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on Microeconomic European Issues |
| By: | Milene Tessarin; Ron Boschma; Deyu Li; Sergio Petralia |
| Abstract: | This paper presents an evolutionary perspective on regional development traps that centers around the structural inability of regions to develop new and complex occupations. Using European Labor Force Survey data, we follow occupational trajectories of 237 European regions and provide evidence on which regions are trapped, what kinds of traps they have fallen into, and which regions have managed to escape such traps. We find a clear-cut divide in Europe: almost all non-trapped regions are in Northern and Western Europe, while trapped regions are found primarily in South and Eastern Europe. However, this geographical divide does not apply to all types of regional traps. Our results also show that regional development traps are persistent: regions often remain in the same trap, but not always. Our study suggests a feasible pathway for low-complexity regions to overcome a development trap is by building capabilities in related occupations and then diversify into complex occupations. Once complexity levels are high, regions tend not to lose their complexity. |
| Keywords: | regional development traps, evolutionary traps, occupations, relatedness, complexity, low complexity trap, structural trap |
| JEL: | J24 J82 R11 O15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2501 |
| By: | Mathilde Almlund (VIVE, The Danish Center for Social Science Research); Mette Ejrnæs (Department of Economics, University of Copenhagen); Thomas H. Jørgensen (Department of Economics, University of Copenhagen) |
| Abstract: | We examine whether financial incentives affect fertility and family planning. We use a reform reducing child benefits paid to larger families together with Danish longitudinal register data on the universe of legal abortions and birth control pill purchases to address this question. We find that partnered women in low-income households reduced their fertility in response to the reform, partly by increasing the use of abortions. Younger women also increased the use of oral contraceptives. Responses are largest for younger and cohabiting women compared to their married counterparts. Our results show that family policies can affect family planning through financial incentives. |
| Keywords: | Childbirth, Abortion, Birth control, The Pill, Child Benefits |
| JEL: | J13 I38 J16 |
| Date: | 2025–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2502 |
| By: | Haag, Lucy; Oberrauch, Luis; Brahm, Taiga; Biewen, Martin |
| Abstract: | Economic literacy has far-reaching consequences on savings and investments and ultimately affects individual financial well-being. Several studies report a gender difference in economic literacy in favor of males, disadvantaging women and posing a threat to gender equality. However, there is limited evidence addressing the factors underlying the gender gap. Using a representative sample of German high school students (N=1, 958), we investigate gender differences in students’ economic literacy. Additionally, we examine potential explanatory factors for the gap that have been reported in previous studies focusing more narrowly on financial literacy and personal finance. Results confirm a substantial gender gap in economic literacy favoring boys (0.25 SD). Regression models and Oaxaca-Blinder decomposition analyses reveal math ability and interest in economics as important drivers for the gender gap. Self-efficacy and risk aversion are further factors accounting for the gap while most socialization variables appear to have little relevance. Including effort as a control variable increases the gap, suggesting that the gap may have been underestimated in previous studies that did not consider this factor. Our study provides important implications for policy interventions to mitigate the gender gap in economic literacy. |
| Keywords: | Economic Literacy, Gender Gap |
| JEL: | A21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:308430 |
| By: | Gallo, Giovanni; Nagore García, Amparo |
| Abstract: | This paper investigates the retirement response to the pandemic and to the resulting acceleration in the adoption of new technologies. Using the European Union Statistics of Income and Living Conditions datasets and leveraging the natural experiment of many workers being forced to work from home in Europe during the lockdown, we compare the retirement response of older workers in digital occupations (i.e. more exposed to the accelerated adoption of new technologies) versus non-digital occupations to detect any differences in retirement behavior, which we interpret as digitalization effects. In addition, we analyze changes in retirement decisions by gender and geographic area. We find that retirement rates increased during COVID-19 in Europe, especially in Mediterranean countries and among women. This trend may be linked to gender occupational segregation. In Mediterranean countries, digitalization increases female retirement, likely due to challenges in balancing digital work and family responsibilities while working from home. In Eastern countries, and to a lesser extent in Northern countries, digitalization leads to postponing retirement among women, likely due to greater gender equality in unpaid work. In contrast, the retirement age for men is less affected by the pandemic with no significant differences between digital and non-digital occupations. This may exacerbate the existing gender gap in labor force participation and pension outcomes. |
| Keywords: | Remote working, Early retirement, Working conditions, COVID-19, Digitalization |
| JEL: | J14 J24 J26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1553 |
| By: | Pierre Cahuc (Sciences Po) |
| Abstract: | This article provides an overview of the economic literature on short-time work. It presents the main characteristics of short-time work since its emergence in Germany in the 1930s. It analyzes its effectiveness as a job preservation mechanism, drawing on theoretical models and empirical studies. It concludes by highlighting the areas that future research could explore to address the most significant gaps in our understanding of short-time work. |
| Keywords: | Short-time work, furlough, employment, working hours |
| JEL: | J23 J41 J63 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2432 |
| By: | Kochen, Federico |
| Abstract: | To what extent can private firms’ external equity substitute for debt financing in a banking crisis? To answer this question, I use firm-level data and firm-bank linkages to estimate the causal effect of an imported lending cut from a large German bank on firms’ capital structure and real outcomes. The estimates imply that for every 1 euro reduction in debt, private firms in Germany received 0.27 euros of external equity. Firm-owner linkages indicate that outsiders provided equity funds in 40% of the firms that received an equity injection, while existing owners provided the funds in the rest. These findings highlight the importance of multiple sources of financing that can serve as backup facilities when the primary source of intermediation fails. The results also have implications for Macro-Finance heterogeneous firm models that typically overlook the role of equity financing. JEL Classification: G01, G21, G32, E32, E44 |
| Keywords: | banking crisis, capital and ownership structure, equity financing |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253008 |
| By: | Niels Johannesen; Johan Sæverud; Emmanuel Saez |
| Abstract: | This paper provides evidence that asset testing of social transfers substantially depresses the liquid wealth of the poor. Our setting is Denmark where the low-income elderly receive an annual payment (around $3, 000) if their end-of-year liquid wealth is below a threshold (around $15, 000). Using administrative data on income and wealth for the full population, we document that the wealth density distribution of the low-income elderly exhibits large but diffuse excess mass below the wealth threshold: The fraction with wealth between 50% and 100% of the wealth threshold is twice as high as for ineligible control groups who are slightly younger or have slightly higher income. A reform analysis supports a causal interpretation: excess mass below the threshold emerges around the introduction of the program and shifts when the threshold is increased discretely. The excess mass remains when we rely solely on third-party reported data to measure liquid wealth and therefore does not reflect strategic misreporting by the recipients. Finally, analyzing bank customer data with monthly information about wealth, spending and cash withdrawals shows that the excess mass largely reflects permanently lower levels of liquid wealth rather than temporary responses around the end of the year. |
| JEL: | H20 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33189 |
| By: | Ronize Cruz (Centre for Business and Economics Research, University of Coimbr); Francisco Nobre (University of Surrey, School of Economics); João Pereira dos Santos (Queen Mary University of London; ISEG - University of Lisbon, REM/ UECE; IZA) |
| Abstract: | This paper examines the rapid rise in short-term rentals (STRs) in Portugal and their impact on the performance of local businesses. Using comprehensive firm-level data covering all private companies, we find that exposure to STRs increases the probability of business closures, particularly for low-performing firms. For surviving incumbent firms, we estimate a significant surge in sales for both resident- and tourist-oriented businesses, along with increases in employment, wage bill, and liquidity for the latter. In civil parishes with greater STR exposure, we observe a higher probability of new firm entry, reshaping the urban business landscape. |
| Keywords: | Short-term rentals, Local businesses, Tourism, Portugal |
| JEL: | R12 L25 L83 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2024-04 |
| By: | Joep Konings; Aaron Putseys |
| Abstract: | We assess how subsidies for on-the-job training affect firm performance. Using a difference-in- differences research design, we find that these subsidies positively influence firm size, wages, and productivity. Over four years, employment increases by 3.55%, value added by 5.68%, and labor costs by 3.60%. Average wages and labor productivity grow by 1.95% and 2.12%, respec- tively. In the first year of treatment, a notable discrepancy exists between the wage (1.21%) and productivity (2.18%) effects, indicating incomplete rent-sharing. These positive effects are primarily seen in smaller firms, which significantly increase training expenditures and hours in the year they receive subsidies, resulting in more trained and skilled workers. Larger firms do not show similar effects, highlighting the possibility that these firms relabel existing training ac- tivities to take advantage of the training subsidy program. Additionally, we find that subsidies focused on training in human resource management, logistics, and business skills drive these positive outcomes for firm size at the firm level. |
| Keywords: | Productivity, Programme evaluation, SMEs growth, Training subsidies |
| Date: | 2025–01–10 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ceswps:757420 |
| By: | Joep Konings; Aaron Putseys |
| Abstract: | We assess how subsidies for on-the-job training affect firm performance. Using a difference-in- differences research design, we find that these subsidies positively influence firm size, wages, and productivity. Over four years, employment increases by 3.55%, value added by 5.68%, and labor costs by 3.60%. Average wages and labor productivity grow by 1.95% and 2.12%, respec- tively. In the first year of treatment, a notable discrepancy exists between the wage (1.21%) and productivity (2.18%) effects, indicating incomplete rent-sharing. These positive effects are primarily seen in smaller firms, which significantly increase training expenditures and hours in the year they receive subsidies, resulting in more trained and skilled workers. Larger firms do not show similar effects, highlighting the possibility that these firms relabel existing training ac- tivities to take advantage of the training subsidy program. Additionally, we find that subsidies focused on training in human resource management, logistics, and business skills drive these positive outcomes for firm size at the firm level. |
| Keywords: | Productivity, Programme evaluation, SMEs growth, Training subsidies |
| Date: | 2025–01–10 |
| URL: | https://d.repec.org/n?u=RePEc:ete:vivwps:757420 |
| By: | Sarah Le Duigou (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Pierre-Jean Messe (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, TEPP - Théorie et évaluation des politiques publiques - CNRS - Centre National de la Recherche Scientifique, CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM]) |
| Abstract: | This paper examines how unemployment insurance rules influence the employment effects of pension reforms prior to retirement. We develop a job-search model with a finite horizon introducing age-specific unemployment insurance rules and endogenous separations. The latter result from the employer's decision to offer a mutually agreed termination after an adverse productivity shock and from the worker's choice to accept the offer. We estimate the structural parameters of the model using French data on quarterly job separation and finding rates for workers aged 55-59 years. The model fits the data at more than 99%. It allows to reproduce the observed peak in employment outflows when the distance to the legal retirement age equals the potential benefit duration of the UI system. We demonstrate that combining an increase in the retirement age with a reduction in the generosity of the unemployment insurance scheme is an efficient policy for raising older workers' employment rates. We also put forward that the horizon effect, i.e. the positive effect of a rise in the legal retirement age on employment prior to retirement, is greater when the job-search requirements are low or when the potential benefit duration is high. |
| Keywords: | Pension Reform, Unemployment Benefits, Older Workers’ Employment |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04814517 |
| By: | Pascal Ricordel (EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université) |
| Abstract: | A common statement found in regional policy reports is that regional growth is an "export or die" issue. However, the succession of disruptions in the international supply chain has highlighted the crucial roles of domestic activities, local markets and short supply chains, turning the environmental and resilience challenge present in growth policy into a "domestic or die" issue. Recent regional growth theories have seriously questioned export activity as the only way in which to drive regional growth and have highlighted the crucial role of the domestic sector. However, no empirical study has assessed the roles of the domestic and export sectors in growth during this troubled economic period, despite the usefulness of this information for nonbiased policy decisions. Using a spatial endogenous regional growth model as a framework, we investigate the role of the domestic sector during the 1999–2014 period for 263 European Union (EU) Nomenclature of Territorial Units for Statistics (NUTS) regions. The results stress the importance of domestic productivity for regional growth during this period, which is characterized by three economic shocks, thereby elucidating the importance of domestic productivity for competitiveness and resilience issues. |
| Keywords: | domestic export sectors economic base theory endogenous growth model regional Dutch disease regional growth regional resilience spatial model, domestic export sectors, economic base theory, endogenous growth model, regional Dutch disease, regional growth, regional resilience, spatial model |
| Date: | 2024–02–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04841821 |
| By: | Eduardo de Sá Fortes Leitão Rodrigues |
| Abstract: | Savings play a critical role in both individual financial well-being and economic development. This article examines the impact of financial literacy, income, educational level, and age on saving decisions across 136 countries, using data from the Global Financial Inclusion Database (2021). Financial literacy is conceptualized as a latent variable, constructed from five indicators related to financial knowledge, financial behaviour, and financial attitudes, aligned with the Organisation for Economic Co-operation and Development (OECD) pillars. Employing Generalised Structural Equation Modelling (GSEM), the analysis demonstrates that financial literacy is a fundamental driver for the decision to save in the short and long term. Education level and income are consistent predictors of savings, while age exhibits distinct effects depending on the savings objective. Regional differences emerge, with Latin American countries showing the strongest link between financial literacy and savings, whereas in high-income economies, its influence is less pronounced. These findings underscore the multifaceted role of financial literacy in shaping saving decisions and highlight its implications for tailored public policies promoting financial literacy. |
| Keywords: | financial literacy; savings; GSEM approach. |
| JEL: | D14 G53 I22 C38 O16 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03622025 |
| By: | Stefania Albanesi (Department of Economics, University of Miami) |
| Abstract: | We examine the link between labour market developments and new technologies such as artificial intelligence (AI) and software in 16 European countries over the period 2011- 2019. Using data for occupations at the 3-digit level in Europe, we find that on average employment shares have increased in occupations more exposed to AI. This is particularly the case for occupations with a relatively higher proportion of younger and skilled workers. This evidence is in line with the Skill Biased Technological Change theory. While there exists heterogeneity across countries, only very few countries show a decline in employment shares of occupations more exposed to AI-enabled automation. Country heterogeneity for this result seems to be linked to the pace of technology diffusion and education, but also to the level of product market regulation (competition) and employment protection laws. In contrast to the findings for employment, we find little evidence for a relationship between wages and potential exposures to new technologies. |
| Keywords: | artificial intelligence, employment, skills, occupations |
| JEL: | J23 O33 |
| Date: | 2023–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:mia:wpaper:wp2023-01.rdf |
| By: | Enrico Maria Fenoaltea; Dario Mazzilli; Aurelio Patelli; Angelica Sbardella; Andrea Tacchella; Andrea Zaccaria; Marco Trombetti; Luciano Pietronero |
| Abstract: | The integration of artificial intelligence (AI) into the workplace is advancing rapidly, necessitating robust metrics to evaluate its tangible impact on the labour market. Existing measures of AI occupational exposure largely focus on AI's theoretical potential to substitute or complement human labour on the basis of technical feasibility, providing limited insight into actual adoption and offering inadequate guidance for policymakers. To address this gap, we introduce the AI Startup Exposure (AISE) index-a novel metric based on occupational descriptions from O*NET and AI applications developed by startups funded by the Y Combinator accelerator. Our findings indicate that while high-skilled professions are theoretically highly exposed according to conventional metrics, they are heterogeneously targeted by startups. Roles involving routine organizational tasks-such as data analysis and office management-display significant exposure, while occupations involving tasks that are less amenable to AI automation due to ethical or high-stakes, more than feasibility, considerations -- such as judges or surgeons -- present lower AISE scores. By focusing on venture-backed AI applications, our approach offers a nuanced perspective on how AI is reshaping the labour market. It challenges the conventional assumption that high-skilled jobs uniformly face high AI risks, highlighting instead the role of today's AI players' societal desirability-driven and market-oriented choices as critical determinants of AI exposure. Contrary to fears of widespread job displacement, our findings suggest that AI adoption will be gradual and shaped by social factors as much as by the technical feasibility of AI applications. This framework provides a dynamic, forward-looking tool for policymakers and stakeholders to monitor AI's evolving impact and navigate the changing labour landscape. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.04924 |