nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2023‒11‒27
eleven papers chosen by
Giuseppe Marotta, Università degli Studi di Modena e Reggio Emilia

  1. Vacancy Duration and Wages By Ihsaan Bassier; Alan Manning; Barbara Petrongolo
  2. Educate Some to Represent Many? Education and Female Political Representation in Europe By Bellani, Luna; Hidalgo-Hidalgo, Marisa
  3. Combining Part-time Work and Social Benefits: Empirical Evidence from Finland By Kalin, Salla; Kyyrä, Tomi; Matikka, Tuomas
  4. Wage and Employment Cyclicalities at the Establishment Level By Merkl, Christian; Stüber, Heiko
  6. Help wanted: the drivers and implications of labour shortages By Groiss, Martin; Sondermann, David
  7. Persistent and Gender-Unequal Impacts of the COVID-19 Pandemic on Student Outcomes in Italy By Léonard Moulin; Mara Soncin
  8. Effects of Parental Death on Labor Market Outcomes and Gender Inequalities By Mathias Jensen; Ning Zhang
  9. Free to Improve? The Impact of Free School Attendance in England By Bertoni, Marco; Heller-Sahlgren, Gabriel; Silva, Olma
  10. Recruitment Competition and Labor Demand for High-Skilled Foreign Workers By Raux, Morgan
  11. Parental Love Is Not Blind: Identifying Selection into Early School Start By Ainoa Aparicio Fenoll; Nadia Campaniello; Ignacio Monzón

  1. By: Ihsaan Bassier; Alan Manning; Barbara Petrongolo
    Abstract: We estimate the elasticity of vacancy duration with respect to posted wages, using data from the near-universe of online job adverts in the United Kingdom. Our research design identifies duration elasticities by leveraging firm-level wage policies that are plausibly exogenous to hiring difficulties on specific job vacancies, and control for job and market-level fixed-effects. Wage policies are defined based on external information on pay settlements, or on sharp, internally-defined, firm-level changes. In our preferred specifications, we estimate duration elasticities in the range -3 to -5, which are substantially larger than the few existing estimates.
    Date: 2023–08–03
  2. By: Bellani, Luna (Ulm University); Hidalgo-Hidalgo, Marisa (Universidad Pablo de Olavide)
    Abstract: Gender disparity is present in many aspects of life, especially in politics. This paper provides new evidence on the impact of women's education on political representation focusing on several European countries. We combine multi-country data from the Gender Statistics Database of the European Institute for Gender Equality (EIGE) and from the European Social Survey (ESS). We find increased female education significantly raises the percentage of women being elected to regional parliaments. We then explore possible channels at the individual level and find education increases women's interest in politics and induces more egalitarian views about gender roles in society among women, although it fails to do so among men.
    Keywords: education, female political participation, compulsory schooling reforms, ESS
    JEL: H52 I21 I23 J24 J31
    Date: 2023–10
  3. By: Kalin, Salla; Kyyrä, Tomi; Matikka, Tuomas
    Abstract: We use detailed, population-wide data from Finland to provide evidence of the impact of earnings disregard policies on part-time work during unemployment spells, and describe the longer-run trends in combining part-time work and social benefits. We find that part-time or temporary work while receiving unemployment benefits is strongly concentrated at service and social and health care sectors, and women participate in part-time work much more commonly than men (25% vs. 12% of benefit recipients). The share of part-time workers among unemployment benefit recipients increased sharply from 10% to 18% over a few years after the implementation of earnings disregards in unemployment benefits and housing allowances. The earnings disregards allowed individuals to earn up to 300 euros per month without reductions in their benefits. Using variation in the impact of the reforms on incentives between individuals eligible to different types of benefits, we estimate a 17–28% increase in participation in part-time work rate due to the implementation of earnings disregards. However, we find no evidence of economically significant positive or negative effects of increased participation in part-time work on transitions to full-time employment.
    Keywords: labor supply, social benefits, part-time work, earnings disregards, Labour markets and education, Social security, taxation and inequality, H24, J21, J22, fi=Sosiaaliturva|sv=Social trygghet|en=Social security|, fi=Työmarkkinat|sv=Arbetsmarknad|en=Labour markets|, fi=Verotus|sv=Beskattning|en=Taxation|,
    Date: 2023
  4. By: Merkl, Christian; Stüber, Heiko
    Abstract: Although the quantitative relationship between employment cyclicality and wage cyclicality is central for the dynamics of macroeconomic models, there is little empirical evidence on this topic. We use the German AWFP dataset to document that wage cyclicalities are very heterogeneous across establishments. Based on this heterogeneity, we estimate the relationship between employment cyclicality and wage cyclicality at the establishment level. We use this micro-estimate as a calibration target for a macro labor market flow model with heterogeneous wage dynamics that nests the standard search and matching model. Based on this micro-macro linkage, we provide a new quantitative benchmark for the role of wage rigidity in search and matching models. Furthermore, we show that acyclical and countercyclical wage establishments are key drivers for stronger labor market reactions in recessions than in booms.
    Keywords: Wage Cyclicality, Employment Cyclicality, Labor Market Flow Model, Labor Market Dynamics, Establishments, Administrative Data
    JEL: E32 E24 J64
    Date: 2023
  5. By: Mattia Filomena (Department of Economics and Social Sciences, Marche Polytechnic University); Matteo Picchio (Department of Economics and Social Sciences, Marche Polytechnic University)
    Abstract: We analyse how unemployment affects individuals' social networks, leisure activities, and the related satisfaction measures. Using the LISS panel, a representative longitudinal survey of the Dutch population, we estimate the effects by inverse propensity score weighting in a difference-in-differences design in order to deal with unobserved heterogeneity and unbalanced covariate distribution between treated and control units potentially associated with the dynamics of the outcome variables. We find that, after job loss, individuals increase their network size by strengthening their closest contacts within the family, spending more time with neighbors, and making more use of social media. Although they devote their extra leisure time mostly to private activities, our results do not support the hypothesis of social exclusion following unemployment.
    Keywords: Unemployment, job loss, social exclusion, leisure, social satisfaction, doubly robust difference-in-differences.
    JEL: I31 J01 J64
    Date: 2023–11
  6. By: Groiss, Martin; Sondermann, David
    Abstract: Labour shortages have become prevalent across advanced economies. Yet, little is known about which firms are more likely to face them and the impact they have on the labour market. We create a firm-level data set spanning 28 EU countries, 283 regions and 18 sectors, contributing to close this gap. We find that structural factors play the dominant role. Firms in regions with limited labour supply as well as innovative and fast-growing firms are particularly prone to face labour shortages. Moreover, shortages tend to aggravate at business cycle peaks. In a second stage, we empirically determine the impact of labour shortages on wages and hiring. Firms with higher shortages pay a wage growth premium to keep and attract workers, increasingly so if they face excess demand. At the same time, those are the firms that hire less than the average. JEL Classification: C36, E24, J20, J23, J30
    Keywords: labour shortages, matching, shift-share instrument, tightness
    Date: 2023–11
  7. By: Léonard Moulin; Mara Soncin
    Abstract: The learning loss caused by the COVID-19 pandemic on students’ outcomes is likely to have lasting effects on which evidence is lacking. Using a differencein-differences design through a triple difference estimator, we identify the evolution of the COVID-19 pandemic’s impact on Italian students’ test scores in the two years following the COVID-19 outbreak. Our findings indicate a persistently negative effect on mathematics and reading scores for grade 5 and grade 8 students in 2021–22, two years after the pandemic began, despite a statistically significant recovery compared to the previous school year. Our analysis highlights the pandemic’s disproportionate impact on girls, leading to a decrease in their academic performance and an intensification of gender-based inequalities (with the exception of grade 8 reading). Our results also show that the pandemic had a greater adverse impact on the academic achievement of students who experienced more prolonged classroom closures.
    Date: 2023
  8. By: Mathias Jensen; Ning Zhang
    Abstract: Nearly everyone experiences the death of a parent in adulthood, but little is known about the effects of parental death on adult children’s labor market outcomes and the underlying mechanisms. In this paper, we utilize Danish administrative data to examine the effects of losing a parent on individual labor market outcomes and its contribution to gender earnings inequalities. Our empirical design leverages the timing of sudden, first parental deaths, al lowing us to focus on the health and family support channels. Our findings reveal that the death of a parent has enduring negative effects on the earnings of both adult sons and daughters, with the effects being more pronounced for daughters. Moreover, the negative impact of mothers’ deaths on daughters’ earnings outweighs that of fathers’ deaths. Consequently, mothers’ deaths can account for 10% of the aggregate gender earnings gap. Our analysis demonstrates that both the mental health and family support channels are at play. Specifically, we observe that women are relatively more inclined to seek psychological assistance, while men tend to receive more mental health-related and opioid prescriptions following the loss of a parent. Additionally, we find that women with young children experience a comparatively larger drop in earnings after parental death due to the loss of informal childcare.
    Date: 2023–08–07
  9. By: Bertoni, Marco (University of Padova and IZA-Bonn); Heller-Sahlgren, Gabriel (Research Institute of Industrial Economics (IFN)); Silva, Olma (LSE and IZA-Bonn)
    Abstract: We investigate the impact of attending a free school in England – that is, a new start-up school that enjoys considerable autonomy while remaining in the state sector. We analyse the effects of two secondary free schools with different teaching philosophies: one follows a ‘no excuse’ paradigm, while the other one adopts a ‘classical liberal’, knowledge-rich approach. We establish causal effects exploiting admission lotteries and a distance-based regression discontinuity design. Both schools have a strong positive impact on student test scores on average. However, we also find heterogeneous effects: the ‘no excuse’ school mostly benefits boys, while the ‘classical liberal’ school mainly benefits White British and non-poor students. Both schools similarly reduce student absences and school mobility. Peer quality, teacher characteristics, and inspectorate ratings cannot fully explain the schools’ effectiveness. Instead, a quantitative text analysis of the schools’ ‘vision and ethos’ statements shows that the ‘no excuse’ and ‘classical liberal’ philosophies adopted by the two free schools clearly set them apart from the counterfactual schools where rejected applicants enrol, and likely explain their heterogeneous effects.
    Keywords: School autonomy; Quasi-markets; Free schools; Achievement
    JEL: I21 I24 I28
    Date: 2023–10–30
  10. By: Raux, Morgan (University of Luxembourg)
    Abstract: This paper estimates the causal effect of recruitment competition on the labor demand for high-skilled foreign workers. I assemble a new data set, combining a firm-level panel of all Labor Condition Applications (LCAs) submitted as a first step to obtaining H-1B visas between 2010 and 2019 with online job vacancies and data on venture capital (VC) investments. I use plausibly quasi-exogeneous variation in VC investments in start-ups to instrument yearly changes in recruitment competition at the local labor market level. I find that a one standard deviation increase in the number of job postings advertised by start-ups yields an 8 percent increase in the number of LCAs submitted by employers in the market and a 3 percent increase in the wages advertised in these LCAs. Estimates are only significant for computer occupations. These results support the role of labor market tightness in explaining the absence of the crowding-out effect from H-1B workers against close native substitutes.
    Keywords: labor market tightness, skilled workers, H-1B
    JEL: F22 J23 J61
    Date: 2023–10
  11. By: Ainoa Aparicio Fenoll (University of Turin/Collegio Carlo Alberto); Nadia Campaniello (University of Turin/Collegio Carlo Alberto); Ignacio Monzón (University of Turin/Collegio Carlo Alberto)
    Abstract: Do parents take into account their children’s ability when deciding on their education? If so, are parents’ perceptions accurate? We study this by analyzing a key educational decision. Parents choose whether their children start elementary school one year early. Do they select high ability kids to start early? We propose a novel methodology to identify the sign and strength of selection into early starting. We find robust evidence of positive selection. Had they started regularly, early starters would have obtained test scores 0.2 standard deviations higher than the average student. Our simple methodology applies to RDD settings in general
    Keywords: School starting age; Selection; Children; Education; Treatment effects
    JEL: I24 C21 J13
    Date: 2023–11

This nep-eur issue is ©2023 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.