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on Microeconomic European Issues |
| By: | Viola Angelini; Joan Costa-Font; Berkay Ozcan |
| Abstract: | We study whether receiving a monetary gift from parents increases the intensity of parent-child social contact. We use unique longitudinal data that follows adult children and their older parents for more than a decade (between 2004 and 2015) across various European countries. We first document that bequests, being more visible and subject to legal restrictions on their division, tend to be equalized among children, whereas gifts are less conspicuous and often unevenly distributed. Leveraging the exogenous variation induced by fiscal incentives resulting from inheritance tax legislation reforms, we use an instrumental variable (IV) and an endogenous treatment strategy to investigate the effect of gift-giving on parent-child social contact. Our findings suggest that financial transfers from parents to children lead to an increase in the intensity of parent-child interactions. We estimate that the receipt of a gift gives rise to a 12% increase in social contact. |
| Keywords: | gift giving, inter-vivos transfers, upstream social contact, inheritance tax-reforms, inheritance tax, gifts, bequests Europe |
| JEL: | J14 H29 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11695 |
| By: | Donata Stonkute (Max Planck Institute for Demographic Research, Rostock, Germany); Angelo Lorenti (Max Planck Institute for Demographic Research, Rostock, Germany); Jo M. Hale (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Variations in the accumulation and decline of cognitive reserve across different cultural and institutional contexts, as well as selective survival processes that influence which population groups remain at risk for cognitive impairment, may contribute to the heterogeneity of educational disparities in cognitive health across European countries and between genders. We explore how educational disparities in Cognitive Health Expectancies (CHE) for men and women vary across different contextual settings in Europe, with a particular focus on Central and Eastern European (CEE) countries. Applying multivariate life table approach and the Sullivan methods to the Survey of Health, Ageing and Retirement in Europe (SHARE) data, we estimated CHE by gender and education at age 50 and the proportion of CHE relative to remaining life expectancy, across 10 European countries. We found that educational inequalities in cognitive health are significantly influenced by national context, with some of the most pronounced effects in CEE countries, particularly for women. Despite higher overall educational attainment in CEE countries, the benefits typically associated with education did not translate equally across groups. The key divergence, which is most pronounced for women, occurs among those with low educational attainment, who appear to be highly disadvantaged. Substantially smaller disparities, such as observed in Northern European countries, suggest untapped potential for mitigating educational inequalities in cognitive ageing. |
| Keywords: | Europe |
| JEL: | J1 Z0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2025-009 |
| By: | Almar, Frederik (Aarhus University); Friedrich, Benjamin (Northwestern University); Reynoso, Ana (University of Michigan); Schulz, Bastian (Aarhus University); Vejlin, Rune Majlund (Aarhus University) |
| Abstract: | This paper revisits the link between education-based marriage market sorting and income inequality. Leveraging Danish administrative data, we develop a novel categorization of “ambition types” that is based on starting wages and wage growth trajectories associated with detailed educational programs. We find a substantial increase in assortative matching by educational ambition over time, and the marriage market explains more than 40% of increasing inequality since 1980. In contrast, sorting trends are flat with the commonly-used educational level categorization. We conclude that the mapping from education to types matters crucially for conclusions about how education-based marriage market sorting contributes to rising income inequality. |
| Keywords: | inequality, marital sorting, education |
| JEL: | D13 D31 I24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17814 |
| By: | Simone Schüller |
| Abstract: | This study investigates whether (and how) working from home (WFH) affects the gender division of parental unpaid labor. I use the recent COVID-19 pandemic that brought an unanticipated yet lasting shift to WFH combined with a measure of occupational WFH feasibility (Alipour et al. 2023) as a quasi-experiment to employ an instrumental variable (IV) approach and estimate causal effects. I use unique longitudinal data from the “Growing up in Germany” (AID:A) panel study, which administered a pre-pandemic wave in 2019, and a post-pandemic wave in 2023. AID:A contains rich information on mothers’ and fathers’ time use for work, commuting, childcare, and housework. I find that the most robust effects emerge for paternal WFH intensity (at least weekly WFH) on parental division of housework: families in which fathers start weekly WFH in the period 2019 to 2023—due to their occupational WFH capacity in combination with the pandemic WFH-boost—experience a significant decrease in the maternal share of parental housework. Interestingly, this shift appears to be mainly driven by a reduction of maternal time use for housework (combined with an increase of her work hours) and less by an increase in paternal time use for housework suggesting cross-parent effects of WFH. |
| Keywords: | working from home, childcare, housework, time use, gender equality, Covid-19, AID:A panel survey |
| JEL: | D13 I31 J13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11689 |
| By: | Ilmakunnas, Ilari (The Finnish Centre for Pensions); Sten-Gahmberg, Susanna |
| Abstract: | Flexible partial retirement schemes are intended to give individuals the opportunity to reduce working hours before moving into full retirement, the expectation being that the reduced workload will contribute to postponed retirement. Yet, there is limited research about whether and how flexible partial pensions are used as a way of exiting the labor force, as an income supplement, or as a way of bridging the transition into retirement through part-time employment. In Finland, individuals can take up part of their accrued old-age pension after reaching age 61 regardless of their employment status. Using high-quality register data with monthly information on retirement and wage income, we use sequence analysis analyze previously employed persons’ wage income trajectories around the take-up of partial old-age pension. We find that only around one in five continue to work at a reduced wage income level, indicating a reduction in working hours. Around one in six left paid employment just before or after pension take-up. Most individuals do not reduce their working hours when taking up a partial pension. Our findings suggest that the Finnish partial old-age pension scheme is currently not likely to extend working lives, raising concerns about its effectiveness in meeting its policy goal. |
| Date: | 2025–03–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:6mznd_v1 |
| By: | O'Connor, Kelsey J. (STATEC Research – National Institute of Statistics and Economic Studies) |
| Abstract: | The immigrant population increased by 32 million in 37 European countries from 1990-2019. Much of this movement was internal, from east to west Europe. Although both the destination and origin countries could be affected, we find no effects on aggregate subjective well-being in either group, using country-panel and instrumental variable techniques. Immigrants, in contrast, experienced increased well-being, converted to monetary terms, in excess of £25, 000 per person. We offer more comprehensive evidence than previous studies, in terms of country and period, and by assessing the impacts on subjective well-being, which captures all of the important factors affected by immigration. |
| Keywords: | life satisfaction, migrants, emigration, immigration, subjective well-being, Europe |
| JEL: | I31 J15 F22 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17816 |
| By: | Fusillo Fabrizio; Manera Maria; Orsatti Gianluca; Quatraro Francesco; Rentocchini Francesco (European Commission - JRC) |
| Abstract: | Reducing uncertainty around critical raw materials (CRM) supply is a policy priority for the EU in view of their role for advanced carbon neutral and digital technologies. A new, AI based indicator is introduced to measure the exposure of inventive activities to critical raw materials, outperforming existing approaches by identifying CRM relevance even when not immediately evident. High exposure sectors, such as aerospace & defence and ICT services, intensify inventive efforts in response to CRM supply risk, indicating strategic shifts towards substitution and diversification. European regions differ significantly in CRM exposure: some areas (e.g. parts of France, Germany, Italy, and Scandinavia) show con-siderable hidden CRM based inventive activity. Firms in CRM exposed sectors adapt by both increasing their inventive efforts and seeking alternative inventive routes, suggesting that innovation can mitigate supply risk vulnerabilities. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc141261 |
| By: | Clarke, Damian (University of Chile); Bhalotra, Sonia R. (University of Warwick); Nazarova, Angelina (ISER, University of Essex) |
| Abstract: | Looking at the earnings profiles of men and women after their first child is born, a number of studies establish that women suffer a larger penalty in earnings than men—a child penalty. Leveraging randomness in the sex of the first birth, we show that the child penalty in the UK is larger when the first born child is a girl. We label this the daughter penalty. Exploiting rich longitudinal survey data, we examine behavioural responses to the birth of a daughter vs. a son to illuminate the underpinnings of the daughter penalty. We find that the birth of a daughter triggers more household specialisation than the birth of a son, with mothers taking on a larger share of household chores and childcare. Mothers suffer a daughter penalty in mental health, while fathers report more satisfaction with their relationship. Our findings imply that girls and boys in the UK are, on average, growing up in different home environments, with girls growing up in households that, by multiple markers, are more gender-regressive. This is potentially a mechanism for the inter-generational transmission of gendered norms. |
| Keywords: | parental involvement, mental health, gender wage gap, child penalty, gender |
| JEL: | J2 J7 I3 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17817 |
| By: | Moawad, Jad (Department of Social Policy and Intervention, University of Oxford) |
| Abstract: | Previous research has focused primarily on income and wealth inequalities, with less emphasis on saving behavior which is one of the key mechanisms linking these components. This study examines the extent of disparities in household saving behavior across Western countries and how these disparities have evolved over the past two decades. Using data from the Luxembourg Wealth Study (LWS), the most comprehensive dataset on saving behavior to date, this analysis covers 10 countries between 1995 and 2018. The analysis yields three key findings. First, saving inequalities are most pronounced in Spain, Finland, Italy, and the United States. However, the baseline of likelihood of saving among low-income earners vary significantly. Bottom quartile earners in the United States and Finland report saving behavior eight times higher than their counterparts in Italy, and twice that of Spain. Second, saving behavior correlates more strongly with a country's economic performance than with its welfare state or social expenditure levels. Third, the financial crisis impacted saving behavior differently across countries. It reduced saving for all economic strata in Italy and Slovakia, while increasing saving inequalities in Austria, Spain, and the United States. |
| Keywords: | Saving Behavior, Welfare States, Financial crisis, Cumulative advantage |
| JEL: | D14 E21 H55 I38 P52 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2024-08 |
| By: | Card, David (University of California, Berkeley); Devicienti, Francesco (University of Turin); Rossi, Mariacristina (University of Turin); Weber, Andrea (Central European University) |
| Abstract: | The gender wage gap rises with experience. To what extent do firm policies mediate this rise? We use administrative data from Italy to identify workers' first jobs and compute wage growth over the next 5 years. We then decompose the contribution of first employers to the rise in the gender wage gap, taking account of maternity events affecting a third of female entrants. We find that idiosyncratic firm effects explain 20% of the variation in early career wage growth, and that the sorting of women to slower-growth firms accounts for a fifth of the gender growth gap. Women who have a child within 5 years of entering work have particularly slow wage growth, reflecting a maternity effect that is magnified by the excess sorting of mothers-to-be to slower-growth firms. Many entrants change jobs within their first 5 years and we find that the male-female difference in early career wage growth arises from gaps for both movers and stayers. The firm components in wage growth for stayers and movers are highly correlated, and contribute similar sorting penalties for women who stay or leave. |
| Keywords: | maternity, firm effects, gender gaps, matched employer-employee data |
| JEL: | J00 J23 J24 J31 J38 J58 L13 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17860 |
| By: | Johannes Hirvonen (Northwestern University); Aapo Stenhammar (University of Bonn); Joonas Tuhkuri (Stockholm University) |
| Abstract: | Industrial policies are widespread, but evidence on their workforce effects remains limited. We present novel evidence on the impact of EU technology subsidies on employment and skill demand in Finnish SMEs, 1994–2018. The subsidies fund new machinery, including robots and CNC machines. Comparing closely matched grant winners and losers, we find that receiving a grant increased employment without changing skill composition. Leveraging application text data and machine learning, we match firms, analyze their plans, and show that subsidies primarily supported expansion, such as launching new products, rather than automating work. In contrast, analysis of a broader sample of manufacturing firms outside the program reveals that IT investments are more strongly associated with skill upgrading than machinery investments, suggesting that different technologies may impact jobs differently. Our findings indicate that machinery grants can create opportunities for non-college-educated workers. |
| Keywords: | Industrial Policy, Subsidies, Technological Change, Labor Demand, Skills |
| JEL: | J23 J24 O33 O25 H25 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2504 |
| By: | Eichhorst, Werner (IZA); Marx, Paul (University of Bonn) |
| Abstract: | Germany has long been portrayed as the best real-world example of an export-oriented economic model associated with a dualized labor market and welfare state. The success of this export-centered model over the last decades has typically been ascribed to competitiveness due to wage restraint and widening wage dispersion in line with declining collective bargaining coverage. This paper starts from this widely shared perception, but sheds a new light on the dynamics and structures of employment in Germany after a long boom period for the late 2000s to the most recent period. The paper argues that much of this change is rather market driven than to be explained by institutional reforms. Employment growth was driven by service sector expansion while wage dispersion and non-standard work stagnated and declined somewhat, reducing the extent of these forms of dualisms in the labor market. Following a cyclical argument about political decision-making, we only saw limited re-regulatory activity. However, the favourable economic climate has changed more recently. |
| Keywords: | Germany, non-standard employment, dual labor markets, labor market reforms, political economy |
| JEL: | J21 J24 J31 J38 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17862 |
| By: | Luis Alonso-Armesto (University of Oxford); Julio Caceres-Delpiano (Universidad Carlos III de Madrid.); Warn Lekfuangfu (Universidad Carlos III de Madrid) |
| Abstract: | This study examines the impact of increasing the Minimum Legal Drinking Age (from 16 to 18 years old) on the academic performance, substance use, and peer behaviours of teenagers. Using a difference-in-discontinuities design, we exploit regional MLDA reforms in Spain and PISA data to identify significant improvements in mathematics and science performance, particularly among male teenagers and those from lower socioeconomic backgrounds. A complementary analysis using data from the Survey on Drug Use in Secondary Education in Spain indicates that these academic gains coincide with reductions in alcohol consumption, intoxication, smoking, and marijuana use, suggesting a link between substance use and educational outcomes. Moreover, the reform led to less drinking and less use of illicit drugs within peer networks, highlighting the amplifying role of peer effects in policy impact. |
| Keywords: | minimum legal drinking age, education, risky behaviour, alcohol, difference-in-discontinuities, PISA, ESTUDES, Spain, teenagers |
| JEL: | I18 I12 I21 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2509 |
| By: | Gabriella Conti; Rita Ginja; Petra Persson; Barton Willage |
| Abstract: | The motherhood penalty is well-documented, but what happens at the other end of the reproductive spectrum? Menopause—a transition often marked by debilitating physical and psychological symptoms—also entails substantial costs. Using population-wide Norwegian and Swedish data and quasi-experimental methods, we show that a menopause diagnosis leads to lasting drops in earnings and employment, alongside greater reliance on social transfers. The impact is especially severe for women with lower socioeconomic status. Increasing access to menopause-related health care can help offset these losses. Our findings reveal the hidden economic toll of menopause and the potential gains from better support policies. |
| Keywords: | menopause, health care, disability income, fertility |
| JEL: | J01 J13 I10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11761 |
| By: | Chapelle, Guillaume (Université de Paris); Gobillon, Laurent (Paris School of Economics); Vignolles, Benjamin (CREST) |
| Abstract: | We study the effects of the SRU law introduced in France in December 2000 to support scattered development of public housing in cities and favor social mixity. This law imposes 20% of public dwellings to all medium and large municipalities of large-enough cities, with fees for those not abiding by the law. Using exhaustive fiscal data, we evaluate the effects of the law over the 1996-2008 period using a difference-in-differences approach at the municipality and neighborhood levels. We find that the law stimulated public housing construction in treated municipalities, but only slightly increased the presence of low-income households. Indeed, new public dwellings enter categories to which medium-income are eligible and most additional occupants are not poor. Within municipalities, the policy decreased public housing segregation but it barely decreased low-income segregation. This comes from local authorities increasing over time the presence of public dwellings in neighborhoods away from existing public housing but in places concentrating low-income households. |
| Keywords: | construction, policy evaluation, public housing, segregation |
| JEL: | R31 R38 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17854 |
| By: | Popova, Daria; Avram, Silvia; Irene, Rioboo |
| Abstract: | This study provides the first comparative analysis of how COVID-19 policy responses influenced gender income inequality across 28 European countries. Using a quasi-experimental approach that combines microsimulation and nowcasting techniques, we construct counterfactual scenarios to estimate the net effects of pandemic-related labor market shocks and government interventions on the incomes of women and men. By employing a gender-sensitive measure of disposable income, we address intra-household inequality often overlooked in distributional research. Our findings show that although both working age men and women experienced income losses in 2020, these were significantly mitigated by tax-benefit policies. Men, on average, benefitted more from furlough due to greater employment losses and higher pre-pandemic earnings, while women benefitted from the progressive design of other policy measures. On average, the ratio of women’s to men’s disposable incomes rose slightly, indicating a temporary narrowing of the gender income gap. These results highlight the equalizing role of expansive social protection during pandemic and underscore the importance of gender-aware policy analysis. |
| Date: | 2025–04–22 |
| URL: | https://d.repec.org/n?u=RePEc:ese:cempwp:cempa7-25 |
| By: | Björn Bos; Moritz A. Drupp; Lutz Sager |
| Abstract: | Low emission zones (LEZ) represent a key environmental policy instrument to address air pollution in cities. LEZs have reduced air pollution and associated health damages in regulated areas, but it remains unclear who has benefited from cleaner air. To examine the distributional effects of LEZs, we combine gridded data on resident characteristics, including income and a proxy for ethnicity, with high-resolution estimates of fine particle (PM2.5) concentrations in Germany, the country with the highest number of LEZs. We estimate heterogeneous treatment effects with a difference-in-differences approach and show that PM2.5 pollution reductions are distributed unequally across society. While residents with German name origins experience larger improvements within LEZs, residents with foreign names disproportionately live in LEZs and thus benefit more when assessed at a nationwide scale. Monetizing air quality benefits following governmental guidance, we find that they are distributed pro-poor within LEZs, disproportionately benefiting lower-income residents. From a nationwide perspective, benefits are distributed almost proportionally although the sign is sensitive to how benefits from cleaner air scale with income. Overall, our results suggest that LEZs have nuanced distributional implications that differ sharply between a national perspective and local assessments that focus on effects within LEZs. |
| Keywords: | air pollution, distributional effects, low emission zones, traffic regulation |
| JEL: | J15 Q52 Q53 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11739 |
| By: | Arrazola, Maria; Campos, Raquel; de Hevia, Jose |
| Abstract: | Despite women outnumbering men in higher education, significant gender segregation persists in the choice of field of study. In the 2020/2021 academic year, only 8% of Spanish female students were enrolled in Engineering, compared to 29.5% of male students. This paper investigates the determinants of the underrepresentation of women in Engineering in Spain by examining whether differences in future labour market outcomes influence this anomaly. Using data from the 2019 University Graduate Employment Outcomes Survey, we find significantly worse labour outcomes for female Engineering graduates than for those in Health. Within fields, we find a larger gender gap in labour outcomes in Engineering than in Health. Our results suggest that gender segregation in higher education can be partly driven by differences in labour market expectations by field of study and gender. Many women who could pursue Engineering based on their pre-university track and accomplishments may opt instead for other fields like Health due to better career prospects: higher probability of finding a job and higher earnings, and lower likelihood of experiencing vertical and horizontal mismatches. |
| Keywords: | engineering; field of study; gender differences; gender segregation; higher education; labour market entry |
| JEL: | R14 J01 |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127944 |
| By: | Katharina Adler; Fabian Kosse; Markus Nagler; Johannes Rincke |
| Abstract: | How do students’ earnings expectations differ by being the first in their family to attend university (FiF) and how do they affect field of study choice? We leverage unique survey and administrative data from a German university to document sizable gaps in expected earnings between FiF and non-FiF students. Our data can explain two-thirds of this gap, with the largest share attributable to field of study choice. We show that FiF students sort less into study fields based on their earnings expectations. Investigating potential explanations, we find that they expect lower own ability and worse non-wage amenities in high-earning fields. |
| Keywords: | socio-economic gaps, first-generation, higher education, earnings expectations |
| JEL: | I23 I24 I26 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11700 |