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on Microeconomic European Issues |
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Issue of 2023‒05‒08
twenty-one papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Österberg, Torun (University of Gothenburg) |
| Abstract: | Moves into and out of privileged neighborhoods as well as moves into and out of disadvantaged neighborhoods in metropolitan Sweden are studied using register data on all moves by adults that took place between 2004 and 2006. Based on estimated multivariate models, we find that, for all four types of moves, age, education, household income, household composition and its changes, as well as labor market status and its changes, matter. However, in addition, where the person was born can matter, as, with some exceptions, foreign-born people are less likely than natives with the same characteristics to move into a privileged neighborhood. Furthermore, foreign-born are typically less likely than natives with the same characteristics to move out of the metropolitan regions. However, considerable heterogeneity in probabilities to move between those born in different categories of countries is found. Adults born in high-income countries are, in many cases, moving similarly to natives with the same characteristics, while this is typically not found among people born in low-income countries. The latter might be due to fewer assets, lesser social capital, discrimination in the housing market or in housing finance, or by choice. |
| Keywords: | residental mobility, neighbourhoods, immigrants, Sweden |
| JEL: | J15 J61 R23 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16044&r=eur |
| By: | Sigurdsson, Jósef (Stockholm University) |
| Abstract: | Men have fallen behind women in education in developed countries. Why? I study the impact of a transitory increase in the opportunity cost of schooling on men's and women's educational attainment. I exploit a reform in Iceland that lowered income taxes to zero for one year and compare teenagers above and below the compulsory schooling age. This earnings opportunity increased the dropout rate and led to a permanent loss in years of education for young men, but had no effect on the education of women. Male dropouts suffer substantial losses in lifetime earnings, slow career progression, and reduced marriage and fertility outcomes. The results cannot be explained by negative selection of dropouts or low returns to education but can be reconciled by gender differences in nonpecuniary costs of school attendance, myopia, or perceived returns to education. The findings suggest that due to these gender differences, economic booms misallocate young men away from school, entrenching the gender gap in education. |
| Keywords: | educational attainment, opportunity cost, gender gap, labor supply, tax reform |
| JEL: | H24 I21 I26 J16 J24 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16050&r=eur |
| By: | Zuleika Ferre; Patricia Triunfo; Jos\'e-Ignacio Ant\'on |
| Abstract: | Abundant evidence has tracked the labour market and health assimilation of immigrants, including static analyses of differences in how foreign-born and native-born residents consume health care services. However, we know much less about how migrants' patterns of health care usage evolve with time of residence, especially in countries providing universal or quasi-universal coverage. We investigate this process in Spain by combining all the available waves of the local health survey, which allows us to separately identify period, cohort, and assimilation effects. We find that the evidence of health assimilation is limited and solely applies to migrant females' visits to general practitioners. Nevertheless, the differential effects of ageing on health care use between foreign-born and native-born populations contributes to the convergence of utilisation patterns in most health services after 20 years in Spain. Substantial heterogeneity over time and by region of origin both suggest that studies modelling future welfare state finances would benefit from a more thorough assessment of migration. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2304.00482&r=eur |
| By: | Jósef Sigurdsson |
| Abstract: | Men have fallen behind women in education in developed countries. Why? I study the impact of a transitory increase in the opportunity cost of schooling on men’s and women’s educational attainment. I exploit a reform in Iceland that lowered income taxes to zero for one year and compare teenagers above and below the compulsory schooling age. This earnings opportunity increased the dropout rate and led to a permanent loss in years of education for young men, but had no effect on the education of women. Male dropouts suffer substantial losses in lifetime earnings, slow career progression, and reduced marriage and fertility outcomes. The results cannot be explained by negative selection of dropouts or low returns to education but can be reconciled by gender differences in nonpecuniary costs of school attendance, myopia, or perceived returns to education. The findings suggest that due to these gender differences, economic booms misallocate young men away from school, entrenching the gender gap in education. |
| Keywords: | educational attainment, opportunity cost, gender gap, labor supply, tax reform |
| JEL: | H24 I21 I26 J16 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10361&r=eur |
| By: | Cecilia Garcia-Peñalosa; Fabien Petit; Tanguy van Ypersele |
| Abstract: | The increase in employment polarization observed in several high-income economies has coincided with a reduction in inter-generational mobility. This paper argues that the disappearance of middling jobs can drive changes in mobility, notably by removing a stepping stone towards high-paying occupations for those from less well-off family backgrounds. Using data from two British cohorts who entered the labour market at two points in time with very different degrees of employment polarization, we examine how parental income affects both entry occupations and occupational upgrading over careers. We find that transitions across occupations are key to mobility and that the impact of parental income has grown over time. At regional level, using a shift-share IV-strategy, we show that the impact of parental income has increased the most in regions experiencing the greatest increase in polarisation. This indicates that the disappearance of middling jobs played a role in the observed decline in mobility. |
| Keywords: | British cohort, inter-generational mobility, job polarization, parental income, occupational transition |
| JEL: | J21 J24 J62 O33 R23 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10337&r=eur |
| By: | Henning Hermes; Philipp Lergetporer; Fabian Mierisch; Frauke Peter; Simon Wiederhold |
| Abstract: | emails from fictitious parents to > 18, 000 early child care centers across Germany, asking if there is a slot available and how to apply. Randomly varying names to signal migration background, we find that migrants receive 4.4 percentage points fewer responses. Responses to migrants also contain substantially fewer slot offers, are shorter, and less encouraging. Exploring channels, discrimination against migrants does not differ by the perceived educational background of the email sender. However, it does differ by regional characteristics, being stronger in areas with lower shares of migrants in child care, higher right-wing vote shares, and lower financial resources. Discrimination on the child care market likely perpetuates existing inequalities of opportunities for disadvantaged children. |
| Keywords: | child care, discrimination, information provision, inequality, field experiment |
| JEL: | J13 J18 J22 C93 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bav:wpaper:225_hermesetal&r=eur |
| By: | Marie, Olivier (Erasmus University Rotterdam); Zwiers, Esmée (University of Amsterdam) |
| Abstract: | This paper presents new causal evidence on the "power" of oral contraceptives in shaping women's lives, leveraging the 1970 liberalization of the Pill for minors in the Netherlands and demand- and supply-side religious preferences that affected Pill take-up. We analyze administrative data to demonstrate that, after Pill liberalization, minors from less conservative areas were more likely to delay fertility/marriage and to accumulate human capital in the long run. We then show how these large effects were eliminated for women facing a higher share of gatekeepers – general practitioners and pharmacists – who were opposed to providing the Pill on religious grounds. |
| Keywords: | birth control, religion, fertility, marriage, human capital, the Netherlands |
| JEL: | I18 J12 J13 Z12 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16051&r=eur |
| By: | Buscha, Franz; Gorman, Emma; Sturgis, Patrick |
| Abstract: | We assess whether changing from an academically selective to a comprehensive schooling system promotes social mobility, using England as a case study. Over a period of two decades, the share of pupils in academically selective schools in England declined sharply and differentially by area. Using a sample of census records matched to data on selective schooling, we exploit temporal and geographic variation in the proportion of pupils attending selective schools to estimate the effects of schooling system on intergenerational social mobility. Our results provide no support for the contention that the move from selective to comprehensive schooling had a notable effect on social mobility in England. The findings are robust to a battery of sensitivity and robustness checks. |
| Keywords: | social mobility; selective schooling; grammar schools; ES/R00627X/1; CeLSIUS is supported by the ESRC under project ES/V003488/1 |
| JEL: | I21 I28 J18 J24 |
| Date: | 2023–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118341&r=eur |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Lipowska, Katarzyna (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS)) |
| Abstract: | We study workers' and employers' preferences for remote work, estimating the willingness to pay for working from home (WFH) using discrete choice experiments with more than 10, 000 workers and more than 1, 500 employers in Poland. We selected occupations that can be done remotely and randomised wage differences between otherwise identical home- and office-based jobs, and between otherwise identical job candidates, respectively. We find that demand for remote work was substantially higher among workers than among employers. On average, workers would sacrifice 2.9% of their earnings for the option of remote work, especially hybrid WFH for 2-3 days a week (5.1%) rather than five days a week (0.6%). However, employers, on average, expect a wage cut of 21.0% from candidates who want to work remotely. This 18 pp gap in the valuations of WFH reflects employers' assessments of productivity loss associated with WFH (14 pp), and the additional effort required to manage remote workers (4 pp). Employers' and workers' valuations of WFH align only in 25-36% of firms with managers who think that WFH is as productive as on-site work. |
| Keywords: | working from home, remote work, discrete choice experiment, willingness to pay |
| JEL: | J21 J31 J81 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16041&r=eur |
| By: | Marco Gambaro; Valentino Larcinese; Riccardo Puglisi; James M. Snyder |
| Abstract: | We analyze minute-by-minute, individual level data on viewership for Italian TV news broadcasts, matched with detailed data on content. We study viewer behavior, especially the decision of viewers to switch away from a news program as a function of the type of story being broadcast. Somewhat surprisingly, we find that viewers are systematically more likely to switch away from “soft” news compared to “hard” news. On the other hand, sensational stories about crime, accidents and disasters are associated with less switching. We also find significant differences in this switching behavior according to gender, age, and TV channel. For example, young people are relatively more likely to switch away from hard news than soft news, compared to older people. Finally, we find that viewers are relatively more likely to seek another news program if they are switching away from a soft news story. Overall, the results are inconsistent with a commonly held view that television viewers always prefer soft news to hard news. |
| Keywords: | television news, media content, infotainment, consumer |
| JEL: | L82 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10326&r=eur |
| By: | Marco Sforza (Department of Economics, Roma Tre University) |
| Abstract: | The paper explores the relationship between the industry-level diffusion of digital technologies and the regionalisation of trade in value added. Theoretical literature underlines two potential effects of these technologies. They may facilitate coordination, favouring higher fragmentation, but also redefine comparative advantages, pushing toward relocation. The aim of the paper is to provide empirical evidence on the relationship between digital technologies and trade regionalisation, for a panel of selected European countries and sectors over the period 2005-2018. I build a dataset combining data from TiVA-OECD, EU-KLEMS and Eurostat SBS. I define two regionalisation measures, comparing intra-EU against extra-EU trade flows, to capture the relative importance of the two regions for input sourcing and output destination. The econometric analyses show a differentiated effect on the two measures: digital capital reduces regionalisation of the input sourcing, while positively correlating with the regionalisation of the intermediate output. Finally, a differentiated effect is also found in magnitude between technologies, namely, physical ICT and software. |
| Keywords: | Digital technologies; Global Value Chains; Trade regionalisation |
| JEL: | O33 F10 F15 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0275&r=eur |
| By: | Stewart, Kitty; Patrick, Ruth; Reeves, Aaron |
| Abstract: | Despite its significance in determining poverty risk, family size has received little focus in recent social policy analysis. This paper provides a correction, focusing squarely on the changing poverty risk of larger families (those with three or more dependent children) in the UK over recent years. It argues that we need to pay much closer attention to how and why poverty risk differs according to family size. Our analysis of Family Resource Survey data reveals how far changes in child poverty rates since 1997 – both falling poverty risk to 2012/13 and increases since then – have been concentrated in larger families. Social security changes are identified as central: these have affected larger families most as they have a greater need for support, due to both lower work intensity and higher household needs. By interrogating the way policy change has affected families of different sizes the paper seeks to increase understanding of the effects of different poverty reduction strategies, with implications for policy debates in the UK and beyond. In providing evidence about the socio-demographics of larger families and their changing poverty risk it also aims to inform contested debates about the state’s role in providing financial support for children. |
| Keywords: | child poverty; family size; larger families; cash benefits; social security; in-work poverty; CUP deal |
| JEL: | N0 |
| Date: | 2023–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117388&r=eur |
| By: | Redmond, Paul (ESRI, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin) |
| Abstract: | A minimum wage increase could lead to adverse employment effects for certain sub-groups of minimum wage workers, while leaving others unaffected. This heterogeneity could be overlooked in studies that examine the overall population of minimum wage workers. In this paper, we test for heterogeneous effects of a minimum wage increase on the hours worked of minimum wage employees in Ireland. For all minimum wage workers, we find that a ten percent increase in the minimum wage leads to a one-hour reduction in weekly hours worked, equating to an hours elasticity of approximately -0.3. However, for industry workers and those in the accommodation and food sector, the impact is larger, with an elasticity of -0.8. We also find a negative impact on the hours worked among men on minimum wage, with no significant effect for women. In line with suggestions from the recent literature, our study uses administrative wage data to accurately identify those in receipt of minimum wage, while also studying the dynamic impact on hours worked over multiple time periods using a fully flexible difference-in-differences estimator. |
| Keywords: | minimum wages, heterogeneous effects, flexible difference-in-difference |
| JEL: | E24 J22 J23 J31 J42 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16031&r=eur |
| By: | Elena Bastianelli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | The existing literature on the (changing) socioeconomic gradient of divorce is not without shortcomings. First, virtually all studies have operationalized individuals’ socioeconomic status through education, downplaying that class differences may be equally (or even more) important. While education may proxy cultural and cognitive skills, social class could more accurately capture individuals’ economic means. Second, most studies have only focused on married couples, despite non-marital cohabitation having become commonplace. Third, the majority of studies have exclusively focused on women. This study addresses such oversights by analyzing the educational and social class gradients of marriage and cohabitation in Italy—a country widely-known as a latecomer of the Second Demographic Transition (SDT) and long characterized by a limited diffusion of union dissolution. We adopted non-proportional hazard models to estimate survival curves and probabilities of union dissolution for married and cohabiting women and men, stratifying by education, social class, and cohort. We found that education and social class play an important and independent role as antecedents of union dissolution in Italy. Our results suggest a vanishing, among women, and a reversal from positive to negative, among men, of the educational and social class gradients of marital dissolution across cohorts. We found no clear socioeconomic gradient in the dissolution of cohabiting unions, neither in terms of education nor social class. However, cohabiting men who are not employed were found to face a much higher risk of union dissolution. |
| Keywords: | Socioeconomic gradient; education; social class; union dissolution; divorce; marriage; cohabitation; Italy. |
| JEL: | J13 J21 J12 J19 J29 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2023_03&r=eur |
| By: | Magda, Iga (Warsaw School of Economics); Cukrowska-Torzewska, Ewa (University of Warsaw); Palczyńska, Marta (Institute for Structural Research (IBS)) |
| Abstract: | Using data from "Generation and Gender Survey" for Poland, we study the relationship between women's relative income within the household, as measured by the female share of total household income, and women's involvement in housework. We find that households in which the woman contributes more to the total household income are more likely to share housework equally. We also find that individual gender norms matter both for women's involvement in unpaid work at home and for the observed link between the female share of income and inequality between the partners in the division of housework. Women from less traditional households are found to be more likely to share housework equally. However, this negative relationship between the female share of household income and female involvement in housework is not observed among more traditional couples. |
| Keywords: | household income, income inequality, housework, gender norms |
| JEL: | D10 D13 D31 J12 J16 J22 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16045&r=eur |
| By: | Martin Flatø; Bernt Bratsberg; Andreas Kotsadam; Fartein Ask Torvik; Ole Røgeberg; Camilla Stoltenberg |
| Abstract: | We consider long-term impacts of establishing school psychology offices in Norway, which introduced ‘maturity testing’ to advice parents and school boards on school starting age. In the early reform period, children born close to the normative age cut-off who reached school-starting age after the establishment were more likely to finish compulsory schooling late, and experienced higher earnings as adults. When offices were instead able to block delayed school entry after a legislative change, having an office in operation led to a reduction in the likelihood of late graduation for the youngest children in each cohort, and no long-term benefits. |
| Keywords: | school psychology, maturity, school readiness, redshirting, school starting age, Norway |
| JEL: | I21 I24 I26 I28 J24 N34 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10352&r=eur |
| By: | Henning Hermes (University of Düsseldorf, Institute for Competition Economics); Marina Krauss (University of Augsburg, Department of Economics); Philipp Lergetporer (Technical University of Munich, School of Management); Frauke Peter (Deutsches Zentrum für Hochschul- und Wissenschaftsforschung); Simon Wiederhold (University of Ingolstadt, D-85049 Ingolstadt) |
| Abstract: | We present experimental evidence that enabling access to universal early child care for families with lower socioeconomic status (SES) increases maternal labor supply. Our intervention provides families with customized help for child care applications, resulting in a large increase in enrollment among lower-SES families. The treatment increases lower-SES mothers' full-time employment rates by 9 percentage points (+160%), household income by 10%, and mothers' earnings by 22%. The effect on full-time employment is largely driven by increased care hours provided by child care centers and fathers. Overall, the treatment substantially improves intra-household gender equality in terms of child care duties and earnings. |
| Keywords: | Child care, maternal employment, gender equality, randomized controlled trial |
| JEL: | D90 J13 J18 J22 C93 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0345&r=eur |
| By: | Palaash Bhargava; Daniel L. Chen; Matthias Sutter; Camille Terrier |
| Abstract: | Social networks are a key factor of success in life, but they are also strongly segmented on gender, ethnicity, and other demographic characteristics (Jackson, 2010). We present novel evidence on an understudied source of homophily: behavioral traits. Behavioral traits are important determinants of life outcomes. While recent work has focused on how these traits are influenced by the family environment, or how they can be affected by childhood interventions, little is known about how these traits are related to social networks. Based on unique data collected using incentivized experiments on more than 2, 500 French high-school students, we find high levels of homophily across all ten behavioral traits that we study. Notably, the extent of homophily depends on similarities in demographic characteristics, in particular with respect to gender. Furthermore, the larger the number of behavioral traits that students share, the higher the overall homophily. Using network econometrics, we show that the observed homophily is not only an outcome of endogenous network formation, but is also a result of friends influencing each others’ behavioral traits. Importantly, the transmission of traits is larger when students share demographic characteristics, such as gender, have longer periods of friendship, or are friends with more popular individuals. |
| Keywords: | homophily, social networks, behavioural traits, peer effects, experiments |
| JEL: | D85 C91 D01 D90 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10351&r=eur |
| By: | Kuosmanen, Natalia; Valmari, Nelli |
| Abstract: | Abstract The past few decades have witnessed a slowdown in productivity growth in many advanced economies, including Finland. Against this backdrop, this study investigates product switching in Finnish manufacturing firms during the period of 2009–2019. The findings indicate a growing trend towards specialization, with more firms focusing on a single product. In general, product diversity has decreased over time. Multi-product firms and those with diverse output tend to be larger in terms of value added, sales, and employment. Additionally, these firms are also more likely to export their products compared to single-product firms. While single-product firms outperform multi-product firms in productivity, the study shows that product diversity is positively related to productivity. Furthermore, the study demonstrates that there is a positive relationship between product scope expansion and contraction and an increase in firm size, as compared to firms where product scopes remain unchanged. These findings suggest that product switching is closely related to the economic outcomes of Finnish manufacturing firms. |
| Keywords: | Manufacturing firms, Multi-product firms, Product switching |
| JEL: | D22 D24 L11 L25 O14 |
| Date: | 2023–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:104&r=eur |
| By: | Kris Boudt; Koen Schoors; Milan van den Heuvel; Johannes Weytjens (-) |
| Abstract: | We develop an income shock classification taxonomy that classifies income changes into 9 categories based on the magnitude, direction and permamency of the income change. Using 01/2017 – 06/2022 bank transaction data of Belgian employees and workers, we apply this classification on labour income changes to find that the elasticity to a positive recurrent labour income shocks is almost double that of a regular labour income change and a transient positive labour income shock. The effect significantly varies among different consumption durability types and is amplified in case of low levels of liquid wealth. Accounting for the heterogeneity in types of income changes is therefore important to understanding the multiplier effect of fiscal policy aimed at increasing available income. |
| Keywords: | Income changes; consumption; liquid wealth; marginal propensity to consume |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:23/1067&r=eur |
| By: | Blanden, Jo; Eyles, Andrew; Machin, Stephen |
| Abstract: | This paper studies intergenerational links in home ownership, an increasingly important wealth marker and a measure of economic status in itself. Repeated cross sectional UK data show that home ownership rates have fallen rapidly over time, most markedly amongst younger people in more recent birth cohorts. Evidence from British birth cohorts data supplemented by the Wealth and Assets Survey show a significant rise through time in the intergenerational persistence of home ownership, as home ownership rates shrank disproportionately among those whose parents did not own their own home. Given the close connection between home ownership and wealth, these results on strengthening intergenerational persistence in home ownership are therefore also suggestive of a fall in intergenerational housing wealth mobility over time. |
| Keywords: | cohorts; housing; intergenerational mobility; wealth |
| JEL: | R31 J11 D31 J62 |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118638&r=eur |