model specifications that address potential endogeneity concerns using matching and instrumental variables. Our results confirm that board director appointments are gender specific and suggest that demand-side factors such as explicit and implicit norms drive women appointments up to a certain threshold.
    Keywords: Executive Directors, Non-Executive Directors, Appointments, Board Dynamics, Gender, Tokenism, Critical Mass, Corporate Governance
    JEL: G34 J08 J16 J71 L22
    Date: 2023
  21. By: Palaash Bhargava (Columbia University); Daniel L. Chen (Toulouse School of Economics); Matthias Sutter (Max-Planck Institute for Research on Collective Goods Bonn, University of Cologne and University of Innsbruck IZA Bonn, CESifoMunich); Camille Terrier (Queen Mary University London)
    Abstract: Social networks are segmented on gender, ethnicity, and other demographic characteristics. We present evidence on an understudied source of homophily: behavioral traits. Based on unique data from incentivized experiments with more than 2, 500 French high-school students, we find high levels of homophily across ten behavioral traits. Notably, homophily depends on similarities in demographic characteristics, in particular gender. Using network econometrics, we show that homophily is not only an outcome of endogenous network formation, but also driven by peer effects. The latter are larger when students share demographic characteristics, have longer periods of friendship, or are friends with more popular individuals.
    Keywords: Homophily, social networks, behavioral traits, peer effects, experiments
    JEL: D85 C91 D01 D90
    Date: 2023–04

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