nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒11‒13
twelve papers chosen by
Giuseppe Marotta, Università degli Studi di Modena e Reggio Emilia

  1. Accounting for firms in gender-ethnicity wage gaps throughout the earnings distribution By Van Phan; Carl Singleton; Alex Bryson; John Forth; Felix Ritchie; Lucy Stokes; Damian Whittard
  2. Technological Innovations and Workers’ Job Insecurity: The Moderating Role of Firm Strategies By Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
  3. The long-term impact of maternal leave duration on smoking behavior By Renner, Anna-Theresa; Shaikh, Mujaheed; Spitzer, Sonja
  4. Does replacing grants by income-contingent loans harm enrolment? New evidence from a reform in Dutch higher education By Jonneke Bolhaar; Sonny Kuijpers; Dinand Webbink; Maria Zumbuehl
  5. Automation and Income Inequality in Europe By Dooley, Karina; Gromadzki, Jan; Lewandowski, Piotr; Tuda, Dora; Van Kerm, Philippe
  6. Cross-country comparison of intergenerational poverty transmission in Europe By Carranza, Rafael; Nolan, Brian; Bavaro, Michele
  7. Immigration Restriction and The Transfer of Cultural Norms Over Time and Boundaries:The Case of Religiosity By Fausto Galli; Simone Manzavino; Giuseppe Russo
  8. Unemployment Insurance with Response Heterogeneity By Wunsch, Conny; Zabrodina, Véra
  9. The Effects of COVID-19 Policies on Consumer Spending in Norway By Fenella Carpena; Laurens Swinkels; Dan Zhang
  10. Individual welfare analysis: A tale of consumption, time use and preference heterogeneity By Tim Obermeier
  11. Broken Homes and Empty Pantries: French Households Suffer Substantial Loss of Standard Living, Reduce Food Consumption and Lose Weight Following Separation By Julia Mink
  12. Why do we consume as we do? The case of ICT spending in the Spanish market By Ruíz-Rúa, Aurora; Fernández-Bonilla, Fernando; Gijón, Covadonga

  1. By: Van Phan (Bristol Business School, University of West of England); Carl Singleton (Department of Economics, University of Reading); Alex Bryson (Social Research Institute, University College London); John Forth (Bayes Business School, City, University of London); Felix Ritchie (Bristol Business School, University of West of England); Lucy Stokes (National Institute of Economic and Social Research (NIESR)); Damian Whittard (Bristol Business School, University of West of England)
    Abstract: Previous studies of gender-ethnicity wage gaps have almost exclusively been confined to analyses of household data, so do not fully account for employer influence and wage-setting power. Exploiting high quality employer-employee payroll data on jobs, hours, and earnings, linked with the personal and family characteristics of workers from the population census for England and Wales, we show that firm-specific wage effects account for sizeable parts of the estimated differences between the wages of white and ethnic minority workers at the mean and other points in the wage distribution, which would otherwise mostly have been attributed to differences in individual worker attributes, such as education levels, occupations, and locations. Nevertheless, substantial gaps persist between the wages of white and ethnic minority employees, especially among higher earners. These patterns differ notably by gender and whichever ethnic minority group is compared with white workers. Since most of the wage disadvantage for ethnic minorities appears to sit within firms, our findings suggest that recent legislative reforms on firm-level gender pay gap transparency could be worth extending in the UK, to encompass gender-ethnicity gaps.
    Keywords: Employer-Employee Data, Unconditional Quantile Regression, Decomposition Methods, UK Labour Market
    JEL: J31 J7 J71
    Date: 2023–10–26
  2. By: Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
    Abstract: In this paper, we empirically assess whether the perceived implications of technological innovations on the probability of job loss vary according to the innovation-related strategies adopted by firms. We take advantage of a unique dataset based on a large and representative cross-sectional survey covering several characteristics of Italian workers and their firms. We find that the relationship between technological innovations and job insecurity is moderated by firms’ technology-specific training programs, their dismissal plans, and the impact of innovations on the tasks and activities performed by workers. Thus, workers’ perceptions of job insecurity vary significantly across innovative firms and the adoption of technological innovations in the workplace has a multifaceted impact on the perceptions of job insecurity of the affected workers.
    Keywords: job insecurity, technology, innovation, firms
    JEL: J28 O33
    Date: 2023
  3. By: Renner, Anna-Theresa; Shaikh, Mujaheed; Spitzer, Sonja
    Abstract: Maternal leave policies aim at protecting the health of new mothers. However, the impact of such policies on precursors of health, such as smoking behavior, is both theoretically and empirically understudied. We investigate the effect of maternal leave duration on the long-term smoking behavior of mothers across 14 European countries by combining survey data on health behaviors with retrospective information on birth and employment histories, and link these with maternity and parental leave policies between 1960 and 2010. To identify the causal impact of maternal leave duration, we exploit between and within country variation in mothers’ exposure to statutory leave duration policies in an instrumental variable framework. We find that a one-month increase in maternal leave duration increases the probability that a woman smokes in the long run by 2.3 percentage points. Similarly, a one-month increase in leave duration increases the lifetime duration of smoking by 13 months. We document non-linearity in this effect for the first time, showing that shorter leave durations have a protective effect, while very long maternal leave promotes harmful health behavior. Suggestive evidence shows lack of financial support from spouse around childbirth as a mediator of the observed effects, while employment and other socio-demographic characteristics play no role.
    Keywords: risky health behavior, maternity leave, parental leave policies, SHARE, instrumental variables
    JEL: I12 J13 J22
    Date: 2023–09
  4. By: Jonneke Bolhaar (CPB Netherlands Bureau for Economic Policy Analysis); Sonny Kuijpers (CPB Netherlands Bureau for Economic Policy Analysis); Dinand Webbink; Maria Zumbuehl (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper evaluates the impact of a reform which replaced universal basic grants by income-contingent loans on enrolment in Dutch higher education using administrative data of ten complete student cohorts. Estimates of differences between cohorts show no negative effect of the policy on enrolment. Moreover, difference-in-differences estimates exploiting variation in eligibility for supplementary grants show no negative effect on enrolment. These findings suggest that a system of income-contingent loans can facilitate an increase of private contributions without harming access to higher education.
    JEL: I22
    Date: 2023–10
  5. By: Dooley, Karina; Gromadzki, Jan; Lewandowski, Piotr; Tuda, Dora; Van Kerm, Philippe
    Abstract: We study the effects of robot penetration on household income inequality in 14 European countries between 2006–2018, a period marked by the rapid adoption of industrial robots. Automation reduced relative hourly wages and employment of more exposed demographic groups, similarly to the results for the United States. Using robot-driven wage and employment shocks as input to the EUROMOD microsimulation model, we find that automation had minor effects on income inequality. Household labour income diversification and tax and welfare policies largely absorbed labour market shocks caused by automation. Transfers played a key role in cushioning the transmission of these shocks to household incomes.
    Date: 2023–10–20
  6. By: Carranza, Rafael; Nolan, Brian; Bavaro, Michele
    Abstract: While the influence of poverty in childhood on adulthood outcomes has been extensively studied, little is known about how the strength of intergenerational persistence in poverty itself varies across countries. Here we examine the intergenerational persistence of poverty in a comparative analysis of 30 European countries using data from the 2019 ad hoc module of the EU-SILC dataset. We construct proxy measures of poverty in the parental household employing information on the inability to meet basic needs, financial hardship, parental education and occupational social class. The strength of the association between current poverty based on the indicators at the core of the EU's social inclusion process and these measures of parental poverty is assessed by estimating odds ratios and marginal effects. The cross-country variation in poverty persistence is probed in terms of its relationship with country characteristics. Mediation analysis highlights the role of own education as well as occupation in underpinning the observed relationship between current and parental poverty. Finally, differences across age cohorts in the strength of poverty persistence are examined.
    Keywords: Intergenerational transmission , poverty, multidimensional poverty, cross-country comparison, disadvantage
    JEL: D63 I32 J62
    Date: 2023–10
  7. By: Fausto Galli (University of Salerno); Simone Manzavino (University of Salerno); Giuseppe Russo (University of Salerno, CSEF, and GLO)
    Abstract: We study the effect of an immigration ban on the self-selection of immigrants along cultural traits, and the transmission of these traits to the second generation. We show theoretically that restricting immigration incentivizes to settle abroad individuals with higher attachment to their origin culture, who, under free mobility, would rather choose circular migration. Once abroad, these individuals tend to convey their cultural traits to their children. As a consequence, restrictive immigration policies can foster the diffusion of cultural traits across boundaries and generations. We focus on religiosity, which is one of the most persistent and distinctive cultural traits, and exploit the 1973 immigration ban in West Germany (Anwerbestopp) as a natural experiment. Through a diff-in-diff analysis, we find that second generations born to parents treated by the Anwerbestopp show higher religiosity.
    Keywords: second-generation immigrants, religiosity, immigration policy, cultural transmission.
    JEL: D91 F22 J15 K37 Z13
    Date: 2023–09–29
  8. By: Wunsch, Conny (University of Basel); Zabrodina, Véra (University of Basel)
    Abstract: The generosity of social insurance coverage often increases with the beneficiary's age and their contribution time to social security, but existing policies vary considerably. We study the differentiation of unemployment insurance (UI) generosity by evaluating how the insurance-incentive trade-off varies with age and contribution time. We exploit numerous discontinuities in potential benefit duration in Germany. Contribution time in the last three years carries information on job search efforts, as it is associated with lower moral hazard responses and fiscal externality. We find no significant response heterogeneity in age or longer contribution time horizons. Contrasting these gradients with an approximated insurance value for four UI regimes, we document that steepening the potential benefit duration schedule in contribution time and flattening it in age would have increased welfare.
    Keywords: policy differentiation, response heterogeneity, unemployment insurance
    JEL: J08 J64 J65
    Date: 2023–10
  9. By: Fenella Carpena (Oslo Business School, Oslo Metropolitan University); Laurens Swinkels (Erasmus University Rotterdam (EUR); Robeco Asset Management); Dan Zhang (Oslo Business School, Oslo Metropolitan University)
    Abstract: This paper examines the effect of COVID-19 policies on consumer spending using bank card transaction data from Norway. Taking advantage of variation in COVID-19 policies over time and across space in the four largest municipalities in the country, we investigate the heterogeneity of effects of policies in their number and type. First, we document that the number of restrictions is negatively correlated with spending and exhibits decreasing marginal effects. Second, restrictions do not affect all types of spending equally: restrictions tend to have larger impacts on the sector in which it is targeted. Finally, we find evidence from a difference-in-differences estimation that supports a causal interpretation of our results.
    Keywords: Expenditure, Consumption, COVID-19, pandemic
    JEL: C83 D12 E21
    Date: 2023–07–02
  10. By: Tim Obermeier
    Abstract: How accurately does household income reflect the well-being of the individuals living within the household? Looking at household income does not take unequal consumption sharing within families, the value of time use (leisure and housework) and preference heterogeneity into account. I build a model of family decision-making and the marriage market which jointly captures these aspects and estimate the model based on British time use data. I use the estimated model to study poverty and inequality based on the individual-level Money-Metric Welfare Index (MMWI). The main result is that only 59% of individuals who are poor in terms of the MMWI ('welfare-poor') are also income-poor, suggesting that the conventional focus on income misses a substantial fraction of the welfare-poor. I find that accounting for unobserved preference heterogeneity is an important factor in assessing individual welfare. From an aggregate perspective, inequality within families accounts for 18% of overall welfare inequality, and heterogeneity in economies of scale across households account for 23% of welfare inequality. Finally, to illustrate the policy relevance of individual welfare measures, I study how minimum wage increases affect welfare-poverty in this framework.
    Keywords: individual welfare, preference heterogeneity, inequality, marriage market, intra-household inequality, minimum wage
    Date: 2023–10–23
  11. By: Julia Mink
    Abstract: This study sheds new light on the impact of couple separation on household living standards by considering the effects of separation on measures reflecting the adequacy of food consumption in addition to more commonly studied income and expenditure measures. Using an event study approach with panel data from France, I examine changes in household disposable income, food expenditure and food quantities purchased, diet quality and household member’s body weight at the time of separation and up to eight years later, compared to a control group of households that did not separate. Disposable income, food expenditure and quantities purchased adjusted for household size fall by around 20%-25% after separation and until the end of the observation window. The ex-partner’s body mass index (weight for height measure) falls by 1.5% in the first three years after separation and diet quality worsens. A possible interpretation of the results is that living standards fall to the point where households cannot maintain a minimum level of consumption to meet their dietary needs, resulting in measurable weight loss.
    Keywords: Separation, divorce, living standards, income, food consumption, event study
    JEL: D12 J12
    Date: 2023–10
  12. By: Ruíz-Rúa, Aurora; Fernández-Bonilla, Fernando; Gijón, Covadonga
    Abstract: This paper presents the research on the last fourteen years household spending patterns on information and communication technology (ICT) and the associated use of digital services due to socioeconomic variables. We found that over the 14 years covered by the research, there is a gender gap in ICT spending that extends beyond the pandemic COVID-10 to the present day, as well as an income gap. Women spend less on ICT than men, although according to the most recent data, this difference is no longer significant. Furthermore, the expected income gap should not be ignored, as fewer resources invested in telecommunications means less ability to move up the labour market, and this may be another way of damaging the social ladder.
    Keywords: ICT, online literacy, consumers, survey data, econometric models, behavioral economics
    Date: 2023

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