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on Microeconomic European Issues |
By: | Christina Brinkmann; Simon Jäger; Moritz Kuhn; Farzad Saidi; Stefanie Wolter |
Abstract: | Governments use short-time work (STW) schemes to subsidize job preservation during crises. We study the take-up of STW and its effects on worker outcomes and firm behavior using German administrative data from 2009 to 2021. Establishments utilizing STW tend to have higher wages, be larger, and have falling employment even before STW take-up. More adverse selection occurred during the COVID-19 pandemic. Within firms, STW is targeted towards workers likely to stay even in the absence of STW. To study the effects of STW, we examine two dimensions of policy variation: STW eligibility and extensions of potential benefit duration (PBD). Workers above retirement age, ineligible for STW, have identical employment trajectories compared to their slightly younger, eligible peers when their establishment takes up STW. A 2012 reform doubling PBD from 6 to 12 months did not secure employment at treated firms 12 months after take-up, with minimal heterogeneity across worker characteristics. However, treated and control firms experienced substantial and persistent differences in their wage trajectories, with control firms without extensions lowering wages compared to treated firms. Across cells, larger wage effects corresponded with smaller employment effects, consistent with downward wage flexibility preventing layoffs and substituting for the employment protection effects of STW. Our research designs reveal that STW extensions in Germany did not significantly improve short- or long-term employment outcomes. |
JEL: | E24 G32 H20 J2 J63 J65 |
Date: | 2024–11 |
URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33112 |
By: | Eichhorst, Werner (IZA); Scalise, Gemma (University of Milano-Bicocca) |
Abstract: | The permanent restructuring of the economy, exacerbated by the digital transition and combined with labour market dualization, is progressively increasing semi- and low-skilled workers' risk of marginalization. This article analyses how countries balance employment and equality concerns in core private services sectors and inquires the policy strategy that governments in Germany, France, Italy and Spain have implemented over the last two decades for workers 'at the margins'. The analysis encompasses multiple policy tools – skill upgrading, social benefits, incentives to reduce barriers to employment and wage regulation – and reveals varied trajectories. A common direction is followed by Germany and Spain, which have adopted policies to mitigate long-standing labor market dualism by implementing protective policies that aim at improving job conditions for low-wage and at-risk workers. France is stuck in its protective approach, focusing on job stabilization through subsidies without addressing the need for skill development, which limits long-term labor market mobility. Italy is exacerbating dualism by failing to improve job quality and training opportunities, leading to persistent low productivity and increasing in-work poverty. |
Keywords: | labour market dualism, welfare, low wage sector, semi- and low-skilled, adult learning |
JEL: | J21 J31 J38 |
Date: | 2024–10 |
URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17378 |
By: | Brinkmann, Christina (University of Bonn); Jäger, Simon (Massachusetts Institute of Technology); Kuhn, Moritz (University of Mannheim); Saidi, Farzad (University of Bonn); Wolter, Stefanie (Institute for Employment Research (IAB), Nuremberg) |
Abstract: | Governments use short-time work (STW) schemes to subsidize job preservation during crises. We study the take-up of STW and its effects on worker outcomes and firm behavior using German administrative data from 2009 to 2021. Establishments utilizing STW tend to have higher wages, be larger, and have falling employment even before STW take-up. More adverse selection occurred during the COVID-19 pandemic. Within firms, STW is targeted towards workers likely to stay even in the absence of STW. To study the effects of STW, we examine two dimensions of policy variation: STW eligibility and extensions of potential benefit duration (PBD). Workers above retirement age, ineligible for STW, have identical employment trajectories compared to their slightly younger, eligible peers when their establishment takes up STW. A 2012 reform doubling PBD from 6 to 12 months did not secure employment at treated firms 12 months after take-up, with minimal heterogeneity across worker characteristics. However, treated and control firms experienced substantial and persistent differences in their wage trajectories, with control firms without extensions lowering wages compared to treated firms. Across cells, larger wage effects corresponded with smaller employment effects, consistent with downward wage flexibility preventing layoffs and substituting for the employment protection effects of STW. Our research designs reveal that STW extensions in Germany did not significantly improve short- or long-term employment outcomes. |
Keywords: | stabilization policies, short-time work, wage rigidity, labor market institutions, intra-firm insurance |
JEL: | J01 J08 J30 J41 |
Date: | 2024–10 |
URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17421 |
By: | Engberg, Erik (Örebro University School of Business); Hellsten, Mark (Aarhus University); Javed, Farrukh (Lund University); Lodefalk, Magnus (Örebro University School of Business); Sabolová, Radka (Örebro University School of Business); Schroeder, Sarah (Aarhus University); Tang, Aili (Örebro University School of Business) |
Abstract: | This paper investigates the impact of artificial intelligence (AI) on hiring and employment, using the universe of job postings published by the Swedish Public Employment Service from 2014-2022 and universal register data for Sweden. We construct a detailed measure of AI exposure according to occupational content and find that establishments exposed to AI are more likely to hire AI workers. Survey data further indicate that AI exposure aligns with greater use of AI services. Importantly, rather than displacing non-AI workers, AI exposure is positively associated with increased hiring for both AI and non-AI roles. In the absence of substantial productivity gains that might account for this increase, we interpret the positive link between AI exposure and non-AI hiring as evidence that establishments are using AI to augment existing roles and expand task capabilities, rather than to replace non-AI workers. |
Keywords: | Artificial Intelligence; Technological Change; Automation; Labour Demand |
JEL: | D22 J23 J24 O33 |
Date: | 2024–11–07 |
URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2024_010 |
By: | Engberg, Erik (The Ratio Institute); Hellsten, Mark (The Ratio Institute); Javed, Farrukh (The Ratio Institute); Lodefalk, Magnus (The Ratio Institute); Sabolová, Radka (The Ratio Institute); Schroeder, Sara (The Ratio Institute); Tang, Aili (The Ratio Institute) |
Abstract: | This paper investigates the impact of artificial intelligence (AI) on hiring and employment, using the universe of job postings published by the Swedish Public Employment Service from 2014-2022 and universal register data for Sweden. We construct a detailed measure of AI exposure according to occupational content and find that establishments exposed to AI are more likely to hire AI workers. Survey data further indicate that AI exposure aligns with greater use of AI services. Importantly, rather than displacing non-AI workers, AI exposure is positively associated with increased hiring for both AI and non-AI roles. In the absence of substantial productivity gains that might account for this increase, we interpret the positive link between AI exposure and non-AI hiring as evidence that establishments are using AI to augment existing roles and expand task capabilities, rather than to replace non-AI workers. |
Keywords: | Artificial Intelligence; Technological Change; Automation; Labour Demand |
JEL: | D22 J23 J24 O33 |
Date: | 2024–11–08 |
URL: | https://d.repec.org/n?u=RePEc:hhs:ratioi:0380 |
By: | Manuel Flores (Serra Hunter Fellow, Department of Applied Economics, Universitat Autònoma de Barcelona, 08193 Bellaterra, Barcelona, Spain.); Fernando G. Benavides (Centre d’Investigació en Salut Laboral, Universitat Pompeu Fabra & CIBER of Epidemiology and Public Health); Laura Serra-Saurina (CIBER of Epidemiology and Public Health & Research Group on Statistics, Econometrics and Health (GRECS), University of Girona.) |
Abstract: | We exploit an unexpected labor market reform to estimate the effects of a significant decrease in unemployment insurance (UI) generosity during an economic recession. On July 13, 2012, the Spanish Government reduced the replacement rate from 60% to 50% after 180 days of UI benefit receipt for all spells beginning after July 14, 2012. Using rich linked administrative data and a difference-in-differences approach, we show that the decrease in UI generosity resulted in higher sickness absence rates, thereby reducing the previously documented government savings from this reform. Our findings suggest that both financial stress and moral hazard are possible mechanisms. |
Keywords: | Unemployment insurance, sickness absence, policy reform, financial stress. |
Date: | 2024–11 |
URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2403 |
By: | Brian C. Fujiy |
Abstract: | I causally estimate local knowledge spillovers in R&D and quantify their importance when implementing R&D policies. Using a new administrative panel on German inventors, I estimate these spillovers by isolating quasi-exogenous variation from the arrival of East German inventors across West Germany after the Reunification of Germany in 1990. Increasing the number of inventors by 1% increases inventor productivity by 0.4%. I build a spatial model of innovation, and show that these spillovers are crucial when reducing migration costs for inventors or implementing R&D subsidies to promote economic activity. |
Keywords: | inventors, research and development, innovation, agglomeration, spillovers |
JEL: | F16 J61 O4 O31 R12 |
Date: | 2024–10 |
URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-59 |
By: | Weichselbaumer, Doris (University of Linz); Riess, Hermann (Johannes Kepler University Linz) |
Abstract: | In this study, we conduct an email correspondence test to examine ethnic discrimination against males with different immigration backgrounds (Serbian, Turkish/Muslim and Syrian/Muslim) in the Austrian rental housing market. In particular, we investigate the effect that immigrant generation has on callback chances. Property owners may perceive more recent immigrants as particularly "other" and fear that they will not be good tenants because, for example, they treat a property in an undesirable manner. We compare landlords' replies to inquiries from immigrants of the first, first and a half, and second generation to those who do not provide respective information about their immigration background. We find substantial levels of ethnic discrimination, which - in the case that no information on immigrant generation is provided - is highest for applicants with a Syrian name, followed by those bearing a Turkish and Serbian name. When applicants specify their place of birth and upbringing, callback rates are highest for second generation immigrants and lowest for first generation immigrants. This suggests advantages for more acculturated applicants. Accommodation seekers with a Syrian name, who may otherwise be perceived as refugees, benefit the most from stating that they were born in Austria. |
Keywords: | ethnic discrimination, housing market, email correspondence experiment |
JEL: | C93 R21 R31 |
Date: | 2024–10 |
URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17403 |
By: | Brüll, Eduard; Rostam-Afschar, Davud; Schlenker, Oliver |
Abstract: | We study how the threat of entry affects service quantity and quality of general practitioners (GPs). We leverage Germany's needs-based primary care planning system, in which the likelihood of new GPs reduces by 20 percentage points when primary care coverage exceeds a cut-off. We compile novel data covering all German primary care regions and up to 30, 000 GP-level observations from 2014 to 2019. Reduced threat of entry lowers patient satisfaction for incumbent GPs without nearby competitors but not in areas with competitors. We find no effects on working hours or quality measures at the regional level including hospitalizations and mortality. |
Keywords: | Entry regulation, general practitioners, healthcare provision, threat of entry, regression discontinuity design |
JEL: | I11 I18 J44 J22 L10 L22 R23 |
Date: | 2024 |
URL: | https://d.repec.org/n?u=RePEc:zbw:cexwps:305253 |
By: | Giovanazzi, Carmen; Victor, Vincent; Putscher, Dorothee |
Abstract: | We examine the dynamics of corporate investment in Germany during the 2000s, a period marked by stagnant macroeconomic investment spending. Employing a mixed-methods approach, we explore investment trends across national accounts data, firm-level financials, and responses from financial executives through our financial strategy survey. We show that while tangible investment remains the most important investment category, both macroeconomic and firm-level data indicate a decline. This decrease is offset by rising intangible investment, reflecting the emergence of the intangible economy. Despite this shift, investment has lagged behind rising corporate saving, leading to an increased net lending position. Often interpreted as corporate financialization, we find only moderate and partial evidence to support this view from a firm-level perspective. Additionally, while we find an increasing importance of M&A at the firm level, this development is not fully captured in the national accounts due to missing goodwill data. Our results underscore the necessity of multifaceted analysis in understanding investment dynamics. |
Keywords: | CFO Survey, Intangible Economy, Investment Strategy, Germany, M&A, Mixed Methods, Financialization |
JEL: | C83 D22 E01 E22 G3 L2 |
Date: | 2024 |
URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:305260 |
By: | Christoph Koenig (DEF, University of Rome "Tor Vergata"); Letizia Borgomeo (Research Department, Intesa Sanpaolo); Martina Miotto (DEM, University of Padova) |
Abstract: | We study the impact of a government subsidy program in Italy targeted at R&D-intensive projects presented by high-tech startups in 2009. Using the score assigned by the scientific commission to each project, we employ a Regression Discontinuity Design to study how the subsidy affected successful firms’ innovation activity and performance over more than 10 years. We show that the subsidy led to substantial increases in intangible assets and had a lasting positive effect on various dimensions of firm performance. Innovation as measured by patents did not respond to the subsidy. |
Keywords: | R&D subsidies, High-tech startups, Innovation policy, Firm performance |
JEL: | D22 G38 L52 O31 O34 O38 |
Date: | 2024–10–31 |
URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:585 |