nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒05‒01
fifteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Structural Labour Market Change, Cognitive Work, and Fertility in Germany By Honorata Bogusz; Anna Matysiak; Michaela Kreyenfeld
  2. On the Road to Equity: Examining Income-Related Inequalities in Ownership of Safer Vehicles By Carrieri, Vincenzo; Davillas, Apostolos; de Oliveira, Victor Hugo
  3. Pension Reforms and Couples' Labour Supply Decisions By Moghadam, Hamed Markazi; Puhani, Patrick A.; Tyrowicz, Joanna
  4. The Unintended Consequences of Censoring Digital Technology - Evidence from Italy's ChatGPT Ban By David H. Kreitmeir; Paul A. Raschky
  5. Longer careers: A barrier to hiring and coworker advancement? By Irene Ferrari; Jan Kabátek; Todd Morris
  6. Returns to ICT Skills Use and Labour Market Institutions By Giorgio Cutuli; Alessio Tomelleri
  7. Educational tracking and the polygenic prediction of education By Hannu Lahtinen; Pekka Martikainen; Kaarina Korhonen; Tim T. Morris; Mikko Myrskylä
  8. What Works for the Unemployed? Evidence from Quasi-Random Caseworker Assignments By Humlum, Anders; Munch, Jakob R.; Rasmussen, Mette
  9. Breaking the marriage trap: unilateral divorce and its effects on labor supply of married women By Alonso-Borrego, César; Pomares Varo, Gema
  10. Did Job Retention Schemes Save Jobs during the Covid-19 Pandemic? Firm-level Evidence from Latvia By Konstantins Benkovskis; Olegs Tkacevs; Karlis Vilerts
  11. Unpacking Social Capital By Ruben Durante; Nicola Mastrorocco; Luigi Minale; James M. Snyder Jr.
  12. The effect of tax incentives on private pension saving By Laurence O'Brien
  13. The role of childhood obesity in socioeconomic inequalities in young adolescents’ mental health: differential exposure or differential impact? By Maria Gueltzow; Joost Oude Groeniger; Maarten J. Bijlsma; P. W. Jansen; T. A. J. Houweling; Frank J. van Lenthe
  14. Public and Private School Grade Inflations Patterns in Secondary Education By Silva, Pedro Luís; DesJardins, Stephen L.; Biscaia, Ricardo; Sá, Carla; Teixeira, Pedro N.
  15. Understanding climate-related disclosures of UK financial institutions By Acosta-Smith, Jonathan; Guin, Benjamin; Salgado-Moreno, Mauricio; Vo, Quynh-Anh

  1. By: Honorata Bogusz (University of Warsaw, Faculty of Economic Sciences); Anna Matysiak (University of Warsaw, Faculty of Economic Sciences); Michaela Kreyenfeld (Hertie School)
    Abstract: Technological change and globalisation have been transforming the structure of labour demand in favour of workers performing cognitive tasks. Even though past research has found that labour force participation is an important determinant of fertility behaviour, few studies have addressed the fertility effects of the long-term structural changes of labour market. To fill this gap, we measure the cognitive task content of work at the occupation level using data from the Employment Survey of the German Federal Institute for Vocational Education and Training (BiBB). We link this contextual information with employment and fertility histories of women and men from the German Socio-Economic Panel 1984-2018 (GSOEP). With event history models, we find that fertility transitions of men working in occupations characterised by high cognitive task intensity are accelerated. We also observe elevated birth risks among women in occupations requiring cognitive labour. However, this pattern is more ambiguous, as we find that non-working women also experience elevated birth rates.
    Keywords: structural labour market change, cognitive work, task content of work, fertility, Germany
    JEL: J01 J11 J13
    Date: 2023
  2. By: Carrieri, Vincenzo (University of Calabria); Davillas, Apostolos (University of Macedonia); de Oliveira, Victor Hugo (Instituto de Pesquisa e Estratégia Econômica do Ceará (IPECE))
    Abstract: Using administrative DVLA data matched with micro-data from Understanding Society – the UK Household Longitudinal Study we estimate income-related inequalities in ownership of vehicles with a set of safety features and we apply a regression-based decomposition method for rank-dependent inequality measures to estimate the source of inequalities. We find systematic pro-rich inequalities in ownership of passively safer vehicles that are almost entirely explained by the characteristics of the vehicles, mainly their price and year of manufacture. A wide range of variables measured at the household level including demographics, risk aversion and time preference proxies, personality traits, cognitive ability, and education plays a much less pronounced and, in most cases, non-statistically significant contribution to overall inequality. These findings reveal inequity in access to passively safer vehicles with potential effects on the socio-economic gap in road-traffic injuries and mortality rates, requiring regulatory intervention.
    Keywords: income inequalities, car's safety, concentration indexes, United Kingdom
    JEL: I10 I14 R41
    Date: 2023–03
  3. By: Moghadam, Hamed Markazi (Leibniz Univeristät Hannover); Puhani, Patrick A. (Leibniz University of Hannover); Tyrowicz, Joanna (University of Warsaw)
    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: 2023–03
  4. By: David H. Kreitmeir (SoDa Labs, Monash University); Paul A. Raschky (Department of Economics and SoDa Laboratories, Monash University)
    Abstract: We analyse the effects of the ban of ChatGPT, a generative pre-trained transformer chatbot, on individual productivity. We first compile data on the hourly coding output of over 8, 000 professional GitHub users in Italy and other European countries to analyse the impact of the ban on individual productivity. Combining the high-frequency data with the sudden announcement of the ban in a difference-in-differences framework, we find that the output of Italian developers decreased by around 50\% in the first two business days after the ban and recovered after that. Applying a synthetic control approach to daily Google search and Tor usage data shows that the ban led to a significant increase in the use of censorship bypassing tools. Our findings show that users swiftly implement strategies to bypass Internet restrictions but this adaptation activity creates short-term disruptions and hampers productivity.
    Keywords: chatgpt, productivity, internet, censorship, italy
    JEL: D72 D83 L86 L88
    Date: 2023–04
  5. By: Irene Ferrari (Department of Economics, University Of Venice CÃ Foscari; Netspar); Jan Kabátek (University of Melbourne, Life Course Centre, IZA; Netspar); Todd Morris (HEC Montreal, Life Course Centre, CEPAR; Netspar)
    Abstract: Government policies are encouraging older workers to delay retirement, which may curb younger workers' career advancement. We study a Dutch reform that raised the retirement age by 13 months and nearly tripled employment at age 66. Using monthly linked employer-employee data, we show that affected firms delay and decrease replacement hiring, and coworkers' earnings fall via reductions in hours worked, wages, and promotions. Combined, the hiring and coworker spillovers offset most of the additional hours worked by older workers, disproportionately affect career advancement for younger workers and women, and considerably increase the policy's ratio of welfare costs to fiscal savings.
    Keywords: retirement reform, labor demand, internal labor markets, firms, coworker spillovers
    JEL: H55 J23 J26 J63
    Date: 2023
  6. By: Giorgio Cutuli; Alessio Tomelleri
    Abstract: This paper analyses the moderating role of institutional factors on returns to ICT skill usage among different groups of workers in eight European labour markets. Using PIAAC data, it leverages the ‘institutional salience’ of contractual status to analyse the returns on the use of ICT-related skills in the workplace, allowing for heterogeneous wage effects at the micro level among workers holding permanent and temporary contracts. It extends the analysis by considering how gaps in ICT wage premiums mirror the compositional differences in national-specific trade union densities among contractual groups. Wage premiums associated with ICT usage are not defined univocally by task content or demand-supply dynamics for specific occupations. Net of occupation and industry, the results show different returns between labour market segments and according to national-specific trade union densities of temporary and permanent workers, providing a test of how the consequence of technological change are shaped by institutional and regulative cleavages.
    Keywords: ICT skills, Wage premiums, European labour markets, Temporary contracts, Trade unions
    JEL: J2 E24 O30 J50
    Date: 2023–04
  7. By: Hannu Lahtinen; Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany); Kaarina Korhonen; Tim T. Morris; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Although it is well known that individuals’ genetics relate to their educational attainment, our understanding of how this may vary across differing educational institutional contexts is limited. In an educational system that does not separate students into different tracks early on, individuals’ unique skills and interests may have more time to manifest, which could potentially strengthen the genetic prediction of education. We test such a hypothesis exploiting the natural experiment of the Finnish comprehensive school reform employed gradually and regionally across the country between 1972 and 1977, using genetically informed population-representative surveys linked to data from administrative registers. We observed that the genetic prediction of education was stronger after the reform by one-third among men and those coming from low-educated families. We observed no evidence for reform effects among women or those from high-educated families. The increase in genetic prediction was particularly pronounced among the first cohort experiencing the new system. From the perspective of genetic prediction, the reform to a more universalist curriculum was successful in promoting equality of opportunity. The results also highlight the potential of various turbulent circumstances – such as puberty or ongoing restructuring of institutional practices – in magnifying genetic effects.
    JEL: J1 Z0
    Date: 2023
  8. By: Humlum, Anders (University of Chicago Booth School of Business); Munch, Jakob R. (University of Copenhagen); Rasmussen, Mette (University of Copenhagen)
    Abstract: This paper examines if active labor market programs help unemployed job seekers find jobs using a novel random caseworker instrumental variable (IV) design. Leveraging administrative data from Denmark, our identification strategy exploits that (i) job seekers are quasi-randomly assigned to caseworkers, and (ii) caseworkers differ in their tendencies to assign similar job seekers to different programs. Using our IV strategy, we find assignment to classroom training increases employment rates by 25% two years after initial job loss. This finding contrasts with the conclusion reached by ordinary least squares (OLS), which suffers from a negative bias due to selection on unobservables. The employment effects are driven by job seekers who complete the programs (post-program effects) rather than job seekers who exit unemployment upon assignment (threat effects), and the programs help job seekers change occupations. We show that job seekers exposed to offshoring – who tend to experience larger and more persistent employment losses – also have higher employment gains from classroom training. By estimating marginal treatment effects, we conclude that total employment may be increased by targeting training toward job seekers exposed to offshoring.
    Keywords: unemployed workers, active labor market policy, classroom training, caseworker instrumental variable
    JEL: J08 J64 I21
    Date: 2023–03
  9. By: Alonso-Borrego, César; Pomares Varo, Gema
    Abstract: We assess the impact of the 2005 divorce law reform in Spain, which reduced the time length and the costs of marriage termination, on the labor market outcomes of married women. We use independent cross sections of the Spanish Labor Force Survey between 2001 and 2009. As the reform affected married couples but not unmarried couples, we undertake a differences-in-differences approach to estimate the causal effect. Our results show that the reform substantially increased the participation and the occupation rates of married women by 4 and 3 percentage points, respectively, but reduced their average working hours by 5 percent. This latter result comes along with a large increase in part time employment due to the reform. The effects weremore pronounced for women without young children, with low education levels, and living in provinces where separate property was the default marital regime.
    JEL: J22 J12 J16 K36 C21 D19
    Date: 2023–04–20
  10. By: Konstantins Benkovskis (Latvijas Banka); Olegs Tkacevs (Latvijas Banka); Karlis Vilerts (Latvijas Banka)
    Abstract: This paper studies the employment effect of the job retention scheme implemented during the Covid-19 pandemic. Using firm-level data from Latvia, we investigate whether a change in the number of employees in firms that received support from the job retention programme has been different from that of similar firms which did not receive such support, and whether these differences have disappeared over time. We find strong evidence that job retention scheme participants in Latvia were less likely to cut employment and that this effect persisted for several months after receiving support. Participation in the job retention scheme affected both the likelihood of a firm’s survival and the rate at which employees were laid off. Our results also suggest that the participation effect was not uniform across firms, with the effect being less pronounced in service sectors with a higher level of contact intensity and more pronounced in sectors with a higher proportion of highly skilled employees.
    Keywords: Job retention schemes, idle-time allowance, Covid-19, employment
    JEL: E24 H12 J62 J68
    Date: 2023–04–11
  11. By: Ruben Durante; Nicola Mastrorocco; Luigi Minale; James M. Snyder Jr.
    Abstract: We use novel and unique survey data from Italy to shed light on key questions regarding the measurement of social capital and the use of social capital indicators for empirical work. Our data cover a sample of over 600, 000 respondents interviewed between 2000 and 2015. We identify four distinct components of social capital – i) social participation, ii) political participation, iii) trust in others, and iv) trust in institutions – and examine how they relate to each other. We then study how each dimension of social capital relates to various socioeconomic factors both at the individual and the aggregate level, and to various proxies of social capital commonly used in the literature. Finally, building on previous work, we investigate to what extent different dimensions of social capital predict differences in key economic, political, and health outcomes. Our findings support the view that social capital is a multifaceted object with multiple dimensions that, while related, are distinct from each other. Future work should take such multidimensionality into account and carefully consider what measure of social capital to use.
    JEL: A12 A13 P10 Z1
    Date: 2023–03
  12. By: Laurence O'Brien (Institute for Fiscal Studies)
    Date: 2023–02–24
  13. By: Maria Gueltzow (Max Planck Institute for Demographic Research, Rostock, Germany); Joost Oude Groeniger; Maarten J. Bijlsma (Max Planck Institute for Demographic Research, Rostock, Germany); P. W. Jansen; T. A. J. Houweling; Frank J. van Lenthe
    Abstract: We investigated to what extent socioeconomic inequalities in young adolescents’ mental health are due to differential exposure to, or differential impact of obesity. We used data from 4, 660 Generation R participants and defined mothers’ education and household income at child’s age 5 as a disparity measure. We estimated the contribution of differential exposure to, and differential impact of, body fat percentage at age 9 to the total disparity in internalizing and externalizing symptoms at age 13. This was done through a four-way decomposition with interventional analogues using marginal structural models with inverse probability of treatment weighting. The total disparity in internalizing symptoms was 0.98 points (95%CI 0.35, 1.63) and 1.68 points (95%CI 1.13, 2.19), comparing children from least- and most-educated mothers, and lowest and highest-income households, respectively. Of these total disparities in internalizing symptoms, 0.50 points (95%CI 0.15, 0.85) and 0.24 points (95%CI 0.09, 0.46) were due to differential exposure to obesity. We found no evidence for differential exposure or impact contributing to disparities in externalizing symptoms. Our results indicate that tackling the higher obesity prevalence in children from mothers with a low socioeconomic position may also reduce inequalities in internalizing symptoms in early adolescence.
    Keywords: Netherlands, adolescence, children, inequality, mental health, obesity
    JEL: J1 Z0
    Date: 2023
  14. By: Silva, Pedro Luís (University of Porto); DesJardins, Stephen L. (University of Michigan); Biscaia, Ricardo (CIPES – Centre for Research in Higher Education Policies); Sá, Carla (CIPES – Centre for Research in Higher Education Policies); Teixeira, Pedro N. (University of Porto)
    Abstract: Grade inflation in high schools is potentially problematic for students, education institutions, and society. We examine the extent of potential grading inflation in courses taken during high school and how such differences vary across student and school characteristics. Utilizing longitudinal, administrative data for the population of high school students in an entire country (Portugal) over ten years, we develop a measure of grade inflation using the position of the student's high school grade relative to their score on the national standardized admission exam. We analyze differences in this measure across four types of high schools: TEIP schools (public schools located in disadvantaged areas that include children at-risk of social exclusion), public schools (state-funded schools), private schools, and private association schools (owned by private entities but publicly funded). We find that private association schools exhibit a lower probability of grade inflation when compared to public schools. Additionally, TEIP schools tend to have a higher probability of inflation for students with high grades. Implications for policy and practice are discussed.
    Keywords: grade inflation, grading standards, high school grading, postsecondary access equity, upper secondary education
    JEL: I21 I23 I24
    Date: 2023–03
  15. By: Acosta-Smith, Jonathan (Bank of England); Guin, Benjamin (Bank of England); Salgado-Moreno, Mauricio (Bank of England); Vo, Quynh-Anh (Bank of England)
    Abstract: Climate-related disclosures reduce information asymmetries between firms and investors and help transition to a net zero economy. However, disclosure practices might differ across firms. We explore the determinants of firm disclosures by creating a unique, firm-level panel data set on climate-related disclosures of UK financial institutions. To that end, we apply Natural Language Processing techniques with Machine Learning classifiers on unique textual data which we hand-collected from their published reports. We document differences in disclosure levels across financial institutions with different sizes and over time. We show that climate‑related policy communications in the form of regulatory guidance on future mandatory disclosures is associated with a catch-up by firms previously disclosing less.
    Keywords: Climate-related disclosures; market discipline; Task Force on Climate-Related Financial Disclosures (TCFD) and Natural Language Processing (NLP).
    JEL: C40 C80 G20
    Date: 2023–03–10

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