The effect of retirement on social relationships

We analyze the causal effect of retirement on individual social relationships using data from the Survey of Health, Ageing and Retirement in Europe. We find that retirement changes the composition of the individual’s social network, inducing a substitution between weak (friends or colleagues) and strong ties (family), along with an increase in the intensity of the surviving ties, and there is no effect on the network’s size. These changes in the social network’s composition are associated with a higher satisfaction and stronger relationships. Interestingly, females reduce the share of friends while males that of colleagues.

Market structure and horizontal growth strategies – A case study of the container shipping industry

This article aims to review the structural transformation in the container shipping industry from 1995 to 2020 and identify the growth strategies of global carriers to enhance their market presence. Along with large investments in mega vessels, the growing deployment of charter capacity in all ship sectors has been a prominent trend in fleet expansion. The waves of mergers/acquisitions and bankruptcies have narrowed the group of global carriers. In addition to internal and external growth, they have been increasingly involved in strategic alliances to expand service coverage and compete well with powerful rivals. A few mega carriers have progressively captured the industry. In 2020, the Top 12 controlled 88 % of the global supply, and nearly 56 % was in the hands of the Top 4. Besides the substantial expansion of the four biggest carriers, we can identify the de-concentration within this gigantic group through the less inequality between their market shares.

The estimation of reaction functions under tax competition

Most of the empirical literature on tax competition has been using panel models in which each country’s tax rate responds to a weighted average of other countries’ tax rates, where weights are given. This approach imposes the reaction functions to be such that all tax rates are either strategic complements or strategic substitutes for all the countries. Moreover, it also requires that the intensity of the reactions of the countries to be proportional to the same set of given weights. Since no theoretical model relies on such restrictive assumptions, we regain flexibility in the empirical analysis by using Vector Autoregressive (VAR) models, where the sign and intensity of countries’ reactions may be heterogeneous. Using a Monte Carlo exercise, we show that if the objects of interest are the reactions to shocks in the tax rates of the other countries and there is no a priori knowledge of the structure of the economy, it can be convenient to opt for a VAR rather than a panel setup. A Bayesian VAR model on real data shows that strategic complementarity between some countries may co-exist with strategic substitutability between other countries, a finding with potential policy implications on the debate on tax competition.

Immigration and anti-immigrant voting in the 2017 German parliamentary election

We empirically examine the relationship between immigration and votes for the Alternative für Deutschland (AfD) in the 2017 German parliamentary election. We conduct a cross-sectional analysis, exploiting election results and socio-demographic as well as geographic features of the 401 German administrative districts. We find that immigration has a negative effect on AfD voting. A 1 percentage point increase in the share of foreigners is associated with a decrease in the AfD vote share of up to 0.37 percentage points. The result is robust to several estimation variations, such as addressing the potentially endogenous distribution of foreigners with an instrumental variable analysis.

A macro-level analysis of language learning and migration

This article investigates the macro-level drivers of adult-age language learning with a focus on migration based on a new dataset on German language learning in 77 countries (including Germany) for 1992–2006. Fixed-effects regressions show that language learning abroad is strongly associated with immigration from countries of the European Union and the Schengen Area whose citizens enjoy free access to Germany, while language learning in Germany is strongly associated with immigration from countries with restricted access. The different degrees of uncertainty about access to Germany seem to be of importance for preparatory language learning. To shed light on country heterogeneities, we substitute the location fixed effects with a vector of country characteristics, which include several distance measures among others, and we estimate a random-effects model. Last, we provide some tentative arguments in favour of a causal interpretation. The main results related to the role of uncertainty are mostly unaffected. The Skilled Immigration Act from 2020 removes part of this uncertainty with potential positive effects on preparatory language learning and economic and social integration.

Skill complementarity in production technology: New empirical evidence and implications

Danish manufacturing firm data reveal that 1) industries differ in within-firm worker skill (= wage) dispersion, and 2) within-firm skill dispersion positively correlates with firm productivity in industries with higher average skill dispersion. We argue that these patterns reflect technological differences between industries: firms in the “skill complementarity” industries profit from hiring similarly able workers, while the “skill substitutability” firms thrive on skill differences. Our study produces a robust, data-driven and theoretically validated classification of industries into the complementarity and substitutability groups, unveils hitherto unnoticed technological heterogeneity between industries within the same economy, and illustrates its importance through simulations.

Do balanced-budget fiscal stimuli of investment increase its economic value?

We examine the timing of a business investment providing valuable external benefits to society. A surge in uncertainty about private returns, a typical feature if not a cause of recessions, delays capital outlays to an extent that may be detrimental to social welfare. Is there an efficiency-improving public policy directed at accelerating investment? By real option analysis, we try answering this question by comparing three fiscal policies: (i) a simple subsidy on investment, (ii) a balanced-budget fiscal stimulus where the subsidy is subsequently covered by profit taxation, and (iii) by taxing external benefits as well. We show that, under a balanced-budget stimulus, investment acceleration may come at the expense of a net economic loss, and the higher is uncertainty on private returns, the higher the likehood of a negative outcome. However, this risk strongly declines when government spending is balanced by taxing both private and public returns on investment.