nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒04‒24
thirteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Two Approaches to Saving the Economy: Micro-Level Effects of Covid-19 Lockdowns in Italy By Cseres-Gergely, Zsombor; Kecht, Valentin; Le Blanc, Julia; Onorante, Luca
  2. Public child care and mothers’ career trajectories By Katrin Huber; Geske Rolvering
  3. Can public policy increase paternity acknowledgement? Evidence from earnings-related parental leave By Anna Raute; Andrea Weber; Galina Zudenkova
  4. Pension Reforms and Couples' Labour Supply Decisions By Moghadam, Hamed Markazi; Puhani, Patrick A.; Tyrowicz, Joanna
  5. Strapped for Cash: The Role of Financial Constraints for Innovating Firms By Esther Ann Bøler; Andreas Moxnes; Karen Helene Ulltveit-Moe
  6. Social media charity campaigns and pro-social behaviour. Evidence from the Ice Bucket Challenge By Antinyan, Armenak; Corazzini, Luca; Fazio, Andrea; Reggiani, Tommaso; Scervini, Francesco
  7. Gendered parenthood-employment gaps in midlife: a demographic perspective across three different welfare systems By Lorenti, Angelo; Jessica, Nisen; Mencarini, Letizia; Myrskylä, Mikko
  8. It never rains but it pours: Austerity and mortality rate in peripheral areas By Guccio, C.; Pignatora, G.; Vidoli, F.
  9. Why Are the Wealthiest So Wealthy? A Longitudinal Empirical Investigation By Serdar Ozkan ⓡ; Joachim Hubmer ⓡ; Sergio Salgado ⓡ; Elin Halvorsen ⓡ; Serdar Ozkan
  10. Breach of Academic Values and Digital Deviant Behaviour: the Case of Sci-Hub By Giulia Rossello; Arianna Martinelli
  11. Mitigating the Impact of Ageing on Property Value: An Analysis of Maintenance and Reinvestment Measures By Wilhelmsson, Mats; Roos, Henrik
  12. Protection of Geographical Indications in Trade Agreements: is it worth it? By Charlotte Emlinger; Karine Latouche
  13. Does a Progressive Wealth Tax Reduce Top Wealth Inequality? Evidence from Switzerland By Samira Marti; Isabel Martínez; Florian Scheuer; Isabel Z. Martínez

  1. By: Cseres-Gergely, Zsombor (European Commission); Kecht, Valentin (University of Bonn); Le Blanc, Julia (European Commission); Onorante, Luca (European Commission)
    Abstract: In response to the two waves of Covid-19 in 2020, the Italian government implemented a general lockdown in March, but geographically targeted policies during fall. We exploit this natural experiment to compare the effects of the two policies in a difference-in-differences design, leveraging a unique database combining traditional, municipality-level and big data at weekly frequency. We find that the general lockdown of the first wave strongly reduced mobility at a high price in terms of employment, while the targeted policies during the second wave induced a lower decrease in mobility and little additional economic cost. We also study the role of pre-existing municipality characteristics and labour market policies in shaping these responses. Our results suggest that working from home and short-term work schemes buffered the adverse consequences of the drop in economic activity on the labour market. Both mechanisms, however, acted more strongly in high-income areas and among white collar workers, exacerbating existing inequalities.
    Keywords: Covid-19, human mobility, lockdowns, big data, differences-in-differences
    JEL: I12 I18 H12 D04 C33 H51
    Date: 2023–02
  2. By: Katrin Huber (University of Potsdam, CEPA, BSE); Geske Rolvering (University of Passau)
    Abstract: This paper studies the effect of public child care on mothers’ career trajectories. To this end, we combine county-level data on child care coverage with detailed individual-level information from the German social security records and exploit a set of German reforms leading to a substantial temporal and spatial variation in child care coverage for children under the age of three. We conduct an event study approach that investigates the labor market outcomes of mothers in the years around the birth of their first child. We thereby explore career trajectories, both in terms of quantity and quality of employment. We find that public child care improves maternal labor supply in the years immediately following childbirth. However, the results on quality-related outcomes suggest that the effect of child care provision does not reach far beyond pure employment effects. These results do not change for mothers with different ‘career costs of children’.
    Keywords: child care, maternal employment, career costs of children, women’s careers
    JEL: J08 J13 J22
    Date: 2023–04
  3. By: Anna Raute (Queen Mary University of London); Andrea Weber (Central European University); Galina Zudenkova (TU Dortmund University)
    Abstract: A child's family structure is a fundamental determinant of future well-being, making it essential to understand how public policies affect the involvement of fathers. In this paper, we exploit a reform of the German parental leave system which increased mother's income and reduced legal father's financial support burden to measure the impact on the relationship contract choices of parents who were unmarried at conception. Based on detailed birth record data, we demonstrate that short-run reform incentives during the first period after birth nudge unmarried fathers into the long-term commitment of acknowledging paternity. This shift reduces single motherhood by 6% but leaves the share of marriages at birth constant. Moreover, the change in relationship contract choices is mostly driven by parents of boys. These findings are compatible with predictions from a model where parents choose between three types of relationship contracts based on the mother's and father's incomes and support obligations. Our results highlight the necessity of studying intermediate relationship contracts (i.e., between the extremes of marriage and single motherhood) to improve our understanding of potential risk groups among the rising number of children growing up outside of marriage.
    Keywords: paid parental leave, family structure, paternity establishment
    JEL: I38 J12 J13 J16 J18
    Date: 2022–03–03
  4. By: Moghadam, Hamed Markazi; Puhani, Patrick A.; Tyrowicz, Joanna
    Abstract: To determine how wives' and husbands' retirement options affect their spouses' (and their own) labour supply decisions, we exploit (early) retirement cutoffs by way of a regression discontinuity design. Several German pension reforms since the early 1990s have gradually raised women's retirement age from 60 to 65, but also increased ages for several early retirement pathways affecting both sexes. We use German Socio-Economic Panel data for a sample of couples aged 50 to 69 whose retirement eligibility occurred (i) prior to the reforms, (ii) during the transition years, and (iii) after the major set of reforms. We find that, prior to the reforms, when several retirement options were available to both husbands and wives, both react almost symmetrically to their spouse reaching an early retirement age, that is both husband and wife decrease their labour supply by about 5 percentage points when the spouse reaches age 60). This speaks in favour of leisure complementarities. However, after the set of reforms, when retiring early was much more difficult, we find no more significant labour supply reaction to the spouse reaching a retirement age, whereas reaching one's own retirement age still triggers a significant reaction in labour supply. Our results may explain some of the diverse findings in the literature on asymmetric reactions between husbands and wives to their spouse reaching a retirement age: such reactions may in large parts depend on how flexibly workers are able to retire.
    Keywords: retirement coordination, labour market participation, household decisions, regression discontinuity design
    JEL: J22 J26
    Date: 2023
  5. By: Esther Ann Bøler; 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
    JEL: D25 G32 L25 L26 O34 O47
    Date: 2023
  6. By: Antinyan, Armenak (Cardiff Business School, Cardiff University.); Corazzini, Luca; Fazio, Andrea; Reggiani, Tommaso (Cardiff Business School); Scervini, Francesco
    Abstract: Social media use plays an important role in shaping individuals' social attitudes and economic behaviours. One of the fist well-known examples of social media campaigns is the Ice Bucket Challenge (IBC), a charity campaign that went viral on social media networks in August 2014, aiming to collect money for research on amyotrophic lateral sclerosis (ALS). We rely on UK longitudinal data to investigate the causal impact of the Ice Bucket Challenge on pro-social behaviours. In detail, this study shows that having been exposed to the IBC increases the probability of donating money, and it also increases the amount of money donated among those who donate at most £100. We also find that exposure to the IBC has increased the probability of volunteering and the level of interpersonal trust. However, all these results, except for the result on the intensive margins of donations, are of short duration and are limited to less than one year. This supports the prevalent consensus that social media campaigns may have only short-term effects.
    Keywords: Donations, Volunteering, Altruism, Social media campaigns, Ice bucket challenge.
    JEL: D64 O35
    Date: 2023–04
  7. By: Lorenti, Angelo; Jessica, Nisen; Mencarini, Letizia; Myrskylä, Mikko
    Abstract: Women’s labor force participation has increased remarkably in western countries, but important gender gaps still remain, especially among parents. This paper uses a novel comparative perspective assessing women’s and men’s mid-life employment trajectories by parity and education. We provide new insight into the gendered parenthood penalty by analyzing the long-term implications, beyond the core childbearing ages by decomposing years lived between ages 40 to 74 into years in employment, inactivity, and retirement. We compare three countries with very different institutional settings and cultural norms: Finland, Italy, and the U.S. Our empirical approach uses the multistate incidence-based life table method. Our results document large cross-national variation, and the key role that education plays. In Finland years employed increase with parity for women and men and the gender gap is small; in the U.S. the relation between parity and years is relatively flat, whereas among those with two or more children a gender gap emerges; and in Italy, years employed decreases sharply with parity for women, and increases for men. Education elevates years employed similarly for all groups in Finland; but in the U.S and Italy, highly educated mothers experience only half of the gender gap compared to low-educated mothers. The employment trajectories of childless women and men differ greatly across countries.
    Date: 2023–03–12
  8. By: Guccio, C.; Pignatora, G.; Vidoli, F.
    Abstract: Austerity policies have been widely adopted in advanced countries to reduce public deficits. However, they can have unintended consequences, including negative impacts on population health. In this paper, taking advantage of temporal and geographical discontinuity of regional healthcare recovery plans (RPs) adopted in Italy since 2007 and employing a matching estimator in a discrete spatial non-stationarity framework, the impact of RPs on mortality rates at the municipal level has been tested for the period 2003 to 2018. We find that austerity has had unintentional negative effects on the mortality rate, particularly in peripheral areas and for the most vulnerable population.
    Keywords: austerity; health outcomes; mortality rate; spatial non-stationarity; difference-in-difference;
    JEL: C23 E32 I10 I18
    Date: 2023–03
  9. By: Serdar Ozkan ⓡ; Joachim Hubmer ⓡ; Sergio Salgado ⓡ; Elin Halvorsen ⓡ; Serdar Ozkan
    Abstract: We use Norwegian administrative panel data on wealth and income between 1993 and 2015 to study lifecycle wealth dynamics, focusing on the wealthiest households. On average, the wealthiest start their lives substantially richer than other households in the same cohort, own mostly private equity, earn higher returns, derive most of their income from dividends and capital gains, and save at higher rates. At age 50, the excess wealth of the top 0.1% group relative to mid-wealth households is accounted for in about equal terms by higher saving rates (34%), higher initial wealth (32%), and higher returns (27%), while higher labor income (5%) and inheritances (1%) account for the small residual. There is significant heterogeneity among the wealthiest: one-fourth of them—which we dub the “New Money”—start with negative wealth but experience rapid wealth growth early in life. Relative to the quartile of top owners that already started their life rich—the “Old Money”—the New Money are characterized by even higher saving rates and returns and also by higher labor income. Their excess wealth is mainly explained by higher saving rates (46%), higher returns (34%), and higher labor income (16%).
    Keywords: wealth inequality, lifecycle wealth dynamics, rate of return heterogeneity, bequests, saving rate heterogeneity
    JEL: D14 D15 E21
    Date: 2023
  10. By: Giulia Rossello; Arianna Martinelli
    Abstract: This paper bridges the organisational psychology and the economics of science literature to examine the role of ideology-based psychological contract breach in eliciting mild deviant behaviour in academia. We provide empirical evidence of how the deterioration of academic values related to the diffusion of the ''publish or perish'' paradigm sparkles copyright violations through Sci-Hub. Based on a representative sample of 2849 academics working in top institutions in 6 European countries, we find that ideology-based psychological contract breach explains Sci-Hub usage, also when controlling for other trivial motivations. The magnitude of the effect depends on contextual and demographic characteristics. Females, foreign and tenured scholars are less likely to respond with digital piracy when experiencing a contract breach of academic values. Our results contribute to prevention policy design, highlighting how policies restoring academic values might also address academic piracy.
    Keywords: Academic Values; Digital Piracy; Deviant Behaviour; Psychological Contract Breach; Sci-Hub.
    Date: 2023–03–29
  11. By: Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology); Roos, Henrik (Lantmateriet)
    Abstract: The value of a property tends to decrease over time as it ages, resulting in a reduced ability to generate the same value. Property depreciation is a multifaceted concept that encompasses both technical and economic aspects. The economic life of a property is used to determine its effective age. This study aims to determine the effective age of a selected property by analysing various data related to its condition, including information on maintenance and reinvestment operations. Additionally, the research seeks to investigate whether the year of construction or price level has an impact on the property's effective age. We collected specific data from property owners on the frequency of various maintenance and reinvestment operations, both internal and external, such as the roof, foundation, heating, and kitchen. Our database consists of nearly 10, 000 houses in Sweden sold between the beginning of 2021 and 2022 that are over 30 years old. Our findings demonstrate that even for older properties, there can be a significant decline in value due to ageing. We also observe that property owners' actions, such as maintenance and reinvestments, can affect age-related value decline. By implementing appropriate measures to reduce the property's effective age, the decline in value due to ageing can be mitigated. Hence, policymakers could consider developing policies and incentives to encourage property owners to invest in maintenance and reinvestment measures that can mitigate the effects of ageing on property value.
    Keywords: depreciation; age-related decrease in value; maintenance; effective age; Sweden
    JEL: D46 G51 R30
    Date: 2023–04–06
  12. By: Charlotte Emlinger (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: The objective of this paper is to estimate the impact of the inclusion of GIs in bilateral agreements on French exports of foodstuffs. To do so, we rely on a unique dataset of firms and products concerned by Geographical Indications (GIs) in the French agri-food industry (excluding wine) for 2012-2017, merged with firm-product level data from French Customs and French National Institute of Statistics. Controlling for markets and firms characteristics, we exploit the time dimension of the agreements and compare GI firms exports before and after the signature of the 13 agreements (25 destination countries) which include GI list to protect. We explore both the impact of the agreements on the probability of firms to export (the extensive margin of trade), their exports in value and quantity (the intensive margin) and their price. We also consider the heterogeneous impact of agreements according to the kind of products (cheese, meat, other), the size of firms and destination characteristics (existence of similar geographical indications for domestic products).
    Keywords: Bilateral trade agreements, Firm level data, Export performance, Trade margins
    Date: 2023–01–12
  13. By: Samira Marti; Isabel Martínez; Florian Scheuer; Isabel Z. Martínez
    Abstract: Like in many other countries, wealth inequality has increased in Switzerland over the last fifty years. By providing new evidence on cantonal top wealth shares for each of the 26 cantons since 1969, we show that the overall trend masks striking differences across cantons, both in levels and trends. Combining this with variation in cantonal wealth taxes, we then estimate an event study model to identify the dynamic effects of reforms to top wealth tax rates on the subsequent evolution of wealth concentration. Our results imply that a reduction in the top marginal wealth tax rate by 0.1 percentage points in-creases the top 1% (0.1%) wealth share by 0.9 (1.2) percentage points five years after the reform. This suggests that wealth tax cuts over the last 50 years explain roughly 18% (25%) of the increase in wealth concentration among the top 1% (0.1%).
    Keywords: wealth tax, inequality, top wealth shares
    JEL: H23 H24 D31
    Date: 2023

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