Economics: Research Guide

We use linked parent-child administrative data for five countries in North America and Europe, and detailed survey data for two more, to investigate methodological challenges in the estimation of absolute income mobility. We show that the commonly used “copula and marginals” approximation methods perform well across countries in our sample, and the greatest challenges to their accuracy stem not from assumptions about relative mobility rates over time but from the use of non-representative marginal income distributions. We also provide a multi-country analysis of sensitivity to specification decisions related to age of income measurement, income concept, family structure, and price index.

The use of digital technologies like artificial intelligence, robotics, or smart devices can be expected to go hand in hand with higher productivity and lower trade costs, and, therefore, 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 to shed further light on this issue by investigating the link between the digitalization intensity of a firm 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, digital..

This study examines the impact of childhood obesity on the academic performance and human capital accumulation of high school students using data from Spain. To address potential endogeneity issues, we exploit the exogenous variation in obesity within peer groups. Specifically, we use the prevalence of obesity by gender in students’ classes as an instrumental variable for individual obesity. The results indicate that obesity has a negative impact on academic achievement, particularly on general scores for girls, cognitive abilities as measured by CRT scores, financial abilities, and English grades for both boys and girls. In addition, we found a negative impact of obesity on girls’ mathe..

This paper first presents a meta-analysis of the causal impact of cultural participation on well-being. The meta-analysis classifies the literature according to the strength of the evidence available and various types of cultural activities. Secondly, this paper uses data from time use surveys from Canada, France, Italy, the United Kingdom, and the United States to study individuals’ emotional responses to a series of daily activities. This is then used as a basis for an empirical assessment of the drivers of time allocation across different activities, showing that expectations of future well-being are one of the reasons why individuals decide to engage in cultural activities. Furthermore..

본 연구에서는 중국 전기차 배터리 시장의 현황과 중국산 배터리의 글로벌 경쟁력에 대해 살펴보고, 중국기업의 유형별 해외 진출 사례와 특징을 분석했다. 또한 중국의 대표 전기차 배터리 기업을 선정하여 해당 기업의 해외 사업 전략과 경쟁력을 파악하고, 우리 정부와 기업이 활용할 수 있는 종합적인 대응방안을 고찰했다. Chinese EV battery companies, which dominate the Chinese domestic market, are recently entering global market in earnest. The demand for Chinese batteries is also rising as the demand for batteries increases due to the rapid pace of EV conversion in major automobile..

Affordable housing is rare in many German cities and municipalities. Publicly social housing in terms of its quality, sustainability, and affordability is a contemporary issue which is more relevant than ever. The federal and state governments have initiated subsidy programs to increase social housing units, but private investors have been hesitant due to perceived economic risks and psychological barriers. Psychological barriers to investment in affordable housing exist and are significant. Prejudices are prevalent and, together with misinformation, lead to misperceptions among potential investors. Besides investors' concerns and doubts, the population and neighbourhood of affordable housin..

In addressing the EU's contemporary challenges, this analysis acknowledges a critical intersection between the imperatives of security, sustainability, and industrial autonomy. The EU undertakes substantial efforts in these domains. The rapidly shifting glob- al context, its considerable volatility, and emerging trends render any immediate as- sessment of recent policy initiatives prema- ture. However, this dynamic and uncertain landscape underscores the limitations of conventional forecasting and necessitates an ongoing reassessment of the EU's strate- gic priorities. Central to this discourse is the policy ‘trilemma' confronting the Union: the need to simultaneously uphold security, fos-..

This paper shows the importance of technological synergies among heterogeneous firms for aggregate fluctuations. First, we document six novel empirical facts using microdata that suggest the existence of important technological synergies between trading firms, the presence of positive assortative matching among firms, and their evolution during the business cycle. Next, we embed technological synergies in a general equilibrium model calibrated on firm-level data. We show that frictions in forming trading relationships and separation costs explain imperfect sorting between firms in equilibrium. In particular, an increase in the volatility of idiosyncratic productivity shocks significantly dec..

This study examines the role of temperature as a driver of seasonal economic cycles. The study first presents a novel dataset of seasonal temperature and seasonal GDP. Stylised facts show that seasonal economic cycles are much more diverse than previous research suggested. The study then attributes seasonal economic cycles to temperature variability. For causal identification, the study proposes a novel econometric approach that accounts for expectations. The results suggest that seasonal temperature has a statistically significantly positive and economically large effect on seasonal GDP. Overall, a substantial share of seasonality in GDP timeseries appears to be due to weather. For a subsam..

We contribute to the long-standing debate on the Italian North–South divide by assessing the impact of public spending on social infrastructure - including education, healthcare, childcare and social assistance - on the gender employment gap over the last two decades, using a P-SVAR analysis. These investments, while not explicitly targeting women, may increase both their labour supply - by reducing the unpaid care work burden - and pro-women labour demand through job creation in care sectors that predominantly employ women. Our research reveals a positive and long-lasting impact of social infrastructure expenditure on private investment, GDP and employment in all areas of the country..

This paper analyses the growth-enhancing effect of different types of innovative activities, i.e., standard-innovation and eco-innovation by focusing on the potential role of exports in mediating the innovation-growth nexus. The empirical study is carried out on a representative sample of Italian firms built by integrating data from the Italian CIS-Community Innovation Survey with the ASIA-FRAME database of the Italian National Statistical Office (ISTAT), which reports information on export values and employment dynamics. The econometric analysis applies Structural Equations Models (SEM) and a two-step counterfactual analysis. Results show that export activities, spurred by engagement in inn..

The EU committed to meet the poverty reduction target set in the European Pillar of Social Rights Action Plan, which entails to reduce the number of children at risk of poverty or social exclusion by 5 million by 2030. The paper assesses the impact of child-contingent cash support in EU-27 in 2019-2022 on child poverty and inequality and sheds light on the role this kind of support plays, or could further play, when it comes to meeting the 2030 child poverty target. We use the microsimulation model EUROMOD to identify child-contingent cash support and find significant variation in average support per child across EU-27, ranging from 3.2% of GDP per capita in Ireland to 12% of GDP per capita ..

How do property taxes affect house prices, homeownership, and welfare? I focus on Italy, a country with high homeownership, an outdated property tax system, and failed reform attempts. As in many other countries, owner-occupied houses are exempt from property taxes in Italy. Additionally, property taxes are calculated using outdated cadastral values. I show that using cadastral values creates a regressive property tax since cadastral values are relatively lower for more expensive housing units. I develop a life-cycle model with endogenous homeownership to assess the effects of reforming the current system. My findings show that removing the owner-occupied exemption and adjusting cadastral va..

We study the role that the productive structure plays in determining carbon dioxide (CO2) emissions by industry. Specifically, we distinguish and isolate the interdependencies originating from the structure of the demand for inputs from those resulting from the supply structure. This separation has the advantage of enabling a better identification of the causal origin of emissions and allows the establishment of a catalog of industries based on their characteristics as demanders or suppliers of inputs. This information, linked to the different nature of demand or supply, can be relevant for designing more effective emission containment measures. The empirical basis of the analysis utilizes i..

Numerous studies have been proposed in the literature to analyse the determinants of renewable energy consumption and their effects. Nevertheless, despite the various proposed methods and obtained results, nothing is known about which factors are most or least important. This paper proposes to contribute to the literature by comparing their effects and ranking them according to their importance. This additional information may be important when developing policies for energy transition. The proposed procedure is based on the estimation of a panel vector autoregressive (PVAR) model including simultaneously the commonly considered factors affecting renewable energy consumption in the literatur..

If a profit-maximising firm credibly commits to an employment-enhancing Corporate Social Responsibility (CSR) objective in negotiations with a trade union, the union can reduce its wage demands. Lower wages, ceteris paribus, raise profits, while the increase in employment enhances the payoff of a wage-setting trade union. Therefore, both the firm and the trade union can be better off in the presence of a collectively bargained CSR-objective than in its absence. Accordingly, establishing a CSR-objective can give rise to a Pareto-improvement and can mitigate the inefficiency resulting from collective wage negotiations.

This paper studies the impact of voluntary climate commitments by banks on their lending activity. We use administrative data on the universe of bank lending from 19 European countries. There is strong selection into commitments, with increased participation by the largest banks and banks with the most pre-existing exposure to high-polluting industries. Setting a commitment leads to a boost in a lender’s ESG rating. Lenders reduce credit in sectors they have targeted as high priority for decarbonization. However, climate-aligned banks do not change their lending or loan pricing differentially compared to banks without climate commitments, suggesting they are not actively divesting. We can ..

We compare the contribution of various popular economic policy uncertainty (EPU) measures with that of widely-studied realized moments (realized leverage, realized skewness, realized kurtosis, realized good and bad volatilities, realized jumps, and realized up and down tail risks) to the performance of out-of-sample forecasts of stock market volatility of the United States (US) over the sample period from 2011 to 2023. To this end, we construct optimal forecasting models by combining the popular heterogeneous autoregressive realized volatility (HAR-RV) model with optimal stepwise predictor selection algorithms and shrinkage estimators (lasso, elastic net, and ridge regression), where we cont..

This paper focus on civil conflicts arising from natural resource appropriation in a growth model with rent-seeking behavior and how fiscal policy can mitigate them. Such conflicts, if destructive, make the development trajectory indeterminate. There are two self-fulfilling equilibria, including a poverty-conflict trap associated with large civil conflicts. The resource curse may emerge because of pessimistic household expectations. However, fiscal policy can help overcome the tradeoff between conflict and economic development and partially solve the conflict-based resource curse. In this regard, there is an appropriate sharing of the government budget between military spending and human cap..

In 2015, Germany introduced a national minimum wage. While the literature agrees on at most limited negative effects on the overall employment level, we go into detail and analyze the impact on the working hours dimension and on the subset of minijobs. Using data from the German Structure of Earnings Survey in 2010, 2014, and 2018, we find empirical evidence that the minimum wage significantly reduces inequality in hourly and monthly wages. While various theoretical mechanisms suggest a reduction in working hours, these remain unchanged on average. However, minijobbers experience a notable reduction in working hours which can be linked to the specific institutional framework. Regarding emplo..

The recent increase in the use of digital technologies has brought benefits in terms of increased productivity, sales and exports. The COVID-19 crisis accelerated the digital transition, pushing both governments and businesses to invest more in information and communication technology (ICT). Policy makers and researchers are interested in assessing the macroeconomic and distributional effects of digitalisation on the labour market. The impact of digitalisation may be either positive or negative, and may affect certain jobs and sectors more than others. Several recent studies have quantified the net impact of digital technologies on employment, with mixed results. This Policy Insight reports ..

The transition to a competitive and sustainable economy is at the heart of EU strategies to achieve climate neutrality while increasing economic efficiency. An indicator to measure the competitive and sustainable transition at regional level is presented based on Santos et al. (2023). The indicator accounts for shifts in employment towards greener and more productive sectors over the 2008-2020 period. On average, the share of employment in more productive and greener sectors is increasing over time, although the impact of the Covid-19 crisis is tangible. There is strong heterogeneity across EU regions, but most of the less developed regions lag behind the more developed ones. However, on the..

In May 2023, the Austrian government announced to set up a new online database to help people compare retail prices across supermarkets and find the cheapest offers in an effort to fight soaring food prices. While plans for a government-built website have been abandoned, private developers released a handful of easy to navigate price comparison websites by June 2023, comprising the assortments of all main supermarket chains in Austria. This brief analyses the extent to which price transparency led to an effective reduction in final consumer prices. To this end, we compare the prices of listed products in Austria with those of the exact same products in Germany, where such price comparison we..

In May 2023, the European Union (EU) implemented the Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage risks associated with its ambitious climate policies. Examining CBAM in conjunction with the EU Emissions Trading System (EU ETS), the paper highlights potential CBAM implications and discusses proposals to address key issues. CBAM is likely to impact exporters’ profitability and trade competitiveness, favouring nations with faster decarbonisation ability and robust carbon pricing systems. The paper advocates for non-EU countries to strengthen their emissions monitoring, reporting, and verification (MRV) systems and carbon pricing frameworks. For India, changing the nome..

This study explored the variability in Aggregate Personal Income (PI) across 13 major industrial sectors in the US during the COVID-19 pandemic. Utilizing time-series data from 2010 Q1 to 2019 Q4, we employed Autoregressive Integrated Moving Average (ARIMA) models to establish baseline trends in Personal Income (PI) before the pandemic. We then extended these models to forecast PI values for the subsequent 14 quarters, from 2020 Q1 to 2023 Q2, as if the pandemic had never happened. This forecasted data was compared with the actual PI data collected during the pandemic to quantify its impacts. This approach allowed for the assessment of both immediate and extended effects of COVID-19 on secto..

Wealth is a central determinant of life chances and intergenerational status persistence in modern societies. Yet, sociologists traditionally overlooked its role in class measurement and inequality, while most economists focused on the elites. This article reconciles sociological and economic perspectives on class analysis by examining the relationship between classes and wealth inequality versus income. Drawing from the Luxembourg Wealth Study (2002-2018) in five European countries, we test whether occupational classes, based on the entire division of labour, keep up with rising economic inequality trends. In contrast to bold claims on class death or decomposition, inequality of outcomes in..

This paper proposes an index to benchmark EU financial systems against their potential to enhance resilient growth and international risk sharing. It finds that the risk sharing mechanism is more effective in more stable financial environments, whereas a larger fraction of shocks remains unsmoothed in the lower financial clusters, especially in the aftermath of the global financial crisis, when the credit channel is significantly downsized.

The article outlines the critical situation of affordable housing in Germany, highlighting the government's goal to create 400, 000 new flats annually to address dwelling shortages. Despite this target, the actual construction completions in 2022 were only 295, 300, with projections indicating a decline to 175, 000 by 2025. This shortfall is attributed to rising construction costs, land prices, and interest rates, making it financially unviable for investors to offer affordable rents. The lack of affordable housing is primarily a distribution issue, with high demand in cities and conurbations leading to a cost spiral and financial burdens for low- and middle-income households. To combat this..

This paper studies the individual-level assumptions of the Malthusian model in pre-industrial Germany. By exploiting demographic records for 150, 000 individuals from the historical county of Wittgenstein, I test for status gradients in child mortality (the Malthusian positive check) and marital fertility (preventive check). While I find no evidence for a status gradient in child mortality, I find strong evidence for a status gradient in fertility. The richest families had, on average, one extra child when compared to their poorer compatriots. Turning to the mechanics of the preventive check, this appears to have been driven mostly by an earlier age of marriage amongst high status families. ..