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on European Economics |
| By: | Angel de la Fuente; Juan Francisco Jimeno |
| Abstract: | This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under c |
| Keywords: | returns to schooling |
| Date: | 2004–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:635.04&r=eec |
| By: | Hans-Werner Sinn |
| Abstract: | The paper deals with the effects of migration resulting from EU Eastern enlargement on the welfare states of Western Europe. Although migration is good in principle, as it yields gains from trade and specialization for all countries involved, it does so only if it meets with flexible labour markets and if it is not artificially induced by gifts from the welfare state. This is not the present state of affairs in Western Europe. In addition to measures that make labour markets more flexible, the introduction of delayed integration of working migrants and the home country principle for non-working migrants is a rational reaction of the state. The proposed new EU constitution which contains far-reaching rules for a European social union should be amended accordingly. |
| Keywords: | EU enlargement, migration, EU constitution, social union |
| JEL: | E20 F20 H00 J30 J60 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1367&r=eec |
| By: | Panu Poutvaara |
| Abstract: | An increasing international applicability of a given type of education encourages students to invest more effort when studying. Governments, on the other hand, face an incentive to divert the provision of public education away from internationally applicable education toward country-specific skills. This would mean educating too few engineers, economists and doctors, and too many lawyers. If the total tax rate is kept constant, then replacing part of existing wage taxes with graduate taxes, collected also from migrants, would improve efficiency. It could even allow for a Pareto-improvement. |
| Keywords: | graduate taxes, public education, European Union, migration, brain drain and brain gain |
| JEL: | F22 H24 H52 I28 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1369&r=eec |
| By: | Giovanni Di Bartolomeo; Jacob Engwerda; Joseph Plasmans; Bas van Aarle; Tomasz Michalak |
| Abstract: | This paper studies the institutional design of the coordination of macroeconomic stabilization policies within a monetary union in the framework of linear quadratic differential games. A central role in the analysis plays the partitioned game approach of the endogenous coalition formation literature. The specific policy recommendations in the EMU context depend on the particular characteristics of the shocks and the economic structure. In the case of a common shock, fiscal coordination or full policy coordination is desirable. When asymmetric shocks are considered, fiscal coordination improves the performance but full policy coordination doesn’t produce further gains in policymakers’ welfare. |
| Keywords: | macroeconomic stabilization, EMU, coalition formation, linear quadratic differential games |
| JEL: | C70 E17 E58 E61 E63 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1376&r=eec |
| By: | Massimo Giuliodori |
| Abstract: | This paper provides a discussion of the `housing market' channels of the monetarytransmission mechanism (MTM) and offers some evidence on institutional differences in the European housing and mortgage markets. Using a number of VAR models, estimated individually for nine European countries over the pre-EMU period, we find that house prices are significantly affected by monetary policy shocks. The relative role of these policy-induced fluctuations in house prices for private consumption is then investigated. We show that house prices may enhance the effects of monetary shocks on consumer spending in those economies where housing and mortgage markets are relatively more developed and competitive. |
| Keywords: | Monetary transmission; house prices; impulse responses. |
| JEL: | C32 E21 E52 R21 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:015&r=eec |
| By: | Hjelm, Göran (National Institute of Economic Research) |
| Abstract: | In the past 25 years, many OECD countries have implemented fiscal contractions to strengthen their public finances. The macroeconomic outcomes of these efforts have <p> varied. With the aid of an econometric model, this paper seeks to identify the factors <p> that make contractions successful from a macroeconomic standpoint. The findings <p> suggest, among other things, that favorable changes in the real exchange rate prior <p> to the period of fiscal contraction and in the real quantity of money during this period <p> play an important part in the macroeconomic outcome. This indicates in turn that it <p> may be more difficult to implement successful fiscal contractions within the EMU. The <p> findings also show that the composition of the contraction in regard to the relative <p> proportions of tax increases and expenditure cutbacks, respectively, is probably less <p> important than has usually been assumed. |
| Keywords: | Fiscal Contractions; Fiscal Policy; Real Exchange Rate; EMU |
| JEL: | C20 E62 E63 H30 |
| Date: | 2004–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0092&r=eec |
| By: | Odile Chagny (Commissariat Général du Plan); Matthieu Lemoine (Observatoire Français des Conjonctures Économiques) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0414&r=eec |
| By: | Sascha Becker; Karolina Ekholm; Robert Jaeckle; Marc Andreas Muendler |
| Abstract: | Using data for German and Swedish multinational enterprises (MNEs), this paper assesses international employment patterns. It analyzes determinants of location choice and the degree of substitutability of labor across locations. Countries with highly skilled labor forces attract German MNEs, but we find no such evidence for Swedish MNEs. This is consistent with the hypothesis that German MNEs locate production stages intensive in high-skilled labor abroad. In MNEs from either country, affiliate employment tends to substitute for employment at the parent firm. On the margin, substitutability is the strongest with respect to affiliate employment in Western Europe. A one percent larger wage gap between Germany and locations in Central and Eastern Europe (CEE) is estimated to be associated with 900 fewer jobs in German parents and 5,000 more jobs in affiliates located in CEE. A one percent larger wage gap between Sweden and CEE is estimated to be associated with 140 fewer jobs in Swedish parents and 260 more jobs in affiliates located in CEE. |
| Keywords: | multinational enterprises, location choice, multinomial choice, labor demand, translog cost function |
| JEL: | F21 F23 J21 J23 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1374&r=eec |
| By: | Parto,Saeed (MERIT) |
| Abstract: | Policy formation is only one the three main components in the continuum of policy formation – policy implementation – policy evaluation – policy formation. To fully understand why policy outcomes often fall significantly short of policy intentions we need to examine the structuring factors, i.e., the institutions of governance, that shape the policy process. This paper focuses on the interplay between the policy process, governance, and institutions to articulate a framework for conducting institutionally sensitive policy analysis. A comparative study of the waste subsystems in the Netherlands and the United Kingdom reveals that each subsystem is the product of its “own” institutional landscape, and not directly and immediately subject to the whims of policy making at the EU scale of governance. Although there are signs of “Europeanization” in both cases, national problems, policies, and politics as manifest through the full spectrum of formal and informal institutions continue to play a major role in facilitating and curtailing change in each of the two waste subsystems. The paper concludes with a discussion of the implications of institutionally sensitive policy analysis for the current discourse on governance for sustainable development at the European scale. |
| Keywords: | Economics ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamer:2005001&r=eec |
| By: | Jacob Bikker; Jaap Bos |
| Abstract: | This paper brings to the forefront the assumptions that we make when focussingon a particular type of explanation for bank profitability. We evaluate a broad field of research by introducing a general framework for a profit maximizing bank and demonstrate how different types of models can be fitted into this framework. Next, we present an overview of the current major trends in European banking and relate them to each model's assumptions, thereby shedding light on the relevance, timeliness and shelf life of the different models. This way, we arrive at a set of recommendations for a future research agenda. We advocate a more prominent role for output prices, and suggest a modification of the intermediation approach. We also suggest ways to more clearly distinguish between market power and effciency, and explain why we need time-dependent models. Finally, we propose the application of existing models to different size classes and sub-markets. Throughout we emphasize the benefits from applying several, complementary models to overcome the identification problems that we observe in individual models. |
| JEL: | G21 L11 L22 L23 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:018&r=eec |
| By: | Nicole Jonker; Carsten Folkertsma; Harry Blijenberg |
| Abstract: | In this paper we examine pricing behaviour of retail firms in the Netherlands during 1998-2003 using alarge database with monthly price quotes of 49 articles, representing different product types. We have conducted this study in order to gain in sight in the degree of nominal rigidity of consumer prices in the Dutch economy. We find that energy prices and prices of unprocessed food are most flexible, whereas prices of services are stickiest. Our sample contains not only ample evidence of upward but also of downward flexible prices. A multivariate analysis shows that firm size matters with prices being stickiest in small retail firms and most flexible in large retail firms and in the smallest retail firms consisting of the owners only. Furthermore, we investigate pass-through effects of VAT changes in product prices. We find that VAT increases are almost completely passed on to consumers. Finally, there is some evidence indicating that, after controlling for inflation, pricing behaviour of retail firms was different during the introduction of the euro than in the period directly preceding it. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:019&r=eec |