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on Microeconomic European Issues |
| By: | Ulrike Famira-Mühlberger (WIFO); Thomas Horvath; Thomas Leoni (University of Applied Sciences Wiener Neustadt); Martin Spielauer (WIFO); Philipp Warum (WIFO) |
| Abstract: | As populations in Asia and Europe face unprecedented levels of ageing, the demand for long-term care (LTC) is escalating, thereby challenging the sustainability of social protection systems. This paper employs a novel dynamic microsimulation model to project LTC demand and supply in Austria and Spain through 2070, utilising data from the Survey of Health, Ageing and Retirement in Europe (SHARE). The findings of the study indicate that, in the context of the current demographic trends, both Austria and Spain are on course to experience an approximate 90 percent increase in the number of LTC hours required. This increase is primarily driven by improved mortality rates and shifts in population age structures. The model applies a stylized needs assessment and reveals that while the proportion of individuals needing care may decrease until 2040, significant increases in care gaps are anticipated thereafter, necessitating a substantial increase in both formal and informal care provision. The analysis further underscores pronounced variations in care delivery models across the two nations. While Austria places greater emphasis on formal care, Spain's system is marked by a more pronounced reliance on informal care. The analysis suggests that both countries will encounter difficulties in meeting the increasing demand, with the gap between care needs and available hours more than doubling, particularly in Spain. Furthermore, educational attainment plays a crucial role in shaping future care needs, with potential strategies to mitigate demand through enhanced educational opportunities. The scenarios presented demonstrate the sensitivity of LTC needs to assumptions about health trends, emphasising the importance of proactive policy measures tailored to each country's socio-cultural context. The findings of this study indicate a necessity for augmented public funding for formal care services, the implementation of supportive policies for informal caregivers, and the adoption of collaborative approaches among stakeholders to establish sustainable and equitable solutions to the challenges posed by long-term care. The study acknowledges limitations related to data and modelling choices, and suggests avenues for further research on the interplay between education, health improvements, and the evolving dynamics of care provision. |
| Date: | 2025–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2025:i:700 |
| By: | Christina Siegert |
| Abstract: | The transition to parenthood is a critical period that exacerbates gendered economic inequality, with mothers more likely than their partners to experience employment disruptions and income losses. This study examines individual poverty risk among partnered indivduals (N=1, 237) in Germany from a life course perspective, analyzing how gendered career patterns around first births between 1992 and 2013 intersect with changes in individual poverty risk, i.e. under the assumption of no income pooling. Applying multichannel sequence analysis (MCSA) to data from the Socio-Economic Panel, the findings reveal substantial heterogeneity in how poverty–employment trajectories unfold after childbirth, both between genders and among women. Men’s employment and financial stability remain largely unchanged after parenthood, whereas women’s economic trajectories vary widely. While most women are financially stable before childbirth, their post-birth pathways diverge. Some return to work quickly with minimal poverty risk, while others take extended parental leave and face prolonged risks. A smaller group is persistently vulnerable even before childbirth, with consistently weak labor market attachment. Over time, the share of women in financially stable trajectories has increased, likely reflecting policy changes that support earlier labor market reintegration. However, a subset of women remains at high risk, particularly those with lower pre-birth earnings. The findings highlight the necessity of long observation periods, as poverty risks evolve beyond the initial years of parenthood, and demonstrate the utility of MCSA in describing these dynamics. |
| Keywords: | poverty, employment, childbirth, motherhood, life course, sequence analysis |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1220 |
| By: | Ayhan Adams; Katrin Golsch |
| Abstract: | This study investigates the impact of child-related absence from work on the income of working mothers and fathers, addressing a significant research gap in sociology and labour economics. While previous research has established that gender and parenthood significantly influence income levels, the consequences of caring for a sick child—a common and unpredictable responsibility—remain inadequately explored. We utilise longitudinal data from the German Socio-Economic Panel Study (2010-2022) to examine how the accumulation of absence days due to child illness affects income levels and changes in income over four years among parents while controlling for various job and family-related characteristics. Our findings indicate that increased absenteeism related to child sickness adversely affects fathers’ income, aligning with signalling theory, which suggests that absent workers may be perceived as less committed by employers. In contrast, mothers appear to experience less significant income impacts from similar absences, indicating that the stigma associated with absence days may be less pronounced. Additionally, we investigate the role of socio-economic status in these effects, finding that higher income positions do not amplify the negative signalling associated with child-related absenteeism for fathers. Meanwhile, we observed no association between mothers’ income and child sickness-related absence when distinguishing between higher and lower income positions, potentially indicating prevailing gendered expectations in the workplace. The results underscore the need for further research into the socio-economic implications of caring for a sick child and employer perceptions to gain deeper insights into the dynamics of work-life balance and career consequences. |
| Keywords: | child sick care; income; gender; signalling theory |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1219 |
| By: | Buchner, Martin; Rehm, Miriam |
| Abstract: | This paper aims to understand the health effects of energy poverty in Germany using SOEP panel data from 2010 to 2020. Linear probability models and fixed effects ordered logit models reveal a consistently negative relationship of three expendituresbased energy poverty indicators with general health. The association is stronger for the subjective energy poverty metric: members of households unable to keep the home comfortably warm due to financial reasons have an about 3.23 p.p. lower probability of being in at least satisfactory health. Investigating potential channels shows that mental health is consistently negatively linked to our energy poverty metrics, while physical health is weakly associated with energy poverty in Germany, with the exception of doctor visits. Finally, by instrumenting energy poverty with data on energy price indices and matching energy costs to the heating systems used by households, we show that living in a household that experiences a transition to energy poverty due to rising energy prices is also linked to a lower likelihood of being in good health. |
| Keywords: | energy poverty, health, fixed effects ordered logit models, Germany |
| JEL: | I10 I32 Q41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:313638 |
| By: | Jonas Dominy (Institute for Socio-Economics, University of Duisburg-Essen, Germany); Claudius Graebner-Radkowitsch (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; Institute for Plural Economics, Europa-Universitaet Flennsburg, Germany); Jakob Kapeller (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; Institute for Socio-Economics, University of Duisburg-Essen, Germany); Philipp Heimberger (The Vienna Institute for International Economic Studies, Austria) |
| 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. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ico:wpaper:159 |
| By: | Bertheau, Antoine (Dept. of Economics, Norwegian School of Economics and Business Administration); Hoeck, Christian Philip (Dept. of Economics, University of Copenhagen) |
| Abstract: | This paper yields new insights into why similar workers are paid differently by surveying a representative sample of Danish firms and linking responses to administrative data. We find that a substantial minority of firms, about 18 percent, have inaccurate beliefs about their position in the wage distribution. Inaccurate beliefs are more likely to occur in smaller firms. To study the implications of firms’ inaccurate beliefs, we build a simple model with monopsonistic firms. Using our survey, we elicit firms’ motives for setting high wages. The dominant motive aligns with wage-posting models, i.e., retaining and attracting new employees. The least common motive is compensating for negative job characteristics. |
| Keywords: | Wage dispersion; firm information frictions; biased beliefs |
| JEL: | D83 J01 J31 J42 M52 |
| Date: | 2025–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_005 |
| By: | R. Zelli; M.G. Pittau; A. Vaiano |
| Abstract: | According to the World Bank report (Gill & Raiser, 2012), the EU has become the modern world's greatest "convergence machine". While the process of convergence has been acknowledged at country level, results at regional level are still unclear. Using the most advanced techniques, we assess convergence across European NUTS2 regions over forty years. The distributional dynamic approach unveils different perspectives that traditional methods have overlooked. We conclude that a process of catching-up between low- and middle-income regions has been in progress, while wealthy regions have been drifting away. |
| Keywords: | mixture models;EU regions;Club convergence |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202507 |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | Policymakers around the globe have sought to stimulate Venture Capital (VC) investments, and an extensive literature has inquired into the institutional determinants of a vibrant VC market, including corporate law. We contribute to that literature by exploring the significance of corporate law for VC contracting and hence VC investments. Corporate law's relative rigidity or flexibility is key to the efficiency of the contractual technology governing VC deals. Importantly, it can hamper such transactions through a number of "constraints, " which we have identified in a companion paper. To illustrate our point, in another companion paper, we take German and Italian corporate laws as two case studies and show how they are largely averse to VC contracting. In addition, we show that the regulatory constraints they impose stem from blackletter corporate law much less often than from scholarly constructs and courts' interpretations. This chapter anticipates two objections that cast doubt over the importance of our findings as to the construction of vibrant VC markets in Germany and Italy. Specifically, the first of these objections is that VC funds and entrepreneurs planning to run their startups in Germany and Italy can circumvent the strictures of local corporate laws by incorporating abroad, and the other is that formal contracts are inconsequential in VC deals, meaning that the regulatory constraints we document are irrelevant. Meanwhile, the chapter also shows that the detailed understanding of regulatory constraints unveiled by our research can inform more effective policymaking. Ultimately, we make two policy recommendations: first, we propose the adoption of a statutory provision that would explicitly insulate the arrangements that typically shape U.S. VC deals from undue interventions; and, second, we argue in favor of a standard charter aligned with U.S. VC transactional practice that the law itself should declare entirely enforceable. |
| Keywords: | Comparative Corporate Law, Comparative Corporate Governance, Entrepreneurship, Financial Contracting, Private Ordering, Startups, Venture Capital, Entrepreneurial Finance |
| JEL: | G38 K22 L26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:313650 |
| By: | A.C. Pinate; M. Dal Molin; M.G. Brandano |
| Abstract: | This paper analyses the relationship between institutional quality and green innovation in Italian regions (NUTS2). We examine how varying levels of institutional quality influence the regional capacity to generate green innovation, disentangling the effects related to economic institutions (corruption, government effectiveness, and regulatory quality) from the impacts associated with political institutions (rule of law and voice and accountability). Using a panel of data for 2004–2018 on green patents, we use an instrumental variable IV approach to control for endogeneity and several robustness checks. Our results show that the most important drivers of green innovation are related to the quality of political institutions. These findings remain robust, even when checking for economic and environmental controls, demonstrating that green innovation is more related to political decisions and social capital than innovation in general is. |
| Keywords: | regional green innovation;green patents;Institutional Quality;italy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202508 |
| By: | Mehic, Adrian (Research Institute of Industrial Economics (IFN)); Mosaddegh, Arian (Confederation of Swedish Enterprise) |
| Abstract: | This paper examines the impact of a Swedish policy allowing manufacturing firms to influence the curricula of local educational institutions. Our analysis shows that the program has contributed to a significant reduction in youth unemployment, as well as an increase in marriage rates and male fertility rates at the municipality level. We further show that these positive labor market outcomes are due to improved quality and relevance of vocational education, rather than an increase in the number of graduates. However, using data covering the universe of Swedish firms, we find that manufacturing firms in neighboring municipalities saw declines in productivity, suggesting some negative spillover effects of the program. |
| Keywords: | Youth unemployment; Vocational education; Fertility |
| JEL: | E24 I26 J12 J24 |
| Date: | 2025–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1524 |
| By: | Gregory Clark (University of Southern Denmark); Martin Hørlyk Kristensen (University of Southern Denmark) |
| Abstract: | In this paper we estimate social mobility rates, free of measurement errors, using register data for Denmark and Sweden, 1968 to 2021. To correct for measurement error attenuation, we take ratios of the correlation of relatives at different locations in family trees, such as cousins relative to siblings. Three things emerge from these estimates. First social mobility rates in both Denmark and Sweden are much lower than conventionally estimated. Second these countries, despite their reputation for high social mobility rates, have nearly the same degree of persistence as in modern England, and also nineteenth century England or Sweden. Finally in all the cases observed marital assortment is much stronger than conventionally estimated, and this helps explain the low rates of intergenerational mobility. |
| Keywords: | intergenerational mobility, social mobility, assortative mating |
| JEL: | J62 J12 D31 I24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0275 |
| By: | Salvatore Carrozzo; Elisabetta Lodigiani; Alessandra Venturini |
| Abstract: | The consumption of cultural goods can play a crucial role in the social and economic integration of immigrants into their destination country. In this paper, we investigate the effect of the cultural national program, IoStudio, designed to enhance the consumption of cultural goods - by providing free or discount access - among upper secondary students in Italy, on post-secondary investment in education and early labor market conditions among young immigrants. Using data from a unique survey conducted by the Institute for Multiethnic Studies (ISMU) on a representative sample of the entire immigrant population in the Italian Lombardy region and employing a difference-in differences estimator, we find that the IoStudio policy has positive effects on investment in post-secondary education. Additionally, young foreigners exposed to the policy exhibit higher earnings, at least in the short run, when they enter the labour market. We claim that cultural consumption by immigrants is a relevant concern, deserving close attention in terms of increasing social capital and labour market inclusion. |
| Keywords: | Cultural participation; migrants; integration; Italy |
| JEL: | Z11 J61 J62 I26 |
| Date: | 2025–03–26 |
| URL: | https://d.repec.org/n?u=RePEc:csl:devewp:501 |
| By: | Michal Marencak; Giang Nghiem |
| Abstract: | Using granular household-level spending data from the ECB Consumer Expectations Survey, we document new stylized facts on the heterogeneity of personally realized inflation across different inflation regimes in the euro area. During the period of low inflation (April 2020 – April 2021) and the period of sticky inflation (January 2024 – October 2024), homeowners, high-income households, and older individuals experienced lower inflation. However, during the inflation surge (July 2021 – October 2023), this pattern reversed as rising energy and food prices disproportionately affected these groups, outweighing their lower spending shares in these categories. Personally experienced inflation accounts for a significant share of the variation in inflation perceptions, inflation expectations, and broader macroeconomic expectations, including personal income expectations. Moreover, these relationships differ notably across inflation regimes. |
| Keywords: | personal inflation rate, expectations, consumer expectations survey |
| JEL: | C33 D84 E31 E52 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-17 |
| By: | Behringer, Jan; van Treeck, Till; Victor, Vincent |
| Abstract: | This paper investigates the role of family firms in the fall of the labor share and rise in corporate saving in Germany from 1993 to 2019. Combining a new Family Ownership and Governance (FOG) database with financial data, we analyze 929 publicly listed firms. Our findings show that firm-level labor share declines are widespread in Germany, contrasting with findings from the U.S. that link this trend to a few fast-growing superstar firms. Family firms, particularly in manufacturing, experienced sharper decreases in the labor share and stronger increases in corporate saving compared to non-family firms. The level of family involvement in Germany's two-tier board system (management and supervisory board) further affects these outcomes. Despite paying lower wages, we find no evidence that family firms provide greater employment stability. Our results challenge global generalizations about the drivers of the labor share and corporate saving, while emphasizing the macroeconomic relevance of family firms, especially in Germany's corporate sector. |
| Keywords: | Labor share, corporate saving, family firms |
| JEL: | D22 D33 G32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:313637 |
| By: | Carlos Carrillo-Tudela (Department of Economics, University of Essex); Alex Clymo (Department of Economics, University of Essex); Cristina Lafuente (Department of Economics, University of Bath); Ludo Visschers (U. Carlos III de Madrid and Edinburgh Futures Institute, University of Edinburgh); David Zentler-Munro (Department of Economics, University of Essex) |
| Abstract: | We use a simple yet powerful approach to investigate the dynamics of worker flows across sectors in the Spanish economy. The method imposes a minimal amount of structure on the data by assuming sector-specific matching functions, and backs out the direction of workers' search intensities across sectors using data on realised worker flows and vacancies. We find that aggregate search intensity in Spain has been increasing since the pandemic and has led aggregate labour shortages to be below pre-pandemic levels by 2023. However, this boost of search intensity is directed to industries with low matching efficiencies and job finding rates. As a result, aggregate match formation is near to a 10-years low relative to the number of matches that would result if search intensity was allocated to maximise total matches given the observed vacancy distribution and match efficiencies across sectors. |
| Keywords: | Job Search; Industry mobility; Vacancies; Mismatch; Labour Shortages |
| JEL: | E24 J23 J62 J63 J64 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:edn:esedps:317 |