nep-eec New Economics Papers
on European Economics
Issue of 2005‒12‒14
33 papers chosen by
Giuseppe Marotta
Universita di Modena e Reggio Emilia

  1. Wage diversity in the euro area - an overview of labour cost differentials across industries By Véronique Genre; Daphne Momferatou; Gilles Mourre
  2. The Impact of Tax and Transfer Systems on Children in the European Union By Corak M; Lietz C; Sutherland H
  3. Pension Incomes in the European Union: Policy Reform Strategies in Comparative Perspective By Mantovani D; Papadopoulos F; Sutherland H; Tsakloglou P
  4. Household incomes and redistribution in the European Union: quantifying the equalising properties of taxes and benefits By Immervoll H; Levy H; Lietz C; Mantovani D; O'Donoghue C; Sutherland H; Verbist G
  5. Alternative Tax-Benefit Strategies to Support Children in the European Union: recent reforms in Austria, Spain and the United Kingdom By Levy H; Lietz C; Sutherland H
  6. Modelling the Redistributive Impact of Indirect Taxes in Europe: an Application of Euromod By O'Donoghue C; Baldini M; Mantovani D
  7. North-South Asymmetric Relationships : Does the EMU Business Affect Small African Economies ? By André, NYEMBWE; Konstantin, KHOLODILIN
  8. In-Work Policies in Europe: killing two birds with one stone? By Bargain O; Orsini K
  9. Welfare Reform in European Countries: A Micro-Simulation Analysis By Immervoll H; Kleven H J; Kreiner C T; Saez E
  10. Fiscal Stabilisers in Europe: The Macroeconomic Impact of Tax and Benefit Systems By Mabbett D
  11. The role of tax and transfers in reducing personal Income Inequality in Europe’s regions: Evidence from EUROMOD By Mercader-Prats M; Levy H
  12. Micro-level analysis of the European Social Agenda: Combating poverty and social exclusion through changes in social and fiscal policy - Final Report By Sutherland H
  14. Is There a Glass Ceiling Over Europe? An Exploration of Asymmetries in the Gender Pay Gap across the Wages Distribution By Wiji Arulampalam; Alison L. Booth; Mark L Bryan
  15. EUROMOD and the Development of EU Social Policy By Atkinson A B
  16. Run-away bureaucracy? Exploring the role of National Regulatory Agencies in the EU By Maria Martens
  17. Social Indicators and other Income Statistics using EUROMOD: an assessment of the 2001 baseline and changes 1998-2001 By Lietz C; Sutherland H
  18. Child Poverty and Family Transfers in Southern Europe By O'Donoghue C; Levy H; Coromaldi M; Mercader-Prats M; Farinha Rodrigues C; Toso S; Tsakloglou P
  19. The Environmental and Economic Effects of European Emissions Trading By Claudia Kemfert; Michael Kohlhaas; Truong P. Truong; Artem Protsenko
  20. Redistributive effect and progressivity of taxes An International Comparison across the EU using EUROMOD By Verbist G
  21. Replacement Incomes and Taxes: A distributional analysis for the EU-15 countries By Verbist G
  22. Average and marginal effective tax Rates facing workers in the eu. A Micro-level analysis of levels, Distributions and driving factors (revised version of EM2/02) By Immervoll H
  23. Falling up the stairs. An exploration of the effects of "bracket creep" on household incomes By Immervoll H
  24. Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps By Claudia Olivetti; Barbara Petrongolo
  25. Long-Term Labour Force Projections for the 25 EU Member States:A set of data for assessing the economic impact of ageing By Giuseppe Carone
  26. EU Action on Social Inclusion and Gender Mainstreaming By Atkinson A B; Meulders D
  27. Childhood Family Structure and Schooling Outcomes: evidence for Germany By Marco Francesconi; Stephen P. Jenkins; Thomas Siedler
  28. The Evolution of French and British Labour Market Segmentation : 1982-2001 By Aline Valette
  29. There’s no Place Like Home: A Strategic Framework to Overcome Liability of Foreignness in the German Car Market. By Wolfgang Sofka; Joerg Zimmermann
  30. Top Incomes and Top Taxes in Germany By Stefan Bach; Giacomo Corneo; Viktor Steiner
  31. Trade Protection and Industry Wage Structure in Poland By Chor-ching Goh; Beata S. Javorcik
  32. Fiscal Federalism in Switzerland : Relevant Issues for Transition Economies in Central and Eastern Europe By Bernard Dafflon; Krisztina Tóth
  33. The Impact of New Firm Formation on Regional Development in the Netherlands By Stel, A.J. van; Suddle, K.

  1. By: Véronique Genre (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Daphne Momferatou (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Gilles Mourre
    Abstract: This Paper provides an overview of the magnitude of sectoral wage differentials in the euro area as a whole. Even when adjusting for structural sectoral features such as the skill structure or the proportion of part-timers, average wage levels in services are substantially lower than in manufacturing. The paper also studies how the euro area wage structure compares with that of the United States and the United Kingdom. It discusses some possible determinants of intersectoral wage differentials in the euro area and their likely implications from a policy perspective. A number of worker characteristics (e.g. age, skills, the proportion of temporary or self-employed) are highly correlated with the structure of wage differentials. At the same time, wage differentials are also highly correlated with sector-specific features such as average firm size or capital intensity. Finally, the paper presents some stylised facts on how the euro area wage structure has evolved since the early 1980s.
    Keywords: Intersectoral wage differential; wage determination; euro area.
    JEL: J31 E24 J41
    Date: 2005–02
  2. By: Corak M; Lietz C; Sutherland H (Institute for Social & Economic Research)
    Abstract: The objective of this paper is to analyse the impact of fiscal policy on the economic resources available to children, and on the child poverty rate. A static microsimulation model specifically designed for the purposes of comparative fiscal analysis in the European Union, EUROMOD, is used to study the age incidence of government taxes and transfers in 2001 in 15 EU countries.
    Keywords: Children, child poverty, fiscal policy, European Union.
    Date: 2005–03
  3. By: Mantovani D; Papadopoulos F; Sutherland H (Institute for Social & Economic Research); Tsakloglou P
    Abstract: This paper considers the effects on current pensioner incomes of reforms designed to improve the long-term sustainability of public pension systems in the European Union. We use EUROMOD to simulate a set of common illustrative reforms for four countries selected on the basis of their diverse pension systems and patterns of poverty among the elderly: Denmark, Germany, Italy and the UK. The variations in fiscal and distributive effects on the one hand suggest that different paths for reform are necessary in order to achieve common objectives across countries, and on the other provide indications of the appropriate directions for reform in each case.
    Keywords: Pensions; European Union; Microsimulation
    JEL: C81 I30 H55
    Date: 2005–03
  4. By: Immervoll H; Levy H (Institute for Social & Economic Research); Lietz C; Mantovani D; O'Donoghue C; Sutherland H (Institute for Social & Economic Research); Verbist G
    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 tax-benefit 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. JEL: C81, D31, H22, H55 Keywords: Income inequality, Redistribution, Microsimulation, European Union
    Keywords: Income inequality, Redistribution, Microsimulation, European Union
    JEL: C81 D31 H22 H55
    Date: 2005–07
  5. By: Levy H (Institute for Social & Economic Research); Lietz C; Sutherland H (Institute for Social & Economic Research)
    Abstract: We compare three EU countries that have recently experienced substantial but very different reforms of their systems to support families with children: Austria, Spain and the United Kingdom. The structure of these systems is different: Austria gives emphasis to universal benefits, Spain to tax concessions and the United Kingdom to means-tested benefits. As a first step the paper compares the distributional implications of these three approaches. The recent reforms have reinforced these existing structures while increasing the amount of public resources directed towards children. The second step is to address the question whether the chosen strategies are the best for each country. What would have happened if instead of reinforcing the existing types of policies these countries had completely transformed the architecture of their systems in either of the other two directions? We use EUROMOD, the European tax-benefit microsimulation model that is designed for making cross-country comparisons and answering "what if" questions such as these to explore the effects of budget-neutral alternatives on the position of children in the income distribution as a whole, the proportions gaining and losing and the effects on child poverty. The three factors that can be distinguished - the level of spending, its structure, and the way it impacts in a particular national context - are all important to varying degrees. JEL: C8, I3 Keywords: Children, European Union, Policy reform, Microsimulation
    Keywords: Children, European Union, Policy reform, Microsimulation
    JEL: C8 I3
    Date: 2005–07
  6. By: O'Donoghue C; Baldini M; Mantovani D
    Abstract: This paper describes a model to simulate expenditure and indirect taxes in 12 EU countries within the EUROMOD tax-benefit model. The paper outlines the types of indirect taxes in the countries examined. Validation checks are made on the effectiveness of the expenditure models used. The redistributive effect of indirect taxes is decomposed into the tax resulting from different commodity groups. Lastly the progressivity and redistributive effect of indirect taxes are examined and compared with income taxes, social insurance contributions (employee and employer) and the main social benefit groupings with all EU countries.
    Keywords: European Union; Microsimulation; Taxation, Redistribution.
    JEL: C81 D31
    Date: 2004–06
  7. By: André, NYEMBWE; Konstantin, KHOLODILIN
    Abstract: In this paper we empirically investigate a possible transmission of the European business cycle to Sub-Saharan Africa’s economies. This linkage may be of interest because the EMU is the main trading partner of African countries, and many of these countries use the euro as either the official or a de facto anchor in order to keep the exchange rate fixed or stable. After identifying possible theoretical channels of transmission, we test whether the relevant economic variables in Africa are sensitive to the fluctuations of European economic activity. Using either a Euro area GDP series or a Stock and Watson approach in order to build indicators of economic fluctuations to Sub-Saharan Africa despite the appealing theoretical linkages between the two areas. The most important relationship we manage to disentangle is between the European and African monetary policies.
    Keywords: North-South linkages; Business cycles; EMU; African economies; Sub-Saharan Africa
    JEL: C32 E31 E32 F41
    Date: 2005–08–15
  8. By: Bargain O; Orsini K
    Abstract: Earning an income is probably the best way to avoid poverty and social exclusion, hence the recent trend of promoting employment through in-work transfers in OECD countries. Yet, the relative consensus on the need for ‘making work pay’ policies is muddied by a number of concerns relative to the design of the reforms and the treatment of the family dimension. Relying on EUROMOD, a EU-15 integrated tax-benefit microsimulation software, we simulate two types of in-work benefits. The first one is means-tested on family income, in the fashion of the British Working Family Tax Credit, while the second is a purely individualized low wage subsidy. Both reforms are built on the same cost basis (after behavioral responses) and simulated in three European countries which experience severe poverty traps, namely Finland, France and Germany. The potential labor supply responses to the reforms and the subsequent redistributive impacts are assessed for each country using a structural discrete-choice model. We compare how both reforms achieve poverty reduction and social inclusion (measured as the number of transitions into activity). All three countries present different initial conditions, including institutional environment, existing tax-benefit systems and distribution of incomes and wages. These sources of heterogeneity are exploited together with different labor supply sensitivities to explain the cross-country differences in the impact of the reforms.
    Keywords: tax-benefit systems, in-work benefits, microsimulation, household labor supply, multinomial logit.
    JEL: C25 C52 H31 J22
    Date: 2004–10
  9. By: Immervoll H; Kleven H J; Kreiner C T; Saez E
    Abstract: This paper estimates the welfare and distributional impact of two types of welfare reform in 14 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 all European Union countries (except Sweden) 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 the large existing welfare programs with high phase-out rates, the uniform redistribution policy is, in general, 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.
    Date: 2004–02
  10. By: Mabbett D
    Abstract: Tax and benefit systems generate aggregate intertemporal effects in addition to their interpersonal redistributive effects. These intertemporal effects appear in the cyclical fluctuations in the government’s fiscal position yielded by the ‘automatic stabilisers’. Using EUROMOD, it is possible to produce estimates of the automatic stabilisers which focus on the stabilisation of household income rather than the budgetary effects of cyclical changes in taxes and benefits. These estimates are used to explore theoretical propositions about the role of the tax and benefit system in providing temporary income insurance to households, and to identify some of the possible effects of taxes and benefits on the speed of labour market adjustment over the cycle. The results show that the size of the stabilisers varies widely across the states participating in European Monetary Union (and the other EU-15 states). However, more analysis of the crosscutting effects of private insurance and access to credit is needed to determine the implications for stabilisation policy.
    Keywords: Automatic stabilisation, European Monetary Union, Insurance Unemployment, Microsimulation
    JEL: C81 D31 E32 H31 J68
    Date: 2004–11
  11. By: Mercader-Prats M; Levy H (Institute for Social & Economic Research)
    Abstract: In this paper we use statistical tools and graphic devices in order to give a comprehensive picture of income inequality levels in a set of 100 EU-15 regions at the end of the XX century before and after the operation of the tax-benefit. Our analysis is based on EUROMOD, the first multi-country tax-benefit model built with a common framework that includes detailed information on taxes and benefits paid and received by individuals and/or households from samples that are representative for the 15 EU countries. Our analysis focuses on intraregional inequality and it explores the relationship between regional inequality levels (both in market incomes and disposable incomes) and economic performance. Our main findings indicate that tax-benefits systems in Europe notably reduce market inequality in all EU regions and that the size of this reduction (i.e. redistributive effect) depends crucially on (i) the market inequality level of the region (positively), (ii) the relative economic performance of the region in the country (negatively) and (iii) the country to which the region belongs.
    Keywords: Regions, European Union, inequality, redistribution, economic performance
    JEL: C81 D31 I38
    Date: 2004–12
  12. By: Sutherland H (Institute for Social & Economic Research)
    Abstract: This project explored the impacts of national social and fiscal policies, and reforms to these policies, on poverty reduction. The project covered all 15 (pre-2004) Member States of the EU. It made use of the tax-benefit model, EUROMOD, which was updated and improved as part of the project. The model now operates with baseline policy rules for 2001 and, for 10 countries, 2003. The developing Social Agenda of the EU and the Social Inclusion process in particular, has provided the policy context and has shaped many of the project’s activities.
    Date: 2005–03
  13. By: Guglielmo Maria Caporale; Alaa M. Soliman
    Abstract: This paper examines the monetary transmission mechanism in eight EU member states. It provides useful empirical evidence for assessing the impact of a common monetary policy in the early stages of EMU, and enables us to form a view on how the regime change represented by EMU is likely to be translated into changes in policy multipliers in the various EU countries. The empirical analysis applies techniques recently developed by Wickens and Motto (2001) for identifying shocks by estimating a VECM for the endogenous variables, and a stationary VAR in first differences for the exogenous variables. Our findings suggest that there are significant differences between EU countries in the transmission mechanism of monetary policy.
    Date: 2005–12
  14. By: Wiji Arulampalam (University of Warwick); Alison L. Booth (Department of Economics, University of Essex); Mark L Bryan (Institute for Social and Economic Research)
    Abstract: Using harmonised data from the European Union Household Panel, we analyse gender pay gaps by sector across the wages distribution for ten countries. We find first, that quantile regression estimates are preferred to the OLS estimates, which give a misleading picture of gender pay gaps. Second, gender pay gaps are typically bigger at the top and the bottom of the wage distribution than in the middle, a finding that is consistent with (whilst not proving) the existence of sticky floors and glass ceilings. Third, the gender pay gap is typically higher at the top than the bottom end of the wage distribution, suggesting that glass ceilings are more prevalent than sticky floors and that these prevail in the majority of our countries.
    Keywords: european union, gender, quantile regression, wage differentials
    Date: 2005–11
  15. By: Atkinson A B
    Abstract: The purpose of this paper is to set EUROMOD - the EU-wide tax and benefit model - in the context of the development of EU social policy. It explores the relation between the rapidly evolving EU social inclusion process and investment in European social science infrastructure. In so doing, I look mainly to the future, but I would like to begin in Sections 1 and 2 with the historical background. It is only in this way that we can place in context the achievements of EU social policy and understand the need for further development. I then describe in Section 3 the main elements of the EU Social Inclusion process and the National Action Plans of Member States. A key role is played by the social indicators agreed at Laeken in 2001, which are the subject of Section 4. Looking to the future, the monitoring of performance by means of social indicators may lead to the setting of targets (Section 5). All of this relates to process and analysis, but substantive progress requires policy innovation and policy learning. In Section 6, I begin with the assessment of policy at the national level, arguing that there is a role for EUROMOD in analysing the policies of individual Member States on a consistent basis across the EU. The role is clearly crucial at the EU level (Section 7). The potential for policy assessment is demonstrated in Section 8 in the context of a "new intergenerational pact", and in terms of working back from possible targets in Section 9. The main lessons for policy analysis are summarised in Section 10.
    Date: 2005–01
  16. By: Maria Martens
    Keywords: European Commission; implementation; networks; institutions; organization theory; Norway; Denmark; Finland
    Date: 2005–11–28
  17. By: Lietz C; Sutherland H (Institute for Social & Economic Research)
    Abstract: This paper reports an exercise to validate EUROMOD output for 2001 by comparing income statistics calculated from the baseline micro-output with comparable statistics from the European Community Household Panel (ECHP). It focuses particularly on some of the income-based common "Laeken" social indicators. It also compares EUROMOD estimates of changes in these indicators between 1998 and 2001 with similar estimates based on ECHP. The values of many of the indicators - and changes to the indicators - calculated using EUROMOD are close to those shown by the ECHP. Where there are discrepancies these can usually be explained by known differences in the methods or underlying data. Users of EUROMOD should be aware of remaining unavoidable sources of non-comparability across countries, as well as the nature of the simulation process. Nevertheless they can be confident that the baseline provides a good starting point for the analysis of the effects of policy changes on indicators.
    Keywords: European Union; Microsimulation; Poverty statistics; Income inequality
    JEL: C81 D31 I32
    Date: 2005–03
  18. By: O'Donoghue C; Levy H (Institute for Social & Economic Research); Coromaldi M; Mercader-Prats M; Farinha Rodrigues C; Toso S; Tsakloglou P
    Abstract: The drive to reduce child poverty is of particular interest in southern Europe, where the subsidiary role of the State in matters of family policy has implied that programmes of public assistance to poor families with children are often meagre or not available at all. The paper examines the effect of family transfers (used broadly to include contributory family allowances, non-contributory child benefits and tax credits or allowances) on child poverty in Greece, Italy, Spain and Portugal. Using the European microsimulation model EUROMOD, the paper first assesses the distributional impact of existing family transfers and finds it is weak. The scope for policy reforms is then explored. By way of illustration, universal child benefit schemes similar to those in Britain, Denmark and Sweden are simulated. The impact of such schemes on child poverty is shown to be considerable, but their fiscal cost correspondingly substantial. The paper concludes with a discussion of key findings and policy implications.
    Keywords: Child poverty, social transfers, fiscal benefits, south Europe, microsimulation
    JEL: C81 D31 I38
    Date: 2004–07
  19. By: Claudia Kemfert; Michael Kohlhaas; Truong P. Truong; Artem Protsenko
  20. By: Verbist G
    Abstract: This paper gives an international comparison of the redistributive effect of personal income taxes in the 15 countries of the EU, using the European tax-benefit model EUROMOD. We focus on the effect of personal income taxes, social insurance contributions and other direct taxes. We present the contribution of progressivity and average tax rate to the reduction of income inequality, as well as the weight of the various types of tax concessions (i.e. exemptions, deductions, allowances and credits). There appears to be a wide variety among countries in the level of inequality reduction as well as in the instruments used to achieve this reduction. Personal income taxes are in all countries the most important source for inequality reduction, which is to a large extent, though not solely, due to the progressive rate schedule. Countries with a high degree of pre-tax inequality do not systematically redistribute more through their taxes; the results indicate rather the opposite.
    Keywords: income redistribution; income taxes; social insurance contributions; microsimulation; European Union
    JEL: C81 D31 H23 H24
    Date: 2004–10
  21. By: Verbist G
    Abstract: In this paper we analyse how income taxation interferes with the logic and aims of the social security system. We investigate the distributional effects of the tax treatment of social benefits, and more specifically of old age pensions and unemployment benefits. We present a brief overview of the different ways of levying taxes on replacement incomes. We measure the distributional effects of these different tax treatments by comparing gross and net replacement incomes over income deciles. By calculating Gini and Kakwani indices, we also estimate the inequality reduction and the progressivity characteristics of taxes on replacement incomes. Having summarised the link between taxes and replacement incomes, as well as their distributional effects, we then try to distinguish if there is a link between the tax treatment of replacement incomes and the type of welfare state.
    Keywords: income redistribution; social benefits; income taxes; social insurance contributions; microsimulation; European Union
    JEL: C81 D31 H23 H24 H55
    Date: 2005–01
  22. By: Immervoll H
    Abstract: Macro-based effective tax rate (ETR) measures do not provide information on the level or distribution of marginal effective tax rates thought to influence household behaviour. They also do not capture differences in average ETRs facing different population sub-groups. I use EUROMOD, an EU-wide tax-benefit model, to derive distributions of average and marginal ETR measures for fourteen countries. Results for each country show how many and which types of individuals face different ETR levels. I consider effective tax burdens on labour income as well as the marginal tax rates faced by working men and women. Results are broken down to isolate the influence of income taxes, social contributions and various types of social benefits.
    Keywords: Effective Tax Rates; European Union; Microsimulation.
    JEL: H22 D31 C81
    Date: 2004–10
  23. By: Immervoll H
    Abstract: This paper analyses how inflation-induced erosions of nominally defined amounts built into relevant tax rules ("bracket creep") alter distributional and revenue-generating properties of income taxes and social insurance contributions. Using a multi-country tax-benefit model, it provides quantitative estimates for Germany, the Netherlands and the UK. In the absence of automatic inflation adjustment mechanisms, effects on individual tax burdens can be substantial even with low inflation. Bracket creep is found to reduce tax progressivity. At the same time, overall tax revenues increase. This second effect more than compensates for the decline in progressivity and leads to an overall increase of relevant redistribution measures. Existing adjustment regimes used in the Netherlands and the UK are successful at preventing large tax burdens changes resulting from inflation-induced nominal income changes.
    Keywords: Inflation; Fiscal Drag; Income Tax; Social Insurance Contributions; Income Distribution; European Union; Microsimulation
    JEL: C81 H24 D31
    Date: 2004–07
  24. By: Claudia Olivetti (Department of Economics, Boston University); Barbara Petrongolo (London School of Economics, CEP, CEPR and IZA)
    Abstract: There is substantial international variation in gender pay gaps, from 25-30% in the US and the UK, to 10-20% in a number of central and northern EU countries, down to an average of 10% in southern EU. We argue that non-random selection of women into work across countries may explain part of such variation. This ides is supported by the observed variation in employment gaps, from 10% in the US, UK and Scandinavian countries, to 15-25% in northern and central EU, up to 30-40% in southern EU and Ireland. If women who are employed tend to have relatively high-wage characteristics, low female employment rates may become consistent with low gender wage gaps simply because low-wage women would not feature in the observed wage distribution. We explore this idea across the US and EU countries estimating gender gaps in potential wages. In order to do this, we recover information on wages for those not in work in a given year by simply making assumptions on the position of the imputed wage observations with respect to the median, not on the actual level. Imputation is based on wage observations from nearest available waves in the sample and/or observable characteristics of the nonemployed. We estimate median wage gaps on the resulting imputed wage distributions. Our estimates for 1999 deliver higher median wage gaps on imputed rather than actual wage distributions for most countries in the sample, meaning that, as one would have expected, women tend on average to be more positively selected into work than men. However, this di¤erence is tiny or virtually zero in the US and northern and central EU countries (except Ireland), and becomes sizeable in Ireland, France and southern EU, all countries in which gender employment gaps are high. In particular, in Spain, Portugal and Greece the median wage gap on the imputed wage distribution reaches 20 log points, a closely comparable level to that of the UK and other central and northern EU countries.
    Date: 2005–03
  25. By: Giuseppe Carone (European Commission - DG ECFIN)
    Abstract: This paper presents the methodology and results of labour force projections over the long term (until 2050) for each of the 25 EU Member States. These projections were undertaken in order to provide the background technical inputs for the assessment of the potential economic and fiscal impact of an ageing population. The projections presented in this paper show the outcome for the labour force of extrapolating recent trends in labour market behaviour (entry and exit rates from the labour market). These base case projections reflect the working assumption of “no policy change” and are neither forecasts nor predictions in that they are not based on any assessment of more or less likely future changes in working patterns or economic conditions. To summarise the outcome of projections, the baseline scenario indicates that, notwithstanding the projected increase in the participation rates and the reduction in unemployment rates, the pace of labour force and employment growth in the EU25 will be weakly positive over the next 15 years and will turn negative over the period 2018 to 2050. These is mainly the outcome of projected declining trends for the working-age population and a shift in the age structure of the population towards older, less participating groups - a consequence of the baby-boom generation approaching retirement and the succeeding lower-birth-rate cohorts reaching working age.
    Keywords: Labour force projections, population projections, cohort method, ageing population, dependency ratios
    JEL: J10 J11 J14 J21 J26 I00
    Date: 2005–12–09
  26. By: Atkinson A B; Meulders D
    Abstract: As embodied in the Treaty of Amsterdam, equality of treatment between women and men is a prominent part of the EU agenda. Member States have agreed that a gender equality perspective should be integrated into all policy areas, an approach referred to as "gender mainstreaming". In July 1997, the United Nations Economic and Social Council (ECOSOC) defined the concept of gender mainstreaming as follows: "Mainstreaming a gender perspective is the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in any area and at all levels. It is a strategy for making the concerns and experiences of women as well as of men an integral part of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres, so that women and men benefit equally, and inequality is not perpetuated. The ultimate goal of mainstreaming is to achieve gender equality."
    Date: 2004–12
  27. By: Marco Francesconi (Department of Economics, University of Essex); Stephen P. Jenkins (Institute for Social and Economic Research); Thomas Siedler (Institute for Social and Economic Research)
    Abstract: We analyse the impact on schooling outcomes of growing up in a family headed by a single mother. Growing up in a non-intact family in Germany is associated with worse outcomes in models that do not control for possible correlations between common unobserved determinants of family structure and educational performance. But once endogeneity is accounted for, whether by using sibling-difference estimators or two types of instrumental variable estimator, the evidence that family structure affects schooling outcomes is much less conclusive. Although almost all the point estimates indicate that non-intactness has an adverse effect on schooling outcomes, confidence intervals are large and span zero.
    Keywords: childhood family structure, education success, instrumental variables, lone parents, sibling differences, treatment effects
    Date: 2005–11
  28. By: Aline Valette (LEST - Laboratoire d'économie et de sociologie du travail - - CNRS : UMR6123 - Université de Provence - Aix-Marseille I;Université de la Méditerranée - Aix-Marseille II)
    Abstract: This paper aims at studying the modification of French and British labour market segmentation from years 1980's to 2000's. Based on a multiple correspondence analysis using national labour force surveys in 1982-83 and 2001, we bring to light the evolution from a ternary structure of these markets to a fourfold division of their labour market with the appearance of a working precarious segment. The resilience of segments on the labour market is exposed in addition with the existence of national specific traits of each segment.
    Keywords: Labour market segmentation; International comparison; General household survey 1983; Labour Force Survey 2001; Employment relations; France; United Kingdom
    Date: 2005–12–05
  29. By: Wolfgang Sofka (Centre for European Economic Research ZEW , Mannheim, Germany); Joerg Zimmermann (Max Planck Institute of Economics, Entrepreneurship, Jena, Germany)
    Abstract: Globalization has led to exciting new business opportunities around the globe. Still, national and cultural boundaries have not evaporated into a “borderless world.†Several studies have identified so-called liabilities of foreignness that arise from a lack of embeddedness and roots in the host market and subsequent competitive disadvantages. Countervailing strategies for these effects have remained scarce so far. We suggest that this is due to the lack of a viable approach to identify and quantify these effects and develop a conceptual framework to empirically estimate the individual degree of liability of foreignness of a firm from a market perspective. We suggest that disruptive changes in a society change the dynamics of liability of foreignness and generate opportunities for foreign companies to optimize their localization strategies. We apply our approach to a large mature market with established international competition: the German new car market. For a comprehensive sample of roughly 1,400 car models from 2003 we estimate the relative turnover disadvantage for all major foreign manufacturers. We find that most foreign producers have managed to overcome liabilities of foreignness in Germany through firm-specific advantages. Still, some face significant challenges. A submarket analysis shows that home market advantages are more deeply rooted in the Western part of Germany and that foreign competitors find a more accessible competitive environment in Eastern Germany. Therefore, East Germany is a superior platform for deploying effective and efficient countervailing strategies. Moreover, we identify a broader rationale to engage early and decisively in untapped but promising markets like China.
    Keywords: Liability of foreignness, automotive market, multinational strategy, seemingly unrelated regressions
    JEL: F23 L62 M10
    Date: 2005–12–05
  30. By: Stefan Bach; Giacomo Corneo; Viktor Steiner
  31. By: Chor-ching Goh (The World Bank); Beata S. Javorcik (The World Bank)
    Abstract: The authors examine the impact of Poland's trade liberalization in 1994-2001 on the industry wage structure. The liberalization was undertaken in preparation for Poland's accession to the European Union and was more pronounced in industries with larger shares of unskilled labor. Their analysis indicates that a decrease in an industry tariff was associated with higher wages being earned by workers employed in the industry, controlling for worker characteristics and geographic variables. The result is robust to including year and industry fixed effects, controlling for industry-level exports, imports, concentration, stock of foreign direct investment, and capital accumulation. The finding is consistent with liberalization increasing competitive pressures, forcing firms to restructure and improve their productivity, which in turn translates into higher profits being shared with workers. It could also be potentially attributed to trade liberalization lowering the costs of imported inputs, which enhances firm profitability. The result holds when skilled workers are excluded from the sample, thus suggesting that reductions in trade barriers benefited the unskilled in terms of an increase in wages.
    Keywords: Transition, Poverty, International economics
    Date: 2005–03–01
  32. By: Bernard Dafflon (The World Bank); Krisztina Tóth (The World Bank)
    Abstract: Its highly fragmented structure of local governments and serious horizontal fiscal imbalances make Switzerland a surprisingly powerful model for Eastern European countries that are currently facing the challenge of fiscal decentralization. In spite of the substantial differences in the tradition and current practice of intergovernmental fiscal relations, transition economies may learn valuable lessons from the Swiss case in the fields of direct democracy, horizontal cooperation, expenditure and revenue assignment, and fiscal discipline. Among other conclusions, the authors suggest that subnational authorities can effectively fend off recentralization attempts of the central government if they engage in spontaneous cooperation to enhance the efficiency of public service provision. Together with an adequate fiscal equalization scheme, interjurisdictional cooperation also permits the reconciliation of the objective of an increasing devolution of powers with the existing regional disparities. The authors also show that the principle of subsidiarity can best be safeguarded by anchoring the expenditure and revenue powers of subnational governments in the constitution or in a similarly strong law. With regard to fiscal discipline, the combination of a "golden rule" with direct democratic instruments of budget control is proven to be successful in enhancing the accountability of local politicians toward their constituencies.
    Keywords: Public sector management
    Date: 2005–07–01
  33. By: Stel, A.J. van; Suddle, K. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper examines the relationship between new firm formation and regional employment change in the Netherlands. Using a new regional data base for the period 1988-2002, we examine the time lags involved in the relationship. We also investigate whether the relationship differs by time period, by sector and by degree of urbanization. We find that the maximum effect of new businesses on regional development is reached after about six years. Our results also suggest that the overall employment impact of new-firm startups is positive but that the immediate employment effects may be small in the Netherlands. Furthermore, we find that the relation between new businesses and regional development has been stable during the period under investigation, that the employment impact of new firms is strongest in manufacturing industries and that the employment impact of new firms is stronger in areas with a higher degree of urbanization.
    Keywords: Startups;Entrepreneurship;Regional Development;the Netherlands;
    Date: 2005–11–30

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