nep-eec New Economics Papers
on European Economics
Issue of 2005‒11‒05
twenty-one papers chosen by
Giuseppe Marotta
Universita di Modena e Reggio Emilia

  1. The Obesity Epidemic in Europe By Anna Sanz-de-Galdeano
  2. Trade invoicing in the accession countries: are they suited to the Euro? By Linda S. Goldberg
  3. The EU's Single Market: At Your Service? By Line Vogt
  4. Exchange rate pass-through to import prices in the Euro area By Jose Manuel Campa; Linda S. Goldberg; Jose M. Gonzalez-Minguez
  5. House Prices and Inflation in the Euro Area By Boris Cournède
  6. Welfare Reform in European Countries: A Microsimulation Analysis By Herwig Immervoll; Henrik Jacobsen Kleven; Claus Thustrup Kreiner; Emmanuel Saez
  7. Household Incomes and Redistribution in the European Union: Quantifying the Equalising Properties of Taxes and Benefits By Herwig Immervoll; Horacio Levy; Christine Lietz; Daniela Manotvani; Cathal O’Donoghue; Holly Sutherland; Gerlinde Verbist
  8. How Important are Financial Frictions in the U.S. and Euro Area? By Queijo, Virginia
  10. On the Segregation of Genetically Modified, Conventional, and Organic Products in European Agriculture: A Multi-market Equilibrium Analysis By Moschini, GianCarlo; Bulut, Harun; Cembalo, Luigi
  12. Analysing European and International Patent Citations: A Set of EPO Patent Database Building Blocks By Hélène Dernis; Dietmar Harhoff; Karin Hoisl; Colin Webb
  13. A New International Division of Labor in Europe: Offshoring and Outsourcing to Eastern Europe By Marin, Dalia
  14. Raising Greece's Potential Output Growth By Vassiliki Koutsogeorgopoulou; Helmut Ziegelschmidt
  15. Trends in East European Factor Productivity By Oldrich Kyn; Ludmila Kyn
  16. Competition and contracts in the Nordic Residential Electricity Markets By Stephen Littlechild
  17. An Estimated DSGE Model for Sweden with a Monetary Regime Change By Cúrdia, Vasco; Finocchiaro, Daria
  18. Public Sector Pay and Regional Competitiveness: A First Look at Regional Public-Private Wage Differentials in Italy By Carlo Dell’Aringa; Claudio Lucifora; Federica Origo
  19. Does the Early Bird Catch the Worm? Instrumental Variable Estimates of Educational Effects of Age of School Entry in Germany By Patrick A. Puhani; Andrea M. Weber
  20. The Relevance of Post-Match LTC: Why Has the Spanish Labor Market Become as Volatile as the US One? By Hector Sala; José I. Silva
  21. ICT and Economic Growth: A Quantification of Productivity Growth in Spain 1985-2002 By Matilde Mas; Javier Quesada

  1. By: Anna Sanz-de-Galdeano (CSEF, University of Salerno and IZA Bonn)
    Abstract: This paper uses longitudinal micro-evidence from the European Community Household Panel to investigate the obesity phenomenon in nine EU countries from 1998 to 2001. The author documents cross-country prevalence, trends and cohort-age profiles of obesity among adults and analyses the socioeconomic factors contributing to the problem. The associated costs of obesity are also investigated, both in terms of health status, health care spending and absenteeism.
    Keywords: obesity, body mass index, demand for health care
    JEL: I12 I18
    Date: 2005–10
  2. By: Linda S. Goldberg
    Abstract: Countries aspiring to join the euro area-the so-called accession countries-are increasingly binding their economic activity, external and internal, to the euro-area countries. This phenomenon is observed in the currency invoicing of international trade transactions, where accession countries have reduced their use of the U.S. dollar in invoicing such transactions. According to theory, the optimal invoicing choice for an accession country depends on its composition of exports and imports and on the macroeconomic fluctuations faced by its trade partners, with both factors bearing out the role of herding and hedging considerations within exporter profitability. These considerations yield country-specific estimates of the optimal degree of euro-denominated invoicing of exports. I find that the exporters in some accession countries might be pricing too much of their trade in euros rather than in U.S. dollars, even in their trade transactions with the euro-area and other European Union countries, and thus may be taking on excessive risk in international markets.
    Keywords: Euro ; European Union countries ; Exports ; International trade
    Date: 2005
  3. By: Line Vogt
    Abstract: While the single market has largely been achieved for the EU market for goods, the services sector has lagged behind. This has resulted in sluggish activity, low productivity growth, high prices, that show a wide dispersion and relatively high inflation in this sector. Both the OECD product market regulation study and the European Commission study on internal market barriers conclude that there are large barriers to trade between the EU countries. Since two-thirds of total output in the EU comes from the services sector it is crucial for the EU to pursue reforms of this sector. The proposed Directive on services in the internal market, also called the services directive, will be a helpful tool towards establishing a single market for services if it is implemented as proposed. The European citizens will gain from large welfare effects associated with the convergence of prices towards the best performers and faster trend economic growth. A watering down of the directive will however reduce the beneficial effects and should be avoided. This Working Paper expands on material presented in the 2005 OECD Economic Survey of the Euro Area ( <P>Le marché unique de l'UE A l’inverse des biens, pour lesquels le marché unique est aujourd’hui devenu une réalité, l’avancée vers un marché unique des services marque le pas. Du fait de ce retard, ce secteur connaît une activité hésitante, une faible croissance de la productivité, des prix élevés (qui sont de surcroît très différents d’un pays à l’autre) et une relativement forte inflation. Les études réalisées par l’OCDE sur la réglementation des marchés de produits et par la Commission européenne sur les entraves au marché intérieur concluent de conserve à la présence de puissants obstacles au commerce de services entre pays de l’Union européenne. Dans la mesure où les services constituent les deux tiers de la production dans l’Union européenne, il est capital pour l’Union européenne de poursuivre les réformes dans ce secteur. Le projet de directive sur les services dans le marché intérieur, plus communément appelée directive services, constituera un outil précieux pour progresser vers la mise en place d’un marché unique des services, à condition qu’elle soit mise en œuvre en l’état. Les citoyens de l’Union européenne y gagneront une plus forte croissance économique et de considérables gains de bien-être grâce à la convergence des prix vers les niveaux qui sont ceux des pays les plus performants. Toute édulcoration de la directive en réduirait les avantages et devrait être évitée. Ce Document de travail prolonge des travaux réalisés pour l’Etude économique de l’OCDE de la zone euro, 2005 (
    Keywords: product market regulation, telecommunications, télécommunications, marchés financiers, European Union, Union européenne, transport, transport, financial sector, réglementation des marchés de produits, services directive, directive sur les services
    JEL: F15 F16 F22 G2 L5 L8 L9
    Date: 2005–10–07
  4. By: Jose Manuel Campa; Linda S. Goldberg; Jose M. Gonzalez-Minguez
    Abstract: This paper presents an empirical analysis of transmission rates from exchange rate movements to import prices, across countries and product categories, in the euro area over the last fifteen years. Our results show that the transmission of exchange rate changes to import prices in the short run is high, although incomplete, and that it differs across industries and countries; in the long run, exchange rate pass-through is higher and close to 1. We do not find compelling evidence that the introduction of the euro caused a structural change in exchange rate pass-through. Although some estimated point elasticities have declined, structural breaks in exchange rate pass-through into import prices are evident only in a limited sample of manufacturing industries. And since the euro was introduced, industries producing differentiated goods have been more likely to experience reduced rates of exchange rate pass-through to import prices. Exchange rate changes continue to lead to large changes in import prices across euro-area countries.
    Keywords: Imports - Prices ; Foreign exchange rates ; Euro ; Industries
    Date: 2005
  5. By: Boris Cournède
    Abstract: The inflation measure used by the European Central Bank excludes housing costs that are borne by home owners even though they make up more than a tenth of household final consumption expenditure in the euro area. Has the exclusion of owner-occupied housing costs driven a wedge between the official harmonised index of consumer prices (HICP) and the cost of living? To answer this question, a measure of the user cost of housing capital has been constructed for every euro area country (except Luxembourg). User costs are measured taking into account property taxes but net of tax breaks that home owners enjoy on mortgage repayments. The user cost measure is combined with the HICP to derive a “broad” inflation estimate. For the sake of comparison, an alternative estimate has been put together using imputed rents. The main conclusion is that owner-occupied housing costs have an impact. Another important conclusion is that the effect of owner-occupied housing costs on inflation varies noticeably with the method used to incorporate them into the price index. The paper finally discusses the choice of the method from the point of view of economic policy makers. "This Working Paper relates to the 2005 OECD Economic Survey of Euro Area (" <P>Prix des logements et inflation dans la zone euro Bien qu’ils représentent plus de dix pour cent de la consommation finale des ménages dans la zone euro, les coûts de logement qui sont supportés par les propriétaires occupants ne sont pas inclus dans l’indicateur d’inflation employé par la Banque centrale européenne. L’exclusion de ces coûts a-t-elle enfoncé un coin entre l’indice des prix à la consommation harmonisé (IPCH) et le coût de la vie ? Pour répondre à cette question, une mesure du coût d’usage du capital a été construite pour les logements occupés pour chacun des pays appartenant à la zone euro (à l’exception du Luxembourg). Il s’agit d’une mesure du coût net d’impôts et de taxes, qui tient compte à la fois des taxes foncières et des allégements d’impôt dont bénéficient les propriétaires occupants. Cette mesure est ensuite adjointe à l’IPCH pour obtenir une évaluation de l’inflation « élargie ». Pour les besoins de la comparaison, une autre estimation a été effectuée en utilisant des loyers imputés. La principale conclusion est que les coûts du logement pour les propriétaires occupants font une différence. Une autre conclusion importante est que l’impact de ces coûts dépend sensiblement de la méthode qui est employée pour les intégrer à l’indice de prix. En conclusion, l'étude examine la question du choix de la méthode du point de vue des opérateurs de la politique économique. "Ce Document de travail se rapporte à l'Étude économique de l'OCDE de Euro area, 2005. ("
    Keywords: housing, logement, ECB, BCE, inflation, inflation, HICP, Eurostat, user cost, imputed rents, IPCH, Eurostat, coût d'usage, loyers imputés
    JEL: E30 E31
    Date: 2005–10–12
  6. By: Herwig Immervoll (University of Cambridge, OECD and IZA Bonn); Henrik Jacobsen Kleven (University of Copenhagen, EPRU and CEPR); Claus Thustrup Kreiner (University of Copenhagen, EPRU and CESifo); Emmanuel Saez (UC Berkeley and NBER)
    Abstract: This paper estimates the welfare and distributional impact of two types of welfare reform in the 15 (pre-enlargement) member countries of the European Union. The reforms are revenue neutral and financed by an overall and uniform increase in marginal tax rates on earnings. The first reform distributes the additional tax revenue uniformly to everybody (traditional welfare) while the second reform distributes tax proceeds uniformly to workers only (in-work benefit). We build a simple model of labor supply encompassing responses to taxes and transfers along both the intensive and extensive margin. We then use EUROMOD to describe current welfare and tax systems in European Union countries and use calibrated labor supply elasticities along the intensive and extensive margins to analyze the effects of the two welfare reforms. We quantify the equity-efficiency trade-off for a range of elasticity parameters. In most countries, because of large existing welfare programs with high phaseout rates, the uniform redistribution policy is undesirable unless the redistributive tastes of the government are extreme. The in-work benefit reform, on the other hand, is desirable in a very wide set of cases. We discuss the practical policy implications for European welfare policy.
    Keywords: labour supply, redistribution, welfare reform
    JEL: H20
    Date: 2005–10
  7. By: Herwig Immervoll (University of Cambridge, OECD, European Centre Vienna and IZA Bonn); Horacio Levy (University of Essex); Christine Lietz (University of Cambridge); Daniela Manotvani (University of Cambridge and Prometeia, Bologna); Cathal O’Donoghue (National University of Ireland, Galway, CHILD and IZA Bonn); Holly Sutherland (University of Essex and DIW Berlin); Gerlinde Verbist (University of Antwerp)
    Abstract: The systems of direct taxes and cash benefits in the Member States of the European Union vary considerably in size and structure. We explore their direct impacts on cross-sectional income inequality (termed "redistributive effect" for the purpose of this paper) using EUROMOD, a tax-benefit microsimulation model for the European Union. This relies on harmonised household micro-data representative of each national population together with simulations of entitlements to cash benefits and liabilities for taxes and social contributions. It allows us to draw a more comprehensive - and comparable - picture of the combined effects of transfers and taxes than is usually possible. We decompose the redistributive effect of taxbenefit systems to assess and compare the effectiveness of individual policies at reducing income disparities. The following categories of benefits and taxes are considered both individually and in combination: income taxes, social contributions, cash benefits designed to target the poor or redistribute inter-personally (through means-testing) as well as cash benefits intended to redistribute intra-personally across the lifecycle (through social insurance or contingency-based entitlement). We derive results for the 15 "old" members of the European Union and present them for each country separately as well as for the EU-15 as a whole.
    Keywords: income inequality, redistribution, microsimulation, European Union
    JEL: C81 D31 H22 H55
    Date: 2005–10
  8. By: Queijo, Virginia (Institute for International Economic Studies, Stockholm University)
    Abstract: This paper aims to evaluate the importance of frictions in credit markets for business cycles in the U.S. and the Euro area. For this purpose, I modify the DSGE financial accelerator model developed by Bernanke, Gertler and Gilchrist (1999) and estimate it using Bayesian methods. The model is augmented with frictions such as price indexation to past inflation, sticky wages, consumption habits and variable capital utilization. My results indicate that financial frictions are relevant in both areas. Using the Bayes factor as criterion, the data favors the model with financial frictions both in the U.S. and the Euro area in five different specifications of the model. Moreover, the size of the financial frictions is larger in the Euro area.
    Keywords: DSGE models; Bayesian estimation; financial accelerator
    JEL: C11 C15 E32 E40 E50 G10
    Date: 2005–08–01
    Abstract: We evaluate changes in international spillovers of equity price shocks with EMU by estimating BEKK-GARCH models over 1993-98 and 1999-2004. Results are consistent with EMU market integration via sectoral allocation, but not autonomy from the external influence of the US.
    Date: 2005–10
  10. By: Moschini, GianCarlo; Bulut, Harun; Cembalo, Luigi
    Abstract: Evaluating the possible benefits of the introduction of genetically modified (GM) crops must address the issue of consumer resistance as well as the complex regulation that has ensued. In the European Union (EU) this regulation envisions the “co-existence” of GM food with conventional and quality-enhanced products, mandates the labelling and traceability of GM products, and allows only a stringent adventitious presence of GM content in other products. All these elements are brought together within a partial equilibrium model of the EU agricultural food sector. The model comprises conventional, GM and organic food. Demand is modelled in a novel fashion, whereby organic and conventional products are treated as horizontally differentiated but GM products are vertically differentiated (weakly inferior) relative to conventional ones. Supply accounts explicitly for the land constraint at the sector level and for the need for additional resources to produce organic food. Model calibration and simulation allow insights into the qualitative and quantitative effects of the large-scale introduction of GM products in the EU market. We find that the introduction of GM food reduces overall EU welfare, mostly because of the associated need for costly segregation of non-GM products, but the producers of quality-enhanced products actually benefit.
    Keywords: biotechnology, differentiated demand, genetically modified crops, identity preservation, innovation, welfare.
    Date: 2005–10–26
  11. By: Ray Barrell; E Philip Davis
    Abstract: We assess the impact of equity prices on the level of output in the Europe Union economies and the US using Vector Error Correction (VECM) time series techniques. The distinction between impacts in bank based and equity market based economies is shown to be important, with equity prices having a greater impact on output in market-based economies. Share prices are shown to be largely autonomous in variance decompositions, whilst equity price do have a strong impact on output in the UK and US in their variance decompositions. An analysis of impulse responses suggests that large market based economies have more effective fiscal and monetary policy instruments.
    Date: 2005–06
  12. By: Hélène Dernis; Dietmar Harhoff; Karin Hoisl; Colin Webb
    Abstract: This paper presents a preliminary set of European and international citation data tables designed to enable researchers to become familiar with the subject and undertake a range of analyses. It addresses analytical and statistical issues such as why citations from international searches and European searches should be combined; the calculation of citation lags; use of International Patent Classification (IPC) codes for grouping patents according to technology; treatment of references to Non-Patent Literature (NPL); and the notion that many publications, from different patenting authorities, covering the same invention can be cited. Differences between US and European citations are also discussed. <P>L'analyse des citations de brevets Européens et internationaux Ce document présente une première sélection de données sur les citations européennes et internationales. Ces modules ont été construits afin de permettre aux chercheurs de se familiariser avec les citations et d'engager un certain nombre d’analyses. Plusieurs questions analytiques et statistiques sont abordées, notamment : pourquoi combiner les citations issues des recherches internationales avec celles des recherches européennes ; calculer des délais de citation ; utiliser les codes de la Classification internationale des brevets (CIB) pour regrouper les brevets par technologies ; comment considérer les références à la littérature non-brevet (NPL) ; et comment comptabiliser les citations lorsque plusieurs brevets, publiés par différents offices de brevet, pour la même invention sont cités. Les divergences entre citations américaines et européennes sont également étudiées.
    Date: 2005–10–18
  13. By: Marin, Dalia
    Abstract: Europe is reorganizing its international value chain. I document these changes in Europe?s international organization of production with new survey data of Austrian and German firms investing in Eastern Europe. I show estimates of the share of intra-firm trade between Austria and Germany on the one hand and Eastern Europe on the other. Furthermore, I present empirical evidence of the drivers of the new division of labor in Europe. I find among other things that falling trade costs and falling corruption levels as well as improvements in the contracting environment in Eastern Europe are affecting the level of intra-firm imports from Eastern Europe. They are also favoring outsourcing over offshoring. Low organizational costs of hierarchies and large costs of hold-up (when there are no alternative investors in Old Europe or no alternative suppliers in Eastern Europe) are favoring offshoring over outsourcing. Tax holidays granted by host countries in Eastern Europe also mildly affect the organizational choice.
    JEL: O11 L14 F11 D51 D23
    Date: 2005–09
  14. By: Vassiliki Koutsogeorgopoulou; Helmut Ziegelschmidt
    Abstract: This Working Paper looks at structural policies which would improve Greece’s long-term economic performance and help speed economic and social convergence with average European Union member countries. It focuses on a number of key areas which are particularly important for rapid growth as they offer substantial scope for catching up with international best practice. These areas are: getting more people into work through higher flexibility in the labour market and more effective labour market policies; competition policy reform; the liberalisation of product markets, in particular the energy, telecommunication and transport sectors; policies to foster entrepreneurship; and financial market reform, including the implementation of a better corporate governance regime. A number of Annexes provide additional information on the reform of the energy markets (electricity, gas, oil), the telecommunications sector, maritime transport and financial markets. This Working Paper relates to the 2005 OECD Economic Survey of Greece ( <P>Renforcer le potentiel de croissance de la productivité en Grèce Ce document de travail examine les politiques structurelles qui amélioreraient les performances à long terme de la Grèce en matière de productivité et contribueraient à accélérer la convergence sur le plan économique et social avec les autres pays membres de l’UE. Ce document de travail se concentre sur un certain nombre de domaines clés, particulièrement importants pour une progression rapide de la productivité car ils offrent des possibilités non négligeables d’harmonisation avec les meilleures pratiques internationales. Ces domaines sont les suivants : réforme de la politique de la concurrence, promotion d’une économie fondée sur le savoir, libéralisation des marchés de produits, en particulier dans les secteurs de l’énergie, des télécommunications et du transport, mesures favorisant l’entrepreneuriat, et mise en œuvre d’un régime de gouvernement d’entreprise de meilleure qualité. Un certain nombre d'annexes prévoient l'information additionnelle sur la réforme des marchés de l'énergie (l'électricité, gas, pétrole), du secteur de télécommunications, du transport maritime, et des marchés financiers. Ce document de travail se rapporte à l'Étude économique de l'OCDE de la Grèce (èce)
    Keywords: telecommunications, télécommunications, financial markets, marchés financiers, productivity, productivité, competition policy, politique de la concurrence, labour markets, marché du travail, privatisation, transport, transport, privatisation, product markets, marchés de produits, reforms, réformes, flexibility, energy sector, entrepreneurship, corporate governance, régime d’accès, flexibilité, secteur d'énergie, entrepreneuriat
    JEL: J22 J38 K20 L94 L96 N2
    Date: 2005–10–13
  15. By: Oldrich Kyn (Boston University); Ludmila Kyn (---)
    Abstract: During the 1960s most of the countries of Eastern Europe experienced a visible retardation of economic growth. This paper supports the view of many Eastern as well as Western economists that the retardation was caused primarily by declining rates of growth of the total factor productivity. The rate of growth of the total factor productivity was estimated as a parameter of the macroeconomic production functions. Several other economists who estimated the production functions for East European countries obtained frequently results with low statistical significance because the time series were short and in addition suffered with the high degree of multicollinearity. In a previous papers (Kyn-Kyn ) we tried to demonstrate, that this obstacles can be overcome by estimating the production functions from the pooled cross-section and time series data. By doing so we received economically reasonable and statistically significant estimates of the capital and labor elasticities, and of the rate of technical change for Poland, Czechoslovakia, Hungary, Bulgaria and Rumania. Although the pooling eliminated the multicollinearity, it caused two other problems, namely heteroscedasticity and autocorrelation. In this paper we have applied a step-wise method with data transformation that practically eliminated these problems. Our results confirmed that the average annual rates of growth of the total factor productivity were very high (around 6 per cent) in the case of Czechoslovakia, Bulgaria and Rumania and somewhat lower, but still respectable (3 - 5 per cent) in the case of Poland and Hungary. It is, however, necessary to keep in mind that this estimates are not strictly comparable with the similar estimate for Western countries, because we have used the gross value of industrial production rather than GNP for measuring the output, and only the data for the nationalized part of industry. In the version of the model that allowed for changing rate of growth of total factor productivity over time we found that Czechoslovakia, Poland and Bulgaria experienced a quite considerably declining trend in the rate of change of the total factor productivity while such trend could not have been discovered in Hungary and Rumania.
    Keywords: Production Function, Total Factor Productivity, Eastern Europe, Czechoslovakia. Hungary, Poland, Bulgaria, Romania,
    JEL: E
    Date: 2005–10–29
  16. By: Stephen Littlechild
    Abstract: The main Nordic residential electricity markets (Norway, Sweden and Finland) effectively opened to retail competition around 1998. They have not been subject to regulatory controls on prices or other contract terms. Between 11 and 29 per cent of residential customers have switched suppliers and between a fifth and a half of all residential customers have chosen alternative contractual terms of supply. These alternatives include fixed price contracts ranging from 3 months to five years duration, as well as spot-price related terms, instead of the standard variable tariffs. The use of these alternatives is increasing over time, and there is considerable product innovation. This paper surveys these developments and illustrates with case studies of significant suppliers in each Nordic market. The market is thus ascertaining and bringing about the outcomes that customers prefer. Without retail competition, it is not clear how regulation will replicate this aspect of the market process.
    Keywords: retail competition, electricity, regulation, Nordic countries
    JEL: L94 L L51
    Date: 2005–11
  17. By: Cúrdia, Vasco (Princeton University); Finocchiaro, Daria (Institute for International Economic Studies, Stockholm University)
    Abstract: Using Bayesian methods, we estimate a small open economy model for Sweden. We explicitly account for a monetary regime change from an exchange rate target zone to flexible exchange rates with explicit inflation targeting. In each of these regimes, we analyze the behavior of the monetary authority and the relative contribution to the business cycle of structural shocks in detail. Our results can be summarized as follows. Monetary policy is mainly concerned with stabilizing the exchange rate in the target zone and with price stability in the inflation targeting regime. Expectations of realignment and the risk premium are the main sources of volatility in the target zone period. In the inflation targeting period, monetary shocks are important sources of volatility in the short run, but in the long run, labor supply and preference shocks become relatively more important. Foreign shocks are much more destabilizing under the target zone than under inflation targeting.
    Keywords: Bayesian estimation; DSGE models; target zone; inflation targeting; regime change
    JEL: C10 C30 E50
    Date: 2005–10–01
  18. By: Carlo Dell’Aringa (Catholic University of Milan); Claudio Lucifora (Catholic University of Milan, ERMES, CEPR and IZA Bonn); Federica Origo (University of Bergamo)
    Abstract: This paper investigates regional public-private wage differentials in Italy. Following the recent wave of reforms that significantly changed wage setting and employment relations in both sectors - increasing decentralisation in collective bargaining and enforcing a "privatisation" of public sector employment contracts - we present new estimates of the public-private wage gap by geographical location. We report both 'standardised' public-private wage differentials, as well as estimates obtained using Geographically Weighted Regressions methods. We show that significant differences exist in public-private wage differentials across Italian regions, and that the latter can be partly explained by local labour market conditions affecting the private sector and only marginally the public sector. Differences in public-private wage differentials across regions are expected to determine several imbalances in terms of ‘wait’ unemployment and recruitment problems in the different areas.
    Keywords: public-private wage differentials, regional labour market, geographically weighted regressions
    JEL: J31 J45
    Date: 2005–10
  19. By: Patrick A. Puhani (Darmstadt University of Technology, SIAW, University of St. Gallen, WDI, and IZA Bonn); Andrea M. Weber (Darmstadt University of Technology)
    Abstract: We estimate the effect of age of school entry on educational attainment using three different data sets for Germany, sampling pupils at the end of primary school, in the middle of secondary school and several years after secondary school. Results are obtained based on instrumental variable estimation exploiting the exogenous variation in month of birth. We find robust and significant positive effects on educational attainment for pupils who enter school at seven instead of six years of age: Test scores at the end of primary school increase by about 0.42 standard deviations and years of secondary schooling increase by almost half a year.
    Keywords: education, immigration, policy, identification
    JEL: I21 I28 J24
    Date: 2005–10
  20. By: Hector Sala (Universitat Autònoma de Barcelona and IZA Bonn); José I. Silva (Universitat Autònoma de Barcelona and Central Bank of Venezuela)
    Abstract: We present a Search and Matching model with heterogeneous workers (entrants and incumbents) that replicates the stylized facts characterizing the US and the Spanish labor markets. Under this benchmark, we find the Post-Match Labor Turnover Costs (PMLTC) to be the centerpiece to explain why the Spanish labor market is as volatile as the US one. The two driving forces governing this volatility are the gaps between entrants and incumbents in terms of separation costs and productivity. We use the model to analyze the cyclical implications of changes in labor market institutions affecting these two gaps. The scenario with a low degree of workers' heterogeneity illustrates its suitability to understand why the Spanish labor market has become as volatile as the US one.
    Keywords: search, matching, training, firing costs, productivity differentials
    JEL: J23 J24 J31 J41 J63 J64
    Date: 2005–10
  21. By: Matilde Mas; Javier Quesada
    Abstract: Using new sectoral data on investment and capital services we carry out a growth accounting exercise on Spain 1985-2002. We compute the contribution to output and labour productivity growth of employment, non-ICT and ICT capital, labour qualification and Total Factor Productivity. Results are given for 29 different branches; individually and grouped into four clusters according to their ICT use intensity. Three ICT assets (hardware, communications and software) are considered. We find that although the ICT intensive group appears to be the most dynamic cluster, most of the impact on productivity is still to come. There is some evidence of a reversal of the productivity slow down of the nineties starting in the year 2000. En utilisant de nouvelles données sectorielles sur les investissements et services de capital, nous menons à bien un exercice de comptabilité de croissance de l’Espagne entre 1985 et 2002. On calcule la contribution à la croissance et la productivité du travail, de l’emploi du capital TIC et non TIC, de la qualification de main d’oeuvre et de la productivité globale des facteurs. Les résultats sont donnés pour 29 différentes branches, individuellement et réparties en quatre groupes, selon l’intensité d’utilisation de leur TIC. Trois actifs des TIC sont considérés (le matériel, les communications et les logiciels). Nous trouvons que bien que le groupe le plus intensif en TIC apparaisse comme le plus dynamique, un impact encore plus important sur la productivité est attendu. En 2000, on constate une certaine accélération de la croissance de la productivité après le ralentissement des années 90.
    Date: 2005–08–17

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