|
on European Economics |
| By: | Michiel van Leuvensteijn (Netherlands Bureau for Economic Policy Analysis); Jacob A. Bikker (De Nederlandsche Bank); Adrian van Rixtel (Banco de España); Christoffer Kok-Sørensen (European Central Bank) |
| Abstract: | This paper is the first that applies a new measure of competition, the Boone indicator, to the banking industry. This approach is able to measure competition of bank market segments, such as the loan market, whereas many well-known measures of competition can consider the entire banking market only. A caveat of the Boone-indicator may be that it assumes that banks generally pass on at least part of their efficiency gains to their clients. Like most other model-based measures, this approach ignores differences in bank product quality and design, as well as the attractiveness of innovations. We measure competition on the lending markets in the five major euro countries as well as, for comparison, the UK, the US and Japan. Bearing the mentioned caveats in mind, our findings indicate that over the period 1994-2004 the US had the most competitive loan market, whereas overall loan markets in Germany and Spain were among the best competitive in the EU. The Netherlands occupied a more intermediate position, whereas in Italy competition declined significantly over time. The French, Japanese and UK loan markets were generally less competitive. Turning to competition among specific types of banks, commercial banks tend to be more competitive, particularly in Germany and the US, than savings and cooperative banks. |
| Keywords: | banking industry, competition, loan markets, marginal costs, market shares |
| JEL: | D4 G21 L1 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0736&r=eec |
| By: | Riccardo Rovelli (University of Bologna, DARRT and IZA); Randolph Bruno (University of Bologna, DARRT and IZA) |
| Abstract: | We conduct a comparative analysis of Labor Market Policies and outcomes for the EU member states, for the period 2000-2005. We document the main differences in Labor Market Policies across EU members, including new member states after 2004. We focus on indicators of policy generosity (expenditures relative to GDP) and relate these and other policy indicators to indicators of labor market outcomes and performance. Our results show that, on a cross-country basis, higher rates of employment are in general associated with: (i) higher expenditures on labor market policies, especially on active policies; (ii) a lower degree of rigidity in labor market institutions and in product market regulation. |
| Keywords: | labor market policies, labor market outcomes, European social models |
| JEL: | J08 J38 J68 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3161&r=eec |
| By: | Masson, Paul R. |
| Abstract: | More than eight years after the introduction of the euro, impacts on developing countries have been relatively modest. Overall, the euro has become much more important in debt issuance than in official foreign exchange reserve holdings. The former has benefited from the creation of a large set of investors for which the euro is the home currency, while demand for euro reserves has been held back by the dominance of the dollar as a vehicle and intervention currency, and the greater liquidity of the market for US treasury securities. Fears of further dollar decline may fuel some shifts out of dollars into euros, however, with the potential for a period of financial instability. |
| Keywords: | Debt Markets,Emerging Markets,Fiscal & Monetary Policy,Currencies and Exchange Rates, |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4381&r=eec |
| By: | Barrios, Salvador; Burgelman, Jean-Claude |
| Abstract: | The renewed Lisbon strategy puts special emphasis on the potential role that Information and Communication Technologies can play in meeting the challenges of boosting growth, competitiveness and cohesion throughout the EU. There is also a general understanding among policy makers that investment of this kind and its related economic benefits can only materialize if labour, capital, product and service markets are flexible enough to facilitate ICT investment and the re-organisation of economic activities. This paper provides evidence of the influence of market rigidities on the propensity to invest in ICT and on the economic return of ICT investment in a number of EU countries, and in the US and Japan. We provide evidence that indicates that market rigidities deter ICT investment and lower the impact of ICT on GDP growth by considering a number of indicators reflecting barriers to business creation and the degree of market regulation in labour and capital markets. These results are invariant, even when other potential determinants of ICT investments and ICT contribution to GDP growth such as the degree of specialisation in ICT-producing industries, past ICT investment, business cycles conditions and a measure of trade openness are controlled for. The paper provides a number of policy implications, most notably, regarding the role played by structural reforms in promoting both ICT adoption and setting the best framework conditions for ICT impact on GDP growth. While the renewed EU Lisbon strategy of economic reforms is badly needed to increase EU growth potential, we show here that this strategy is also needed to promote technological change in the EU economy. |
| Keywords: | Information and Communication Technologies; ICT; Growth; European Union; Lisbon Strategy |
| JEL: | E22 O33 E01 |
| Date: | 2007–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5838&r=eec |
| By: | GAYLE ALLARD (Instituto de Empresa); CRISTINA SIMON (Instituto de Empresa) |
| Abstract: | This study explores the challenge of capturing talent from both the political and the management level in Western Europe. It begins by identifying the special characteristics of Generation Y: those born since 1980 and recently joining national labor forces. It then evaluates the rigidity of labor markets in the European countries, dividing them into most and least regulated and exploring some of the labor-market characteristics that accompany those extremes. Finally, it identifies the employment aspirations of Generation Y, and contrasts them with the realities of young workers on national job markets. |
| Keywords: | Human Resources, Human talent |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp07-15&r=eec |
| By: | Tarja Viitanen (Department of Economics, The University of Sheffield) |
| Keywords: | informal care, formal care, ECHP, attrition bias |
| JEL: | J14 J2 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007010&r=eec |
| By: | Eskil Wadensjö (SOFI, Stockholm University, SULCIS and IZA) |
| Abstract: | Sweden did not apply any transitional rules for migrants coming from the ten new European Union member states in May 2004. The migration to Sweden from these countries also increased, especially from Poland and the Baltic states, even if not to the same extent as the immigration to Ireland and the UK (two countries with transitory rules of minor importance). The composition of the migrants changed. While earlier many more women than men arrived, now the gender composition is much more even. In this paper the labour market situation is studied for people living in Sweden at the end of 2005 who were either born in one of new member states or born in Sweden. The immigrants are represented in all sectors of the economy but overrepresented in some sectors. Their wages controlling for education are somewhat lower than those for natives. The labour market situation is rather good for the new immigrants and they are not overrepresented in different income transfer programs. The knowledge of these conditions may explain that Sweden abstained from introducing transitional rules also when Bulgaria and Romania became members of the European Union in January 2007. |
| Keywords: | international migration, migration policy, common labour market |
| JEL: | J61 F22 O15 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3190&r=eec |
| By: | van der Hoek, M. Peter; Radloff, Sarah. E. |
| Abstract: | This paper compares owner-occupied housing tax regimes in the Netherlands and the other countries in the EU-15. The Nether-lands appears to stand apart in two respects. First, in Luxembourg and the Netherlands owner-occupiers have to include an imputed rental income in their taxable income. Second, in the Netherlands, the tax-deductibility of mortgage interest payments is almost unre-stricted. The tax regime of owner-occupied homes increasingly erodes the personal income tax base in the Netherlands, so that higher tax rates are needed to collect a given amount of revenue. However, elimination or reduction of the mortgage interest deduction can only be realized gradually. Due to a lack of data both within the various tax regimes and across time periods, a comprehensive multivariate time-series comparison among the various tax regimes in the EU-15 is not pos-sible. Thus, the statistical analysis is limited to bivariate compari-sons. |
| Keywords: | owner-occupied housing; mortgage interest deduction; imputed rental income |
| JEL: | H2 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5876&r=eec |
| By: | Leitão, João; Ferreira, João |
| Abstract: | The paper aims to investigate the impact of the liberalization of European Telecommunications Markets, on the Business Ownership Rate, the Employment, the Gross Domestic Product, and the Investment in ICT, in two European countries: Germany and Portugal. For this purpose, a Cointegrated Vector Autoregressive (CVAR) approach is developed, in order to identify the impacts that are originated from the adoption of this kind of public policies. In the case of Germany, a surprising causality relationship is detected, in the sense that Gross Domestic Product precedes decreasing Business Ownership Rates. In the case of Portugal, the Business Ownership Rate pulls for additional investments in ICT. Besides, a creative entrepreneurial destruction is somehow ratified, since the Business Ownership Rate impacts, negatively, on the level of employment. |
| Keywords: | Entrepreneurship, Information and Communication Technologies, Cointegration, Vector Autoregressive Model. |
| JEL: | L96 L51 M13 |
| Date: | 2007–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5728&r=eec |
| By: | Dominique Anxo (Vaxjo University); Lennart Flood (Göteborg University and IZA); Letizia Mencarini (University of Florence); Ariane Pailhé (INED, Paris); Anne Solaz (INED, Paris); Maria Letizia Tanturri (University of Pavia) |
| Abstract: | This article analyses the extent to which changes in household composition over the life course affect the gender division of labour. It identifies and analyses cross-country disparities between France, Italy, Sweden and United States, using most recent data available from the Time Use National Surveys. We focus on gender differences in the allocation of time between market work, domestic work and leisure over the life-cycle. In order to map the lifecycle, we distinguish between nine key cross-country comparable life stages according to age and family structure such as exiting parental home, union formation, parenthood, and retiring from work. By using appropriate regression techniques (Tobit with selection, Tobit and OLS), we show large discrepancies in the gender division of labour at the different life stages. This gender gap exists in all countries at any stage of the life course, but is usually smaller at the two ends of the age distribution, and larger with parenthood. Beyond social norms, the impact of parenthood on time allocation varies across countries, being smaller in those where work-family balance policies are more effective and traditionally wellestablished. |
| Keywords: | time use, gender, life-cycle, paid and unpaid work |
| JEL: | D13 J22 O17 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3193&r=eec |
| By: | Stepán Jurajda (CERGE-EI, CEPR and IZA); Katherine Terrell (University of Michigan, CEPR and IZA) |
| Abstract: | Differences in regional unemployment in post-communist economies are large and persistent. We show that inherited variation in human-capital endowment across the regions of four such economies explains the bulk of regional unemployment variation there and we explore potential explanations for this outcome through related capital and labor mobility patterns. The evidence suggests that regions with high inherited skill endowments attract skilled workers as well as FDI. This mobility pattern, which helps explain the lack of convergence in regional unemployment rates, is consistent with the presence of complementarities in skill and capital. Nevertheless, we find no supporting evidence of human capital wage spillovers implied by the complementarities story. Unemployment of the least-skilled workers appears lower in areas with a higher share of college-educated labor and future research is needed to see if this finding as well as the observed migration pattern arise from different adjustments to regional shocks by education level brought about in part by Central European labor-market institutions, such as guaranteed welfare income raising effective minimum wages. |
| Keywords: | unemployment, human capital, regional labor markets, transition economies, labor mobility, complementarities, spillovers, Czech Republic, Hungary, Romania, Ukraine |
| JEL: | E24 J0 J61 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3176&r=eec |
| By: | Tanasie, Anca; Fratostiteanu , Cosmin |
| Abstract: | For most Eastern European countries that experienced former communist regimes, the EU accession and the use of European symbols – such as the EURO currency – represents both the integration into a strong and efficient economic system, but also the guarantee of a system based on real democratic values. Romania has been the first of this category of states, that has expressed the real and strong attachment for the European Union, its symbols and values. This paper wishes to analyze the key elements concerning Romania’s accession to the EMU and finally the EURO adoption: Romania’s actual macroeconomic situation, the situation of the real and nominal convergence to the accession criteria – in a fuzzy clustering approach in order to determine optimum sequencing of the Euro adoption and the envisaged official calendar for the EURO adoption. |
| Keywords: | Romania; Euro; monetary convergence; fuzzy clustering |
| JEL: | F47 F33 F36 |
| Date: | 2007–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5832&r=eec |
| By: | Arjan Lejour; Andrea Mervar; Gerard Verweij |
| Abstract: | We explore the economic implications of the possible accession of Croatia to the European Union. We focus on two main changes associated with the EU-membership: accession to the internal European Market and institutional reforms in Croatia triggered by the EU-membership. consumption per capita in Croatia is estimated to rise by about 2.5% as a result of accession to the internal market. In particular the textile and wearing apparel sectors expand. If Croatia succeeds in reforming its domestic institutions in response to the EU-membership, income levels in Croatia could increase even more. In particular, tentative estimates suggest that GDP per capita in Croatia could even rise by additional 8%. Overall, the macroeconomic implications for the existing EU countries are negligible. |
| Keywords: | Regional economic integration; General equilibrium model; Gravity equations; Institutional reform; Croatia |
| JEL: | F13 F15 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:154&r=eec |
| By: | Ruud de Mooij |
| Abstract: | European governments aim to raise labour supply, cut unemployment and, at the same time, maintain social cohesion. Yet, economists have stressed the trade-off between these objectives. This paper reviews the key policy insights from optimal tax theory to identify options for reform in the tax-benefit system that can potentially improve the equity-efficiency trade-off. Using a comprehensive applied general equilibrium model, we then explore whether reforms along these lines in the actual Dutch tax-benefit system will raise employment without sacrificing equality. The analysis reveals that selective tax relief for elastic secondary earners and low-skilled workers have this potential. A flat income tax structure - possibly combined with a negative income tax - worsens the equity-efficiency trade-off. |
| Keywords: | Tax-benefit system; Labour supply; Unemployment; the Netherlands; Applied general equilibrium |
| JEL: | D31 D58 H24 J22 J68 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:88&r=eec |
| By: | Donata Bessey (Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: | This paper presents first empirical evidence on international student migration to Germany. I use a novel approach that analyzes student mobility using an augmented gravity equation and find evidence of strong network effects and of the importance of distance - results familiar from the empirical migration literature. However, the importance of disposable income in the home country does not seem to be too big for students, while the fact of being a politically unfree country decreases migration flows significantly. I also provide extensive sensitivity checks and estimates using both the usual log-linearized and a multiplicative specification. The results are quite stable. |
| Keywords: | Globalization of higher education, international migration, gravity equation |
| JEL: | F I |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0006&r=eec |
| By: | Clemens Fuest (CPE, University of Cologne and IZA); Andreas Peichl (CPE, University of Cologne); Thilo Schaefer (CPE, University of Cologne) |
| Abstract: | The success of the flat rate tax in Eastern Europe suggests that this concept could also be a model for the welfare states of Western Europe. The present paper uses a simulation model to analyse the effects of revenue neutral flat rate tax reforms on equity and efficiency for the case of Germany. We find that a flat rate tax with a low tax rate and a low basic allowance yields positive static welfare effects amounting to approximately 1.8 per cent of income tax revenue but increases income inequality. The increase in income inequality can be avoided by combining a higher tax rate with a higher basic allowance. But in this case the efficiency gains vanish. We conclude that, due to their limited efficiency effects and their problematic distributional impact, flat tax reforms are unlikely to spill over to the welfare states of Western Europe. |
| Keywords: | flat tax reform, equity, efficiency, distribution, welfare |
| JEL: | D31 D60 H20 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3142&r=eec |
| By: | Ronny Freier (Stockholm School of Economics and DIW Berlin); Viktor Steiner (Free University Berlin, DIW Berlin and IZA) |
| Abstract: | 'Marginal employment', i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a threeyears' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany. |
| Keywords: | marginal employment, social security contributions, wage subsidies, labour market policy, evaluation of treatment effect |
| JEL: | J23 J64 H43 C35 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3175&r=eec |
| By: | Martin Kahanec (IZA); Mehmet Serkan Tosun (University of Nevada-Reno) |
| Abstract: | This paper examines resident foreigners’ interest in German citizenship. The study focuses on the roles played by attitudes towards foreigners, political interest of foreigners, intergenerational conflict between natives and foreigners and among foreigners themselves, and regional differences in public finances. To address our research questions, we use a unique dataset from a survey of foreign residents in the German States provided by the Central Archive for Empirical Social Science Research of the University of Cologne. We find that some of the significant negative factors that affect citizenship interest are negative attitudes towards foreigners and generational conflict within foreigner families. On the other hand, interest in political participation, German schooling, home ownership, being born in Germany and being a citizen of non-EU country are important positive factors. Negative experience of foreigners in terms of hostile attitudes, lack of voting rights, or uncertainty of the possibility to stay in Germany mainly discourage foreign residents who actively participate in the labor market, have more years of schooling, and are younger. |
| Keywords: | immigration, attitudes, citizenship, voting |
| JEL: | F22 J15 J22 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3140&r=eec |
| By: | Joanne Lindley (Department of Economics, The University of Sheffield) |
| Keywords: | Education; over-education, earnings, immigrants, ethnic minorities |
| JEL: | J24 J7 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007013&r=eec |
| By: | Pauna, Catalin; De Ro sa, Donato; Fay, Marianne |
| Abstract: | Less restrictive product market policies are crucial in promoting convergence to higher levels of GDP per capita. This paper benchmarks product market policies in Romania to those of OECD countries by estimating OECD indicators of Product Market Regulation (PMR). The PMR indicators allow a comprehensive mapping of policies affecting competition in product markets. Comparison with OECD countries reveals that Romania ' s product market policies are less restrictive of competition than most direct comparators from the region and not far from the OECD average. Nonetheless, this achievement should be interpreted in light of the fact that PMR approach measures officially adopted policies. It does not capture implementation and enforcement, the area where future reform efforts should be directed if less restrictive policies are to have an effective impact on long-term growth prospects. |
| Keywords: | Public Sector Regulation,Transport Economics Policy & Planning,E-Business,Emerging Markets,Markets and Market Access |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4402&r=eec |
| By: | Jessie Bakens; Henri de Groot |
| Abstract: | This paper investigates the impact of the emergence of China and Eastern Europe as increasingly important players on the world market for a small open economy such as the Netherlands. We describe and compare in detail revealed comparative advantages across the different country groups. This allows us to characterize the sectors in the Dutch economy that are most likely to experience enhanced competition in the face of globalization. This analysis is complemented with a gravity analysis that adds a second dimension to the competitive impact, viz. the extent to which markets are localized as opposed to global. We conclude that the overlap in revealed comparative advantages between China and the Netherlands is limited. The major impact of the emergence of China for Dutch trade is that it is likely to foster the position of the Netherlands as a gateway to Europe. Furthermore, we show that the overlap in comparative advantage between China and Eastern Europe is relatively large, implying that competition from Eastern Europe are likely to be stronger than from China. |
| Keywords: | revealed comparative advantage; gravity analysis; China; Eastern Europe; globalization |
| JEL: | F01 F10 N70 O57 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:89&r=eec |
| By: | Ilieva, Stella; De Rosa, Donato; Fay, Marianne |
| Abstract: | Less restrictive product market policies are crucial in promoting convergence to higher levels of GDP per capita. This paper benchmarks product market policies in Bulgaria to those of OECD countries by estimating OECD indicators of Product Market Regulation (PMR). The PMR indicators allow a comprehensive mapping of policies affecting competition in product markets. Comparison with OECD countries reveals that Bulgaria has made substantial progress towards less restrictive product market policies but also emphasizes a number of areas where further reform is needed. These include adoption of a regulatory process based on incentive-based rather than command-and-control approach, reduction of state interference in the decision of state-owned enterprises, further streamlining of business licensing procedures, and improvement in the communication of rules and procedures to affected parties. |
| Keywords: | Transport Economics Policy & Planning,Public Sector Regulation,E-Business,Emerging Markets,Markets and Market Access |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4393&r=eec |
| By: | Peter Haan (DIW Berlin); Michal Myck (DIW Berlin, IFS and IZA) |
| Abstract: | Many aspects of the economic transition which started in 1989 in Poland are by now complete. However, the route Polish governments have so far taken concerning the system of support for low-income families still implies very different poverty alleviation schemes compared to those found in many developed countries. We examine the Polish system of social assistance in a comparative context with Germany and focus on its implications for financial incentives to work. The paper shows the effect of extending the financial support system for poorest families in Poland on labour market incentives. We demonstrate that assumptions concerning sharing of resources among families within households have significant implications on the resulting financial incentives and importantly change the implied consequences of the reforms. This is the case especially for single-adult families. 74% of single adults without children, and 53% of lone parents in Poland live in multi-family households. |
| Keywords: | work incentives, social assistance, within-household sharing, transition |
| JEL: | J21 I38 D13 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3157&r=eec |
| By: | Wouter Vermeulen; Jan Rouwendal |
| Abstract: | In spite of a growing recognition of the importance of supply conditions for the level and volatility of house prices, empirical work on housing supply outside the US is scarce. This paper considers various measures of housing supply in the Netherlands, where real house prices have roughly tripled since 1970. Besides the volume of investment in residential structures and new housing construction in units, we derive time series of structure and location quality in a hedonic analysis. Each of these variables appears to be almost fully inelastic with respect to house prices in at least the short to medium long run. Further analysis of the quality of location index shows that conventional models of competitive land and housing markets cannot account for these findings. However, they may be well explained in terms of the rather extensive body of interventions by the Dutch government. |
| Keywords: | Housing supply; residential investment; housing markets; land use regulation |
| JEL: | E22 R31 R52 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:87&r=eec |
| By: | Aslan Zorlu (AMIDst, AIAS, University of Amsterdam and IZA); Jan Latten (Statistics Netherlands) |
| Abstract: | This paper examines the residential mobility behaviour of migrants and natives in the Netherlands using a rich administrative individual data file. The inclination to move and the choice of destination neighbourhood are estimated, correcting for the selection bias of movers. Subsequently, the role of preferences in the mobility behaviour is implicitly derived from regression estimates. The analysis shows that the percentage of natives in the destination neighbourhood is predicted to be about 18 percentage points lower for nonwestern migrants than for natives. About 65 percent of the differential is explained by their observable characteristics; the remaining part can largely be attributed to preferences and discrimination. No indication is found of the spatial assimilation of second-generation nonwestern migrants. On the other hand, the mobility pattern of the second-generation western migrants is similar to that of natives. |
| Keywords: | migrants, residential segregation |
| JEL: | J1 J6 R3 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3155&r=eec |
| By: | Tarja Viitanen (Department of Economics, The University of Sheffield) |
| Keywords: | Social experimentation, vouchers, childcare use, labour force participation |
| JEL: | H42 J2 J13 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007011&r=eec |
| By: | Rudy Douven; Harm Lieverdink; Marco Ligthart; Ivan Vermeulen |
| Abstract: | This paper proposes a new method for estimating annual price elasticities from market share data of health insurers. In contrast to traditional methods the elasticity is derived from bilateral price elasticities which relate the net share of switchers between two health insurers not only to their premium difference but also to the market share and premium of the higher priced health insurer. Our new method explains the annual variation in the Dutch market share data better than the traditional methods. We find in the Dutch social health insurance for the period 1996- 2005 rather low negative annual price elasticities ranging between -1 and 0. In that period stickiness of insurer choices was high and less than 5% of the population switched annually from health insurer. This result, however, was in sharp contrast with an exceptional high price elasticity of -7 for the year 2006, where after a major health care reform about 18% of the population switched mostly to lower priced health insurers. Besides large media coverage, one important difference with previous years was that many consumers holding an individual contract could switch to a lower priced group contract. |
| Keywords: | health plan choice; premium elasticities; switching costs |
| JEL: | D12 I11 I18 L11 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:90&r=eec |