Omar Paccagnella

Centering or Not Centering in Multilevel Models? The Role of the Group Mean and the Assessment of Group Effects

In multilevel regression, centering the model variables produces effects that are different and sometimes unexpected compared with those in traditional regression analysis. In this article, the main contributions in terms of meaning, assumptions, and effects underlying a multilevel centering solution are reviewed, emphasizing advantages and critiques of this approach. In addition, in the spirit of Manski, contextual and correlated effects in a multilevel framework are defined to detect group effects. It is shown that the decision of centering in a multilevel analysis depends on the way the variables are centered, on whether the model has been specified with or without cross-level terms and group means, and on the purposes of the specific analysis.

Do Danes and Italians Rate Life Satisfaction in the Same Way? Using Vignettes to Correct for Individual-Specific Scale Biases†

Self-reported life satisfaction is highly heterogeneous across similar countries. We show that this phenomenon can by largely explained by the fact that individuals adopt different scales and benchmarks in evaluating themselves. Using a cross sectional dataset on individuals aged 50 and over in ten European countries, we compare estimates from an Ordered Probit in which life satisfaction scales are invariant across respondents with those from a Hopit model in which vignettes are used to correct for individual-specific scale biases. We find that variations in response scales explain a large part of the differences found in raw data. Moreover, the cross countries ranking in life satisfaction dramatically depends on scale biases.

Income, wealth and financial fragility in Europe

The article examines the distribution of income and wealth among the generation of Europeans aged 65 and over, using data drawn from the first wave of the Survey of Health, Ageing and Retirement in Europe (SHARE). It looks at how cross-country comparisons of income, wealth and debt are affected by differences in purchasing power, household size and taxation, and shows that some seemingly wide international differences appear less so when the proper adjustments are made. The article reveals wide differences in income, wealth and indebtedness of elderly households in Europe, and provides background information on social issues such as the adequacy of savings at retirement, and the financial fragility of the elderly.

Age, Health and Life Satisfaction Among Older Europeans

In this paper we investigate how age affects the self-reported level of life satisfaction among the elderly in Europe. By using a vignette approach, we find evidence that age influences life satisfaction through two counterbalancing channels. On the one hand, controlling for the effects of all other variables, the own perceived level of life satisfaction increases with age. On the other hand, given the same true level of life satisfaction, older respondents are more likely to rank themselves as “dissatisfied” with their life than younger individuals. Detrimental health conditions and physical limitations play a crucial role in explaining scale biases in the reporting style of older individuals.

VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE

Using data from Survey of Health, Ageing and Retirement in Europe (SHARE), we investigate the determinants of voluntary private health insurance (VPHI) among the over 50s in 11 European countries and their effects on healthcare spending. First, we find that the main determinants of VPHI are different in each country, reflecting differences in the underlying healthcare systems, but in most countries, education levels and cognitive abilities have a strong positive effect on holding a VPHI policy. We also analyse the effect of holding a voluntary additional health insurance policy on out-of-pocket (OOP) healthcare spending. We adopt a simultaneous equations approach to control for self-selection into VPHI policy holding and find that, only in the Netherlands, VPHI policyholders have lower OOP spending than the rest of the population, whereas in some countries (Italy, Spain, Denmark and Austria), they spend significantly more. This could be due to not only increased utilisation but also cost-sharing measures adopted by the insurers to counter the effects of moral hazard and to keep adverse selection under control.

Cross-Country Differentials in Work Disability Reporting Among Older Europeans

Descriptive evidence shows that there is large cross-country variation in self-reported work disability rates of the elderly in Europe. In this paper we analyse whether these differences are genuine or they just reflect heterogeneity in reporting styles. To shed light on the determinants of work-disability differentials across countries, we combine a wide set of individuals’ socioeconomic and health status characteristics with macro-economic indicators describing the institutional background of the country of residence.

Childhood, Schooling and Income Inequality

Parental or socioeconomic background plays an important role in determining employment outcomes during the individual whole life-cycle. The extent to which individuals move (up or down) the social ladder relative to one?s parents is known as inter-generational social mobility. In a relatively immobile society individual outcomes, such as education, occupation or incomes, tend to be strongly related to those of their parents. On the one hand, in less mobile societies human skills may be wasted or mis-allocated. On the other hand, the motivations, the effort, the individual productivity may be affected by the lack of equal economic opportunities. These in turn may affect the overall efficiency and growth potential of a country. The influence of parental socio-economic status on the descendants? education, incomes and occupation has been widely investigated in the literature (Solon, 2002; Corak, 2004; OECD, 2010). Even though no single indicator can summarize a so puzzling picture, a general pattern that emerges is that a group of countries (namely, Mediterranean countries) shows a low inter-generational social mobility, while another group of countries (for instance, Nordic countries) tends to be relatively mobile. In this contribution we exploit the richness of SHARELIFE information on household economic resources and social background of respondents at the age of 10 to investigate the relationship between their educational attainments, their labour market outcomes and the social environment where they grew up.

Comparing vocational training courses through a discrete-time multilevel hazard model:

In this article, the author provides an econometric approach for comparing vocational training courses, and aims to study how courses affect individual behaviour. Given the hierarchical nature of the data and the purposes of the analysis, he proposes the application of a discrete-time multilevel hazard model. The variable of interest is the duration (in months) of the first job-search after the end of the course. The author focusses on contextual and correlated (course) effects and comments on the results also in terms of school effectiveness. The approach may be easily applied to several other clustered structures.

Asset Ownership of the Elderly Across Europe: A Multilevel Latent Class Analysis to Segment Countries and Households

Wealth is a useful measure of the socio-economic status of the elderly, because it might reflect both accumulated socio-economic position and potential for current consumption. A growing number of papers have studied household portfolio in old age, both from a financial point of view (i.e. in the framework of the life-cycle model) and from a marketing perspective. In this chapter, we aim at providing new evidence on this issue both at the household and country level, by investigating similarities and differences in the ownership patterns of several financial and real assets among elderly in Europe. To do so, we exploit the richness of information provided by SHARE (Survey of Health, Ageing and Retirement in Europe), an international survey on ageing that collects detailed information on several aspects of the socio-economic condition of the European elderly. Given the hierarchical structure of the data, the econometric solution we adopt is a multilevel latent class analysis, which allows us to obtain simultaneously country and household segments.

Job-major match and job satisfaction in Italy

Purpose - – The purpose of this paper is to study how graduates’ jobs may be determined by their educational performances and social background. In particular, the authors investigate job-education mismatch and job satisfaction to evaluate whether time spent and effort exerted during university studies were compensated with a good job. Design/methodology/approach - – Data on the occupational status of the graduates 36 months after graduation, collected by the Padua University on its graduates, are analysed by means of univariate and multivariate methodologies. In particular, the pathways from graduates’ social capital to job satisfaction are investigated through a structural equation modelling approach. Findings - – The authors find that a minority of graduates can be considered as overeducated when considering the requirements of the labour market, but many graduates state that any degree would suffice for their job. Multivariate analyses show that graduates’ job quality is related to their university choice and outcome, high school choice and performance, social capital. Destiny is written from the beginning of the educational pathway, but students can affect their labour market future with an appropriate choice of university programme. Originality/value - – The qualified point of this paper lies on the complexity of the model adopted for the analysis and its ability to highlight direct and indirect effects: two job outcomes (job-major match and job satisfaction) are the variables of interest, analysed within a structural model covering all educational stages of the Italian educational pathway, from parental social background to university degree.