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on European Economics |
| By: | Marcel Erlinghagen |
| Abstract: | Job insecurity causes far reaching negative outcomes. The fear of job loss damages the health of employees and reduces the productivity of firms. Thus, job insecurity should result in increasing social costs. Analyzing representative data from 17 European countries, this paper investigates self perceived job insecurity. Our multi level analysis reveals significant cross-country differences in individuals' perception of job insecurity. This finding is not only driven by social-structural or institutional differences, but job insecurity is also shown to be affected by cultural characteristics. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp688&r=eec |
| By: | Sergio de Nardis (ISAE - Institute for Studies and Economic Analyses); Roberta De Santis (ISAE - Institute for Studies and Economic Analyses); Claudio Vicarelli (ISAE - Institute for Studies and Economic Analyses) |
| Abstract: | This paper provides an update of de Nardis and Vicarelli (2003) estimates of the euro effect on trade integration of EMU economies, taking into account aggregate bilateral exports of 23 OECD countries for the sample period 1988-2003. In this paper we utilize the dynamic panel data estimator proposed by Blundell and Bond (1998) and introduce controls for heterogeneity. The results of our dynamic specification of the gravity equation lead to an estimate of the intra-Eurozone pro-trade effect, following the adoption of the single currency, as high as around 4%. This finding, slightly lower than our previous work results, is in line with very recent empirical literature using dynamic specification of gravity equation. It is also consistent with the already tight trade links characterizing the economies that embraced the euro and with the possibility that the trade impact involved the introduction of new goods rather than the expansion, due to lower transaction costs, of the incumbent products. |
| Keywords: | International Trade, Currency Unions, Gravity models, Dynamic Panel Data |
| JEL: | F14 F15 F4 F33 C33 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:isa:wpaper:80&r=eec |
| By: | Andrea Bassanini (OECD, CEPN, University of Paris 13 and ERMES, University of Paris 2); Giorgio Brunello (University of Padova, KIER Kyoto, CESifo and IZA) |
| Abstract: | We develop a theoretical and empirical analysis of the impact of barriers to entry on workplace training. Our theoretical model yields ambiguous predictions on the sign of this relationship. On the one hand, given the number of firms, a deregulation reduces profits per unit of output, and thereby reduces training. On the other hand, the number of firms increases, and so does the output gain from training, which facilitates the investment in training. Our numerical simulation shows that for reasonable values of the parameters a negative relationship prevails. We use repeated cross section data from the European Labour Force Survey to investigate empirically the relationship between product market regulation and training incidence in a sample of 15 European countries and 13 industrial sectors, which we follow for about 7 years. Our empirical results are unambiguous and show that an increase in product market deregulation generates a sizeable increase in training incidence. |
| Keywords: | training, product market competition, Europe |
| JEL: | J24 L11 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2746&r=eec |
| By: | SAINT-PAUL, Gilles |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:6754&r=eec |
| By: | BERTRAND, Olivier; IVALDI, Marc |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:1275&r=eec |
| By: | Balázs Égert; Jesus Crespo-Cuaresma; Thomas Reininger |
| Abstract: | In this study, we seek to better understand the interest rate pass-through in five Central and Eastern European countries – the Czech Republic, Hungary, Poland, Slovakia and Slovenia, the CEE-5. Our pass-through estimates for several retail rates are generally lower than those reported in the literature, given the absence of cointegration between policy rates and long- or even short-term market rates. In addition, the pass-through has been declining over time in the CEE-5, and we argue that it is likely to decrease further in the future. Finally, the pass-through appears similar in the CEE-5 than in Spain and is higher than in core euro area countries. Hence, euro adoption by the CEE-5 would not further increase heterogeneity within the euro area with regard to the interest rate passthrough. However, substantially more research is needed to establish commonalities and differences between the CEE-5 and the euro area with respect to the reaction of prices and output to monetary policy action. |
| Keywords: | interest rate pass-through, monetary transmission mechanism, transition economies, Central and Eastern Europe, Austria, Germany, Spain. |
| JEL: | E43 E50 E52 C22 G21 O52 |
| Date: | 2006–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-851&r=eec |
| By: | Fabrizio Coricelli; Balázs Égert; Ronald MacDonald |
| Abstract: | This paper surveys recent advances in empirical studies of the monetary transmission mechanism (MTM), with special attention to Central and Eastern Europe. In particular, while laying out the functioning of the separate channels in the MTM, it explores possible interrelations between different channels and their impact on prices and the real economy. The empirical ndings for Central and Eastern Europe are then briey compared with results for industrialized countries, especially for the euro area. We highlight potential pitfalls in the literature and assess the relative importance, and potential development, of the different channels, emphasizing the relevant asymmetries between Central and Eastern European countries and the euro area. |
| Keywords: | Monetary transmission, transition, Central and Eastern Europe, credit channel, interest rate channel, interest-rate pass-through, exchange rate channel, exchange rate pass-through, asset price channel |
| JEL: | E31 E51 E58 F31 O11 P20 |
| Date: | 2006–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-850&r=eec |
| By: | Jan Filácek; Roman Horváth; Michal Skorepa |
| Abstract: | This article analyzes the main issues for monetary policy in new EU member states before their euro adoption. These are typically rooted in the challenge of fulfilling concurrently of the Maastricht inflation and exchange rate criterion, as these countries are experiencing equilibrium real exchange rate appreciation. In this article we first distinguish between the wording, written interpretation and “revealed” interpretation of the inflation and exchange rate criteria. Then we discuss the options for monetary policy in the period of fulfilment of these criteria in terms of its transparency, its continuity with the previous monetary policy regime, the choice of central parity for the ERM II, the setting of the fluctuation bandwidth, the probability of fulfilment of both criteria and the impact on economic stability. |
| Keywords: | monetary policy, euro adoption, ERM II, EU |
| JEL: | E58 E52 F42 F33 |
| Date: | 2006–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-853&r=eec |
| By: | Balázs Égert; Evžen Kocenda |
| Abstract: | We study comovements between three developed (France, Germany, the United Kingdom) and three emerging (the Czech Republic, Hungary and Poland) European stock markets. The novelty of our paper is that we apply the Dynamic Conditional Correlation GARCH models proposed by Engle (2002) to five-minute tick intraday stock price data for the period from June 2003 to January 2006. We find a strong correlation between the German and French markets and also between these two markets and the UK stock market. By contrast, very little systematic positive correlation can be detected between the Western European stock markets and the three stock markets of Central and Eastern Europe, as well as within the latter group. |
| Keywords: | stock markets, intraday data, comovements, bi-variate GARCH, European integration |
| JEL: | F37 G15 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2007-861&r=eec |
| By: | José Alberto Molina (University of Zaragoza and IZA); María Navarro (FEDEA, Madrid); Ian Walker (University of Warwick, Princeton University and IZA) |
| Abstract: | We study how fathers and mothers income satisfaction correlates with the income satisfaction of their sons and daughters, as well as with other economic and sociodemographic variables. We estimate these correlations using data on parents and children in households surveyed in the eight waves of the European Community Household Panel- ECHP (1994-2001) for 14 EU countries. To assess the robustness of these correlations, we use siblings in the Panel and we investigate the sensitivity of the estimates with the inclusion of other control variables. We also adopt a multi-level random effects ordered probit specification, that uses step-parents in the data, to allow us to distinguish nature effects from nurture effects. Our main results show evidence of strong altruism effects, but these estimated effects differ across countries, differ between mothers and fathers, and differ between sons and daughters. |
| Keywords: | parents and children, income satisfaction, interdependent marginal utilities, altruism, Europe |
| JEL: | D13 D60 D64 C33 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2734&r=eec |
| By: | Johannes Geyer (DIW Berlin); Viktor Steiner (Free University Berlin, DIW Berlin and IZA) |
| Abstract: | The employment behavior of mothers is strongly influenced by labor market regulations and certain institutional arrangements, which both vary greatly across European countries. Using the European Community Household Panel (ECHP) 1994-2001 for Denmark, Germany, Italy and the United Kingdom, which represent four distinct ‘institutional regimes’, we estimate the short-run and long-term effects of childbirth on married women’s employment and working hours. Estimation results show that these effects vary across the four countries in accordance with prevailing institutional regulations. |
| Keywords: | employment and working hours, labor supply, childbirth, European Community Household Panel, panel data models |
| JEL: | J22 J13 D12 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2693&r=eec |
| By: | Manolis Syllignakis; Georgios Kouretas |
| Abstract: | This paper examines the short- and long-term relationships between seven Central Eastern European (CEE) stock markets and two developed stock markets, namely the German market and the US market. Application of the Gonzalo and Granger (1995) methodology indicates that the examined stock markets are partially integrated, while there is also evidence that the five stock markets in the central Europe (Czech Republic, Hungary, Poland, Slovenia and Slovakia) together with the German and the US stock markets have a significant common permanent component, which drives this system of stock exchanges in the long run. Contrary, the Estonian and Romania markets are segmented. A DCC model indicates that the short – term interdependencies between the CEE stock markets and the developed stock markets have strengthened during the Asian and Russian crises but since then (except for the Czech Republic, Hungary, Poland) they returned almost to their initial (relatively low) levels. Moreover, significantly increased volatility is observed during the Russian crisis period for all the markets under enquiry. |
| Keywords: | Central Eastern European equity markets, Market Integration, Common trends, DCC, SWARCH-L. |
| JEL: | G15 C12 C32 F36 |
| Date: | 2006–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-832&r=eec |
| By: | Arnaud Dupuy (ROA, Maastricht University and IZA); Daniel Fernández-Kranz (Saint Louis University, Madrid) |
| Abstract: | Using microdata for 35 countries over the period 1985-1994-2002 we find that labor market institutions traditionally associated to more compressed wage structures are associated to a higher family gap. Our results indicate that these policies reduce the price effect of having children but aggravate the human capital loss due to motherhood. We also find evidence that policies that help women continue in the same job after childbirth decrease the family gap. Of all the countries we study, mothers in Southern Europe suffer the biggest family gap and our analysis indicates that this is due to the bad combination of labor market policies in these countries. Our results are robust to specification changes and indicate that the main reason mothers lag behind other women in terms of earnings is the loss of accumulated job market experience caused by career breaks around childbirth. |
| Keywords: | family gap, institutions |
| JEL: | J31 J60 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2719&r=eec |
| By: | David Dorn (University of St. Gallen); Alfonso Sousa-Poza (University of Hohenheim, University of St. Gallen and IZA) |
| Abstract: | Recent literature makes a distinction between 'voluntary' and 'involuntary' early retirement, where 'involuntary' early retirement results from employment constraints rather than from a preference for leisure relative to work. This paper analyzes 'voluntary' and 'involuntary' early retirement based on international microdata covering 19 industrialized countries. The results show that 'involuntary' early retirement is particularly widespread in Continental Europe. Countries facing economic recessions and having strict employment protection legislation have higher shares of 'involuntary' retirements among early retirees. Generous early retirement provisions of the social security system do not only make 'voluntary' early retirement more attractive for individuals, but also induce firms to push more employees into early retirement. |
| Keywords: | early retirement, involuntary early retirement, social security, pensions |
| JEL: | J14 J21 J22 J26 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2714&r=eec |
| By: | Balázs Égert |
| Abstract: | This paper analyses the effectiveness of foreign exchange interventions in Croatia, the Czech Republic, Hungary, Romania, Slovakia and Turkey using the event study approach. Interventions are found to be effective only in the short run when they ease appreciation pressures. Central bank communication and interest rate steps considerably enhance their effectiveness. The observed effect of interventions on the exchange rate corresponds to the declared objectives of the central banks of Croatia, the Czech Republic, Hungary and perhaps also Romania, whereas this is only partially true for Slovakia and Turkey. Finally, interventions are mostly sterilized in all countries except Croatia. Interventions are not much more effective in Croatia than in the other countries studied. This suggests that unsterilized interventions do not automatically inuence the exchange rate. |
| Keywords: | central bank intervention, communication, foreign exchange intervention, verbal intervention |
| JEL: | F31 |
| Date: | 2006–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-846&r=eec |
| By: | Michael Lechner (SIAW, University of St. Gallen, CEPR, IAB, ZEW, PSI and IZA); Stephan Wiehler (SIAW, University of St. Gallen) |
| Abstract: | This paper investigates active labor market programs in Austria with a special emphasis on male-female effect heterogeneity. On average, we find only small effects, if any, for most of the programs. A crucial advantage of the large and informative administrative data we use is that it provides records about pregnancies and times of parental leave, in addition to the information that can typically be found in European administrative data sources used for evaluating active labor market policies. We show that these variables play a key role in removing selection bias and defining outcome variables which may explain why other similar studies found such programs to be more effective for women than for men. In particular for younger women a key effect of the programs is to reduce or postpone pregnancies and to increase the attachment to the labor force. After taking into account gender specific selection effects and the effects of the programs on pregnancies, gender differences (almost) disappear. |
| Keywords: | active labor market policy, matching estimation, program evaluation, panel data |
| JEL: | J68 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2740&r=eec |
| By: | Dachs, Bernhard (Austrian Research Centers, Vienna, Austria); Ebersberger, Bernd (Management Center Innsbruck, Innsbruck, Austria); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper compares the innovative performance of foreign-owned and domestically owned enterprises in five European countries. We look at innovation inputs, outputs, and examine how strong foreign-owned enterprises are embedded in the innovations systems of their host countries. We find that foreign ownership causes no differences in innovation input, but yields a higher innovation output and higher labour productivity. In four of the five countries, affiliates of foreign multinationals show a similar or even a higher propensity to co-operate with domestic partners than domestically owned enterprises |
| Keywords: | Austria; Denmark; Finland; Norway; Sweden; Innovation; Multinational Enterprises; Foreign-owned Enterprises; CIS |
| JEL: | F23 O31 |
| Date: | 2007–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0087&r=eec |
| By: | Balázs Vonnák (Magyar Nemzeti Bank) |
| Abstract: | This paper attempts to aggregate and summarise fresh results concerning the monetary transmission mechanism in Hungary. Within a research project at the MNB nine studies have been published investigating the channels through which Hungarian monetary policy affects the economy. We create a framework for synthesising particular results based on Mishkin’s (1996) classification. We analyse how aggregate demand is affected through those channels. Our conclusion is that during the past ten years monetary policy did exert a measurable influence on real activity and prices. The dominance of the exchange rate channel explains why prices respond faster and output responds more mildly than in closed developed economies like the U.S. or the euro area. We expect that after adopting the euro the absence of exchange rate will be compensated by the fact that the interest rate channel will work through foreign demand as well. Therefore, no significant asymmetries can be expected inside the euro area in terms of monetary transmission. |
| Keywords: | monetary transmission mechanism, monetary policy shock, exchange rate channel. |
| JEL: | E44 E52 E58 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2007/3&r=eec |
| By: | Roman Horváth |
| Abstract: | This paper examines (real-time) equilibrium interest rates in the Czech Republic in 2001:1- 2005:12 estimating various specifications of simple Taylor-type monetary policy rules. First, we estimate it using GMM. Second, we apply structural time-varying coefficient model with endogenous regressors to evaluate fluctuations of equilibrium interest rate over time. The results suggest that there is substantial interest rate smoothing and central bank primarily responds to inflation (forecast) developments. The estimated parameters seem to sustain the equilibrium determinacy. We find that the equilibrium interest rates gradually decreased over sample period to the levels comparable to those of in the euro area reflecting capital accumulation, smaller risk premium and successful disinflation in the Czech economy. |
| Keywords: | equilibrium interest rates, Taylor rule, augmented Kalman filter |
| JEL: | E43 E52 E58 |
| Date: | 2006–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-848&r=eec |
| By: | Roman Horváth |
| Abstract: | The paper examines a financial accelerator mechanism in analyzing determinants of corporate interest rates. Using a panel of the financial statements of 448 Czech firms from 1996–2002, we find that balance sheet indicators matter for the interest rates paid by firms. Market access is particularly important in this regard. The strength of corporate balance sheets seem to vary with firm size. There is also evidence that monetary policy has a stronger effect on smaller than on larger firms. On the other hand, we find no asymmetry in the monetary policy effects over the business cycle. |
| Keywords: | balance sheet channel, financial accelerator, interest rates, monetary policy transmission |
| JEL: | G11 G32 |
| Date: | 2006–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2006-847&r=eec |
| By: | José M. Labeaga (FEDEA and UNED, Madrid); José Alberto Molina (University of Zaragoza and IZA); María Navarro (FEDEA, Madrid) |
| Abstract: | The first objective of our paper is to identify the determinants of income satisfaction in Spain, with one of these being relative deprivation, and the second is to measure this relative deprivation, in both monetary and satisfaction terms. To that end, we use data from the eight waves of the Spanish section of the European Community Household Panel (1994-2001). With respect to the first objective, we estimate models for categorical variables in order to test whether subjective satisfaction measures depend on relative deprivation, as well as on other determinants. As for the second objective, we first calculate inequality and polarization indices and then we specifically analyze whether the Spanish tax-benefit system helped to reduce individual deprivation. Our results suggest that the more unequal the income distribution is in a group, the less income satisfied is the individual. Moreover, being unemployed is one of the main determinants of deprivation, although public transfers help to reduce individual deprivation. When we observe the amount of public transfers received, deprivation is reduced up to a certain threshold, beyond which it continues to decline, but at a lower rate. |
| Keywords: | income satisfaction, deprivation, inequality, polarization, Spain |
| JEL: | D31 D63 I31 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2702&r=eec |
| By: | Stefan Bach (DIW Berlin); Giacomo Corneo (Free University of Berlin and IZA); Viktor Steiner (DIW Berlin, Free University of Berlin and IZA) |
| Abstract: | We analyze the distribution and concentration of market incomes in Germany in the period 1992 to 2001 on the basis of an integrated data set of individual tax returns and the German Socio-Economic Panel. The unique feature of this integrated data set is that it encompasses the whole spectrum of the population, from the very poor to the very rich. We find a modest increase in overall inequality of market incomes as measured by the Gini coefficient. However, we also document a substantial drop of median income and a remarkable income growth at the top 0.1% of the income distribution. The increase of income inequality was stronger in East Germany than in West Germany. In both regions, the income concentration process strongly benefited the economic elite, which we define as the richest 0.001% persons in the population. While the elite mainly obtains its income from business and capital, the income share that it receives in form of wage income is increasing. |
| Keywords: | income distribution, top incomes, inequality |
| JEL: | D31 D33 H24 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2723&r=eec |
| By: | Peter Tulip |
| Abstract: | This paper discusses recent developments and policy issues relating to financial markets in Iceland. Overall, the sector is thriving, both relative to history and to conditions in other countries. This bodes well not only for those directly involved in the industry but for the country as a whole, as financial development is an important source of economic growth. Recently concerns have been expressed about the stability of the financial system; however the guarded assessment... <P>La libéralisation financière en Islande <BR>Ce document examine l’évolution récente et les questions de fond concernant les marchés financiers islandais. Globalement, ce secteur est florissant, tant au regard du passé que par rapport à d’autres pays. Cela est de bon augure non seulement pour les acteurs directement impliqués dans le secteur, mais aussi pour le pays dans son ensemble, car le développement financier est une source... |
| Keywords: | financial markets, marchés financiers, libéralisation, liberalisation, Iceland, Islande |
| JEL: | G20 G28 |
| Date: | 2007–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:549-en&r=eec |
| By: | Michael Fritsch (University of Jena, School of Busniess and Economics, Max Planck Institute of Economics Jena, and Institute for Economic Research (DIW Berlin)) |
| Abstract: | This paper investigates the geography and the effect of people in creative occupation in Germany. The population share of the Creative Class as well as of bohemians and artists is relatively high in larger cities, but smaller places and rural regions may also have a considerable proportion of people with a creative job. While ethnical and cultural diversity and a high level of public supply in health care and education can explain the distribution of creative people, employment opportunities seem to play only a minor role. There is a positive statistical relationship between the share of people in creative occupations, the level of new business formation and the innovativeness of regions. A high share of creative occupations seems to be conducive to regional growth; however, the exact nature of this relationship is still unclear. |
| Keywords: | Creativity, innovation, entrepreneurship, regional development |
| JEL: | O31 O18 R11 |
| Date: | 2007–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-001&r=eec |
| By: | Claudia Burlando (DIEM - Dipartimento di Economia e Metodi quantitativi - [Università degli studi di Genova]); Laurent Guihéry (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]) |
| Abstract: | Depuis les années 70, le transport régional ferroviaire de voyageurs connaît un recul de sa part modale face au transport individuel. Pour enrayer ce déclin, une réforme de fond est aujourd'hui engagée en France comme en Italie dans le sens d'une régionalisation du transport ferroviaire régional de voyageurs. Cette réforme se caractérise dans les deux pays par un transfert de compétence vers l'échelon régional qui devient autorité organisatrice pour les services de transport ferroviaire régional de voyageurs et par la mise en place de contrat de service entre l'opérateur, qui reste en France uniquement la SNCF, et la région. A cela s'ajoute dans les deux pays une négociation entre l'État central et la région sur le montant financier des subventions transférées pour les missions de transport ferroviaire régional. L'article détaille l'avancement de la réforme dans les deux pays et pose la question des limites et freins à cette réforme d'envergure. La France suivra-t-elle la voie de l'Italie qui a ouvert l'accès aux réseaux régionaux à de nouveaux entrants par la mise en œuvre de procédures d'appels d'offres et de franchises régionales ? |
| Keywords: | régionalisation ; transport ferroviaire régional de voyageurs ; réforme ferroviaire ; autorité organisatrice ; expérience française ; expérience italienne |
| Date: | 2007–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00069345_v1&r=eec |