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on Microeconomic European Issues |
| By: | Wagner, Joachim |
| Abstract: | The use of advanced technologies like artificial intelligence, robotics, or smart devices will go hand in hand with higher productivity, higher product quality, and lower trade costs. Therefore, it can be expected to be positively related to export activities. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union collected in 2025 to shed further light on this issue by investigating the link between the use of advanced technologies and extensive margins of exports. Applying a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), which does not impose any restrictive assumptions for the functional form of the relation between margins of exports, use of advanced technologies, and any control variables, we find that firms which use more advanced technologies do more often export and do export to more different destinations. |
| Keywords: | Advanced technologies, exports, firm level data, Flash Eurobarometer 559, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kcgwps:334537 |
| By: | Charles Yuji Horioka; Luigi Ventura |
| Abstract: | We analyze the saving motives of European households using micro-data from the Household Finance and Consumption Survey, which is conducted by the European Central Bank. We find that the rank ordering of saving motives differs greatly depending on what criterion is used to rank them. We find that the precautionary motive is the most important saving motive of European households when the proportion of households saving for each motive is used as the criterion to rank them but that the retirement motive is the most important saving motive of European households if the quantitative importance of each motive is taken into account. Moreover, the generosity of social safety nets seems to affect the importance of individual saving motives, with saving for the retirement motive being less important in countries with generous public pension benefits and saving for the precautionary motive being less important in countries with generous public health systems. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1251r |
| By: | Mauro Lanati; Giorgia Giovannetti; Lisa Grazzini; Annalisa Luporini; Michel Rizzo |
| Abstract: | This article examines how EU structural funds affect local labor demand. Using Lightcast granular data on online-job postings in Italy, we match quarterly information on EU project disbursements with variations in labor demand at NUTS-3 provincial level. By relying on a shift-share type of instrument, we find that EU structural funds have a positive effect on the number of job postings. The resulting impact is mostly driven by the European Social Fund (ESF) and is particularly strong on jobs that require green and digital skills. Moreover, the results suggest that the effect on labor demand manifests itself only in areas with middle-high socio-economic conditions, while it is not significant in poorest areas. From a policy perspective, our findings point to a negative role played by EU structural funds in reducing geographical disparities in terms of employment opportunities across Italian provinces. |
| Keywords: | EU Structural Funds; Labor Demand; Green and Digital Skills |
| JEL: | C21 F35 H23 H77 R11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2025_17.rdf |
| By: | Giulia Klinges; Alain Jousten; Mathieu Lefebvre |
| Abstract: | Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused by changes in the incentives to work. Our results show that mechanically, reforms have led to losses in expected benefits for all but the lowest income quintile. Behavioral changes had a positive but orders of magnitude smaller effect. Overall, inequality decreased as a result of reforms. |
| JEL: | D63 H55 I38 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34579 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia) |
| Abstract: | In an era marked by repeated crises and the growing traction of populist movements, understanding the deep-rooted factors shaping EU cohesion has become increasingly urgent. This paper investigates how lifetime exposure to economic recessions influences individual attitudes toward the European Union (EU). Resorting to rich micro-data from the European Social Survey (ESS) and the Eurobarometer, we construct a detailed measure of economic hardship experienced during lifetime, capturing not just isolated downturns but the accumulated burden of multiple recessions over time. Importantly, we distinguish between various types of shocks-including output contractions, unemployment surges, consumption drops, participation in IMF adjustment programs, and the asymmetry or symmetry of crises across EU member states. We show that individuals with greater lifetime exposure to these economic shocks are more likely to distrust EU institutions, oppose further integration, vote for Eurosceptic parties, and support exiting the EU. These patterns are especially pronounced for asymmetric shocks, which disproportionately affect specific regions or countries, in contrast to symmetric shocks, which appear to foster a sense of shared fate and solidarity. A series of robustness tests-including placebo checks, heterogeneity analyses, diverse shock types and designs exploiting EU institutional structure -confirms the persistent impact of economic trauma on EU attitudes, underscoring the need to address historical recessions to safeguard cohesion and democratic legitimacy in the context of the EU. |
| Keywords: | Populism; Political attitudes; Institutional trust; OLS, Difference-in-differences |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2025_07 |
| By: | Grebol, Ricard (affiliation not available); Machelett, Margarita (Banco de España); Stuhler, Jan (Universidad Carlos III de Madrid); Villanueva, Ernesto (Bank of Spain) |
| Abstract: | We study the evolution of intergenerational educational mobility and related distributional statistics in Spain. Over recent decades, mobility has risen by one-third, coinciding with pronounced declines in inequality and assortative mating among the same cohorts. To explore these patterns, we examine regional correlates of mobility, using split-sample techniques. A key finding from both national and regional analyses is the close association between mobility and assortative mating: spousal sorting accounts for nearly half of the regional variation in intergenerational correlations and also appears to be a key mediator of the negative relationship between inequality and mobility documented in recent studies. |
| Keywords: | assortative mating, intergenerational mobility, inequality, education |
| JEL: | I24 J12 J62 N34 R11 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18351 |
| By: | Luigi Ventura; Charles Yuji Horioka |
| Abstract: | In this paper, we first show that a particular form of precautionary saving, which we will call “intertemporal precautionary saving” to distinguish it from purely intertemporal and purely precautionary saving, will inevitably arise in the case of pure (downside) risk as long as consumers are risk-averse, even if they are not prudent. We then present a simple example that shows that even pure precautionary saving (i.e., saving generated by risk alone without effects on expected income) may arise as long as consumers are risk-averse, even if they are not prudent and even if risk is speculative (two-sided). |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1297 |
| By: | Alessandro Montanaro (Università degli studi di Ferrara); Massimiliano Mazzanti (Università degli studi di Ferrara); Marianna Gilli (Università degli studi di Ferrara); Elisa Chioatto (Università degli studi di Ferrara); Filippo Cicoli (Department of Economics, Society and Politics of Università di Urbino Carlo Bo) |
| Abstract: | This paper presents and applies a new Italian Regional Accounting Matrix of Environmental Accounts (RAMEA) panel (1995–2019) to demonstrate how hybrid environmental–economic accounting can inform regional assessments of eco-efficiency and structural change. Using Emilia-Romagna and Lazio as two contrasting regional economies, we implement a sequence of applications: (i) long-run sectoral economic–environmental profiles, (ii) emission-intensity measures for greenhouse gases (GHG) and PM10, and (iii) an employment-based decomposition of emission dynamics. The results point to broad improvements in eco-efficiency: PM10 abatement is predominantly explained by within-sector technique gains, whereas GHG reductions reflect a combination of compositional shifts and technique effects, with the latter becoming stronger after 2005. We further exploit RAMEA granularity by zooming into manufacturing sub-sectors and by estimating a targeted econometric specification linking emissions per worker to productivity, investment, and EU ETS exposure, illustrating how decomposition diagnostics can be complemented with econometric evidence on potential drivers. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0925 |
| By: | Pavanello, Filippo; Valenti, Giulia |
| Abstract: | In 2004, Italy introduced a national program to address heat-related health risks, combining public awareness campaigns, heat-wave warning systems, and hospital protocols. Leveraging administrative mortality data and high-frequency temperature variation, we show that the program reduced heat-related mortality by more than 57% on days at or above 30°C. To identify the mechanisms, we exploit the staggered introduction of heat-wave warning systems across provinces and show that treated areas experienced substantially larger reductions in heat-related mortality. We further document that information disclosure plays a key role in driving these reductions. Overall, our findings underscore the importance of public adaptation policies that rely on information provision to cost-effectively mitigate the health impacts of extreme temperatures. |
| Keywords: | Climate Change, Sustainability |
| Date: | 2025–12–27 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:386192 |
| By: | Vitt, Helena |
| Abstract: | Health care services are Germany's largest in-kind transfer, yet their distributional effects remain underexplored. Using a microsimulation model, we integrate detailed survey data on health care utilisation from the German Health Update Study (GEDA) with administrative expenditure records from the German Health Reporting system. In contrast to previous studies that allocate benefits using demographic proxies, we apply an actual-use, cost-based approach to assign thirteen categories of health care services to individuals based on reported utilisation. These services are monetised and added to equivalised household income to assess their redistributive effect. We find that total benefits are overall progressive: publicly insured individuals average about €3, 759 in benefits, while civil-servant-subsidised private insurance averages €4, 050, with public insurance raising household income substantially more due to its wider coverage and targeting of need. A KOB-decomposition at the 60% median-income threshold shows that the poor receive €1, 432 more in total benefits than the non-poor, with most of the explained gap driven by worse health status and activity limitations and further widened by employment composition. A lower prevalence of private insurance among the poor narrows the gap. Distribution-wide RIF results reveal that the explained component is sizable at P75 (+€1356) and very large at the 90th percentile (+€5480), reflecting steep need gradients at the top of the benefit distribution. By service type, hospital and GP benefits remain progressive, while specialist care shows no significant mean gap. However, composition effects still indicate that private insurance pushes specialist benefits toward the better-off. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:334485 |
| By: | Tobias R\"uttenauer; Kasimir Dederichs; David Kretschmer |
| Abstract: | Immigrant residential segregation can profoundly shape access to opportunities, immigrant integration, and inter-group relations. Yet we lack systematic evidence on how segregation varies across Europe, and what structural factors are associated with these patterns. This study addresses the gap by focusing on two questions: (i) how does immigrant-native segregation vary across urban areas in Europe, and (ii) which urban area- and country-level characteristics are consistently linked to segregation? Using harmonised 1x1 km grid-level data from the 2021/22 census, we calculate spatially weighted Dissimilarity Indices for all 717 Functional Urban Areas (FUAs) across 30 European countries. We combine these measures with rich data on demographics, the economy, housing, immigrant populations, and policy. To identify robust correlates of segregation, we apply a Specification Curve Analysis across 16, 164 regression models. Segregation is higher in Western and Northern Europe compared to most of Eastern and Southern Europe. Moreover, we show that segregation is heavily driven by macro-spatial dynamics between diverse urban cores and relatively homogeneous suburban areas. At the urban area level, segregation is systematically linked to the demographic composition and spatial distribution of the local population, economic conditions, housing market characteristics, as well as the composition of the immigrant population. At the national level, established immigrant destinations are more segregated, while migration and integration policies are not consistently linked to segregation. These findings offer the most comprehensive comparative assessment of immigrant segregation across Europe to date, revealing how structural conditions relate to spatial integration. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.17037 |
| By: | Stefan Leknes (Statistics Norway); Jorn Rattso (Department of Economics, Norwegian University of Science and Technology); Hildegunn E Stokke (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | Intangible capital, an asset class central to the knowledge economy, has been shown to contribute substantially to productivity growth. However, the importance for agglomeration economies has received limited attention. We examine how the agglomeration effect varies with industries’ intensity of intangible capital, combining international measures of industry-level intangible capital with rich Norwegian administrative employer–employee data. The analysis addresses methodological challenges related to endogenous intangible investment, unobserved worker characteristics, and correlation between worker moves and firm quality. We find that at mean intangible intensity, the elasticity of wages with respect to city size is 0.026, with each standard-deviation increase in intangible intensity raising the elasticity by 0.004. Dynamic wage returns to city-specific experience are also significantly higher in intangible-intensive industries. Employing the AKM framework and a complementary firm- based measure of local productivity, we show that our main results are robust to potential hierarchy effects arising from worker mobility. Moreover, we document that positive selection on unobserved ability into large cities is driven primarily by workers employed in intangible-intensive industries, irrespective of education level. We further document heterogeneity across intangible components, showing that agglomeration elasticities are strong for industries intensive in software and databases, and economic competencies. Taken together, these findings highlight the importance of intangible capital investments in shaping urban wage premia. |
| Keywords: | Agglomeration economies, knowledge spillover, intangible capital, AKM-model, sorting, worker experience |
| JEL: | J24 J31 J61 R12 R23 |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:nst:samfok:20425 |
| By: | Ahammer, Alexander (University of Linz); Halla, Martin (Vienna University of Economics and Business); Heckl, Pia (Ifo Institute for Economic Research); Winter-Ebmer, Rudolf (Johannes Kepler University Linz) |
| Abstract: | Long-term unemployment among older workers is particularly difficult to overcome. We study the impacts of a large-scale job guarantee program that offered up to two years of fully subsidized employment to long-term unemployed individuals aged 50 and above. Using a sharp age-based discontinuity in eligibility, we find that participation increased regular, unsubsidized employment by 43 percentage points two years after the program ended. The gains are driven by transitions into new firms and industries, rather than continued subsidized employment, and we find no evidence of displacement effects for non-participants or spillovers to family members. The program had no measurable short-run health effects. |
| Keywords: | subsidized employment, temporary job guarantee, long-term unemployment, health status |
| JEL: | J64 J08 J78 I14 H51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18322 |
| By: | Fumany, Malene; Nguyen-Tien, Viet; Li, Nanxi; Elliott, Robert J.R.; Lander, Laura |
| Abstract: | Lithium-ion batteries (LIBs) are central to the European Union's (EU) Net Zero strategies. Yet, rising regulatory pressures and geopolitical tensions have increased the risk of supply chain bottlenecks for strategic and critical materials such as nickel and cobalt, posing threats not only to the EU's decarbonisation agenda but also to global Net Zero ambitions. In response, EU policymakers have accelerated efforts to develop local battery ecosystems including the recycling of end-of-life LIBs. However, the potential impact of these interventions on material dependencies and battery economics is not well understood. This paper introduces a novel policy-economic framework to assess the prospective evolution of the LIB recycling sector in response to policy changes introduced by the EU Battery Regulation (Regulation (EU) 2023/1542). In particular, drawing on an industry-led survey, the framework evaluates the impact of the mandated minimum recycled content on material flow and battery costs. The results reveal that the Battery Regulation may increase battery cell costs by up to 15 %. While this study is EU-specific, its findings carry broader relevance for international battery policy and market dynamics and provides new evidence on how international policies may impact the future of the battery sector. |
| Keywords: | policy-economic framework; battery recycling; battery costs; critical minerals; EU battery regulation |
| JEL: | R48 Q53 Q58 |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130801 |
| By: | Pezer, Martina (Institute of Economics, Zagreb); Sologon, Denisa M. (LISER); Kyzyma, Iryna (LISER (CEPS/INSTEAD)); Peluso, Eugenio (University of Luxembourg); O'Donoghue, Cathal (University of Galway) |
| Abstract: | Equivalence scales are central to distributional analysis, adjusting household incomes for size and composition and shaping poverty and inequality measurement. Despite changes in consumption patterns, most applied work continues to rely on the modified OECD scale from the 1990s. We revisit equivalence scales for 23 EU countries using a linear expenditure demand system and harmonized Household Budget Survey data for 2010–2020. We estimate three demand-based scales: a minimum-needs scale anchored in subsistence, a utility-implicit scale based on welfare equivalence under common preferences, and a utility-explicit scale for sensitivity analysis. Our estimates imply larger economies of scale than the modified OECD scale, particularly for larger households. Scales decline with living standards and over time. Simulations of 2020–2024 price changes suggest that recent inflation is likely to further reduce equivalence scales, with stronger effects for households with children. While regional heterogeneity remains, poverty measures are more sensitive than inequality measures to the choice of scale. The results highlight the need to update equivalence scales and to report distributional statistics under alternative assumptions. |
| Keywords: | household consumption patterns, linear expenditure system, demand system, equivalence scales, income distribution measures |
| JEL: | D12 D31 E31 I32 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18340 |
| By: | Ricard Grebol; Margarita Machelett; Jan Stuhler; Ernesto Villanueva |
| Abstract: | We study the evolution of intergenerational educational mobility and related distributional statistics in Spain. Over recent decades, mobility has risen by one-third, coinciding with pronounced declines in inequality and assortative mating among the same cohorts. To explore these patterns, we examine regional correlates of mobility, using split-sample techniques. A key finding from both national and regional analyses is the close association between mobility and assortative mating: spousal sorting accounts for nearly half of the regional variation in intergenerational correlations and also appears to be a key mediator of the negative relationship between inequality and mobility documented in recent studies. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.22848 |
| By: | Antoine Bozio; Maxime Tô; Julie Tréguier |
| Abstract: | This study analyzes the distributional effects of French pension reforms from 1993 to 2014 across different socioeconomic groups. Using administrative data for individuals born between 1934 and 1950, we examine the impact on social security wealth (SSW) across lifetime earnings deciles and genders. Our methodology incorporates differential life expectancy and exploits the PENSIPP model for counterfactual scenarios. Results show that reforms generally decreased SSW across all income groups, with regressive tendencies. The 1993 reform had the most significant impact, reducing SSW by over 15% for men in the lowest earnings decile compared to 5% for the highest. Subsequent reforms had milder effects. These findings contribute to understanding the long-term consequences of pension reforms on inequality and inform future policy decisions in countries facing similar demographic challenges. |
| JEL: | H55 J14 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34576 |
| By: | Adriaan Kalwij; Arie Kapteyn |
| Abstract: | Since the early 2010s, the state pension age (SPA) is one of the main public policy instruments in the Netherlands for inducing people to postpone retirement. The SPA has gradually increased from 65 years in 2012 to 66 years and 4 months in 2021. In the context of the Dutch old-age social security system, an increase in the SPA is hypothesized to decrease the retirement probability and to increase inequality in pension benefits entitlements. Empirical support for the two hypotheses is found with data on individuals aged 55–69 over the period 2011-2021. Inequality in old-age social security wealth has increased after 2015 for non-retirees. However, the findings do not support that this increase is because of the SPA increase. |
| JEL: | H0 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34569 |
| By: | Felbermayr, Gabriel; Hinz, Julian; Krantz, Sebastian; Mahlkow, Hendrik; Wanner, Joschka |
| Abstract: | How do adverse global trade shocks affect sub-national outcomes, and what insurance does regional integration provide? We study the EU Single Market using a large-scale quantitative trade model with regional labour mobility, calibrated to a new NUTS2- based Regionalized Inter-Country Input-Output (REICIO) database. Comparing four baselines, from a fully frag-mented Europe to deep integration, we evaluate the 2025 US tariffs. Full integration of EU goods and labour markets reduces the average regional loss in real value added per capita by about 25% and more than halves its dispersion. Further deepening barely improves the mean but compresses the distribution of regional impacts even further. |
| Keywords: | Global Trade Wars, MRIO, ICIO, European Regions, NUTS2, Global Value Chains, Sectoral Mobility Frictions, Trade Integration |
| JEL: | F15 F16 F17 R15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:334528 |
| By: | Marianne Simonsen; Lars Skipper; Jeffrey Andrew Smith |
| Abstract: | This paper uses register-based data to analyze the consequences of a recent major Danish welfare reform for children’s academic performance and well-being. In addition to work requirements, the reform brought about considerable reductions in welfare transfers. We implement a comparative event study that contrasts outcomes for individuals on welfare at the time of reform announcement before and after the implementation of the reform with the parallel development in outcomes for an uncontaminated comparison group, namely those on welfare exactly one year prior. Our analysis documents that mothers’ propensity to receive welfare decreased somewhat as a consequence of the reform, just as we observe a small increase in hours worked. At the same time, we do not detect negative effects on children’s short-run academic performance. We do find small negative effects on children’s self-reported school well-being and document substantial upticks in reports to child protective services for children exposed to the reform. |
| Keywords: | welfare reform, child outcomes, Denmark |
| JEL: | I38 J13 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12369 |
| By: | Kaiser, Ulrich (University of Zurich); Mata, José (Copenhagen Business School) |
| Abstract: | We study whether gender norms—proxied by Switzerland’s 1981 referendum on constitutional gender equality—continue to shape women’s entrepreneurship today, despite major demographic change. Using startup data for all Swiss municipalities from 2016 to 2023, we find that places with stronger historical support for gender equality have significantly higher women-to-men startup ratios. A one–percentage point increase in the 1981 “yes” vote share is associated with a 0.165 percent increase in this ratio. The result is robust to controlling for later gender-related referenda, extensive municipal characteristics, and contemporary policy measures. The association is stronger in municipalities with more stable populations and in less religious municipalities. Childcare spending alone is not linked to startup rates, but it positively affects women’s entrepreneurship when combined with supportive historical gender norms, highlighting the joint role of formal policies and informal social support. |
| Keywords: | Switzerland, female founders, cultural persistence, entrepreneurship, gender norms |
| JEL: | J16 L26 Z13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18337 |
| By: | Gerald Foong; Stephen Machin; Matteo Sandi; Woan Foong Wong; Steve Machin |
| Abstract: | We study whether economic incentives matter for crime in a novel way, through study of expensive precious metal thefts by thieves stealing catalytic converters. We combine sharp, plausibly exogenous variation in the prices of precious metals embedded in converters with newly assembled U.S. data and multiple research designs. We show that phenomenally fast increases in precious metal prices generated a sizeable and rapid rise in auto-part thefts, while subsequent price declines and policy responses quickly reversed this pattern. The resulting boom-and-bust dynamics provide clean evidence that both demand- and supply-side economic forces shape property crime and inform targeted deterrence policies. |
| Keywords: | expensive precious metals, auto-part theft, catalytic converters |
| JEL: | K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12366 |
| By: | Oliveira, Joao |
| Keywords: | Agricultural and Food Policy, International Development, International Relations/Trade |
| URL: | https://d.repec.org/n?u=RePEc:ags:ilopsa:258825 |
| By: | Bach-Mortensen, Anders; Goodair, Benjamin; Petersen, Ole Helby; Kvist, Jon |
| Abstract: | Like many other countries, Denmark has recently seen a sharp increase in outsourced social service provision for children and adults. While quasi-market theory suggests that complex social services could be ill-suited to market provision, there has been little assessment of how ownership relates to service quality for welfare services due to fragmented data. This paper presents findings from a population-wide analysis of quality and inspection outcomes across public, non-profit, and for-profit providers in Denmark's social services for children and working-age adults with support needs, including children's homes and adult residential facilities (N = 2375, 2020-2024). First, we document a 44.1 % increase in for-profit providers over five years (2020-2024), while public and non-profit provision remained stable or declined. Second, for-profit providers were significantly more likely to receive regulatory sanctions, including intensified monitoring and forced closure compared to other ownership types. Third, non-profit providers received higher quality ratings, while newer for-profit entrants underperformed relative to both public and older for-profit providers. Fourth, quality and regulatory differences were most pronounced between for-profit and not-for-profit providers rather than between public and private providers, indicating that ownership form and the profit-motive within the private sector matters more than the public-private distinction. These findings support theoretical claims that welfare markets for complex social services are prone to market failure due to information asymmetries, user complexity, and incomplete contracts. Finally, the findings have policy implications for market regulation, procurement and pricing strategies in terms of how to sustain high-performing providers in an increasingly marketised social service landscape. [Abstract copyright: Copyright © 2025 The Authors. Published by Elsevier Ltd.. All rights reserved.] |
| Keywords: | outsourcing; Nordic welfare state; social services; welfare marketisation; privatisation; ownership |
| JEL: | E6 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130825 |
| By: | Tadhg Ryan-Charleton (Motu Economic and Public Policy Research); Conor O’Kane (University of Otago); Dean Hyslop (Motu Economic and Public Policy Research); David C. Maré (Motu Economic and Public Policy Research); Amelia Blamey (Motu Economic and Public Policy Research) |
| Abstract: | The Research and Development Tax Incentive (RDTI) was introduced on 1 April 2019 to encourage business innovation, by offering a 15% tax credit on eligible research and development (R&D) expenditure. It replaced the R&D Growth Grants scheme, which closed to new applicants in 2019 and was phased out in 2021. The legislation introducing the RDTI specifies that an objective and independent evaluation of the scheme must be laid before the House of Representatives every five years. Motu Research was engaged by MBIE to lead the first five-year evaluation. Motu Research worked with the University of Otago, who contributed qualitative and subject-specific expertise to the evaluation. Our team was asked to address five questions focusing on the impact of the RDTI (and of other types of government R&D support to businesses), as well as the RDTI’s compliance costs, administrative processes and legal requirements. We were also asked to consider a sixth question — how certain conclusions from our evaluation would be affected by changes to three specific policy settings. We addressed these questions using a mixed methods approach, combining quantitative analysis of survey and administrative data with qualitative insights from interviews with key stakeholders. The quantitative approach relied primarily on statistical analysis of data from Statistics New Zealand’s Longitudinal Business Database, with our descriptive analysis also drawing on other administrative data sources. The qualitative analysis used data from 67 semi-structured interviews we conducted with 84 participants. This includes 41 interviews with firms, 10 with RDTI operational team members, 5 with policy experts and 11 with professional tax advisors. Our quantitative analysis found firms supported by the RDTI spent more on R&D than they would have in the absence of RDTI support. The difference was stronger for smaller firms. Annual R&D expenditure was on average $274, 000 higher per firm because of RDTI support. The total additional R&D expenditure generated by the RDTI was $1.83 billion. For every $1 of government spend, firms invested $1.40 in additional R&D, which is similar to OECD benchmarks. The additional R&D stimulated by the RDTI was estimated to generate an impact on New Zealand’s GDP of $6.77 billion (mid-point of a range estimate), which suggests an overall economic impact of 4.2 times government investment. Our qualitative analysis suggested significant RDTI compliance costs were more than offset by the ability to access greater levels of R&D support. Most firms indicated the RDTI had a positive impact on their R&D activities and business outcomes. Several firms with international operations explained the RDTI is influential in attracting and retaining R&D work in Aotearoa New Zealand. There was also a strong indication that businesses prefer policy stability, with the implication that instability leads to lower R&D expenditure and lower uptake. |
| Keywords: | Public funding for business R&D, business innovation, technology and innovation policy, RDTI, New Zealand |
| JEL: | O38 O31 D22 |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:mtu:wpaper:25_11 |
| By: | Diego Restuccia |
| Abstract: | I examine the empirical properties of firm-level productivity and distortions across countries using the newly released World Bank Enterprise Surveys (WBES). Using a standard framework of production heterogeneity, I show that the gap in productivity and distortions between high and low productivity firms is larger in developing countries, generating large aggregate productivity losses from misallocation. A key empirical property of distortions in developing countries is that they systematically weaken the relationship between firm size and firm productivity. I exploit a unique feature of the WBES data to document which specific aspects of the economic environment faced by firms, such as financial constraints, regulation, corruption, and weak infrastructure, are consistent with the empirical pattern of distortions across countries. |
| JEL: | O11 O14 O4 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34573 |