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on European Economics |
| By: | Paola Monperrus-Veroni (Observatoire Français des Conjonctures Économiques); Francesco Saraceno (Observatoire Français des Conjonctures Économiques) |
| Abstract: | This paper aims at providing a quantitative assessment of different proposals for reforming the Stability and Growth Pact by extending a counterfactual experiment performed in Eichengreen and Wyplosz (1998). Using estimated coefficients from a reduced form model, we simulate the path of the output gap for the largest Euro zone countries (France, Germany, Italy) after imposing limits to structural deficit according to different fiscal rules (structural deficit rules, golden rules and rules that incorporate the stock of debt). For each of these countries we can rank the different reform proposals in terms of output loss over the period considered. Our analysis has the merit of using a uniform method and hence allow a comparison across countries and across rules. The main results of the experiment, which emerge robustly, are (a), that the golden rule would be the most beneficial both using individual country's criteria and global criteria; and (b) that the status quo, the Maastricht rule, is less restrictive than many currently debated alternatives. |
| Keywords: | Stability Pact, Golden Rule, European Union, Institutional Reform, Fiscal Rules |
| JEL: | E62 E63 H62 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0501&r=eec |
| By: | Cornelia Woll |
| Abstract: | Abstract Lobbying by economic actors constitutes a central element of a large part of the literature on trade policy-making. However, it is mainly considered as “input” into the political system, which then aggregates the demand of different societal interests. As such inputs, the preferences of economic actors are often simply deduced from economic theory. This paper raises doubts about the usefulness of this analytical parsimony and tries to distinguish more clearly between stable interests, preferences and strategic choices. In particular, it suggests a model that clarifies how abstract interests are translated into concrete policy choices. By examining the lobbying carried out by service providers in the United States (US) and the European Union (EU) in telecommunications and air transport, it then shows that the deduction of trade policy preferences from economic theory does not account well for the general support of multilateral trade liberalization by EU service providers. In particular, changes in identity, causal beliefs and strategic environments in the US and the EU create a variety of lobbying choices that goes beyond the material incentives of trade liberalization. By studying the learning process and the constraints on lobbying imposed by political institutions, the paper suggests that even the political preferences of strong economic actors are sometimes more appropriately dealt with as endogenous to the trade policy process. |
| Keywords: | ideas; identity; interest representation; international trade; lobbying; policy learning; political opportunity structure; role conceptions; political economy; trade policy |
| Date: | 2005–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:erp:mpifgx:p0065&r=eec |
| By: | Maria A. Davia (Institute for Social and Economic Research) |
| Abstract: | This piece of work is aimed at studying the rewards to job mobility and whether it is a proper tool to experience wage growth and escaping situations of low-paid jobs. The data-base used will be the European Community Household Panel Survey, from which a sample of young people (under 30 in 1994) from thirteen different countries has been drawn. The selected technique will be a fixed-effects model where job mobility endogenous nature is taken into account and where the marginal wage increase for movers is approached. Results show that, on average, young workers who move across employers (being initially worse paid than the stable ones) achieve a positive increase in their wages vis-à-vis those who remain with the same employer. However, this advantage in the wage dynamics is positive but at a decreasing rate, with too much mobility resulting in lower outcomes. Although a causal relation between job mobility is found, including control for endogeneity often wipes the explanatory power of mobility away, particularly when accumulated mobility is looked at. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2005-03&r=eec |
| By: | Arnaud Lefranc (THEMA, Université de Cergy-Pontoise); Alain Trannoy (EHESS, GREQAM-IDEP) |
| Abstract: | This paper examines the extent and evolution of intergenerational earnings mobility in France. We use data from five waves of the French Education- Training-Employment (FQP) surveys covering the period 1964 to 1993. Our estimation procedure follows Bj¨orklund and J¨antti (1997)’s two-sample instrumental variable method. On our samples, the elasticity of son’s (respectively daughter’s) long-run income with respect to father’s long run income is around .4 (resp. .3) with no significant change over the period under scrutiny. Comparing these estimates to results obtained from other studies suggest that intergenerational mobility is higher in France than in the United States and United Kingdom and lower than in Scandinavian countries. |
| Keywords: | Intergenerational mobility, earnings, split-sample instrumental variables. |
| JEL: | D1 D3 J3 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:iep:wpidep:0401&r=eec |
| By: | Marco Francesconi (University of Essex); Wilbert Van der Klaauw (University of North Carolina) |
| Abstract: | In October 1999, the British government enacted the Working Families’ Tax Credit, a generous tax credit aimed at encouraging work among low -income families with children. This paper uses longitudinal data collected between 1991 and 2001 to evaluate the effect of this reform on single mothers. We identify this impact by comparing changes in behavior of lone mothers to changes for single women without children. Our results show that the financial incentives of the reform had powerful effects on a wide range of lone mothers’ decisions. The reform led to a substantial increase in employment rates of about 7 percentage points, which was driven by both higher rates at which lone mothers remained in the labor force and higher rates at which they entered it. Women’s responses were highly heterogeneous, with larger effects for mothers with one pre-school aged child, and virtually no effect for mothers with multiple older children. The reform also led to significant reductions in single mothers’ subsequent fertility and in the rate at which they married. Our findings suggest that the generous childcare tax credit component of the reform played a key role in explaining the estimated employment responses. Finally, we find relatively large behavioral effects in anticipation of the actual reform, which emphasizes the importance of allowing for such effects in future evaluation research. |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-13&r=eec |
| By: | Cheti Nicoletti (Institute for Social and Economic Research); Franco Peracchi |
| Abstract: | Social surveys are usually affected by item and unit nonresponse. Since it is unlikely that a sample of respondents is a random sample, social scientists should take the missing data problem into account in their empirical analyses. Typically, survey methodologists try to simplify the work of data users by ``completing'' the data, filling the missing variables through imputation. The aim of this paper is to give data users some guidelines on how to assess the effects of imputation on their micro-level analyses. We focus attention on the potential bias caused by imputation in the analysis of income variables and poverty measures. We consider two methods for evaluating the effects of imputation, using the European Community Household Panel as an illustration. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-19&r=eec |
| By: | Rob Alessie; Agar Brugiavini; Guglielmo Weber |
| Abstract: | The paper deals with the e.ects of cohabitation of grown children with their parents on household saving, using data from Italy and the Netherlands. It presents a two-period gametheoretical model where the child has to decide whether to move out of the parental home. This decision is affected by transaction costs, the child%u2019s preference for independence, and by the consumption loss induced by the move (consumption is a public good while the child lives in the parental home). We show that the child%u2019s income share affects the household saving decision, in contrast with predictions of the standard unitary model of household decision making. Empirical results from both countries are supportive of the key model predictions. We find strong positive effects of the child income share on the saving rate in Italy, where we calculate saving as the difference between disposable income and consumption but cannot distinguish children who will leave from those who will stay. We also find some significant effects of the child income share on household saving rate in the Netherlands, where saving is computed as the change over time in financial wealth. In the Dutch data we distinguish between children who stay and children who leave. The effect of the child%u2019s income share is significantly negative for those who stay, positive for those who leave. |
| JEL: | E2 D1 D9 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11079&r=eec |
| By: | Kristian Orsini; Amedeo Spadaro |
| Abstract: | Equal intra-household sharing is still assumed by the vaste majority of applied analyses in welfare economics. Few pieces of work have tried to depart from the equal sharing hypothesis, but their impact has been limited by lack of data or restricted application to special cases. This paper proposes a new framework to derive sharing rules based on individual bargaining power. The latter is defined for each household member as the share of resources gained by the household due to his/her presence. The causes of power differentials and their impact on income distribution are analysed in four EU countries presenting significantly different tax-benefit systems: Finland, Italy, Germany and the United Kingdom. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-04&r=eec |
| By: | Irena Grosfeld; Iraj Hashi |
| Abstract: | Focusing on two different mass privatization schemes in two transition economies, Poland and the Czech Republic, we show that the ownership structure in the two countries has rapidly evolved since the initial distribution of property rights Ownership concentration has significantly increased and we can observe an important reallocation of ownership claims between different groups of shareholders. This evidence goes against the main argument of the critics of mass privatization concerned with the dispersed ownership structure these programs were supposed to generate. The fact that the degree of ownership concentration is similar in Poland and in the Czech Republic suggests that private benefits of control are large in both countries. However, when we consider the determinants of ownership concentration we find an interesting difference: in the Czech Republic the increase in ownership concentration is less likely in poorly performing firms while in Poland the quality of past performance does not affect investors' willingness to increase their holdings. This contrasting effect may be interpreted in the light of the theory stressing the importance of the quality of the legal system for investors' behaviour: Poland is usually praised for high standards of its regulation while the Czech Republic, especially in the early and mid-1990s, has been blamed for its weaknesses. So, although direct comparison of ownership concentration in the two countries does not provide confirmation of the main prediction of "law matters" theory, we find indirect evidence in its favour. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-01&r=eec |
| By: | Alexandr Cerny |
| Abstract: | Using a unique dataset covering 8 months of high frequency data on the indices from markets in the U.S., London, Frankfurt, Paris, Warsaw, and Prague, I investigate the issue of stock market integration from a novel perspective. Cointegration and Granger causality tests with data of different frequencies (from 5 minutes to 1 day) are performed. The aim is to describe the time structure in which markets react to the information revealed in prices on other markets. Particularly, I want to detect the speed of information transmission between the differentmarkets. The results suggest that markets react very quickly to the information revealed in the prices on other markets. In all cases the reaction occurs as soon as within 1 hour. The U.S. markets seem to be an important source of information for the markets in London and Frankfurt, which react within 30 minutes, with the first reaction occurring already within 5 minutes. Information transmission between the market in London and any of the two continental markets in Paris or Frankfurt appears to be relatively unimportant compared to the information transmission between the two continental markets. The stock market in Paris seems to react to the information revealed at the stock market in Frankfurt with a delay of 40 minutes to 1 hour. Similarly, the two relatively small Eastern European markets in Warsaw and Prague are found to react to the information revealed in the stock market prices in Frankfurt. The reaction of the market in Prague seems to be faster, occurring within 30 minutes, while reaction speed of the market in Warsaw is around 1 hour. |
| Keywords: | Stock market integration, Market comovement, High-frequency data, Speed of information transmission, Cointegration, Granger causality. |
| JEL: | G14 G15 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp242&r=eec |