nep-eec New Economics Papers
on European Economics
Issue of 2005‒06‒05
ten papers chosen by
Giuseppe Marotta
Universita di Modena e Reggio Emilia

  1. What if the UK has Joined the Euro in 1999? An Empirical Evaluation using a Global VAR By M. Hashem Pesaran; L. Vanessa Smith; Ron P. Smith
  2. Housing and Equity Wealth Effects of Italian Households By Charles Grant; Tuomas Peltonen
  3. On the Determinants of Social Capital in Greece Compared to Countries of the European Union By Asimina Christoforou
  4. Your Money or Your Life: Changing Job Quality in OECD Countries By Andrew E. Clark
  5. Parental Leave - A Policy Evaluation of the Swedish "Daddy-Month" Reform By John Ekberg; Rickard Eriksson; Guido Friebel
  6. Making Sense of Bolkestein-Bashing: Trade Liberalization under Segmented Labor Markets By Gilles Saint-Paul
  7. Portugal-EU convergence revisited: evidence for the period 1960-2003 By Miguel Lebre de Freitas
  8. L’État et la cellule familiale sont–ils substituables dans la prise en charge du chômage en Europe ? Une comparaison basée sur le panel européen. By Olivia ECKERT–JAFFE; Isabelle TERRAZ
  9. Trade types with Developed and Developing Countries What can we learn from Spanish data? By Juliette Milgram; Ana Moro-Egido
  10. What Shapes the Attitudes Towards Paying Taxes? Evidence from Switzerland, Belgium and Spain By Benno Torgler; Friedrich Schneider

  1. By: M. Hashem Pesaran; L. Vanessa Smith; Ron P. Smith
    Abstract: We provide a conceptual framework to analysis counterfactual scenarios using macroeconometric models. We consider UK entry to the euro. We derive conditional probability distributions for the difference between the future realisations of variables of interest subject to UK entry restrictions being fully met over a given period, and the alternative realisations without the restrictions. Economic interdependence means that such policy evaluation must take account of international linkages and common factors that drive fluctuations across economies. We use the Global VAR developed by Dees, di Mauro, Pesaran and Smith (2005). The paper briefly describes the GVAR which has been estimated for 25 countries and the euro area over the period 1979-2003. It reports probability estimates that output will be higher and prices lower in the UK and the euro area as a result of entry. It examines the sensitivity of these results to a variety of assumptions about UK entry.
    Keywords: Global VAR (GVAR), Counterfactual Analysis, euro.
    JEL: C32 C35 E17 F15 F42
    Date: 2005–05
  2. By: Charles Grant; Tuomas Peltonen
    Abstract: The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be
    Keywords: Wealth Effect; Consumption; MPC; Housing; Equities; SHIW
    JEL: D12 E21
    Date: 2005–05
  3. By: Asimina Christoforou (Athens University of Economics and Business)
    Abstract: Social capital refers to the stock of social relations, based on norms and networks of cooperation and trust that spill over to the market and state to enhance collective action between actors and achieve improved social efficiency and economic growth. The aim of the present paper is to discuss the implications of contemporary literature and empirical findings on social capital for the growth prospects of Greece, compared to the member-states of the European Union. In order to examine the potential of social capital to enhance growth, we must look into the factors that determine the nature and context of trust, norms and networks that have emerged in our multinational, multiethnic and multicultural Europe.The contribution of this paper is to offer insight on the determinants of social capital in Greece, compared to the European Union (EU - former 15 member-states). For this purpose, we regress an index of individual group membership, derived from the European Community Household Panel (ECHP), on a set of individual as well as aggregate factors of social capital. Regression results provide evidence of the impact of both individual and institutional characteristics on group membership. Differences on the extent of group membership between countries might be indicative of the historical and cultural differences that have affected the evolution of social capital across Europe. Particularly in Greece, the relatively low level of group membership compared to the other EU countries might provide further evidence of its low levels of civicness. Historically, its weak civil society has been a result of a prior civic tradition of clientelism under arbitrary rule, the interference of special-interest groups and the lack of credibility and impartiality from the part of the state. And these factors might be responsible for the slow pace in reform and growth observed compared to the rest of the EU. Nevertheless, the findings on the determinants of social capital may direct us to possible means of rebuilding patterns of participatory and cooperative behavior, especially in countries with low levels of trust and civicness, such as Greece.
    Keywords: Determinants, Social capital in Greece, European union, Diversity
    Date: 2005–05
  4. By: Andrew E. Clark (CNRS, PSE and IZA Bonn)
    Abstract: Job quality may usefully be thought of as depending on both job values (how much workers care about different job outcomes) and the job outcomes themselves. Here both crosssection and panel data are used to examine changes in job quality in OECD countries over the 1990s. Despite rising wages and falling hours, overall job satisfaction is either stable or declining. These movements are not due to changes in the type of workers, nor to changes in their job values. A number of pieces of evidence point to stress and hard work as being strong candidates for what has gone wrong with employees’ jobs. We find evidence of increasing inequality in a number of job outcomes. Some groups of workers have done better than others: the young and the higher-educated have been insulated against downward movements in job quality, and there is tentative evidence that trade unions may have protected their members against adverse job outcomes.
    Keywords: job values, job outcomes, job satisfaction, effort
    JEL: J28 J3 J81
    Date: 2005–05
  5. By: John Ekberg (SOFI, Stockholm University); Rickard Eriksson (SOFI, Stockholm University); Guido Friebel (University of Toulouse (EHESS and IDEI), CEPR and IZA Bonn)
    Abstract: Many countries are trying to incentivize fathers to increase their share in parental leave and in household work to improve female labor market opportunities. Our unique data set stems from a natural experiment in Sweden. The data comprises all children born before (control group) and after the reform (treatment group) in cohorts of up to 27,000 newborns, mothers and fathers. We find strong short term effects of incentives on male parental leave. However, we find no learning-by doing, or specialization, effects: fathers in the treatment group do not have larger shares in the leave taken for care of sick children, which is our measure for household work.
    Keywords: natural experiment, family benefits, gender and labor, incentives
    JEL: J48 J13 J16 J22
    Date: 2005–05
  6. By: Gilles Saint-Paul (University of Toulouse 1, CEPR and IZA Bonn)
    Abstract: Trade liberalization is often met with sharp opposition. Recent examples include the so-called "Bolkestein" directive, which allows service providers from a given EU member to temporarily work in another member country. One way to view such a reform is that it simply widens the range of goods that are tradeable. This kind of reform is analyzed in a two-country Dornbusch-Fischer-Samuelson style model, where labor cannot relocate to another sector upon a non expected increase in the range of goods that can be traded. The effect of liberalization on the terms of trade tends to favor the poorer country (the "East"), if (as assumed) the most sophisticated goods are tradeable before reform. Second, under ex-post liberalization, there exists a class of workers in the West who are harmed because they face competition from Eastern workers and cannot relocate to other activities. But if the East's economy is relatively small, their wage losses are not very large. Things are different, however, if there exist asymmetries in labor market institutions, such that upon reform, labor can relocate in the East but not in the West. Some workers in the West can then experience very large wage losses. Thus, rigid labor markets in the West magnify opposition to reform there.
    Keywords: trade liberalization, European integration, Bolkestein directive, labor mobility, labor market institutions, comparative advantage, terms of trade
    JEL: F16 F11 F13
    Date: 2005–05
  7. By: Miguel Lebre de Freitas (Universidade de Aveiro and NIPE)
    Abstract: This paper uses the stochastic approach to convergence to investigate whether real per capita GDP in Portugal has been converging to the EU15 average. The estimation accounts for conditional convergence, transitional dynamics and up to two structural breaks. It is found that per capita GDP in Portugal has indeed converged to the EU15 average, but the pace of convergence has not been uniform along time. In particular, a slow down in the convergence process is identified in 1974. This result depends, however, as to whether the choice of this break-date is viewed as uncorrelated with the data. No evidence of acceleration in the speed of convergence is found after EC accession, in 1986.
    Keywords: Unit root test, Income convergence, The Portuguese Economy.
    JEL: C32 O40
    Date: 2005
  8. By: Olivia ECKERT–JAFFE; Isabelle TERRAZ
    Abstract: Cette contribution se propose de tester la substituabilité entre Etat et famille dans la prise en charge du chômage dans dix pays européens. Après avoir estimé ce que pourrait être le gain estimé des chômeurs, nous utilisons cette base de comparaison pour analyser le pourcentage du salaire espéré pris en charge par l’Etat et la famille. Nous montrons que, malgré la conjonction des prises en charge familiale et étatique, les niveaux de vie des chômeurs restent très contrastés en Europe et cette disparité de niveaux de vie recoupe principalement les différences de générosité du système d’indemnisation chômage. Nous soulignons également que l’importance des niveaux de prise en charge dépend crucialement de la structure démographique du chômage (chômage de la personne seule ou chômage des jeunes qui vivent toujours au domicile familial). Enfin, nous testons la substituabilité entre les indicateurs de prise en charge étatique et familiale pour mettre en évidence une substituabilité dans les pays « continentaux ». Cette substituabilité est surtout apparente pour les chômeurs qui résident toujours au sein de la structure familiale.
    Keywords: Niveaux de vie, Chômage, Solidarités publiques et privées.
    Date: 2005
  9. By: Juliette Milgram (Department of Economic Theory and Economic History, University of Granada); Ana Moro-Egido (Department of Economic Theory and Economic History, University of Granada)
    Abstract: In this paper, we investigate the nature of Spanish intra-industry trade and find that intra-industry trade with CEEC, Asian and Mediterranean countries has increased considerably since the middle of the Nineties. The second aim of the paper is to study if the comparative advantage argument also explains vertical intra-.industry trade between different income countries. According to OLS estimations, technological differences do increase DVIIT while physical capital differences decreases it. Results obtained applying Heckman method support the idea that differences in physical capital reduce the probability of IIT to occur but the level of vertical and horizontal IIT is better explained by the proximity of partners, the similarity in development level and size of market than by differences in physical capital endowments. The variables considered, mostly country-specific do have the same impact on vertical and horizontal IIT with emergent countries.
    JEL: F13 F17
    Date: 2005–06–01
  10. By: Benno Torgler; Friedrich Schneider
    Abstract: There is considerable evidence that enforcement efforts cannot fully explain the high degree of tax compliance. To resolve this puzzle of tax compliance, many researchers have argued that citizens’ attitudes toward paying taxes or tax morale, seen as the intrinsic motivation to pay taxes, can help to explain the high degree of tax compliance. However, most studies treat tax morale as a black box without discussing which factors shape it. Additionally, there is a lack of empirical evidence in the tax compliance literature that investigate attitudes towards paying taxes in Europe. Thus, a unique aspect in this paper is to examine citizens’ attitudes towards paying taxes in the three European countries Switzerland, Belgium and Spain, allowing thus to investigate in detailed way the impact of internal and external institutions.
    Keywords: Tax Morale; Tax Compliance; Tax Evasion; Internal and External Institutions.
    JEL: H26 H73
    Date: 2005–02

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