Social Protection and Human Capital: Test of a Hypothesis

The claim of this paper is to investigate the relationship between social protection and the investment in human capital. The idea is that investment in human capital is risky and therefore, as a prerequisite, needs some kind of protection as insurance. Investments in specific human capital, in particular, are very risky and require a special protection so as not to be avoided. An attempt is made to study the micro foundations of this relationship in depth which afterwards moves on to a macroeconomic analysis. Here a strong link is found between the levels and types of social protection and the skill profiles of a country (as predicted). The clusters we find seem to be in accordance with existing literature on ‘varieties of capitalism’. The last stage of this work is a hypothesis in the opposite direction of the nexus: how the choices of workers and firms influence the institutional framework (endogeneity of institutions of the welfare state). The result of this network of relations seems to be the formation of several organizational equilibria (and not a global convergence) in which institutions shape agents’ behaviour and, at the same time, agents, through their policy preferences, reinforce existing institutional infrastructures.

Educational choices and the selection process before and after compulsory schooling

The aim of this paper is to analyze the selection process at work before and after compulsory schooling by assessing the determinants of school failures, dropouts and upper secondary school decisions of young Italians. The dataset is built combining individual data by the Labor Force Survey and aggregate data on local labor markets and school supply by the Italian National Statistic Institute and the Minister of Public Education, respectively. Our results show that school failure (i.e., repetition of a year) is highly correlated with the family background, and it strongly affects later choices. Early school leaving and the upper secondary school choice are mainly a reflection of the parents’ socioeconomic status. The effectiveness of the educational system when narrowing the failure risk and the scholastic outflow relies on the widespread adoption of full-time attendance in compulsory school, the quality of the school infrastructures and the fewer teachers with temporary contracts.School failures, early dropout, school choice, social mobility, Italian education system

Tax morale and public spending inefficiency

Tax evasion is a widespread phenomenon and encouraging tax compliance is an important and much debated policy issue. Many studies have shown that tax cheating has to be attributed to a considerable extent to the tax morale of taxpayers. The aim of the present paper is to shed light on the relationship between the taxpayer and the public sector. Specifically, we investigate whether public spending inefficiency shapes individual tax morale. Combining data from Italian municipalities’ balance sheets with individual data from a properly designed survey on tax morale, we find that the attitude towards paying taxes is better when resources are spent more efficiently. This does not appear to be due to some confounding factors at the municipality level or to spatial sorting of citizens. It is also robust to alternative measures of both inefficiency and tax morale.tax morale, public spending inefficiency

How does immigration affect native internal mobility? New evidence from Italy

This paper investigates the relationship between native internal mobility and immigration in Italy, in order to gain a better understanding of the impact of immigration on local labour markets and to gauge the consequences for the socio-demographic composition of the local population. Native mobility is examined both with respect to residential displacements across regions and the demographic evolution of local labour markets. Endogeneity issues related to immigrant geographical distribution are addressed using proximity to “gateways” as the instrumental variable. We find that immigration is positively associated with inflows of highly-educated natives, suggesting the existence of potential complementarities. The impact is concentrated among young adults and is higher in more urbanized areas. We also find a displacement of low-educated natives; in particular, immigrant concentration in the northern regions has partially substituted the traditional South-North mobility of less-skilled natives.Immigration, native mobility, distance

With a little help from abroad: the effect of low-skilled immigration on the female labor supply

In this paper we examine whether and how the inflow of female immigrants who “specialize” in household production affects the labor supply of Italian women. To identify the causal effect, we exploit the family reunification motive and the network effects - i.e. the tendency of newly arriving female immigrants to settle in places where males of the same country already live - as an instrument for the geographical distribution of female foreign workers. We find that the higher the number of immigrants who provide household services the more time native Italian women spend at work (intensive margin) without affecting their labor force participation (extensive margin). The impact is concentrated on the highly skilled women whose time has a higher opportunity cost. These results also hold after a battery of robustness checks. Some further evidence confirms that the impact passes through the substitution in household work rather than complementarities in the production sector. Finally, we show that immigration arises as a substitute to publicly provided welfare services, although this raises concerns about the fairness and the sustainability of this private and informal welfare model.immigration, female labor supply, household production

Intergenerational mobility in the very long run: Florence 1427-2011

We examine intergenerational mobility in the very long run, across generations that are six centuries apart. We exploit a unique dataset containing detailed information at the individual level for all people living in the Italian city of Florence in 1427. These individuals have been associated, using their surnames, with their pseudo-descendants living in Florence in 2011.We find that long-run earnings elasticity is about 0.04; we also find an even stronger role for real wealth inheritance and evidence of persistence in belonging to certain elite occupations. Our results are confirmed when we account for the quality of the pseudo-links and when we address the potential selectivity bias behind the matching process. Finally, we frame our results within the existing evidence and argue that the quasi-immobility of preindustrial society and the existence of multigenerational effects might explain the long-lasting effects of ancestors\u2019 socioeconomic status

Labour mobility in Italy: new evidence on migration trends

The paper provides an analysis of labour mobility in Italy, with a joint analysis of residence transfers and "long-range†commuting. In the period 1990-2005, migration inflows have increased in the Centre North, both in short- and long-range component. In the South, by contrast, the low short-range mobility has decreased further, while the emigration toward the North remained significant; moreover, the high-educated outflows have increased significantly. The empirical findings show that South-North migration continues to be driven by the large economic differentials between the two areas. In the second half of the nineties, the widening gap on the employment rate, the downsizing of the public sector and the reduction of the gap on house prices have prompted a growing number of people to emigrate. In the current decade the strong growth of house prices in the Centre North has contributed to reduce the phenomenon. The spread of temporary contracts and immigration from abroad have also affected the migration propensity of natives and structurally changed the nature of mobility.internal migration, commuting

Italian households and labour market: structural characteristics and effects of the crisis

This analysis aims at studying joblessness and the effect of the economic crisis at the household rather than the individual level. With respect to the main European countries, in Italy the jobless household rate is lower because of the larger household size (the more adults present the lower the risk of joblessness) and the greater propensity to link household formation to employment status. The effects of the economic crisis on the labour market have led to an increase in the jobless household rate. However this increase has been lower than expected, thus suggesting that Italian households have partly absorbed the negative shocks in the labour market. Within households, the job losses mostly related to young people still living with their parents, reflecting an employment protection system that is segmented on a generational basis.jobless household, distribution of work

The Real Effects of Credit Crunch in the Great Recession: Evidence from Italian Provinces

The paper estimates the real effects of the sharp reduction in credit supply, following the 2008 financial crisis, on Italian local economies. We develop a measure of local credit supply that is based on the market shares of the banks that serve a local economy and the national change in each bank’s lending that is attributable to supply factors (i.e., purged of local demand factors). The decrease in our credit supply indicator, which is strongly correlated to the outstanding loan dynamics, explains the 13% of the contraction in real value added with respect to the pre-crisis period. The negative effects on the value added are heterogeneous across sectors and, in particular, are larger for the manufacturing sector. Moreover, the impact of the credit crunch is concentrated on the small firms, in the areas that are more dependent upon external finance and in the Central-Northern provinces. Finally, credit supply shocks affected lending but not real outcomes in the pre-crisis period

Banks, Firms, and Jobs

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