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on Microeconomic European Issues |
| By: | Costa-Font, Joan; Nicińska, Anna |
| Abstract: | Education systems serve various purposes, including the enhancement of later‐life health, though effects can differ by sociopolitical regime. This paper examines the effect of communist education, which exposed children to a distinct curriculum and ideological content, on later‐life health. We exploit a novel dataset that collects information on compulsory education reforms in several European countries, with different cohorts exposed and unexposed to Soviet communist education. Using a difference‐in‐differences (DiD) design, we show that while the extension of compulsory education improved some relevant measures of health, communist education encompassed an additional health‐enhancing effect. We document that the effect remains robust when using staggered DiD approaches and various robustness tests, and that it is explained by the priority given to physical education in the school curricula, together with an increased likelihood of marriage. |
| Keywords: | communist education; health education gradient; later-life health; physical activity; Europe; Soviet communism |
| JEL: | I18 P36 |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130480 |
| By: | Hainaut, Donatien (Université catholique de Louvain, LIDAM/ISBA, Belgium) |
| Abstract: | This article proposes a parametric model explaining dierences in mortality across European NUTS2 regions using economic and environmental variables. We extenda multi-group version of the LeeCarter framework by incorporating economic and environmental time series as driving factors. The marginal eects of these factors are modeled with B-splines. Compared to the Li and Lee framework, our model oersseveral advantages. First, it is interpretable and allows assessment of the impact on mortality resulting from changes in economic or environmental policies. Second, theparameterization limits the model's degrees of freedom, enabling reliable estimation over shorter time windows. We illustrate the eciency of our approach by explaining regional mortality patterns in France, Italy, and BelgiumNetherlands. |
| Keywords: | Mortality forecasting ; Lee-Carter model ; multi-group mortality ; life insurance |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:aiz:louvad:2026001 |
| By: | Weikl, Jan |
| Abstract: | Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low aggregate take-up and a strong skill gradient is puzzling. This paper accounts for these twin facts with a principal-agent model in which the entire preference vector-risk aversion, probability weighting, time discounting, and effort cost-varies systematically with schooling. Endogenizing preferences yields two predictions: (i) optimal incentive slopes and induced effort increase with education-linked preferences; (ii) the productivity threshold for accepting performance pay falls with schooling, while heterogeneity in tastes keeps worker participation incomplete. A light calibration guided by documented schooling gradients reproduces modest overall incidence alongside a pronounced skill gradient. The key novelty is to treat the preference vector as an endogenous state variable that enters both sides of the principal-agent problem, shaping the optimisation problems of both the firm and the worker rather than being taken as a fixed primitive. |
| Abstract: | Leistungsabhängige Vergütung steigert die Produktivität. Im Sozio-Ökonomischen Panel (SOEP) berichten jedoch nur rund 16 % der Beschäftigten, leistungsbezogene Entlohnung zu erhalten. Zugleich liegt die Inzidenz unter Hochschulabsolventen um etwa sieben Prozentpunkte höher als unter Nicht-Absolventen. Dieses Nebeneinander aus geringer Gesamtverbreitung und ausgeprägtem Bildungsgradienten ist erklärungsbedürftig. Diese Arbeit erklärt beide Befunde in einem Prinzipal-Agenten-Modell, in dem der gesamte Präferenzvektor systematisch mit dem Bildungsniveau variiert. Die Endogenisierung von Präferenzen liefert zwei Implikationen: (i) optimale Anreizintensitäten und die induzierte Anstrengung steigen mit bildungsbezogenen Präferenzparametern; (ii) die Produktivitätsschwelle für die Akzeptanz leistungsabhängiger Vergütung sinkt mit dem Bildungsniveau, während Präferenzheterogenität die Teilnahme insgesamt unvollständig hält. Eine einfache Kalibrierung, welche sich an dokumentierten Bildungsgradienten orientiert, repliziert eine moderate Gesamtinzidenz bei gleichzeitig starkem Qualifikationsgradienten. Der Beitrag dieser Arbeit besteht darin, den Präferenzvektor als endogene Zustandsvariable zu modellieren, die die Optimierungsprobleme von Unternehmen und Beschäftigten gleichermaßen bestimmt, statt exogen vorgegeben zu sein. |
| Keywords: | performance pay, incentives, risk preferences, time discounting, contract theory |
| JEL: | D81 D82 D86 J24 J33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:faulre:336772 |
| By: | Brunori, Paolo; Fedeli, Emanuele; Triventi, Moris |
| Abstract: | We present an in-depth analysis of educational inequality in Italy, focusing on disparities in educational outcomes and opportunities across different socio-economic, gender, and migration backgrounds. Leveraging administrative longitudinal data, we construct a dataset of 386 small geographical areas with a sufficient sample size to assess the extent to which key ascriptive characteristics predict the mathematical achievement of Italian students in the 5th grade of primary school. Our findings highlight a substantial influence of ascriptive characteristics on students’ educational attainment, able to correctly predict out-of-sample up to 20% of the variability despite the relatively small sample size. We show significant geographical variation that previous studies, based on larger geographical aggregations, were unable to observe comprehensively. Additionally, we identify a weak yet negative trade-off between equality and average attainment, which is more pronounced in southern areas, where higher achievement is associated with greater variance and a stronger influence of ascriptive characteristics. Among the predictors, we find that mother’s education plays a predominant role in most of the country. |
| Keywords: | mathematics; opportunity; education; inequality; machine learning; INVALSI |
| JEL: | J1 |
| Date: | 2026–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:131065 |
| By: | Maxime Fajeau (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - ULCO - Université du Littoral Côte d'Opale - Université de Lille - CNRS - Centre National de la Recherche Scientifique, CAE - Conseil d'analyse économique); Julien Grenet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, IPP - Institut des politiques publiques); Emma Laveissière (CAE - Conseil d'analyse économique); Orane Leonetti (CAE - Conseil d'analyse économique) |
| Abstract: | Ce Focus présente les hypothèses et paramètres qui sous-tendent le calcul des indices d'efficacité des dépenses publiques (EDP) appliqués aux politiques éducatives analysées dans la Note du CAE n° 84 « Éducation: comment mieux orienter la dépense publique ». L'EDP, ou Marginal Value of Public Funds en anglais, mesure le bénéfice social généré pour chaque euro net investi par l'État. Cette méthode permet d'évaluer de manière homogène et rigoureuse une grande diversité de politiques publiques, en intégrant les effets différés sur les trajectoires individuelles, les retours fiscaux et les économies budgétaires potentielles. Le présent document explicite l'ensemble des hypothèses empiriques, des paramètres économiques et des choix méthodologiques mobilisés pour construire ces indicateurs. Il vise à garantir la transparence de l'exercice d'évaluation, à éclairer l'interprétation des résultats et à favoriser l'appropriation de l'outil par les décideurs, les chercheurs et le grand public. |
| Keywords: | Marginal Value of Public Funds, Indice d'efficacité de la dépense publique |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:ipppap:halshs-05458929 |
| By: | Sven A. Hartmann (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University) |
| Abstract: | This paper analyzes the causal effect of exposure to uncensored environmental reporting on individuals’ environmental preferences and pro-environmental behavior. We exploit a natural experiment occurring in the German Democratic Republic, where geographic characteristics determined access to Western TV. Western media provided information on environmental pollution, a topic censored in East German state media. Using individual-level data from the German Socio-Economic Panel, we find a positive and persistent effect of Western TV exposure on environmental concerns and participation in environmental organizations. Complementing these findings, the analysis of county-level data reveals additional changes in pro-environmental behavior. Specifically, we show that Western TV induced GDR citizens to submit complaint letters on environmental issues to local authorities. Furthermore, regions with Western TV access exhibited stronger electoral support for the Green Party in the first two federal elections of reunified Germany. These results highlight the influential role of mass media in shaping both environmental preferences and corresponding behavior. |
| Keywords: | Television; Environmental preferences; Pro-environmental behavior; Natural experiment |
| JEL: | N54 P28 Q53 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:iaa:dpaper:202601 |
| By: | Jorge Ale-Chilet (UANDES - Universidad de los Andes [Santiago]); Cuicui Chen (SUNY - State University of New York); Jing Li (Tufts University [Medford]); Mathias Reynaert (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We study collusion among firms against imperfectly monitored environmental regulation. Firms increase variable profits by violating regulation and reduce expected noncompliance penalties by violating jointly. We consider a case of three German automakers colluding to reduce the effectiveness of emissions control technology. By estimating a structural model of the European automobile industry from 2007 to 2018, we find that collusion lowers expected noncompliance penalties substantially and increases buyer and producer surplus. Due to increased pollution, welfare decreases by €1.57–5.57 billion. We show how environmental policy design and antitrust play complementary roles in preventing noncompliance. |
| Keywords: | noncompliance, automobile market, pollution, regulation, collusion |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05492381 |
| By: | Haotian Deng; Sam Desiere; Bart Cockx; Gert Bijnens (-) |
| Abstract: | This paper studies how employment subsidies for start-ups shape their performance. We exploit an unexpected policy reform in Belgium that permanently exempted start-ups hiring their first employee from payroll taxes for that employee. Using firm-level administrative data and a regression-discontinuity-in-time design, we find that subsidized post-reform startups employed fewer workers and generated lower output, value added, and profits compared to pre-reform start-ups. However, post-reform start-ups were more likely to survive as employers. These effects emerged within the first year after hiring and remained stable over a medium horizon of three years. Our findings indicate a compositional shift: the subsidy primarily induced low-productivity firms to enter the market. As most firms nowadays are nonemployers, our results meaningfully generalize the theoretical implications of standard neoclassical entrepreneurship models (employee–employer margin) and fill the important gap of the nonemployer–employer margin. |
| Keywords: | entrepreneurship, start-up, employment subsidy, tax reduction, labor demand, small firms |
| JEL: | H25 J23 J24 J38 L25 L26 M51 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1135 |
| By: | Gabriel M. Ahlfeldt; Stephan Heblich; Tobias Seidel; Fan Yin |
| Abstract: | We construct a new micro-geographic commercial rent index for Germany to study the capitalization of agglomeration economies into floor space prices. In large local labor markets, commercial rents decline by -17% per kilometer from the central business district, compared to 13% for residential rents, reflecting stronger agglomeration benefits at the center. Commercial rents in central business districts increase with local labor market size at an elasticity of 15%, implying that wage responses capture only about half of the agglomeration effect on total factor productivity. |
| Keywords: | Agglomeration, commercial rent, prime locations, spatial equilibrium, total factor productivity |
| JEL: | L2 R3 |
| Date: | 2026–02–11 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0091 |
| By: | Picazo-Tadeo, Andrés, J. (Department of Applied Economics II, University of Valencia (Spain)); Melguizo, Celia (Department of Applied Economics II, University of Valencia (Spain)); Peiró-Palomino, Jesús (Department of Applied Economics II, University of Valencia (Spain)) |
| Abstract: | A key objective of the green transition is to minimise the environmental impact of human activity while ensuring sustained economic progress. Efficiently allocating policy resources requires accurately measuring this intricate relationship. Eco-efficiency indicators are useful tools for this purpose, offering valuable insights to policymakers by assessing territories’ potential to minimise environmental impact while maintaining economic performance. This research calculates eco-efficiency scores in terms of greenhouse gas emissions, a major cause of global warming, for European Union regions in 2023. The results reveal significant disparities between and within countries. Generally, the Nordic and Western regions rank among the best performers, whereas the Central and Eastern European regions are mostly among the weakest performers. In a second stage, the paper addresses the study of the determinants of regional eco-efficiency. Relevant factors fostering performance include economic development, government quality, and social capital. Conversely, large industrial sectors hinder progress towards the green transition. These results emphasise the need for place-based policy interventions that prioritise technological upgrading, industrial diversification and innovation to foster emission reductions that are compatible with sustained economic growth. Moreover, reinforcing governance quality, institutional effectiveness and social capital can enhance policy implementation and sustain long-term eco-efficiency improvements. |
| Keywords: | Eco-efficiency; European Green Deal; European Union; Greenhouse gases emissions; Green transition; regions |
| JEL: | C61 D62 Q54 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2602 |
| By: | Sebastian, Raquel; Salas-Rojo, Pedro (London School of Economics and Political Science); C. Palomino, Juan; G. Rodríguez, Juan |
| Abstract: | Technological change fuels economic growth, but its impact on wage inequality remains contested. This study presents a unified empirical framework that isolates the effects of new technologies such as automation and AI on the entire wage distribution. We develop a continuous and task-sensitive automation index and propose a distributional counterfactual-based method. Applying the approach to Spanish micro-data for 2000-2019 and instrumenting technology variables, we find automation to be a key driver of inequality: without task displacement the Gini coefficient would be 21.5% lower and significant wage shares would shift from the top 10% towards middle and bottom groups. Automation is found to barely affect the gender gap in the period studied, yet to widen the education premium. Like automation, AI exposure increases inequality, although the mechanisms to impact wages differ: automation tends to negatively impact wages in the middle of the distribution, while AI tends to increase wages at the top. Trade, offshorability, educational attainment, employment rates and mark-ups play secondary, period specific roles. The results can inform policies on skill formation and inclusive innovation. |
| Keywords: | automation; AI; wage inequality; structural change; job tasks |
| JEL: | O33 D33 J21 J24 J31 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2026-04 |
| By: | Bothner, Jonathan; Lopez-Garcia, Paloma; Momferatou, Daphne; Setzer, Ralph |
| Abstract: | This paper investigates the relationship between institutional and regulatory quality, and high-tech sector investment. Using data from 25 European Union (EU) countries from 2004 to 2019 (extended to 2023 for artificial intelligence-specific analyses), the study examines how institutional governance, labour market regulations, and business regulations influence investments in innovative, high-tech, and artificial intelligence-intensive sectors. The findings reveal that better institutional quality and less burdensome regulations are associated with higher investment shares in innovative, high-tech, and artificial intelligence industries. Raising EU countries’ institutional and regulatory quality to the level of the current EU frontier could raise the share of investment in high-technology sectors by as much as 50%, hence notably narrowing the existent EU-US investment gap. These results highlight the importance of effective governance and efficient regulations in fostering investment, innovation, and therefore long-term productivity growth. JEL Classification: C23, E02, L51, O38 |
| Keywords: | artificial intelligence, innovation, institutional quality, investment, regulatory frameworks, risky technology |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263185 |
| By: | Bäckman, Claes; D'Lima, Walter; Khorunzhina, Natalia |
| Abstract: | We show that high-income buyers earn higher capital gains on housing using detailed transaction data from Denmark. Geographic location statistically accounts for nearly all the difference, with little role for aggregate market timing, property type, or other buyer characteristics. This finding is consistent with income-based sorting, whereby higher-income households systematically sort into locations with persistently higher price growth. We test whether credit conditions shape access to locations with higher house-price growth and find no detectable change in buyer composition by income rank around major credit expansions and contractions. |
| Keywords: | Housing, wealth inequality, affordability, spatial sorting, inequality |
| JEL: | D31 G51 R31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:336814 |
| By: | Anne Epaulard; Chloé Zapha |
| Abstract: | In France, the 2009 reform of the judicial map profoundly reshaped the territorial distribution of commercial courts. Despite initial fears, court mergers have not undermined the commercial justice system; on the contrary, we show that they have improved the quality of decisions by reducing certain errors of judgment in the handling of insolvencies for companies with fewer than 10 employees. <p> En France, la réforme de la carte judiciaire de 2009 a profondément réorganisé la répartition territoriale des tribunaux de commerce. Malgré les craintes initiales, les fusions de tribunaux n’ont pas dégradé la justice commerciale ; au contraire, nous montrons qu’elles ont amélioré la qualité des décisions en réduisant certaines erreurs de jugement dans le traitement des défaillances pour les entreprises de moins de 10 salariés. |
| Date: | 2026–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:428 |
| By: | Gold, Robert; Schrader, Klaus |
| Abstract: | STRING (South Western Baltic Sea Transregional Region - Implementing New Geography) is a regional cooperation of urban centers and regions in the Nordic countries and Northern Germany. The study shows that the member countries of STRING have developed dynamically over the last decades, both economically and institutionally. Economic growth has been driven by the urban agglomerations, but the less densely populated areas have benefitted as well. Altogether, STRING seems on a stable growth trajectory. The analyses suggest that STRING may well be on the way to integrating into a mega-region in the sense of theory. However, national borders still provide significant obstacles to economic exchange within the STRING region. The authors observe that the STRING organization provides a suitable institutional framework for mitigating administrative barriers to economic exchange by improving coordination between the local and regional decisionmakers. Still, they conclude that the heterogenous membership structure of STRING may complicate its further integration, due to differing interests, competencies, and resources. Based on their findings, they suggest a two-sided approach: On the one hand, strengthening the mandate of the STRING Secretariat as an agency in policy areas of universal interest, specifically vis-à-vis national governments and the European Union. On the other hand, allowing for optionality in the members' involvement in cooperative projects. |
| Abstract: | STRING (South Western Baltic Sea Transregional Region-Implementing New Geography) ist eine regionale Kooperation von urbanen Zentren und Regionen in den nordischen Ländern und Norddeutschland. Die Studie zeigt, dass sich die Mitgliedsregionen von STRING in den letzten Jahrzehnten sowohl wirtschaftlich als auch institutionell dynamisch entwickelt haben. Das Wirtschaftswachstum wurde von den städtischen Ballungsräumen getrieben, aber auch die weniger dicht besiedelten Gebiete haben davon profitiert. Da STRING insgesamt auf einem stabilen Wachstumskurs zu sein scheint, kommen die Autoren zu dem Schluss, dass STRING auf einem guten Weg ist, sich zu einer Megaregion im Sinne der Theorie zu entwickeln. Allerdings sind nationale Grenzen nach wie vor erhebliche Hindernisse für den wirtschaftlichen Austausch innerhalb der STRING-Region. Die Autoren stellen fest, dass die STRING-Organisation einen geeigneten institutionellen Rahmen für den Abbau administrativer Hindernisse, die den wirtschaftlichen Austausch hemmen, bietet, indem sie die Koordination zwischen lokalen und regionalen Entscheidungsträgern verbessert. Sie kommen aber auch zu dem Schluss, dass die heterogene Mitgliedsstruktur von STRING aufgrund unterschiedlicher Interessen, Kompetenzen und Ressourcen die weitere Integration erschweren könnte. Vor dem Hintergrund ihrer Ergebnisse schlagen sie einen zweigleisigen Ansatz vor: Einerseits sollte das Mandat des STRING-Sekretariats als Vertretung in Politikbereichen von allgemeinem Interesse gestärkt werden, insbesondere gegenüber den nationalen Regierungen und der Europäischen Union. Andererseits sollen die Mitglieder frei entscheiden können, inwieweit sie sich an Kooperationsprojekten beteiligen möchten. |
| Keywords: | regional policy, economic integration, agglomeration economies, spatial planning, connectivity, global competitiveness, Schleswig-Holstein, Nordic Countries, Regionalpolitik, wirtschaftliche Integration, Agglomerationseffekte, Raumplanung, Konnektivität, globale Wettbewerbsfähigkeit, Schleswig-Holstein, nordische Länder |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkbw:336790 |
| By: | Kässi, Otto; Wang, Maria |
| Abstract: | Abstract This policy brief analyses the level and structure of business support measures related to the green transition in Finland in a European comparative perspective. Finland ranks among the EU countries with the highest level of green transition support when business subsidies are measured relative to GDP. However, a high level of support alone does not indicate the steering or incentive effects of subsidy policy. A comparison with other EU countries shows that Finland’s support system places greater emphasis on cost-compensating instruments, whereas in many large member states support is more directly targeted at investment projects and technological transformation. The available empirical evidence does not so far indicate that the main Finnish support instruments have had significant effects on firms’ investment activity, productivity growth, or long-term competitiveness, despite their substantial fiscal cost. At the same time, assessing the overall impact of the support system is complicated by the fact that subsidies are concentrated on large and financially strong firms, for which suitable comparison groups are difficult to identify. The policy brief highlights that the central challenge of green transition support policy lies in the structure of support measures and in evaluating their effectiveness, rather than in the overall level of support. |
| Keywords: | Green Transition Subsidies, State Subsidies, Environmental Policy Funding, Industrial Policy |
| JEL: | H23 H25 H81 Q58 O38 |
| Date: | 2026–02–09 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:174 |