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on Microeconomic European Issues |
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Issue of 2023‒12‒04
eighteen papers chosen by Giuseppe Marotta, Università degli Studi di Modena e Reggio Emilia |
| By: | Cesar Barreto; Robert Grundke; Zeev Krill |
| Abstract: | The green transformation of the economy is expected to lead to a sharp reduction in employment in carbon-intensive industries. For designing policies to support displaced workers, it is crucial to better understand the cost of job loss, whether there are specific effects of being displaced from a carbon-intensive sector and which workers are most at risk. By using German administrative labour market data and focusing on mass layoff events, we estimate the cost of involuntary job displacement for workers in high carbon-intensity sectors and compare it with the displacement costs for workers in low carbon-intensity sectors. We find that displaced workers from high carbon-intensity sectors have, on average, higher earnings losses and face stronger difficulties in finding a new job and recovering their earnings. Our results indicate that this is mainly due to human capital specificity, the regional clustering of carbon-intensive activities and higher wage premia in carbon-intensive firms. Workers displaced in high carbon-intensity sectors are older, face higher local labour market concentration and have fewer outside options for finding jobs with similar skill requirements. They have a higher probability to switch occupations and sectors, move to occupations that are more different in terms of skill requirements compared to the pre-displacement job, and are more likely to change workplace districts after displacement. Women, older workers and those with vocational degrees as well as workers in East Germany, experience particularly high costs in case they are displaced from high carbon-intensity sectors. |
| Keywords: | carbon-intensive sectors, difference-in-differences, green transition, human capital specificity, Job loss effect, labour displacement, labour market concentration, labour reallocation |
| JEL: | J24 J31 J42 J63 J64 J65 Q52 |
| Date: | 2023–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1774-en&r=eur |
| By: | Antonio Ughi; Andrea Mina |
| Abstract: | Investments in advanced manufacturing technologies are expected to generate substantial gains for firms. The aim of this work is to evaluate the nature and extent of such gains. We use information on the ''Nuova Sabatini'' subsidy - an important policy measure adopted in Italy over the last few years - and employ a Difference-in-Differences methodology to estimate the effects of digital technologies on adopters relative to a first control group of applicants whose funding was revoked, and a second one obtained through statistical matching. The analysis exploits the rare opportunity of bringing together data from the Italian ''National Register of State Aids'' (NRA), confidential data from the Ministry of Economic Development (MiSE), and financial data from the complete business register of the Italian Chambers of Commerce (InfoCamere). Results show that new digital investments have positive effects on productivity and that the policy is effective in boosting the overall performance of treated firms. In addition, there is no evidence that digital adoption results in technological unemployment. |
| Keywords: | Advanced manufacturing; Industry 4.0; Technology diffusion; Adoption subsidies; Industrial strategy. |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2023/41&r=eur |
| By: | Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper analyses the labour market entry of refugees and other (non-humanitarian) migrants originating from middle- and low-income non-European countries that arrived in Austria in 2014-2016. Specifically, we analyse factors that shaped the transition to and out of the first job in the Austrian labour market, document the characteristics of the first job and explore job stability in Austria. Even though refugees took longer to find a job, individual and household characteristics, as well as labour market indicators, are associated with the time between arrival and the first job in Austria, similar to other migrants. Refugees and other migrants also found similar job types as their entry jobs, which tended to be located in low-wage segments. The results, however, suggest that other migrants held their first job, on average, for a longer time than refugees. Although other migrants quit their first job relatively quickly when it was marginal employment, refugees tended to hold marginal jobs as long as full-time and part-time jobs. Finally, our results suggest that entry jobs with a higher quality in terms of working hours and wages (i.e. full-time jobs) tended to be linked with job stability, while entry jobs with a lower quality (i.e. marginal jobs) tended to be associated with job instability for both refugees and other migrants. The results of the paper showcase the importance of immediate access to various training and re-education programs for refugees to improve the quality of their entry jobs and their long-term prospects in the Austrian labour market. |
| Keywords: | Refugees, labour market integration, labour market entry, labour market transition, job stability |
| JEL: | C41 J15 J62 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:231&r=eur |
| By: | Wagner, Joachim |
| Abstract: | This paper uses firm level data from the World Bank Enterprise surveys conducted in 2019 and from the COVID-19 follow-up surveys conducted in 2020 in eight European countries to investigate the link between exporting before the pandemic and firm survival until 2020. The estimated effect of exports is positive and statistically significant ceteris paribus after controlling for various firm characteristics that are known to be related to firm survival. Furthermore, the size of this estimated effect can be considered to be large on average. Exporting helped firms to survive. |
| Keywords: | Exports, firm survival, COVID-19, World Bank Enterprise Surveys, Robit regression |
| JEL: | D22 F14 L20 L25 L29 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:279794&r=eur |
| By: | Stefano Boscolo; Francesco Figari |
| Abstract: | We study the redistributive effect of inflation-induced revenue and expenditure variations in the Italian tax-benefit system in a context in which pensions and social transfers are indexed to inflation and nominal wage growth struggles to keep up. By means of the EUROMOD microsimulation model, we isolate the contribution of i ) fiscal drag through the personal income tax, ii ) indexation rules and policy changes regarding social insurance contributions and iii ) pension and social transfer indexation rules related to the overall redistributive effect of the tax-benefit system and its vertical and horizontal components. The findings suggest that benefit indexation rules contribute to a non-negligible extent to income redistribution, that fiscal drag has a small regressive effect and that the implicit redistribution favours pensioners over private-sector employees. |
| Keywords: | inflation; indexation; fiscal drag; redistribution; EUROMOD |
| JEL: | D31 H23 H24 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0187&r=eur |
| By: | Dominik Kowitzke |
| Abstract: | I conduct an empirical analysis of household living space consumption based on microdata from the German Socio-Economic Panel. At the stage of the family life-cycle when children launch from home, frequently, no adjustment of living space takes place by the parental household, the then so-called empty nest household. In many cases, this doesn't happen due to market frictions like political interventions which lower the mobility of elderly households. I claim that a better utilization of this space would improve housing markets suffering from a lack of dwellings. Supplying this space to the market can substitute new dwelling construction and prevent related environmental harm. Thus, I quantify the total amount of excess living space in Germany related to this life-cycle effect using a multiply linear regression model to approximate the potential of living space creation by comparing empty nest households to a control group. On average, empty nest households consume 11 m2 more than the control group. Further, the application of a fixed effects model shows that if empty nest households move, they downsize significantly by about 16 m2. Moreover, I estimate environmental effects related to the substitution of housing construction. In short, my results show that there is a significant amount of vacant space in so-called empty nest households. Thus, measurements which support older households with freeing-up living space would ease tight housing markets and prevent environmental harm. |
| Keywords: | Empty nests; Living space; Overhousing |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_259&r=eur |
| By: | Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper analyses occupational trajectories of refugees from their last job in the home country to their first and current jobs in Austria and the role of co-ethnic and Austrian social networks in job search, using data from a large-scale survey of recognised refugees from Syria, Afghanistan, Iraq and Iran who have predominantly come to Austria since 2010, thereby covering the strong refugee wave of 2015 2016. The results corroborate a U-shaped pattern, with a sharp initial occupational loss followed by a rather moderate occupational recovery. Although native social networks play no role for occupational changes, co-ethnic social networks – particularly when used as a stand-alone job search strategy – prove detrimental along the entire trajectory. However, co-ethnic social networks are beneficial if used in combination with the Austrian labour market service or NGOs. Some refugees prove particularly vulnerable, such as older refugees or highly educated refugees who undergo more pronounced initial occupational downgrading, with subsequent occupational upgrading either limited or absent. |
| Keywords: | Refugees, labour market integration, occupational trajectories, social capital |
| JEL: | J15 J24 J62 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:232&r=eur |
| By: | Carrillo-Tudela, Carlos (University of Essex); Kaas, Leo (Goethe University Frankfurt); Lochner, Benjamin (University of Erlangen-Nuremberg) |
| Abstract: | Firms and workers predominately match via job postings, networks of personal contacts or the public employment agency, all of which help to ameliorate labor market frictions. In this paper we investigate the extent to which these search channels have differential effects on labor market outcomes. Using novel linked survey-administrative data we document that (i) low-wage firms and low-wage workers are more likely to match via networks or the public agency, while high-wage firms and high-wage workers succeed more often via job postings; (ii) job postings help firms the most in poaching and attracting high-wage workers and help workers the most in climbing the job ladder. To evaluate the implications of these findings for employment, wages and labor market sorting, we structurally estimate an equilibrium job ladder model featuring two-sided heterogeneity, multiple search channels and endogenous recruitment effort. The estimation reveals that networks are the most cost-effective channel, allowing firms to hire quickly, yet attracting workers of lower average ability. Job postings are the most costly channel, facilitate hiring workers of higher ability, and matter most for worker-firm sorting. Although the public employment agency provides the lowest hiring probability, its removal has sizeable consequences, with aggregate employment declining by at least 1.4 percent and rising bottom wage inequality. |
| Keywords: | search channels, on-the-job search, recruitment effort, sorting, wage dispersion |
| JEL: | E24 J23 J31 J63 J64 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16583&r=eur |
| By: | Ann-Marie Sommerfeld (Friedrich Schiller University Jena) |
| Abstract: | Exploiting the age-at-enrollment policies in 16 German states as exogenous source of variation, I examine whether the schooling of the oldest child in a migrant household affects parents' integration. My analysis links administrative records on primary school enrollment cutoff dates with micro data from the German Socioeconomic Panel (GSOEP). Using a regression discontinuity design around the school enrollment cutoff and an instrumental variable approach I show that children's schooling improves the integration of parents along several dimensions, such as labor market outcomes, financial worries, and German language skills. Labor market outcomes are most positively affected for mothers. Additional analysis of underlying mechanisms suggests that results are driven by gains in disposable time and exposure to the German language and culture. |
| Keywords: | international migration, assimilation, integration, education, schooling, family, regression discontinuity, instrumental variables |
| JEL: | F22 I24 I26 J16 |
| Date: | 2023–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2023-018&r=eur |
| By: | Qiulin; Bin Chi Ke; Michael White; Bing Zhu |
| Abstract: | During the pandemic time, the UK government introduced Stamp Duty Land Tax (SDLT) rate reduction to stimulate the housing market. Reduced Stamp Duty Land Tax (SDLT) rates would apply for residential properties purchased from 8 July 2020 to 30 September 2021 inclusive. According to the policy, the temporary nil rate band of £500, 000 would be in place until 30 June 2021, then extended to 30 September 2021. Thereafter, the nil rate band would return to the standard amount of £125, 000 on 1 October 2021. The purpose of SDLT reduction was to support the housing market and the jobs and businesses which relied on it. At the same time, it would lower the transaction costs of moving home to maintain the liquidity of the housing market. Evidence suggests the stamp duty holiday made a positive impact on the property market. In this research, we investigate how the tax temporary reduction affects housing prices in the UK, using all housing transactions in the UK from March 2020 to December 2021inclusive, three months pre and post-SDLT cut with quasi-experimental variation from reduction. We also examine whether the effect was consistent across all price bands. |
| Keywords: | Housing Price; stamp duty; Transaction tax; UK |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_339&r=eur |
| By: | Davide Antonioli (UniFE - Università degli Studi di Ferrara = University of Ferrara); Elisa Chioatto (UniFE - Università degli Studi di Ferrara = University of Ferrara); Massimiliano Mazzanti (UniFE - Università degli Studi di Ferrara = University of Ferrara) |
| Abstract: | The introduction of innovative practices compatible with the objectives of the circular economy is one of the main enablers for transforming current production patterns towards more sustainable and competitive systems. Understanding whether and to what extent firms are introducing circular-oriented innovations allows monitoring where we stand in the circular transition and thus which further efforts are needed to achieve a resource-efficient economy. This study is based on data from two surveys on Small and Medium Enterprises: the first one reaches 4565 companies located throughout Italy (in the two-year period 207-2018) and the second one focuses on 1603 companies operating in the Emilia-Romagna region (in the three-year period 2017-2019). The analysis is aimed at offering a broad picture of the level of involvement of national and regional firms in the implementation of circular innovation. Despite the overall positive performance, there appears to be a fragmented adoption of circular innovation in terms of firms' size, technological intensity of the sectors and in accordance with the geography and the productive specialization of the territory. In general, circular innovation mainly involves firms operating in low-technology-intensity sectors in Southern Italy and more technological intensive sectors in Northern Italy and it is more widespread among large firms. On the contrary, in Emilia-Romagna, the distribution of circular innovation mainly concerns mediumsized firms, especially those belonging to low and medium technology-intensive sectors, moreover companies in the provinces of Modena and Parma show higher adoption rates. |
| Keywords: | Circular Economy, Eco-Innovation, Circular Innovation, Small and Medium Enterprises, Business Models, Regional Studies |
| Date: | 2022–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04242573&r=eur |
| By: | Bottasso, Anna (University of Genoa); Conti, Maurizio (University of Genoa); Ferrara, Antonella Rita (University of Calabria); Robbiano, Simone (University of Eastern Piedmont) |
| Abstract: | The focus of this study is to assess the causal impact of the connection of a local area to a high-speed rail network (HSR) on firms' total factor productivity (TFP). The quasi-random location of the HSR station in the Italian city of Reggio Emilia is exploited in a Difference-in Differences (DiD) research design applied to a large sample of firms, observed over the period 2010-2018. The results suggest that the opening of the HSR station improved treated firms' TFP of about 5%; in particular, such effect is larger for firms closer to the HSR station and slightly increases over the sample period. We also find that the impact of the connection to the HSR station is heterogeneous across industries and depends on firms' size and past productivity. Overall results are robust to a large number of sensitivity checks and falsification tests. |
| Keywords: | transport infrastructure, Difference-in-Differences, total factor productivity |
| JEL: | C50 D24 L92 R30 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16572&r=eur |
| By: | Qiulin Ke; Michael White |
| Abstract: | MEES is a measure to improve buildings’ energy efficiency. However, whether this legislation will achieve its goals is not certain. Since the implementation of MEES, limited evidence of possible impact and effectiveness has been published, especially there is no post-implementation evidence. In this paper, we investigate whether price differentials exist between the EPC-labeled office buildings and nonlabelled buildings; then we further investigate whether the premiums/discount are affected by the level of rating if the price differentials exist, especially for the ones below MEES. We use a much larger sample of office buildings across England and Wales. We use the data of the office buildings, their hedonic features, and the rents from Costar. The EPCs are from data from the Ministry of Housing, Communities and Local Government with which the EPC assessment and rating reports are registered. The proportion of energy performance-certified buildings in our sample has increased significantly to above 50% of the total sample. 12, 514 investment office buildings with the full information at the end of 2021 are included in the study, among them, 55% of the office buildings have valid EPC ratings. This is the first study of UK commercial real estate with such a large sample to examine the effect of the EPC on commercial real estate value and provide some post-implementation evidence of the effectiveness of the MEES regulation. |
| Keywords: | EPC; Office Building; rental premium; UK |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_341&r=eur |
| By: | Yoann Morin; Martin Regnaud; Marie Breuille; Julie Le Gallo |
| Abstract: | We evaluate the impact of the rent control regulation implemented by the city of Paris since July 2019 on the rental market. We take advantage of the mass of data available in real time on SeLoger platform with the ads published by professional realtors, with a database of 422, 874 observations from January 1, 2018, to July 31, 2022. We apply a difference- in-differences model, where control units are located in eight major French cities in which the rental market is particularly tense but not regulated during the period of analysis. We show that the rent control policy decreased rents by 3.2% in Paris on average but that the policy is heterogeneous depending on dwelling characteristics. In particular, we find that small apartments are more affected by the policy than others. |
| Keywords: | Difference in differences; Paris; Rent Control; Rental market |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_225&r=eur |
| By: | Jonas Wogh; Nils Kok; Jaap Bos |
| Abstract: | Bidding wars, whereby multiple buyers compete for a property and place bids in excess of the initial list price, have become increasingly common in residential real estate markets. However, there is only scarce empirical evidence on their causes and even less evidence on their direct and indirect effects. We link bidding behavior to shocks to local demand by leveraging quasi-experimental variation from a generous tax exemption policy in the Dutch housing market. In those local markets most affected by the policy, the share of transactions above list price increased significantly, compared to less exposed markets. Importantly, this impact of the tax exemption on transaction outcomes is not driven by treated buyers alone but spills over to other buyers, who also increase their bids. Both effects last well beyond the period in which the tax exemption policy exists. The policy also has important wealth effects that outweigh the original tax exemption. Finally, we show that the demand shock does not have a uniform effect, as it is most pronounced in markets that were relatively tight to begin with. |
| Keywords: | Bidding Wars; Demand Shock; Overbidding; Spillovers |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_62&r=eur |
| By: | Montag, Felix; Mamrak, Robin; Sagimuldina, Alina; Schnitzer, Monika |
| Abstract: | Pass-through determines how consumers respond to taxes. We investigate the impact of imperfect price information on pass-through of commodity taxes. Our theoretical model predicts that the pass-through rate increases with the share of well-informed consumers. Pass-through is higher for the minimum price, paid by well-informed consumers, than for the average price, paid by uninformed consumers. Moreover, passthrough to the average price is non-monotonic with respect to the number of sellers. An empirical analysis of multiple recent tax changes in the German and French retail fuel markets confirms our theoretical predictions. Our results have implications for tax policy and shed light on the relative effectiveness of Pigouvian taxes versus regulation. |
| Keywords: | pass-through, taxes, imperfect information, competition |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cbscwp:279798&r=eur |
| By: | Floris Blok; Angelika Brändle; Ante Busic; Franz Fuerst; Marius Zumwald |
| Abstract: | Using a hedonic regression, we examine the relationship between natural hazard exposure and residential rents using a sample of 18.339 dwellings in Switzerland. Hillslope debris flow and storm hazard are found to be associated with a significant discount across the study area. Flooding and surface runoff hazard are associated with significant discounts outside of urban areas, but results are inconsistent within urban areas. We explore some possible explanations for this finding. Results on the effect of avalanches, debris flow, landslides, hail and rockfall on rents are inconclusive. Exposure to heat is not associated with lower rents in Switzerland. Similarly, we find no evidence that increased exposure to flooding and surface runoff (in the form of living on the ground floor) is associated with lower rents relative to dwellings on higher floor levels. Furthermore, we find that the “MINERGIE” energy-efficiency rating is associated with a small premium depending on the general standard of the building. |
| Keywords: | Energy Efficiency; Hedonic Price Method; Natural hazards; Residential Rents |
| JEL: | R3 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2023_258&r=eur |
| By: | Bontemps, Christian; Cherbonnier, Frédéric; Magnac, Thierry |
| Abstract: | The existence of transaction taxes reduces transactions, and in the case of housing, reduces household mobility and affects the costs of downsizing in dire times. We construct and estimate an overlapping generation model in which households are heterogeneous in age and earnings, and prudential regulation and the tax system are modeled in fine detail. These housing and public policies are likely to affect markets globally, and clearing both rental and property markets is important when evaluating them. We use the institutional and data setting of France, where transactions taxes are some of the highest in Europe, and evaluate the counterfactual impact of reducing transaction taxes from 14% to 6%, similar to US levels. The impact on transactions is strong, but the impact on welfare remains limited. |
| Keywords: | Heterogenous agents; dynamic structural models; general equilibrium; housing;; transaction taxes |
| JEL: | C68 D15 D58 H31 R21 R31 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128690&r=eur |