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on Microeconomic European Issues |
| By: | Caliendo, Marco (University of Potsdam); Pestel, Nico (Maastricht University); Olthaus, Rebecca (DIW Berlin) |
| Abstract: | We investigate the long-term effects of the introduction of the German minimum wage in 2015 and its subsequent increases on regional employment. Using comprehensive survey data, we are able to measure the regional bite of the minimum wage in 2014, just before its introduction, as well as in 2018, before it was raised substantially in several steps. The introduction mainly affected the labour market in East Germany, while the minimum wage increases increasingly affected low-wage regions in West Germany, with about one third of regions changing their (binary) treatment status between 2014 and 2018. We use different specifications and extensions of the canonical difference-in-differences approach, as well as a set of new estimators that allow unbiased effect estimation with a staggered treatment adoption and heterogeneous treatment effects. Our results show a small negative effect on total dependent employment of 0.5%, driven by a significant reduction in marginal employment of 2.4%. The extended specifications suggest additional effects of the minimum wage increases, as well as stronger negative effects for those regions that were strongly affected by the minimum wage in both periods. |
| Keywords: | minimum wage, employment, regional bite |
| JEL: | J23 J31 J38 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17436 |
| By: | Francesconi, Marco (University of Essex); Sonedda, Daniela (University of Insubria) |
| Abstract: | Leveraging a major Italian reform enacted in June 2012 that eroded employment protection to workers on permanent contracts, we use detailed administrative data to estimate how this reduction affected the cost of job loss. We employ a stacked-by-event research design, which compares workers moving into nonemployment before and after the reform. Weakening employment protection led to additional penalties in terms of lower re-hiring earnings and lower re-employment probabilities. Heterogeneous effects of the reform deepened pre-existing divides, penalizing more, among others, young workers and workers living in the South. |
| Keywords: | layoffs, employment protection, dual labor markets, difference-in-differences, Italy |
| JEL: | J63 J65 J30 J41 J68 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17374 |
| 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 afer 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: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_606 |
| By: | Asbjoern Juul Petersen (Department of Economics, University of Copenhagen) |
| Abstract: | investigate what affects foreign students’ decision to stay and work in the host country after completion of higher education. Specifically I ask whether the network of native peers at university affect the probability that foreign students in Denmark stay in the country and find employment after ended studies. To identify the causal effects, I exploit idiosyncratic variation in the share of Danish students who are admitted into each study program over adjacent cohorts. I find that an increase in the share of native peers of one standard deviation increases the probability that foreign students are employed in Denmark two years after ended studies by 4 pct. points. The effects are significant at least four years after ended studies. Improved professional network and knowledge of the Danish labor market seem to be an important mechanism. |
| Keywords: | Foreign students, labor supply, peer effects, higher education |
| JEL: | J22 I21 F66 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2417 |
| By: | Peter Toth (National Bank of Slovakia); Matej Vitalos (Supreme Audit Office of the Slovak Republic) |
| Abstract: | We study the returns to language skills of immigrants using the European Adult Education Survey (2016). We estimate a standard income equation augmented by self-reported proficiency levels in the host country's language and in English. Contrary to earlier literature, we find that the inclusion of English skills of immigrants increases the estimated returns to proficiency in the local language. Next, considering heterogeneous effects across occupations, we find significantly positive returns to language proficiency only for medium-skilled occupations. Among those, blue-collar jobs reward fluency in both the local language and English. Whereas in white-collar jobs, only the knowledge of English yields significantly higher income. These estimates are consistent with occupational sorting of immigrants and suggest that there are complementarities between proficiency in languages and job skills for some occupations. Following earlier literature, we also corrected the potential endogeneity bias in host-country language skills using instrumental variable methods. Our findings could be relevant for immigration policies in Europe. |
| JEL: | J15 J31 J61 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1114 |
| By: | Martin Regnaud; Marie Breuille; Julie Le Gallo |
| Abstract: | This study provides a comprehensive analysis of the evolution of bid-rent functions forhousing prices and rents in 30 major French attraction areas during a period markedby the COVID-19 pandemic. We exploit 3.3M property transfers (DV3F) and 740’000rental listings posted on SeLoger’s portal to quantify the shifts. We observe a flatteningof the bid-rent curve in the wake of the pandemic, especially for large areas of more than200, 000 inhabitants and for sold properties (apartments or houses). Stronger flatteningof the bid-rent curve for sold properties is observed for a higher share of employees, more densely populated areas, and lower purchasing power. By contrast, the pandemichad little effect on bid-rent function slopes for rents. |
| Keywords: | Covid-2019; housing market; Real Estate Platforms Data; Structural Breaks |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2024-249 |
| By: | Yassine Lefouili (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse); Leonardo Madio (Unipd - Università degli Studi di Padova = University of Padua); Ying Lei Toh (Federal Reserve Bank - Kansas City) |
| Abstract: | We analyze how a privacy regulation taking the form of a cap on information disclosure affects quality-enhancing innovation incentives by a monopolist--who derives revenues solely from disclosing user data to third parties--and consumer surplus. If the share of privacy-concerned users is sufficiently small, privacy regulation has a negative effect on innovation and may harm users. However, if the share of privacy-concerned users is sufficiently large, privacy regulation has a positive effect on innovation. In this case, there is no trade-off between privacy and innovation and users always benefit from privacy regulation. |
| Keywords: | Privacy Regulation, Data Disclosure, Innovation |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04774302 |