nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒05‒15
27 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. The Effect of Removing Early Retirement on Mortality By Cristina Bellés-Obrero; Sergi Jiménez-Martín; Han Ye
  2. Background Matters, but not Whether Parents are Immigrants: Outcomes of Children Born in Denmark By Mathias Fjællegaard Jensen; Alan Manning
  3. Income Taxes and the Mobility of the Rich: Evidence from US and UK Households in Switzerland By Marko Köthenbürger; Costanza Naguib; Christian Stettler; Michael Stimmelmayr
  4. Discrimination on the Child Care Market: A Nationwide Field Experiment By Hermes, Henning; Lergetporer, Philipp; Mierisch, Fabian; Peter, Frauke; Wiederhold, Simon
  5. The role of localised, recombinant and exogenous technological change in European regions By Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
  6. What impact does subsidised housing renovations have on the filtering process? By Warsame, Abukar; Wilhelmsson, Mats
  7. Grandparents ""on Board"":How They Translateinto the Number of Their Young Grandchildren By Filip Chybalski; Edyta Marcinkiewicz
  8. Technological Change, Firm Heterogeneity and Wage Inequality By Cortes, Guido Matias; Lerche, Adrian; Schönberg, Uta; Tschopp, Jeanne
  9. Do People Really Dislike Wealth Taxes more than Other Types of Taxes? Evidence from a Survey-Experiment Representative of the Italian Population By Sergio Beraldo; Enrico Colombatto
  10. How Does the Presentation of Energy Performance Affect the Price of Houses? A Case Study of Detached Houses in Stockholm, Sweden By Wilhelmsson, Mats
  11. Income-Poor, Asset-Rich? The Role of Homeownership in Shaping the Welfare Position of the Elderly By Edyta Marcinkiewicz; Filip Chybalski
  12. Decomposing Migrant Self-Selection: Education, Occupation, and Unobserved Abilities By Ilpo Kauppinen; Panu Poutvaara
  13. What if she earns more? Gender norms, income inequality, and the division of housework By Iga Magda; Ewa Cukrowska-Torzewska; Marta Palczyńska
  14. Alone and lonely: the economic cost of solitude for regions in Europe By Burlina, Chiara; Rodríguez-Pose, Andrés
  15. When Health Trumps Money: Economic Incentives and Health Equity in the Provision of Nursing Homes By Øystein Hernæs; Snorre Kverndokk; Simen Markussen; Henning Øien
  16. Tax Responses in Local Public Finance: The Flypaper Effect at Work By Marko Köthenbürger; Gabriel Loumeau
  17. The Determinants of Refugees' Destinations: Where Do Refugees Locate within the EU? By Di Iasio, Valentina; Wahba, Jackline
  18. Gender Segregation in Vocational Education and Occupations in the Context of Digitalisation By Leitner, Andrea; Kreimer, Margareta; Heck, Ines; Vakavlieva, Zora
  19. The Pandemic Push: Digital Technologies and Workforce Adjustments By Gathmann, Christina; Kagerl, Christian; Pohlan, Laura; Roth, Duncan
  20. Educational gradients in the prevalence of Medically Assisted Reproduction (MAR) births in a comparative perspective By Alice Goisis; Peter Fallesen; Marta Seiz; Leire Salazar; Tatiana Eremenko; Marco Cozzani
  21. Biased Expectations and Labor Market Outcomes: Evidence from German Survey Data and Implications for the East-West Wage Gap By Almut Balleer; Georg Duernecker; Susanne Forstner; Johannes Goensch
  22. Risk Aversion and COVID-19 Vaccine Hesitancy By Lepinteur, Anthony; Borga, Liyousew G.; Clark, Andrew E.; Vögele, Claus; D'Ambrosio, Conchita
  23. The causal impact of maternal educational curricula on infant health at birth By Cristina Borra; Pilar Cuevas-Ruiz; Almudena Sevilla
  24. The Myth of the Middle Class Squeeze: Employment and Income by Class in Six Western Countries, 1980-2020 By Jad Moawad; Daniel Oesch
  25. Parental Allowance Increase and Labor Supply: Evidence from a Czech Reform By Jakub Grossmann; Filip Pertold; Michal Šoltés
  26. Neighbourhood Gangs, Crime Spillovers, and Teenage Motherhood By Christian Dustmann; Mikkel Mertz; Anna Okatenko
  27. Refugee Benefit Cuts By Christian Dustmann; Rasmus Landersø; Lars Højsgaard Andersen

  1. By: Cristina Bellés-Obrero; Sergi Jiménez-Martín; Han Ye
    Abstract: This paper sheds new light on the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform. This reform exogenously changed the early retirement age, depending on the date individuals started contributing to the Social Security system. Those contributing before 1 January 1967 maintained the right to voluntarily retire early (at age 60), while individuals who started contributing after that date could not voluntarily claim a pension until the age of 65. Using the Spanish administrative Social Security data, we find that the reform delayed the individuals’ labour market exit by around half a year and increased the probability that individuals take up disability pensions, partial pensions, and no pensions. We show evidence that delaying exiting employment increases the hazard of dying between the ages of 60 and 69, for almost all individuals. Heterogeneous analysis indicates that the increase in mortality is stronger for those employed in low-skilled, physically and psychosocially demanding jobs. Moreover, we show that allowing for flexible retirement schemes, such as partial retirement, mitigates the detrimental effect of delaying retirement on mortality.
    Keywords: Delaying retirement, Mortality, Heterogeneity, Flexible retirement
    JEL: I10 I12 J14 J26
    Date: 2023–04
  2. By: Mathias Fjællegaard Jensen; Alan Manning
    Abstract: In Europe, the children of migrants often have worse economic outcomes than those with local-born parents. This paper shows that children born in Denmark with immigrant parents (first-generation locals) have lower earnings, higher unemployment, less education, more welfare transfers, and more criminal convictions than children with local-born parents. However, when we condition on parental socio-economic characteristics, first-generation locals generally perform as well or slightly better than the children of locals. Our results suggest that there is little distinctive about being a child of immigrants, other than the fact that they are more likely to come from deprived backgrounds.
    Date: 2023–03–31
  3. By: Marko Köthenbürger; Costanza Naguib; Christian Stettler; Michael Stimmelmayr
    Abstract: We provide quasi-experimental evidence on the income tax-induced migration of foreign high-income households living in Switzerland by exploiting the differential tax treatment of UK and US households. While the two groups are similar in terms of non-tax sorting preferences, US households are effectively insulated from Swiss income taxation due to the US world-wide income tax system. Comparing the location choices of UK households (our treatment group) with those of US households (our control group) within a one-hour commuting zone of Zurich, we find a migration elasticity with respect to the net-of-tax rate of around eight. This estimate mirrors the possibility of unrestricted migration between small Swiss municipalities with significantly different income tax rates.
    Keywords: high-income households, location choice, income taxes, sorting
    JEL: H24 H71 J44 R32
    Date: 2023
  4. By: Hermes, Henning (Düsseldorf Institute for Competition Economics (DICE)); Lergetporer, Philipp (Ifo Institute for Economic Research); Mierisch, Fabian (Catholic University of Eichstätt-Ingolstadt); Peter, Frauke (DZHW-German Centre for Research on Higher Education and Science Studies); Wiederhold, Simon (IWH Halle)
    Abstract: We provide the first causal evidence of discrimination against migrants seeking child care. We send 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
  5. By: Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
    Abstract: How do regions develop and evolve along their productive and technological path is a central question. Within an evolutionary perspective, a given region is likely to develop new technologies closer to its pre-existing specialization. We adopt the approach of Hidalgo et al. (2007) to map the regional European technology/knowledge space to investigate the pattern and the evolution of regional specialisation in the most innovative EU countries. These dynamics depend on the interaction of three factors: (i) localised technological change, (ii) endogenous processes of knowledge recombination, and (iii) exogenous technological paradigm shifts while accounting for spatial and technological spillovers. Our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors at the NUTS2 level for the 11 most innovative European countries, plus Switzerland and Norway. The results show that regional technological specialization is mainly shaped by localised technological change and exogenous technological paradigm shifts, whereas recombinant innovation contributes to a lower extent and that these effects largely depends on the increasing, decreasing or stable regional dynamics.
    JEL: C23 O14 O31 O33 O52 R11 R12
    Date: 2023
  6. By: Warsame, Abukar (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Sweden has introduced a system of subsidising renovations of housing in the property market, which aims to modernise the building stock and improve energy efficiency. This study explores the extent to which the tax deduction for renovations (ROT) has contributed to the reduction of property depreciation and subsequent differences in single-family house prices in Swedish municipalities. The paper also investigates whether house price levels influence the desire to renovate and whether tax deductions incentivise renovation needs. Using unbalanced data from 2004 to 2020 at a municipal level regarding total subsidy amounts and housing prices, we will estimate a panel data model based on a traditional DiPasquale and Wheaton reduced-form model where house prices are dependent variable in one model and renovation amounts are the dependent variable in the other model. Other independent variables that will be used are, among others, income, demographics, and supply of single-family houses. The findings suggest that variations in the amount of tax reduction for renovations and the number of property owners receiving these subsidies in different municipalities have contributed to observable differences in house prices. The study concludes that government housing policies like subsidising renovations may interfere with a well-functioning housing market's expected filtering process. Therefore, it could have implications for policymakers looking to promote more equitable access to housing in Sweden.
    Keywords: Housing; depreciation; renovation; maintenance; subsidy; price effect; filtering
    JEL: H20 R30 R38
    Date: 2023–04–27
  7. By: Filip Chybalski; Edyta Marcinkiewicz
    Abstract: We test whether the co-residence of older parents with their adult children at the reproductive age increases the chance of forming a multi-child family. Using data from Wave X of the Luxembourg Wealth Study (LWS) and multinomial logistic regression, we model the number of children using the binomial variable informing if there is an older household member (or not) as the main predictor and controlling for other socio-economic household attributes. Our data set covers 11 European countries. The results do not support the view that intergenerational households in which an elderly person lives include more children. Thus, the co-residence of two adult generations of parents-pensioners and their working-age children does not stimulate growth in the number of multi-child families. The results suggest that what matters for it is the gender equality policy facilitating solving of the motherhood-work conflict for families and women.
    JEL: J13 J12 H31
    Date: 2023–02
  8. By: Cortes, Guido Matias (York University, Canada); Lerche, Adrian (LMU Munich); Schönberg, Uta (University College London); Tschopp, Jeanne (University of Bern)
    Abstract: We argue that skill-biased technological change not only affects wage gaps between skill groups, but also increases wage inequality within skill groups, across workers in different workplaces. Building on a heterogeneous firm framework with labor market frictions, we show that an industry-wide skill-biased technological change shock will increase between-firm wage inequality within the industry through four main channels: changes in the skill wage premium (as in traditional models of technological change); increased employment concentration in more productive firms; increased wage dispersion between firms for workers of the same skill type; and increased dispersion in the skill mix that firms employ, due to more sorting of skilled workers to more productive firms. Using rich administrative matched employer-employee data from Germany, we provide empirical evidence of establishment-level patterns that are in line with the predictions of the model. We further document that industries with more technological adoption exhibit particularly pronounced patterns along the dimensions highlighted by the model.
    Keywords: skill-biased technological change, heterogeneous firms, between-firm inequality
    JEL: J31
    Date: 2023–04
  9. By: Sergio Beraldo (Università di Napoli Federico II, IREF and CSEF); Enrico Colombatto (University of Turin and IREF)
    Abstract: We designed a Survey Experiment (SE) to study the attitudes of the Italians towards wealth, income and consumptions taxes. In particular, we interviewed a sample of 2, 400 subjects drawn from a larger representative pool of 120, 000 individuals. Beside collecting information about individuals’ values and beliefs, the survey also gathered information about (i) the preferred tax base, (ii) the attitudes towards replacing all the taxes with a unique tax, possibly on wealth, (iii) the views in regard to proposals to increase public expenditure by resorting to taxes of various kind and in different scenarios. We find that wealth taxes are definitely preferred to consumption taxes and that this preference is at par with income taxation. Wealth taxes are justified by the fact that they reflect one’s ability to pay. Opposition emerges when it is feared that wealth taxes end up increasing tax pressure and when the value of the main residence is included in the tax base. Political inclinations play a minor role.
    Keywords: Wealth taxes; Survey Experiment.
    JEL: D31 H24
    Date: 2023–04–06
  10. By: Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Our study aims to analyse whether the capitalisation of a property's energy performance is affected by how it is presented. Since 2002, an EU directive has been in place mandating the introduction of an energy performance certificate (EPC) when selling detached houses. This directive was implemented in Sweden in 2009. We analyse how EPC capitalised on housing prices during 2012-2018 for detached houses in Stockholm. This has been done before, but our contribution is to analyse both the effect of energy rating or labelling (A-G) and energy consumption (kWh/m²). How energy performance is communicated or displayed to potential buyers conveys that the format, style, and content of energy performance information may influence how buyers perceive its value and impact on the property's market price. We have information on energy rating, consumption, or both for selected properties. This allows us to test the hypothesis that how energy performance is presented affects pricing. We have also tested whether information affects different age cohorts differently. The results indicate that how energy performance is presented and visualised is important and that information about rating and consumption might be considered as a substitute for each other. It is also clear that the capitalisation effect differs depending on the age of the building.
    Keywords: energy rating; energy performance; labelling; capitalisation; housing prices
    JEL: M31 Q48 R30
    Date: 2023–04–17
  11. By: Edyta Marcinkiewicz; Filip Chybalski
    Abstract: Our study contributes to the discussion about the extent of the phenomenon of the ‘income-poor, asset-rich’ elderly households, which can be associated with high homeownership rate in this group. However, we do not limit our analyses to this single category where low income is paired with high wealth, but rather explore the distribution of elderly households in terms of combinations of different levels of income and wealth. This way we shed some light on the existing patterns with reference to this distribution. This study focuses on the significance of homeownership and its impact on the welfare position of the elderly relative to the total population. We employ microdata from the Luxembourg Wealth Study Dataset (LWS) for 12 European countries. The results of the empirical research allow to draw some conclusions. First, ‘income-poor, asset-rich’ elderly households are a quite marginal category. Second, in the case of most countries studied, higher homeownership rates among elderly households, as compared to non-elderly households, are not accompanied by proportionally greater household wealth, even though the non-elderly are additionally burdened by the mortgage debt. However, we also find some evidence that homeownership is positively associated with the welfare position of the elderly.
    Date: 2022–03
  12. By: Ilpo Kauppinen; Panu Poutvaara
    Abstract: We analyze self-selection and sorting of emigrants from Finland, using full-population administrative data from Statistics Finland. We analyze emigration events lasting at least five years and decompose migrant self-selection into education, occupation, and unobserved abilities. Our analysis focuses on Finnish citizens satisfying three criteria: they were between 25-54 years of age; they had no immigrant background; and they were employed. We find that emigrants from Finland are strongly positively self-selected in terms of education and earnings. We also find strong evidence of sorting: men who emigrate outside Nordic countries are considerably better educated and have higher earnings and residual earning than men who emigrate to Nordic countries. Most of the self-selection in terms of higher earnings can be explained by emigrants being more educated. Adding occupational controls increases the fraction of explained self-selection only marginally. While men are positively self-selected also with respect to residual earnings, women are not.
    Keywords: international migration, self-selection, Roy model, education, residual earnings
    JEL: F22 I26 J31
    Date: 2023
  13. By: Iga Magda (Institute for Structural Research, SGH Warsaw School of Economics, and IZA); Ewa Cukrowska-Torzewska (Faculty of Economic Sciences, University of Warsaw); Marta Palczyńska (Institute for Structural Research)
    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
  14. By: Burlina, Chiara; Rodríguez-Pose, Andrés
    Abstract: Solitude is a rising phenomenon in the western world. The share of people affected by solitude has been rising for some time and the Covid-19 pandemic has further brought this trend to the fore. Yet, we know next to nothing about the aggregate subnational economic impact of the rise in solitude. In this paper we analyse the consequences of solitude on regional economic performance across Europe, distinguishing between two of its key dimensions: alone living, proxied by the regional share of single-person households and loneliness, proxied by the aggregate share of social interactions. We find that solitude has important implications for economic development, but that these go in different directions. While alone living is a substantial driver of economic growth across European regions, high shares of lonely people undermine it. The connection of loneliness with economic growth is, however, dependent on the frequency of in-person meetings, with large shares of the population meeting others socially on a weekly basis, alongside a small percentage of people who never meet others, yielding the best economic returns.
    Keywords: solitude; alone living; loneliness; growth; GDP per capita; regions
    JEL: J12 P48 R23
    Date: 2023–02–28
  15. By: Øystein Hernæs; Snorre Kverndokk; Simen Markussen; Henning Øien
    Abstract: The allocation of public care services should be determined by individual needs but can be influenced by economic factors. This paper examines the impact of economic incentives on the allocation of nursing home care in the Norwegian long-term care system. The study uses a theoretical model and empirical data from the municipality of Oslo to determine if nursing home spots are allocated based on income, which would be financially advantageous for the provider. We do not find evidence that the economic incentives of the care provider play a role in the allocation of nursing homes. Thus, in this setting, needs seems to be the dominant factor for allocation of nursing home care, while economic incentives seem to play no significant role.
    Keywords: long-term care, economic incentives in health care, health care equity
    JEL: I14 I18 H51
    Date: 2023
  16. By: Marko Köthenbürger; Gabriel Loumeau
    Abstract: The transfer elasticity of income tax rates is an important parameter in public finance. Given the significant fiscal autonomy of Swiss municipalities, Switzerland is an ideal setting for examining behavioral responses to tax policy. Using a regression kink design, we find robust causal evidence that transfers have a positive local average treatment effect on municipal expenditures while leaving the income tax rate (and other tax rates) unchanged. Thus, ‘money sticks where it hits’, providing comprehensive support for the flypaper effect, including with regard to income tax responses.
    Keywords: public finance, regression kink design, flypaper effect, transfers
    JEL: C21 H72 H77
    Date: 2023
  17. By: Di Iasio, Valentina (University of Southampton); Wahba, Jackline (University of Southampton)
    Abstract: The recent so called Mediterranean refugee crisis has ignited concerns about the magnitude of the flows of asylum seekers to Europe. This paper examines the determinants of the destination choice of first time non-EU asylum applicants to the EU, between 2008-2020. It investigates the role played by policies related to employment rights, processing of asylum applications, attractiveness of the welfare system, economic factors and networks on the destination of asylum seekers within the EU. We find that the strongest pull factor for asylum seekers to a destination is social networks both in terms of previous asylum applicants as well as stock of previous migrants. Our findings also suggest that employment bans are not a strong deterrence for asylum seekers given their modest association to asylum flows.
    Keywords: asylum seekers, refugees, EU migration, employment ban
    JEL: F22 J61 J15 O52
    Date: 2023–04
  18. By: Leitner, Andrea (Institute for Advanced Studies Vienna, Austria); Kreimer, Margareta; Heck, Ines; Vakavlieva, Zora
    Abstract: Austria is one of the countries with persistently high gender segregation in combination with a high matching of training and occupations. In this context, we analyse how educational and occupational segregation interact in the male-dominated fields of science, technology, engineering, and mathematics (STEM) and in the female-dominated areas of education, health and welfare (EHW). We discuss how atypical education can reduce gender segregation in the labour market and whether automation risks affect women and men in STEM and EHW differently. Firstly, our analysis shows that educational segregation is heavily transmitted to the occupational system in this fields. Secondly, the results point to the potential of gender-atypical fields for reducing segregation but also to their limitations especially since we find a double mismatch for women in STEM. Based on findings from digitalisation and automation research, we find that women are overrepresented in STEM jobs focussing on manual routine tasks which are more likely to be automated than the jobs primarily performed by men. While EHW is less prone to automation in general, the distribution of tasks between men and women indicates vertical segregation despite EHW being a female-dominated sector.
    Keywords: gender segregation, occupational segregation, vocational education, STEM subjects, mismatch, digitalisation
    Date: 2023–04
  19. By: Gathmann, Christina (LISER); Kagerl, Christian (Institute for Employment Research (IAB), Nuremberg); Pohlan, Laura (Institute for Employment Research (IAB), Nuremberg); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Based on a unique survey and administrative employer-employee data, we show that the COVID-19 pandemic acted as a push factor for the diffusion of digital technologies in Germany. About two in three firms invested in digital technologies, in particular in hardware and software to enable decentralized communication, management and coordination. The investments encouraged additional firm-sponsored training despite pandemic-related restrictions indicating that investments in digital technologies and training are complements. We then demonstrate that the additional investments helped firms to insure workers against the downturn during the pandemic. Firms that made additional investments relied less on short-time work, had more of their regular employees working normal hours and had to lay off fewer marginal workers. Male, younger and medium-skilled workers benefitted the most from the insurance effect of digital investments.
    Keywords: innovation, digital technologies, COVID-19, pandemic, investment, training, employment, worker flows
    JEL: D22 E22 J23 J63
    Date: 2023–04
  20. By: Alice Goisis; Peter Fallesen (Rockwool Foundation); Marta Seiz (UNED); Leire Salazar (European Commission - JRC); Tatiana Eremenko; Marco Cozzani (University of FLorence)
    Abstract: A handful of studies from individual countries have shown that parents of Medically Assisted Reproduction (MAR)-conceived children are more likely to have, relative to parents of naturally conceived (NC) children, higher socioeconomic status. Yet, a comparative perspective is lacking. In this paper we assess the extent to which children conceived after MAR are more likely to be born to socioeconomically advantaged mothers, measured through their level of education, and whether the gradient varies across countries with different institutional contexts, specifically Denmark, France, Spain, United Kingdom, and the United States, using national representative data and applying Linear Probability Models. Children of socioeconomically advantaged mothers are more likely to have been conceived after MAR across all contexts prior to adjustment for covariates. After adjustment, however, educational differences fully attenuate in France and the United Kingdom.
    Keywords: Medically Assisted Reproduction, population-based studies, social inequality, comparative perspective
    Date: 2023–03
  21. By: Almut Balleer; Georg Duernecker; Susanne Forstner; Johannes Goensch
    Abstract: We measure individual bias in labor market expectations in German survey data and find that workers on average significantly overestimate their individual probabilities to separate from their job when employed as well to find a job when unemployed. These biases vary significantly between population groups. Most notably, East Germans are significantly more pessimistic than West Germans. We find a significantly negative relationship between the pessimistic bias in job separation expectations and wages, and a significantly positive relationship between optimistic bias in job finding expectations and reservation incomes. We interpret and quantify the effects of (such) expectation biases on the labor market equilibrium in a search and matching model of the labor market. Removing the biases could substantially increase wages and expected lifetime income in East Germany. The bias difference in labor market expectations explains part of the East-West German wage gap.
    Keywords: labor market risk, biased beliefs, wages, reservation wages
    JEL: E24 J31 D84
    Date: 2023
  22. By: Lepinteur, Anthony (University of Luxembourg); Borga, Liyousew G. (Luxembourg Institute of Health); Clark, Andrew E. (Paris School of Economics); Vögele, Claus (University of Luxembourg); D'Ambrosio, Conchita (University of Luxembourg)
    Abstract: We here investigate the role of risk aversion in COVID-19 vaccine hesitancy. The theoretical effect is ambiguous, as both COVID-19 infection and vaccination side-effects involve probabilistic elements. In large-scale data covering five European countries, we find that vaccine hesitancy falls with risk aversion, so that COVID-19 infection is perceived as involving greater risk than is vaccination.
    Keywords: risk aversion, COVID-19, vaccine hesitancy
    JEL: I12 D81
    Date: 2023–04
  23. By: Cristina Borra; Pilar Cuevas-Ruiz; Almudena Sevilla
    Abstract: We provide the first causal evidence of the returns to maternal educational curricula on offspring's health at birth. Educational programs that aim to deliver more general knowledge may potentially improve women's earning potential and maternal prenatal investment by increasing the portability of skills across occupations and improving women's ability to make informed decisions about fertility options and health behavior. We study the impacts of a comprehensive educational reform that postponed students' curriculum choices and integrated more general education into the high school system on infant health outcomes. Using a dose-response difference-in-differences (DiD) model research design applied to linked population registries, we find that the reform led to a significant reduction in the incidence of very low birth weight (less than 1, 500 grams) and very preterm birth (less than 33 gestation weeks). Overall, the reform's positive effects on infant health at birth seem to be driven by increased mothers' labor market opportunities and better family planning, rather than increased ability to avoid risky behaviours or increased women's earnings via different occupational choices or assortative mating.
    Keywords: health at birth, educational curricula, vocational education, academic education, comprehensive educational reform
    Date: 2023–04–18
  24. By: Jad Moawad (University of Lausanne); Daniel Oesch (University of Lausanne)
    Abstract: The public debate depicts the middle class as the victim of employment polarization and income stagnation. This narrative of a squeezed middle class suggests that people above and below fared better in terms of job and income growth. However, this narrative ignores basic insights from class theory and lacks empirical evidence. Based on the Luxembourg Income Study, we trace the evolution of employment and income by class for six large Western countries – France, Germany, Poland, Spain, the UK and US –, 1980-2020. Over this period, employment of the upper-middle and middle class strongly expanded, while the skilled and low-skilled working class shrank everywhere. Working-class households also made consistently smaller income gains than middle-class households in all countries except Poland. Real labor income of the working class declined in Germany, stagnated in the US and grew by less than one percent annually in France and the UK. A cohort analysis of wage growth shows that the promise of doing better than one’s parents and grandparents held for middle- class households. However, this same promise vanished for the working class – most evident in Germany and the US. The great economic loser of the last decades was not the middle, but the working class.
    Keywords: Social classes; Middle class; Employment structure; Working class
    Date: 2023–04
  25. By: Jakub Grossmann; Filip Pertold; Michal Šoltés
    Abstract: We study the effect of a CZK 80, 000 (36%) increase in parental allowance, a universal basic income-type benefit, on the labor supply of parents in the Czech Republic. Drawing a parental allowance does not preclude labor market activity, which allows us to study the income effect. After the reform, mothers substantially prolonged the average period they drew an allowance. The labor market participation of mothers of young children decreased by 6 percentage points (15%). The estimated effect corresponds to a non-labor income labor supply elasticity at the extensive margin of about -0.5. The effect is particularly strong among mothers with their first child (10 p.p. or 28%) and among university-educated mothers (16 p.p. or 36%). We observe a virtually identical reduction in hours worked. We found no effect on the labor supply of fathers.
    Keywords: parental allowance, maternal labor supply, income effect of social policy, Czech Republic
    JEL: J13 J20 H53
    Date: 2023
  26. By: Christian Dustmann (University College London); Mikkel Mertz (Queen Mary University of London); Anna Okatenko (University College London)
    Abstract: Using an identification strategy based on random assignment of refugees to different municipalities in Denmark between 1986 and 1998, we find strong evidence that gang crime rates in the neighbourhood at assignment increase the probability of boys to commit crimes before the age of 19, and that gang crime (but not other crime) increases the likelihood of teenage motherhood for girls. Higher levels of gang crime also have detrimental and long-lasting effects, with men experiencing significantly higher levels of inactivity and women experiencing lower earnings and higher levels of welfare benefit claims at ages 19 to 28.
    Keywords: Crime spillovers, gang crime, teenage motherhood
    JEL: J1 K4 I3
    Date: 2023–03
  27. By: Christian Dustmann (University College London); Rasmus Landersø (Rockwool Foundation); Lars Højsgaard Andersen (Rockwool Foundation)
    Abstract: This paper analyzes the effects of Denmark’s Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform’s immediate effects, but also its longer-term consequences, and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform’s effects on immediate and longer-term employment.
    Keywords: Social assistance, welfare state, labor market outcomes, labor demand, migration.
    JEL: E64 I30 J60
    Date: 2023–04

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