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on Microeconomic European Issues |
| By: | Usman, Sehrish |
| Abstract: | Who thrives when alimony payments change? Restrictions on spousal alimony influence intra-family economic decisions by altering bargaining positions and raising concerns about post-divorce financial instability. Existing findings on restricted regimes are contradictory and need more clarity on the differential impact across heterogeneous households. This paper explores behavioural adaptations in labour supply and saving decisions of intact married partners in response to amendments in alimony reform in Germany. Using a difference-in-difference framework and longitudinal and retrospective datasets, I show that policy led to increased labour market participation of married women. However, behavioural responses vary significantly depending on the age cohort, family composition, duration of relationship, and income levels. |
| Keywords: | Household Economics, Spousal bargaining, Intra-family Decisions, Saving, Labor Supply, Policy Reform |
| JEL: | D13 D14 J12 J18 J22 |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122806 |
| By: | Brescianini, Sonia (Istituto Superiore di Sanità); Cappellari, Lorenzo (LISER); Checchi, Daniele (University of Milan) |
| Abstract: | We use administrative data on educational attainments and life-time earnings to study their correlations among Italian twins. Using the ACE decomposition, we find that heritability in education accounts to almost half of the variance, especially for younger birth cohorts. With respect to labour market outcomes, we find that only for the oldest cohorts there is a greater share of inequality that can be attributed to idiosyncratic factors compared to education, and symmetrically a lower share due to genetics, while the impact of shared environment remains stable among the youngest cohorts. We suggest that increased employment flexibility may be responsible for the decline in the environmental component. Using a larger sample of pseudo-twins (individuals sharing birth date, birth place and family name) we confirm previous results, providing evidence that heritability also drives labour market attachment and prosocial behaviour. |
| Keywords: | heritability, inequality, labour market outcomes, Italy |
| JEL: | D31 E21 I24 J31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17476 |
| By: | Balgova, Maria (Bank of England); Illing, Hannah (University of Bonn) |
| Abstract: | This paper examines the differential impact of job displacement on migrants and natives. Using administrative data for Germany from 1997-2016, we identify mass layoffs and estimate the trajectory of earnings and employment of observationally similar migrants and natives displaced from the same establishment. Despite similar pre-layoff careers, migrants lose an additional 9% of their earnings in the first 5 years after displacement. This gap arises from both lower re-employment probabilities and post-layoff wages and is not driven by selective return migration. Key mechanisms include sorting into lower-quality firms and depending on lower-quality coworker networks during job search. |
| Keywords: | immigration, job displacement, job search |
| JEL: | J62 J63 J64 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17496 |
| By: | Morelli, Salvatore; Nolan, Brian; Palomino, Juan C.; Van Kerm, Philippe |
| Abstract: | This paper uses survey data from Germany, Spain, France, Italy, Great Britain and the United States to analyze how inheritances impact wealth inequality in a range of rich countries. Adopting an influence function regression approach, the paper calculates the counterfactual effects of small increases in the share of recipients of different-sized wealth transfers in each country. Results suggest that while a marginal increase in inheritance recipients generally contracts wealth inequality measures – confirming a common finding in the literature that inter-generational transfers tend to reduce relative wealth inequality – an increase in recipients of ‘large’ inheritances has the opposite effect. We determine what ‘large’ means in this context by point-estimating the thresholds above which transfers become disequalising. Such thresholds are then put in perspective against the inheritance tax schedules in place in the six countries analyzed. No unique pattern emerges. While the thresholds are very close to tax exemption thresholds in Britain and Germany, they are somewhat higher in France and Spain and they are much lower in Italy and the United States. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2024–12–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:j76ds |
| By: | Filser, Andreas (University of Oldenburg); Achard, Pascal; Frodermann, Corinna; Müller, Dana; Wagner, Sander |
| Abstract: | This study compares the size and stratification of motherhood penalties in labour market participation between France and Germany- two countries with contrasting policy regimes regarding maternal employment. France encourages a swift return of mothers to the labour market, whereas Germany does not. Using harmonized administrative data, we analyse labour market trajectories of 24, 112 French and 74, 258 German women who were employed prior to birth and had their first child between 1997 and 2014. Our results reveal that women with higher pre-birth income, education, and employment in higher-wage firms experience less employment loss in both countries. Among these dimensions, pre-birth income emerges as the strongest stratifying factor when analysed jointly. Motherhood penalties are significantly smaller in France, predicting less than a third of the overall employment reduction found in Germany during the five years after birth. However French penalties are more stratified than across all three dimensions of stratification. For instance, in France, a mother from the lowest income quintile faces a participation reduction that is 3.14 times greater than that of a mother from the highest quintile, whereas in Germany, this ratio is 1.17. Within Germany, East Germany exhibits smaller but more stratified penalties. Finally, we test if the observed macro-level patterns - where bigger penalties correspond to less stratification - generalize to local labour markets. An analysis of 65 NUTS-2 regions in both countries rejects this hypothesis. These findings suggest that in regimes promoting rapid labour market reintegration, mothers from lower socio-economic backgrounds may face greater challenges. |
| Date: | 2024–12–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:tn5v7 |
| By: | Valenti, Giulia; Vona, Francesco |
| Abstract: | This paper examines the impact of temperature shocks, measured by cold and heat waves, on labour market outcomes across 14 European countries. Using retrospective individual-level data from the Survey on Health, Ageing, and Retirement in Europe (SHARE) and daily climate data from the E-OBS dataset, we analyze the effect on wages and occupational transition. By leveraging plausibly exogenous weather shocks, we find that heat waves significantly reduce individual income, with losses accumulating over time. Moreover, our analysis documents that older individuals, those with severe health conditions, and workers in heat-exposed occupations experience particularly large income reductions. Losses are also more pronounced in Mediterranean and Eastern European countries, as well as in regions with less regulated wage-setting mechanisms. Additionally, our findings suggest that heat waves increase the likelihood of changing jobs and in particular to transition from heat-exposed to non-heat-exposed occupations. These results underscore the need for targeted policy interventions to mitigate economic losses and protect vulnerable workers in the face of increasing climate variability. |
| Keywords: | Climate Change, Labor and Human Capital |
| Date: | 2024–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:348848 |
| By: | Giulia Valenti (Ca’ Foscari University of Venice and Fondazione Eni Enrico Mattei); Francesco Vona (University of Milan and Fondazione Eni Enrico Mattei) |
| Abstract: | This paper examines the impact of temperature shocks, measured by cold and heat waves, on labour market outcomes across 14 European countries. Using retrospective individual-level data from the Survey on Health, Ageing, and Retirement in Europe (SHARE) and daily climate data from the E-OBS dataset, we analyze the effect on wages and occupational transition. By leveraging plausibly exogenous weather shocks, we find that heat waves significantly reduce individual income, with losses accumulating over time. Moreover, our analysis documents that older individuals, those with severe health conditions, and workers in heat-exposed occupations experience particularly large income reductions. Losses are also more pronounced in Mediterranean and Eastern European countries, as well as in regions with less regulated wage-setting mechanisms. Additionally, our findings suggest that heat waves increase the likelihood of changing jobs and in particular to transition from heat-exposed to non-heat-exposed occupations. These results underscore the need for targeted policy interventions to mitigate economic losses and protect vulnerable workers in the face of increasing climate variability. |
| Keywords: | Temperature, labour market, wages, occupational transition |
| JEL: | Q54 J24 J30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.31 |
| By: | Bagues, Manuel (University of Warwick); Villa, Carmen (University of Warwick) |
| Abstract: | Over the past decades, many European countries have raised the minimum legal drinking age (MLDA) from 16 to 18 years. This study provides novel evidence of the impact of this policy on educational outcomes by exploiting the staggered timing of MLDA changes across Spanish regions. Raising the MLDA decreased alcohol consumption among adolescents aged 14–17 by 8 to 18% and improved their exam performance by 4% of a standard deviation. This effect appears driven by alcohol's direct impact on cognitive ability, as we find no significant changes in potential mediators like use of other substances or time spent on leisure activities, including socialising, sports, gaming, or internet use. We also observe a decrease in tranquilliser and sleeping pill use, suggesting improved mental health. Our findings indicate that reducing teenage alcohol consumption represents a significant opportunity to improve educational outcomes in Europe, where youth drinking rates remain notably high. |
| Keywords: | alcohol, adolescence, minimum legal drinking age, PISA |
| JEL: | I18 I12 I21 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17507 |
| By: | Nicola Gagliardi |
| Abstract: | This PhD thesis includes three original microeconomic analyses that investigate critical factors influencing workers’ wages and firm productivity, and underpinning relevant megatrends poised to reshape economic systems and lifestyles worldwide for decades to come. Specifically, the thesis explores the following dimensions: firms’ relative positioning within Global Value Chains (GVCs), organizational tenure (i.e. the length of employment in a given firm), and the economic implications of global warming. The first two analyses focus on the Belgian labor market, while the third adopts a broader European perspective. Based on matched employer-employee data relative to the Belgian manufacturing industry for the period 2002-2010 combined with a unique indicator of firm-level upstreamness (i.e. the steps before the production of a firm meets final demand), Chapter 1 shows that workers earn significantly higher wages when employed in more upstream firms. However, the benefits from upstreamness are found to be unequally shared among workers, both along the wage distribution and when considering the gender dimension of the workforce. Using rich longitudinal matched employer-employee data on Belgian firms over the period 2005-2016, Chapter 2 point to positive, but decreasing, returns to tenure. The study also finds that the impact differs widely across several firm dimensions (e.g. task routineness, job complexity, capital intensity). Using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries over the period 2013-2020, combined with detailed weather data, including temperature, Chapter 3 reveals that global warming significantly and negatively impacts firms’ Total Factor Productivity (TFP). Labor productivity also declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Such impacts appear to persist across geographical, sectoral, and firm-specific dimensions. |
| Keywords: | Global Value Chains; Firm Productivity; Wages; Gender Wage Gap; Organizational Tenure; Climate Change; Global Warming |
| Date: | 2025–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/386761 |
| By: | Celina Proffen; Franziska Riepl |
| Abstract: | This paper examines the impact of introducing birthright citizenship in Germany on the educational trajectories of second-generation immigrants. Our identification strategy exploits a legal change in 2000 that granted children of foreigners with longtime residency automatic citizenship at birth. Using high-quality census data, we show that the reform contributes to closing pre-existing educational gaps in secondary school track choice and completion. These findings also hold when relying exclusively on within-household variation across siblings. We provide evidence for the underlying mechanisms, highlighting the roles of higher expected returns to education and of an increased sense of belonging to Germany. |
| Keywords: | birthright citizenship, education, human capital, integration, immigration |
| JEL: | J15 J24 K37 O15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11483 |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Szymczak, Wojciech (Institute for Structural Research (IBS)) |
| Abstract: | We study the effect of the adoption of automation technologies – industrial robots, and software and databases – on the incidence of atypical employment in 13 EU countries between 2006 and 2018. We find that industrial robots significantly increase atypical employment share, mostly through involuntary part-time and involuntary fixed-term work. We find no robust effect of software and databases. We also show that the higher trade union density mitigates the robots' impact on atypical employment, while employment protection legislation appears to play no role. Using historical decompositions, we attribute about 1-2 percentage points of atypical employment shares to rising robot exposure. |
| Keywords: | robots, automation, atypical employment, trade unions |
| JEL: | J23 J51 O33 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17544 |
| By: | Joan Costa-Font; Cristina Vilaplana-Prieto; Joan Costa-i-Font |
| Abstract: | The hidden value of adult informal care (IC) refers to the unaccounted value of informal care in overall costs of long-term care (LTC) estimates. This paper estimates the net wellbeing value of adult IC in Europe, drawing on a wellbeing-based methodology. We use an instrumental variable strategy and a longitudinal and cross-country dataset to estimate the causal effect of the extensive and intensive margin of caregiving on subjective wellbeing. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer to compensate for the net disutility of caregiving. We find that IC reduces average subjective wellbeing by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country’s Gross Domestic Product (GDP), the value of informal care ranges between 4.2% in France and 0.85% in Germany, which is inversely correlated with the country’s share of formal LTC spending and leads to reconsidering LTC regimes. The average CS per hour of IC ranges between 9.55 €/hour, ranging between 22 €/hour in Switzerland and 5 €/hour in Spain. Finally, we also find that long-term CS is smaller than short-term CS. |
| Keywords: | informal care, wellbeing methods, the value of time, caregiving, daughters, life satisfaction |
| JEL: | I18 J17 J18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11535 |
| By: | Baraldi, Anna Laura; Cantabene, Claudia; De Iudicibus, Alessandro; Fosco, Giovanni |
| Abstract: | The allocation of funds to finance cohesion policies has been a significant European and national level activity. We focus on the 2007-2013 and 2014-2020 programming periods within a 23-year (2000 to 2022) time frame to assess whether and how cohesion funds have affected per-capita income growth rates in the municipalities in the Objective 1 Italian regions of Calabria, Campania, Apulia, and Sicily. We use static and dynamic difference-in-differences methodologies. Municipal level examination allows us to filter out the distorting effects generated by characteristics typical of those countries whose regions have benefited from the allocation of structural funding. The literature shows that structural funding causes contrasting effects on various economic variables. We found significant increases in municipal per-capita income growth rates in the treated compared to the control group of municipalities, with increased effects starting from the 10th year after the first payment. We interpret our results in terms of income inequality; we show that funding causes a rise in both the Gini and Atkinson inequality indexes. This suggests that while EU cohesion funds have been effective for promoting income growth, they have not improved equity. |
| Keywords: | Cohesion Policies, Diff-in-Diff, Objective 1 Regions, Income growth, Inequalities |
| JEL: | C21 C22 R11 R15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123048 |
| By: | Tiago Leitão (NOVA SBE Economics Club, MSc Economics); Laura Bartolomeu (NOVA SBE Economics Club, MSc Economics); Francesca di Biase (NOVA SBE Economics Club, MSc Economics) |
| Abstract: | This research project aims to investigate the impact of post-displacement job mobility on wage dynamics for displaced workers (i.e. workers who lost their jobs due to firm closures) in the Portuguese labor market. The study utilizes a nationally representative matched employer-employee dataset and a multi-dimensional fixed effects event study model to estimate the differences in wage trajectories for displaced workers who experience post-displacement occupational, industrial and geographic mobility compared to the displaced workers who do not. The findings reveal that changes in job title significantly impact wage trajectories, with workers experiencing occupational mobility facing significantly worse outcomes even five to six years after displacement. Geographical mobility also shows negative effects, particularly for women. However, no significant differences are found for workers who move from one industry to another. This study contributes to the existing literature on factors impacting wage dynamics and provides insights valuable for individual career choices and governmental policy-making. |
| Keywords: | Displacement; Job Mobility; Wage Dynamics; Multi-Dimensional Fixed Effects |
| JEL: | J61 J62 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mde:wpaper:188 |
| By: | Giannantoni, Costanza; Rodríguez-Pose, Andrés |
| Abstract: | Declining fertility and the persistent underrepresentation of women in the labour market are key concerns of our time. The fact that they overlap is not fortuitous. Traditionally, women everywhere have faced a conflict in balancing their career ambitions with family responsibilities. Yet, the pressures arising from this conflict vary enormously from one place to another. Existing research has tended to overlook the geographical features of this dilemma, which could result in an inadequate understanding of the issue and lead to ineffective policy responses. This paper examines how variations in the quality of regional institutions affect women’s capacity to reconcile career and motherhood and, consequently, gender equality within Europe. Using panel data from 216 regions across 18 European countries, we uncover a positive effect of regional institutional quality on fertility rates, taking into account variations in female employment. Moreover, we show that European regions with better government quality provide a more reliable environment for managing the career/motherhood dilemma often faced by women. In contrast, women living in regions with weaker government institutions are more constrained in both their career and childbearing options. |
| Keywords: | fertility; gender equality; institutional equality; European regions |
| JEL: | J11 J13 R11 |
| Date: | 2024–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125631 |
| By: | Antonin Bergeaud (HEC Paris, CEP-LSE, CEPR); Max Deter (University of Potsdam); Maria Greve (Utrecht University); Michael Wyrwich (Groningen University) |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on German patents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | patents, migration, Germany, Iron Curtain, innovation |
| JEL: | H10 N44 P20 D31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:84 |
| By: | Bonatti, Luigi; Lorenzetti, Lorenza Alexandra; Traverso, Silvio |
| Abstract: | This paper discusses the potential introduction of permanent public subsidies to supplement the wages of low-paid workers in Italy, taking inspiration from Edmund Phelps' ideas on supporting the working poor. We consider how a negative taxation scheme for low-wage earners might address structural labor market challenges such as low participation rates, labor market segmentation, and widespread in-work poverty. Using a stylized theoretical model, we illustrate how such subsidies could affect wages, employment, and labor supply-demand dynamics, with a particular focus on potential cost implications under different elasticity assumptions. We also consider how design features - such as targeting full-time workers or integrating the subsidy with broader social and economic reforms - could maximize the measure's impact while mitigating risks related to fraud or uneven coverage. Finally, a scenario analysis based on Italian Labor Force Survey data provides an indication of the policy's likely scale and distributional effects. The paper concludes by reflecting on both opportunities and challenges for implementing wage subsidies in Italy's segmented labor market. |
| Keywords: | Low-skilled workers, Working poor, Wage subsidies, Negative taxation |
| JEL: | D04 H20 J20 J38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1552 |