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on Microeconomic European Issues |
| By: | Biancardi, Daniele (European Commission Joint Research Centre (JRC)); Lucifora, Claudio (Università Cattolica del Sacro Cuore); Origo, Federica (University of Bergamo) |
| Abstract: | Short-time work (STW) has been widely used, both during the Great Recession and the COVID crisis, to preserve jobs. In most European countries, the implementation of STW schemes is often the result of bargaining between trade unions and employers, yet very little is known about the role of unions. In this paper, we investigate the effects of STW schemes on a number of firms' economic outcomes, considering the role of unions and collective bargaining. We use firm-level panel data, for the metal--engineering industry (from 2009 to 2015), with information on firms characteristics, STW use, industrial relations attributes, merged with accounting data. We estimate the elasticity of employment, working hours, wages and labour productivity to STW hours using an IV-FE estimator. We find that STW is an effective policy to preserve jobs in all firms. The positive effect on employment is supported by quite different mechanisms, which depend on unions presence and power in the firm. In low unionized firms wage cuts are the prevailing adjustment mechanisms, while in highly unionized firms, per-capita wages are insensitive to STW and adjustment mainly occurs through a reduction in working hours. These results are coherent with the use of STW as a work sharing device to protect incumbent workers who are mainly union members. |
| Keywords: | short-time work, employment, wages, labour productivity, unions |
| JEL: | J08 J38 J58 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17657 |
| By: | Honorata Bogusz (University of Warsaw, Faculty of Economic Sciences); Daniela Bellani (Università Cattolica, Milano) |
| Abstract: | In the 21st century, advancements in technologies such as industrial robots have raised concerns about their impact on employment and wages, prompting extensive research. However, their effects on workers’ subjective well-being remain underexplored. This study addresses this gap ¬by examining whether workers experience a decline in well-being due to a loss of agency or maintain it by leveraging human skills to adapt to automation. Using data from the International Federation of Robotics, Eurostat, and the European Social Survey (2002–2018), we link robot density at the country-industry-year level to workers’ life satisfaction, happiness, job influence, and health. Employing an instrumental variables approach, we find that robot adoption negatively affects medium-educated workers’ well-being, particularly its eudaimonic dimension, supporting the decreasing agency thesis. In contrast, low- and highly educated workers experience positive effects. These impacts are more pronounced among women and weaker in countries with robust compensatory social policies. |
| Keywords: | industrial robots, well-being, life satisfaction, Europe, education |
| JEL: | I31 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2025-01 |
| By: | Bruno Merlevede; Pablo Muylle (-) |
| Abstract: | Since the late 2000s, shocks and crises of various types have led to a revival of state intervention around the world. This paper builds a large firm-level dataset to analyze state ownership of firms in Europe for the period 2002-18. We confirm the underperformance of state-owned enterprises (SOEs) relative to privately-owned enterprises (POEs) found in earlier literature for this recent period for a range of firm-level performance indicators. We also examine the impact of SOEs on private firms. We find that larger SOE presence in an industry is associated with lower productivity growth and lower productivity levels among private firms in that industry, but does not affect industry dynamics in terms of entry and exit. This suggests potential aggregate productivity gains from reallocating resources from SOEs to POEs. Further, we show that employment is more stable and crisis-resistant at SOEs, and that SOEs are a more stable source of downstream input demand for other firms. Leveraging our dataset's cross-country nature, we find that SOEs are complements to, rather than substitutes for, lower quality institutions. |
| Keywords: | State ownership, Firm performance, Productivity, Spillover e ects, Privatization, Business dynamism |
| JEL: | H11 L25 L32 O47 P31 P52 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1105 |
| By: | Ulrich Glogowsky (Johannes Kepler University Linz); Emanuel Hansen (Ludwig-Maximilians-Universität in Munich); Dominik Sachs (University of St. Gallen); Holger Lüthen (German Federal Ministry for Economic Affairs and Climate Action) |
| Abstract: | Using German administrative data from the 1960s onward, this paper (i) examines the long-term evolution of child-related gender inequality in earnings and (ii) assesses the impact of family policies on this inequality. Our first (methodological) contribution is a decomposition approach that separates changes in child-related inequality into three components: the share of mothers, child penalties, and potential earnings of mothers (absent children). Our second contribution is a comprehensive analysis of child-related gender inequality in Germany. We derive three sets of findings. First, child penalties (i.e., the share of potential earnings mothers lose due to children) have increased strongly over the last decades. Mothers who had their first child in the 1960s faced much smaller penalties than those who gave birth in the 2000s. Second, the fraction of overall gender inequality in earnings attributed to children rose from 14% to 64% over our sample period. We show that this trend resulted not only from growing child penalties but also from rising potential earnings of mothers. Intuitively, in later decades, mothers had more income to lose from child-related career breaks. Third, we show that parental leave expansions between 1979 and 1992 amplified child penalties and explain nearly a third of the increase in child-related gender inequality. By contrast, a parental benefit reform in 2007 mitigated further increases. |
| Keywords: | child penalties; family policy; gender earnings gap; |
| JEL: | H31 J13 J22 |
| Date: | 2025–02–13 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:527 |
| By: | Dominy, Jonas; Gräbner-Radkowitsch, Claudius; Heimberger, Philipp; Kapeller, Jakob |
| Abstract: | This paper analyzes developmental trajectories in the EU. In doing so, it diagnoses economic polarization on two different levels: for one, we observe a divergence of average incomes across EU countries as a persistent empirical feature associated with European integration. For another, European economic integration in general and the introduction of the Euro in particular are associated with the emergence of heterogeneous developmental trajectories, which build on, and intensify differences in technological capabilities, institutional and legal setups, as well as labor market characteristics. When clustering countries with reference to similarities in terms of macroeconomic and institutional characteristics across countries, we find evidence for the existence of four distinct development models: core, periphery, and workbench economies, as well as financial hubs. Each of these groups is defined by distinct technological, institutional, and macroeconomic characteristics. Our findings point to suitable ways for extending and refining existing typological approaches, such as the Varieties of Capitalism or the growth model approach, thereby allowing us to better account for the heterogeneity of developmental pathways emerging in the course of an intensifying European race for the best location. |
| Keywords: | Economic polarization, European integration, Development models, growth models, European Union |
| JEL: | B5 F6 F45 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:311852 |
| By: | Bertheau, Antoine (Dept. of Economics, Norwegian School of Economics and Business Administration); Kudlyak, Marianna (Research Department, Federal Reserve Bank of San Francisco); Larsen, Birthe (Dept. of Economics, Copenhagen Business School); Bennedsen, Morten (Dept. of Economics, University of Copenhagen) |
| Abstract: | We use a novel large-scale survey of firms, implemented in Denmark in 2021 and linked to administrative data, to study why firms lay off workers instead of cutting wages. Our questions on layoffs, wage cuts, and the link between them provide new insights into firms' strategies for adjusting labor in response to adverse shocks. We find that layoffs are more prevalent than wage cuts, but wage cuts are not rare in firms experiencing revenue reduction and were used by 15% of such firms. Employers are hesitant to cut wages in many instances because they see wage cuts as a poor substitute for layoffs. First, firms report that lowering wages triggers costs through the impact on morale and quits. Comparing these costs with potential savings from wage cuts, most employers in the survey agree that a wage reduction would not have saved jobs. Second, firms report that a crisis is an opportune time for layoffs because of lower opportunity costs of restructuring and because layoffs during a crisis are perceived by workers as more fair. We find that firms that report such opportunistic layoffs are less likely to implement wage cuts. |
| Keywords: | Wage rigidity; Layoffs |
| JEL: | D22 J23 J30 J63 |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_004 |
| By: | Elisabetta Iossa (CEIS & DEF, University of Rome "Tor Vergata"); Chiara Latour (University of Stockholm) |
| Abstract: | Do firms with higher legality standards contribute to better procurement outcomes? We address this question in the context of Italian public works procurement, by combining contract-level data on procurement and firm-level data on legality scores, using the Legality Rating System managed by the Italian Antitrust Authority. We find that higher legality scores are positively associated with a significant and economically important improvement in procurement efficiency, measured by shorter time delays and lower extra costs. |
| Keywords: | Cartels, corruption, firm efficiency, legality, procurement |
| JEL: | H57 K40 L4 |
| Date: | 2025–02–10 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:592 |
| By: | Onnis, Luisanna (Cardiff Business School, Cardiff University); Piga, Claudio A. (Department of Economics, University of Genoa); Conti, Maurizio (Department of Economics, University of Genoa); Bottasso, Anna (Department of Economics, University of Genoa) |
| Abstract: | In July 2020, the UK government reduced the VAT rate on hospitality services from 20% to 5% as an emergency policy intervention. Using a novel dataset of detailed hotel room characteristics in the UK and elsewhere, we estimate how much of the tax cut was passed on to consumers via a price reduction. We find a statistically significant contemporaneous pass-through to hotel room prices that varies between approximately 20% and 50%, with a peak effect observed in the second week after the reform. However, the pass-through effect is discretionary, as discounts were negligible for rooms sold two months after the policy introduction. |
| Keywords: | VAT Cut; Pass-Through; Hospitality |
| JEL: | H22 H25 L83 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2025/4 |
| By: | Colcerasa, Francesco; Giammei, Lorenzo; Subioli, Francesca |
| Abstract: | Restoring the theoretical foundation of John Roemer’s conceptualization of inequality of opportunity (IOp), we introduce an innovative empirical approach to measure unfair inequalities through Bayesian networks. This methodology enhances our understanding of income inequality through structural learning algorithms, generating an IOp index and, most importantly, shedding light on the underlying income formation process. We demonstrate how this proposal relates to established measurement methods through simulated data, and provide an application to five European countries to illustrate the potential of Bayesian networks in the context of measuring inequality of opportunity. |
| Keywords: | inequality of opportunity; EU-SILC; Bayesian networks |
| JEL: | A13 C43 D63 I20 |
| Date: | 2025–02–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127182 |
| By: | Di Gioacchino, Debora; Ghignoni, Emanuela; Verashchagina, Alina |
| Abstract: | The prolonged career break around childbirth is one of the reasons behind large motherhood penalties in terms of pay and employment opportunities. We aim to understand what is driving the duration of career break in Italy, where it often remains longer than the five-month obligatory maternity leave. The theoretical model proposed describes trade-offs about career, fertility and time devoted to children, allowing for heterogeneity in women's education and preferences for parenting versus career. This preference is an individual characteristic which can be influenced by social norms and gender stereotypes. By relying on PLUS 2014 and 2021 surveys, we test model predictions and reveal an interesting shift: while a decade ago women characterised by higher parenting priority seemed to be more exposed to the risk of dropping out from the labour market, nowadays the desire to have kids appears to go side by side with the desire to maintain paid employment. We interpret this as a course for economic independence on the side of Italian women, especially the more educated, probably related to a shift in their priorities from parenting towards work and career. Further analysis is proposed to understand how the prevailing social norms and local characteristics could impact on career break and labour market participation. |
| Keywords: | Career break, Female labour force participation, Italy |
| JEL: | D10 J13 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1564 |
| By: | Marydas, Sneha (RS: GSBE MGSoG, Maastricht Graduate School of Governance); Mathew, Nanditha (Maastricht Graduate School of Governance, RS: GSBE MORSE, RS: GSBE MGSoG); De Marzo, Giordano; Pietrobelli, Carlo (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn) |
| Abstract: | In this study, using a novel dataset that matches firm-level data with online job vacancy data, we investigate the effects of firms’ digital technology adoption on future hiring and the dynamics of hiring and training, focusing on different types of technologies and categories of occupations. First, we examine the impact of adopting different types of digital technologies, namely AI, Advanced ICT, and Basic ICT, on future firm hiring. Our findings reveal that less advanced digital jobs (eg. Basic ICT, Advanced ICT) are substituted by more advanced digital jobs (eg. AI), while the advanced technology adoption by firms leads to increased overall hiring of non-digital roles. Second, we show that there is a positive relationship between training and new hiring only for one occupational category, namely, managers, with no significant relationship for other occupations. Third, we investigate the joint effect of training and technology adoption for firm performance. Our findings reveal that digital technology adoption enhances a firm’s financial performance only when combined with internal staff training. The sole exception is AI, which yields positive performance benefits even in the absence of training. |
| JEL: | O33 O12 L20 D22 |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025004 |
| By: | Caselli, Mauro; Traverso, Silvio |
| Abstract: | This study examines whether trade competition from low-wage countries (LWCs) can influence immigration patterns in an advanced economy. We focus on Italy between 2003 and 2013, a period characterized by rising market pressure from China and Eastern Europe. Using census data on sectoral employment, administrative records on immigrants by nationality, and disaggregated bilateral trade data, we investigate whether heightened import competition acted as a pull factor for migrant workers at the local labor market level. To identify the exogenous component of these trade shocks, we adopt a shift-share instrumental variable strategy, while disaggregating immigrant data by nationality allows us to control in detail for the role of local networks and for bilateral push and pull factors. Our findings indicate that trade competition from LWCs significantly increased local immigrant shares. We hypothesize, and provide indirect evidence, that firms under competitive pressure tried to cut labor costs by relying on a more flexible, lower-paid workforce, primarily composed of foreign workers. |
| Keywords: | Import competition, International migration, Trade shocks, Italy |
| JEL: | F14 F16 F22 J61 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1562 |
| By: | Eckhard Hein; Moritz Marpe; Karolina Schütt |
| Abstract: | Ederer/Rehm (2020b) empirically calibrated long-run equilibrium wealth distribution for ten European countries, mainly using 2010 Household Finance and Consumption Survey (HFCS) data. Measuring wealth inequality through the capitalists’ share of wealth, they find that seven out of ten countries deviate from Piketty’s (2014) prediction that under the condition of r > g wealth distribution will become ever more unequal. With the actual capitalists’ share in 2010 below the calibrated equilibrium, however, they forecast increasing wealth inequality. Our research extends this analysis in two ways. Firstly, using the 2010, 2014, 2017, and 2021 HFCS data, we recalibrate the equilibrium based on 2010 data and track the capitalists’ share of wealth over the decade. We observe convergence tendencies towards the stable long-run equilibrium in some but not in all countries. Secondly, we expand the Ederer/Rehm (2020b) model to include real estate assets and mortgage debt. Recalibrating the long-run equilibrium for this extended model using 2010 values produces a similar pattern: For three countries, Piketty’s prediction holds, while for the remaining seven the equilibrium capitalists’ wealth share is lower than 100 per cent. The extended model shows a much lower actual capitalists’ share of wealth, supporting the idea that real estate assets, adjusted for mortgage debt, are more equally distributed than other types of wealth. Wealth inequality for the extended model is also predicted to rise. Based on 2014, 2017 and 2021 HFCS data, we indeed find a convergence of actual wealth distribution towards the stable long-run equilibrium for some, but not for all countries. In several countries, the stable long-run equilibrium distribution itself varies over time, partly in line with actual distribution which points to potential endogeneity of the former towards the latter. The channels remain to be explored. |
| Keywords: | Wealth distribution, post-Kaleckian model, model calibration |
| JEL: | D31 E12 E21 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2506 |