nep-eec New Economics Papers
on European Economics
Issue of 2007‒01‒06
ten papers chosen by
Giuseppe Marotta
Universita di Modena e Reggio Emilia

  1. Reconciling the Estimates of Potential Migration into the Enlarged European Union By Anzelika Zaiceva
  2. A Note on Productivity Change in European Co-operative Banks: The Luenberger Indicator Approach By Carlos Pestana Barrosa; Nicolas Peypoch; Jonathan Williams
  3. Demand for Higher Education Programs: The Impact of the Bologna Process By Ana Rute Cardoso; Miguel Portela; Carla Sá; Fernando Alexandre
  4. Earnings Instability and Tenure By Lorenzo Cappellari; Marco Leonardi
  5. Is It the Way She Moves? New Evidence on the Gender Wage Growth Gap in the Early Careers of Men and Women in Italy By Emilia Del Bono; Daniela Vuri
  6. An Experimental Investigation of Age Discrimination in the French Labour Market By Peter A. Riach; Judith Rich
  7. Credit Flows, Fiscal Policy, and the External Deficit of Bosnia and Herzegovina By Daniel Kanda
  8. Stabilizing Inflation in Iceland By Keiko Honjo; Ben Hunt
  9. Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment" By Anzelika Zaiceva
  10. Export Performance and External Competitiveness in the Former Yugoslav Republic of Macedonia By Eva Gutierrez

  1. By: Anzelika Zaiceva (IZA Bonn)
    Abstract: This paper briefly reviews the existing literature on potential migration into the enlarged European Union, reconciles the results with recent evidence and presents an additional migration scenario. The estimation procedure accounts for both sending and receiving countries' unobserved heterogeneity, and in the simulations a counterfactual scenario is calculated, in which all EU member states introduce free movement of workers simultaneously in 2011. The results suggest that the overall level of migration from the East will amount to around 1 per cent of the EU15 population within a decade after enlargement, and that the legal introduction of free movement of workers will not increase immigration significantly. These findings are compared both with the previous literature and emerging evidence.
    Keywords: migration extrapolations, EU enlargement, panel data
    JEL: F22 J11 J61
    Date: 2006–12
  2. By: Carlos Pestana Barrosa; Nicolas Peypoch; Jonathan Williams
    Abstract: This paper proposes a framework for benchmarking European co-operative banks and the rationalization of their operational activities. The analysis is based on the Luenberger productivity indicator. A key advantage of this method is that it allows for both input contraction and output expansion in determining relative efficiencies and productivity changes. Benchmarks are provided for improving the operations of those banks which perform worse than others. Several interesting and useful managerial insights and implications arise from the study. The general conclusion is that, between 1996 and 2003, productivity increased for the majority of European co-operative banks analyzed.
    Keywords: Europe; Co-operative banks; Luenberger productivity indicator.
    JEL: G21 D24
  3. By: Ana Rute Cardoso (IZA and University of Minho); Miguel Portela (Tinbergen Institute, NIPE-University of Minho and IZA); Carla Sá (Tinbergen Institute and NIPE-University of Minho); Fernando Alexandre (NIPE-University of Minho)
    Abstract: The Bologna process aims at creating a European Higher Education Area where intercountry mobility of students and staff, as well as workers holding a degree, is facilitated. While several aspects of the process deserve wide public support, the reduction of the length of the first cycle of studies to three years, in several continental European countries where it used to last for four or five years, is less consensual. The paper checks the extent of public confidence in the restructuring of higher education currently underway, by looking at its implications on the demand for academic programs. It exploits the fact that some programs have restructured under the Bologna process and others have not, in Portugal. Precise quantification of the demand for each academic program is facilitated by the rules of access to higher education, in a nation-wide competition, where candidates must list up to six preferences of institution and program. We use regression analysis applied to count data, estimating negative binomial models. Results indicate that the programs that restructured to follow the Bologna principles were subject to higher demand than comparable programs that did not restructure, as if Bologna were understood as a quality stamp. This positive impact was reinforced if the institution was a leader, i.e. the single one in the country that restructured the program. Still an additional increase in demand was experienced by large programs that restructured to offer an integrated master degree, thus conforming to Bologna principles while not reducing the program duration.
    Keywords: education policy, European Higher Education Area, economic, social and cultural integration, count data
    JEL: I28 I21 F15
    Date: 2006–12
  4. By: Lorenzo Cappellari (Catholic University of Milan and IZA Bonn); Marco Leonardi (University of Milan and IZA Bonn)
    Abstract: This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and the transitory variance of earnings. The model is also used to evaluate earnings instability associated with fixed-term contracts (short-tenure contracts) in Italy. Our results indicate that each year of tenure on the job reduces earnings instability on average by 15%. Workers on a fixed-term contract on average have an earnings instability 10% higher than workers on a permanent contract. Workers who spend their entire working life on fixedterm contracts can expect an earnings instability twice as high.
    Keywords: earnings instability, earnings dynamics, tenure, temporary contracts, minimum distance estimation
    JEL: C23 J21 J31
    Date: 2006–12
  5. By: Emilia Del Bono (ISER, University of Essex and IZA Bonn); Daniela Vuri (University of Rome Tor Vergata, CHILD, CESifo and IZA Bonn)
    Abstract: This paper explores newly available Italian data derived from a 1:90 sample of social security administrative records (INPS) to investigate gender differences in pay during the initial stages of a worker’s career. We find that a significant and growing pay differential between men and women emerges during the first years of labour market experience, and that gender differences are highest when workers move across firms. In particular, we find that the most significant gender gap in log wage growth is associated with job moves which take place within a very short period of time, involve positive wage growth and result in the highest salary increases. Moreover, this gender mobility penalty occurs mainly when workers move to larger firms and we show that this is most likely explained by the fact that women value more than men some of the characteristics of these jobs or employers. Overall our results suggest that job and firm characteristics, rather than differences in worker characteristics or across-the-board discrimination, are the most important determinants of the gender wage growth differential in the Italian labour market.
    Keywords: job mobility, gender gap, wage growth, fixed effects panel estimation
    JEL: J16 J31 C23
    Date: 2006–12
  6. By: Peter A. Riach (IZA Bonn (Research Fellow)); Judith Rich (University of Portsmouth and IZA Bonn)
    Abstract: In a field experiment of age discrimination, pairs of men aged twenty-seven and forty-seven, inquired, by email, about employment as waiters in twenty four French towns. The rate of net discrimination found against the older French waiter, corresponds to the highest rates ever recorded anywhere, by written tests, for racial discrimination. Discrimination was higher in Paris than in the rest of France.
    Keywords: age, discrimination, employment, field experiment, hiring
    JEL: J71 C93
    Date: 2006–12
  7. By: Daniel Kanda
    Abstract: This paper develops and estimates a model of the trade balance of Bosnia and Herzegovina. Credit flows and the fiscal stance are found to play a significant role in determining the trade balance. On this basis the paper discusses the trade-offs between monetary and fiscal policy settings needed to achieve a clear downward path for the large current account deficit of Bosnia and Herzegovina.
    Keywords: Fiscal , monetary , credit , trade balance ,
    Date: 2006–12–18
  8. By: Keiko Honjo; Ben Hunt
    Abstract: This paper provides some empirical estimates on how tightly is it feasible to control inflation in a very small open economy such as Iceland. Estimated macroeconomic models of Canada, Iceland, New Zealand, the United Kingdom, and the United States are used to derive efficient monetary policy frontiers that trace out the locus of the lowest combinations of inflation and output variability that are achievable under a range of alternative monetary policy rules. These frontiers illustrate that inflation stabilization is more challenging in Iceland than in other industrial countries primarily because of the relative magnitudes of the economic shocks.
    Keywords: Efficient policy frontier , monetary policy rules , inflation-output variability tradeoff , policy coordination , Inflation , Iceland , Monetary policy , Economic stabilization , Economic models ,
    Date: 2006–11–28
  9. By: Anzelika Zaiceva (IZA Bonn)
    Abstract: This paper investigates the causal effect of geographic mobility on income. The returns to German East-West migration and commuting are estimated, exploiting the structure of centrally planned economies and a "natural experiment" of German reunification for identification. I find that the migration premium is insignificantly different from zero, the returns for commuters equal to 40 per cent, and the local average treatment effects for compliers are insignificant. In addition, estimation results suggest no positive self-selection on unobservables for migrants, and some evidence of positive self-selection on unobservables for commuters.
    Keywords: returns to migration, causality, treatment effects
    JEL: F22 J61 R23
    Date: 2006–12
  10. By: Eva Gutierrez
    Abstract: This paper reviews a broad set of indicators of competitiveness in the Macedonian economy and estimates the equilibrium real effective exchange rate (REER) using different methodologies. Although the REER is broadly in equilibrium at present, structural factors are found to hamper competitiveness. While a more competitive exchange rate might improve short-term export performance, sustained improvements require enhanced productivity and resource reallocation to more dynamic sectors, which depends on reforms to improve the business environment.
    Keywords: Competitiveness , equilibrium exchange rate , Export performance , Macedonia, FYR , Competition , Exchange rates ,
    Date: 2006–11–28

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