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on European Economics |
| By: | Luca Onorante (DG Economics, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Diego J. Pedregal (ETSI Industriales, Edificio Politécnico, Universidad de Castilla-la-Mancha, campus universitario s/n, 13071 Ciudad Real, Spain.); Javier J. Pérez (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Sara Signorini (Global Economics & FI/FX Research, HVB Milan, Via Tommaso Grossi 10, 20121 Milan, Italy.) |
| Abstract: | Short-term fiscal indicators based on public accounts data are often used by European policy makers. They represent one of the main sources of publicly available intra-annual fiscal information. Nevertheless, these indicators have received limited attention from the academic literature analysing fiscal forecasting in Europe. Some recent literature suggests the validity of public accounts data to forecast government deficits in the euro area. We extend this literature on two fronts: (i) we shift the focus from indicators of government deficits to look at indicators for government total revenue and total expenditure; (ii) we use a mixed-frequency state-space model to integrate readily available monthly/quarterly cash-based fiscal data with annual general government series (National Accounts). By doing so, we are able to maintain the focus on forecasting and monitoring annual outcomes, while making use of infra-annual fiscal information, available within the current year. The paper makes a case for the use of monthly cash indicators for multilateral fiscal surveillance at the European level. JEL Classification: C53, E6, H6. |
| Keywords: | Leading indicators, Fiscal forecasting and monitoring, Euro area. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080901&r=eec |
| By: | Boltho, Andrea; Eichengreen, Barry |
| Abstract: | Economic integration, from the European Payments Union and the European Coal and Steel Community to the Common Market, the European Monetary System, the Single Market, and the euro, is one of the most visible, controversial and commented-upon aspects of Europe’s development since the end of World War II. It is hard to imagine that Europe’s economy would have developed the same way without it. Or is it? We see how far we can push the argument that European living standards, growth rates, and economic structure would have been little different in the absence of the institutions and processes that have culminated in today’s European Union. We adopt the methodology applied by Fogel to the railroads: suspecting that the results are small, wherever possible we adopt assumptions that bias upward the estimated impact. We conclude that European incomes would have been roughly 5 per cent lower today in the absence of the EU. |
| Keywords: | European integration; European Union |
| JEL: | F0 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6820&r=eec |
| By: | Günter Coenen (Directorate General Research, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Matthias Mohr (Directorate General Economics, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Roland Straub (Directorate General International and European Relations, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | In this paper, we examine the macroeconomic effects of alternative fiscal consolidation policies in the New Area-Wide Model (NAWM), a two-country open-economy model of the euro area developed at the European Central Bank (cf. Coenen et al., 2007). We model fiscal consolidation as a permanent reduction in the targeted government debt-to-output ratio and analyse both expenditure and revenue-based policies that are implemented by means of simple fiscal feedback rules. We find that fiscal consolidation has positive long-run effects on key macroeconomic aggregates such as output and consumption, notably when the resulting improvement in the budgetary position is used to lower distortionary taxes. At the same time, fiscal consolidation gives rise to noticeable short-run adjustment costs in contrast to what the literature on expansionary fiscal consolidations suggests. Moreover, depending on the fiscal instrument used, fiscal consolidation may have pronounced distributional effects. JEL Classification: E32, E62. |
| Keywords: | DSGE modelling, limited asset-market participation, fiscal policy, fiscal consolidation, euro area. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080902&r=eec |
| By: | Gavin Murphy (Economic and Social Research Institute (ESRI)); Iulia Siedschlag (Economic and Social Research Institute (ESRI)) |
| Abstract: | We estimate the euro effect on Irish export patterns using a panel of industry data over the period 1993-2004. Our innovation is to account for country and industry specific omitted trending variables bias. We find that the euro effect on Irish exports to the euro area countries relative to the rest of the trading partners of Ireland has been positive, significant and increasing since 2000. Furthermore, we find heterogeneous euro effects across industries. We find consistent significant positive euro effects for industries characterised by increasing returns to scale. |
| Keywords: | EMU,trade,Ireland |
| JEL: | F14 F15 F41 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp243&r=eec |
| By: | Alessandro Calza (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper tests whether the proposition that globalisation has led to greater sensitivity of domestic inflation to the global output gap (the “global output gap hypothesis”) holds for the euro area. The empirical analysis uses quarterly data over the period 1979-2003. Measures of the global output gap using two different weighting schemes (based on PPPs and trade data) are considered. We find little evidence that global capacity constraints have either explanatory or predictive power for domestic consumer price inflation in the euro area. Based on these findings, the prescription that central banks should specifically react to developments in global output gaps does not seem to be justified for the euro area. JEL Classification: E3, F4. |
| Keywords: | Globalisation, inflation, global output gap. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080890&r=eec |
| By: | Laurent Maurin (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Matthieu Darracq Pariès (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | Several factor-based models are estimated to investigate the role of country-specific trade and survey data in forecasting euro area manufacturing production. Following Boivin and Ng (2006), the emphasis is put on the role of dataset selection on the empirical performance of factor models. First, spectral analysis is used to assess the information content for euro area manufacturing production of external trade and surveys data of the three largest economies as well as two medium-sized highly opened economies. Second, common factors are estimated on four datasets, following twomethodologies, Stock andWatson (2002a, 2002b) and Forni et al. (2005). Third, a rolling out of sample forecast comparison exercise is carried out on ninemodels. Compared to univariate benchmarks, our results are supportive of factor-basedmodels up to two quarters. They show that incorporating survey and external trade information improves the forecast of manufacturing production. They also confirm the findings of Marcellino, Stock and Watson (2003) that, using country information, it is possible to improve forecasts for the euro area. Interesting, the medium-sized highly opened economies provide valuable information to monitor area wide developments, beyond their weight in the aggregate. Conversely, the large countries do not add much to the monitoring of the aggregate, when considered separately. JEL Classification: E37, C3, C53. |
| Keywords: | Factor models, Dataset, Forecasting. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080894&r=eec |
| By: | Christian Dreger; Jürgen Wolters |
| Abstract: | Money growth in the euro area has exceeded its target since 2001. Likewise, recent empirical studies did not find evidence in favour of a stable long run money demand function. The equation appears to be increasingly unstable if more recent data are used. If the link between money balances and the macroeconomy is fragile, the rationale of monetary aggregates in the ECB strategy has to be doubted. In contrast to the bulk of the literature, we are able to identify a stable long run money demand relationship for M3 with reasonable long run behaviour. This finding is robust for different (ML and S2S) estimation methods. To obtain the result, the short run homogeneity restriction between money and prices is relaxed. In addition, a rise in the income elasticity after 2001 is taken into account. The break might be linked to the introduction of euro coins and banknotes. The monetary overhang and the real money gap do not indicate significant inflation pressures. The corresponding error correction model survives a battery of specification tests. |
| Keywords: | Cointegration analysis, error correction, excess liquidity, money demand, monetary policy |
| JEL: | C22 C52 E41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp795&r=eec |
| By: | Karen Mayor (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)) |
| Abstract: | We use a model of international and domestic tourist numbers and flows to investigate the effect of various climate policy instruments implemented in Europe on arrivals and emissions for the countries concerned. We find that these schemes do not fulfil their desired effects. The introduction of aviation into the European Trading system results in a fall in the number of tourists travelling into the EU in favour of other destinations. It also causes a significant welfare loss with only a small reduction in emissions. The flight taxes in the Netherlands and the United Kingdom result in different substitution effects across destinations (depending on the zones being taxed) but both policies do have the same consequence of inducing welfare losses and also reducing visitor numbers to the countries. We find that when these policies are combined their effects are additive. Welfare impacts are robust to variations in the underlying assumptions and changes in the scope of the taxes examined have the expected effects. |
| Keywords: | Climate policy, carbon dioxide emissions, international tourism |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp241&r=eec |
| By: | Herrmann, Peter (University College Cork); Tausch, Arno (University of Innsbruck); Heshmati, Almas (University of Kurdistan Hawler); Bajalan, Chemen S. J. (University of Kurdistan Hawler) |
| Abstract: | In this qualitative sociological and quantitative economic policy paper, we start out from the assumption of a very recent European Commission Background paper on the “Efficiency and effectiveness of social spending”, which says the effectiveness of social spending can be defined by the degree to which the realized allocation approaches the socially desired outcome. The conclusions listed in the Commission paper are found far reaching and not supported by the empirical data. We perform such an analysis, starting from advances in recent literature. A more encompassing sociological perspective on the issue and factor analytical calculations is presented, which supports our general argument about the efficiency of the Scandinavian model. The social quality approach provides an alternative perspective on welfare system analysis, focusing on public policies rather than social policies. The empirical evidence, suggests that in terms of the efficiency of the European social model, the geography of comparative performance include: the direct action against social exclusion, health and family social expenditures, the neo-liberal approach, and the unemployment benefit centred approach. Applying rigorous comparative social science methodology, we also arrive at the conclusion that in terms of the initial ECOFIN definition of efficiency, the data presented in this article suggest that apart from Finland and the Netherlands, three new EU-27 member countries, especially the Czech Republic and Slovenia, provide interesting answers to the question about the efficiency of state expenditures in reducing poverty rates. |
| Keywords: | social spending, European Commission, index numbers and aggregation, cross-sectional models, spatial models, economic integration, regional economic activity, international factor movements, nternational political economy |
| JEL: | C43 C21 F15 R11 F2 F5 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3482&r=eec |
| By: | Barrett, Alan (ESRI, Dublin); McCarthy, Yvonne (ESRI, Dublin) |
| Abstract: | The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data shows higher use of welfare by immigrants although for some countries, for example Germany, this difference can be explained by differences in characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives but the opposite appears to be the case in Ireland. |
| Keywords: | immigrants, welfare participation, Ireland, U.K. |
| JEL: | I38 J61 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3494&r=eec |
| By: | Jaume Garcia; Climent Quintana |
| Abstract: | The problem of obesity is alarming public health authorities around the world. Therefore, it is important to study its determinants. In this paper we explore the empirical relationship between household income and body mass index (BMI) in nine European Union countries. Our findings suggest that the association is negative for women, but we find no statistically significant relationship for men. However, we show that the different relationship for men and women appears to be driven by the negative relationship for women between BMI and individual income from work. We tentatively conclude that the negative relationship between household income and BMI for women may simply be capturing the wage penalty that obese women suffer in the labor market. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-21&r=eec |
| By: | Zagaglia, Paolo (Dept. of Economics, Stockholm University) |
| Abstract: | This note investigates the transmission of volatility from longer maturities to the overnight segment of the Euro area money market. I use non-parametric estimates of the daily variance of swap rates to test for block exogeneity with respect to the overnight. The results suggest that there exists transmission of volatility shocks from the 1-year swap rate to the overnight market. The reform of the operational framework of March 2004 has improved the segmentation of the market, as it has insulated the overnight segment from spillovers in volatility stemming from swap rates up to 6 months of maturity. |
| Keywords: | Money Market; High-Frequency Data; Granger Causality |
| JEL: | C22 E58 |
| Date: | 2008–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2008_0005&r=eec |
| By: | Andrés, Javier; López-Salido, J David; Nelson, Edward |
| Abstract: | We examine the role of money in three environments: the New Keynesian model with separable utility and static money demand; a nonseparable utility variant with habit formation; and a version with adjustment costs for holding real balances. The last two variants imply forward-looking behaviour of real money balances, with forecasts of future interest rates entering current portfolio decisions. We conduct a structural econometric analysis of the U.S. and euro area economies. FIML estimates confirm the forward-looking character of money demand. A consequence is that real money balances are valuable in anticipating future variations in the natural interest rate. |
| Keywords: | money; natural rate; New Keynesian models |
| JEL: | E51 E52 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6812&r=eec |
| By: | Frances McGinnity (Economic and Social Research Institute (ESRI)); Emma Calvert (Economic and Social Research Institute (ESRI)) |
| Abstract: | Recent debates on time-use suggest that there is an inverse relationship between time poverty and income poverty (Aguiar and Hurst, 2007), with Hammermesh and Lee (2007) suggesting much time poverty is ‘yuppie kvetch’ or ‘complaining’. Gershuny (2005) argues that busyness is the ‘badge of honour’: being busy is now a positive, privileged position and it is high status people who work long hours and feel busy. Is this also true of work-life conflict? This paper explores the relationship between work-life tension and social inequality, as measured by social class, drawing on evidence from the European Social Survey (2004). To what extent is work-life conflict a problem of the (comparatively) rich and privileged professional/managerial classes, and is this true across European countries? The countries selected offer a range of institutional and policy configurations to maximise variation. Using regression modelling of an index of subjective work-life conflict, we find that in all the countries under study, work-life conflict is higher among professionals than non-professionals. Part of this is explained by the fact that professionals work longer hours and experience more work pressure than other social classes, though the effect remains even after accounting for these factors. Country variation is modest, despite much variation in policies concerning work-life conflict. We consider other explanations of why professionals report higher work-life conflict and the implications of our findings for debates on social inequality. |
| Keywords: | work-life balance, social inequality, work pressure, comparative research, Western Europe. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp239&r=eec |
| By: | Anna Lipinska (Bank of England, Monetary Analysis, International Economic Analysis Division, Threadneedle Street, London EC2R 8AH, UK.) |
| Abstract: | The EMU accession countries are obliged to fulfill the Maastricht convergence criteria prior to entering the EMU. This paper uses a DSGE model of a two-sector small open economy, to address the following question: How do the Maastricht convergence criteria modify optimal monetary policy in an economy facing domestic and external shocks? First, we derive the micro founded loss function that represents the objective function of the optimal monetary policy not constrained to satisfy the criteria. We find that the optimal monetary policy should not only target inflation rates in the domestic sectors and aggregate output fluctuations but also domestic and international terms of trade. Second, we show how the loss function changes when the monetary policy is constrained to satisfy the Maastricht criteria. The loss function of such a constrained policy is characterized by additional elements penalizing fluctuations of the CPI inflation rate, the nominal interest rate and the nominal exchange rate around the new targets which are potentially different from the steady state of the unconstrained optimal monetary policy. Under the chosen parameterization, the unconstrained optimal monetary policy violates two criteria: concerning the CPI in.ation rate and the nominal interest rate. The constrained optimal policy results in targeting the CPI inflation rate and the nominal interest rate that are 0.7% lower (in annual terms)than the CPI inflation rate and the nominal interest rate in the countries taken as a reference. The welfare costs associated with these constraints need to be offset against credibility gains and other benefits related to the compliance with the Maastricht criteria that are not modelled. JEL Classification: F41, E52, E58, E61. |
| Keywords: | Optimal monetary policy, Maastricht convergence criteria, EMU accession countries. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080896&r=eec |
| By: | Müller, Kai-Uwe (DIW Berlin); Steiner, Viktor (DIW Berlin) |
| Abstract: | In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of € 7.5 per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes. Simulation results show that the minimum wage would be rather ineffective in reducing poverty, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution and had no negative employment effects. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of means-tested income support. |
| Keywords: | minimum wage, wage distribution, working poor, poverty reduction, micro-simulation |
| JEL: | I32 H31 J32 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3491&r=eec |
| By: | Bernhard, Sarah (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Stephan, Gesine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In Germany, since 2005 needy job-seekers without access to earnings-related and insurance-paid 'unemployment benefit I' are entitled to means-tested and tax-funded 'unemployment benefit II'. Several active labour market programmes support the integration of these needy job-seekers into the labour market. Our paper estimates the average effect of targeted wage subsidies - paid to employers for a limited period of time - on the subsequent labour market prospects of participating needy job-seekers. We apply propensity score matching to compare participants with a group of similar non-participants. The results show that wage subsidies had in fact large and significant favourable effects: 20 months after taking up a subsidised job, the share of persons in regular employment is nearly 40 percentage points higher across participants. Estimated effects on the shares not unemployed and the share no longer receiving 'unemployment benefit II' are slightly smaller." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitslosengeld II-Empfänger, Eingliederungszuschuss, Wirkungsforschung, Arbeitsmarktchancen |
| JEL: | J68 J64 J65 |
| Date: | 2008–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200821&r=eec |
| By: | Fräßdorf, Anna (University of Bamberg); Grabka, Markus M. (DIW Berlin); Schwarze, Johannes (University of Bamberg) |
| Abstract: | This paper analyses the contribution of capital income to income inequality in a cross-national comparison. Using micro-data from the Cross-National Equivalent File (CNEF) for three prominent panel studies, namely the BHPS for Great Britain, the SOEP for West Germany, and the PSID for the USA, a factor decomposition method described by Shorrocks (1982) is applied. The factor decomposition of disposable income into single income components shows that capital income is exceedingly volatile and its share in disposable income has risen in recent years. Moreover, capital income makes a disproportionately high contribution to overall inequality in relation to its share in disposable income. This applies to Germany and the USA in particular. Thus capital income accounts for a large part of disparity in all three countries. |
| Keywords: | inequality, capital income, factor decomposition, CNEF |
| JEL: | D33 I31 F00 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3492&r=eec |
| By: | David Carey |
| Abstract: | Improving education outcomes is important for Germany’s long-term economic performance and social cohesion. While student achievement is above the OECD average in science and at the OECD average in reading and mathematics according to the 2006 OECD PISA study, weaker students tend to do badly by international comparison and socio-economic and/or immigrant backgrounds have a large impact. Another problem is that the proportion of younger people that completes tertiary education is relatively low. The authorities are undertaking wide ranging reforms touching all levels of education to tackle these problems. Nevertheless, there is scope to go further by: increasing participation in early childhood education and care of children from less advantaged socio-economic backgrounds and improving the quality of such education; improving teaching quality; reducing stratification in the school system; and making tertiary education more attractive and responsive to labour-market requirements. With the reforms underway or suggested, Germany would be able to look forward to higher education achievement and attainment and, especially, greater equality of education opportunity. <P>Améliorer les résultants de l’enseignement en Allemagne <BR>Il importe d’améliorer les résultats de l’enseignement pour les performances économiques à long terme et pour la cohésion sociale de l’Allemagne. Si les élèves réussissent mieux que la moyenne de l’OCDE en sciences et atteignent la moyenne en compréhension de l’écrit et en mathématiques selon l’enquête PISA 2006 de l’OCDE, les élèves en difficulté ont généralement des résultats faibles par rapport à ceux des autres pays et l’influence du milieu socio-économique et/ou de l’origine est forte. Autre problème : la proportion des jeunes qui achèvent leurs études supérieures est relativement faible. Les autorités ont entrepris une vaste réforme de l’ensemble du système éducatif afin de résoudre ces difficultés. Néanmoins, il est possible d’aller plus loin, notamment en augmentant le nombre d’enfants de familles défavorisées inscrits dans les services d’éducation et d’accueil des jeunes enfants et en améliorant la qualité de ces services, en rehaussant la qualité de l’enseignement, en réduisant la stratification du système scolaire, et en rendant l’enseignement supérieur plus avantageux et plus réactif face aux exigences du marché du travail. Avec les réformes en cours ou proposées, l’Allemagne pourrait espérer des résultats scolaires et des niveaux de formation plus élevés et surtout, une plus grande égalité des chances dans le domaine de l’éducation. |
| Keywords: | education, éducation, PISA, achievement, attainment, school system, stratification, PISA, réussite scolaire, stratification, accountability, responsabilité, cadre socio–économique |
| JEL: | I21 I28 J24 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:611-en&r=eec |
| By: | Wheeler, Tracy (Monetary Policy Committee Unit, Bank of England) |
| Abstract: | This paper investigates empirically whether the level or growth of cheap imports from China has had an impact on UK inflation. We use two methods; the first calculates UK weighted world export price inflation as the sum of the effect of the inflation level in the UK's trading partners and the effect of substituting imports from more expensive countries with imports from countries with lower price levels. The second estimates these two effects on UK inflation using panel regressions. The results from the first method suggest that the substitution of imports from more expensive countries with imports from China reduced UK weighted world export price inflation by an average of -0.75 percentage points per annum from 2000 to 2004. Similarly, the panel regressions suggest that over the 1997-2005 period this substitution had a small but significant downward impact on UK CPI inflation. However, the same regressions also suggest that higher inflation in imports from China than in imports from other countries has put upward pressure on some components of UK CPI inflation. As this upward 'inflation effect' is likely to have outweighed the downward 'substitution effect' the regressions suggest that the overall effect of Chinese imports on UK CPI inflation from 1997-2005 was positive. |
| Keywords: | Inflation; China; Imports |
| JEL: | E31 F15 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:mpc:wpaper:0022&r=eec |
| By: | Elish Kelly (Economic and Social Research Institute (ESRI)); Philip O'Connell (Economic and Social Research Institute (ESRI)); Emer Smyth (Economic and Social Research Institute (ESRI)) |
| Abstract: | This paper looks at the economic returns to different fields of study in Ireland in 2004 and also the value placed on various job-related competencies, accumulated on completion of higher education, in the Irish labour market. In examining these issues the paper seeks to control for potential selection influences by ensuring through quantile regression that comparisons are made within sections of the wage distribution where ability differences are likely to be minimal. The impact that education-job mismatch, both education-level and field, has on earnings is also taken into consideration. The results derived indicate that, relative to the base case, there are higher returns to Medicine & Veterinary, Education, Engineering & Architecture, Science and Computers & IT. The quantile regression analysis reveals that the OLS estimates are not particularly affected by unobserved heterogeneity bias. Furthermore, this approach indicates that field specific returns diminish the more able the graduate. Small but significant returns were found for some of the competencies analysed, in particular technical skills. |
| Keywords: | Field of Study, Competencies, Returns to Education, Quantile Regression, Ireland |
| JEL: | I20 J24 J30 J31 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp242&r=eec |
| By: | Thomas Post; Helmut Gründl; Joan Schmit; Anja Zimmer |
| Abstract: | Much of the industrialized world is undergoing a significant demographic shift, placing strain on public pension systems. Policymakers are responding with pension system reforms that put more weight on privately managed retirement funds. One concern with these changes is the effect on individual welfare if individuals invest suboptimally. Using micro-level data from the United States and Germany, we compare the optimal expected lifetime utility computed using a realistically calibrated model with the actual utility as reflected in empirical asset allocation choices. Through this analysis, we are able to identify the population subgroups with relatively large welfare losses. Our results should be helpful to public policymakers in designing programs to improve the performance of privately organized retirement systems. |
| Keywords: | Asset Allocation, Retirement Welfare, Pension Reform |
| JEL: | D14 D91 G11 G28 I31 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2008-037&r=eec |
| By: | Nicola Brandt |
| Abstract: | The aim of the recent healthcare reform was to increase the sustainability of healthcare finances, by reducing its negative impact on employment and increasing cost-effectiveness via enhanced competition. Higher budget contributions will help decouple healthcare finances from labour income a bit, if and once they materialise. An improved risk adjustment between insurers could reduce incentives for risk selection, raising chances for competition to lead to more cost-effectiveness instead. However, the segmentation of the healthcare system in a private and a social insurance market will continue to pose equity and efficiency problems. Owing to its design, the price signal in the new financing system for social health insurance will be both weak and distorted and this will need to be corrected for competition to produce desired results. More freedom for contractual relations between insurers, healthcare providers and pharmaceutical companies could help to better reap the benefits of competition, but the government will need to watch the results closely and adjust framework conditions if needed. <P>Pérenniser le financement des dépenses de santé en Allemagne <BR>La réforme récente du secteur de la santé vise à assurer un financement plus viable des dépenses de santé en réduisant leurs effets négatifs sur l’emploi et en améliorant leur efficacité économique grâce à une concurrence accrue. Si l’augmentation prévue des contributions budgétaires se matérialise, elle permettra un certain découplage entre le financement du secteur de la santé et les revenus du travail. Une meilleure répartition des risques entre les assureurs pourrait réduire la tendance à une sélection des risques, si bien que la concurrence pourrait en fait conduire à une plus grande efficacité économique. Cela étant, la segmentation du système de santé dans un marché où cohabitent assurance privée et assurance publique continuera de poser des problèmes d’équité et d’efficacité. Par sa conception même, le nouveau système de financement de l’assurance maladie publique limite et fausse les signaux transmis par les prix ; il faudra donc remédier à ce problème pour permettre à la concurrence de produire les résultats souhaités. Une plus grande liberté des relations contractuelles entre assureurs, prestataires de soins et laboratoires pharmaceutiques permettrait sans doute de tirer un meilleur parti de la concurrence, mais les autorités devront faire preuve de vigilance et adapter les conditions cadres le cas échéant. |
| Keywords: | santé, public sector efficiency, gestion publique, health care, accès aux marchés |
| JEL: | H51 H73 I11 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:612-en&r=eec |
| By: | Müller, Kai-Uwe (DIW Berlin); Steiner, Viktor (DIW Berlin) |
| Abstract: | We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard rate model which accounts for the dynamic nature of the treatment. We find positive short- and long-term effects of benefit sanctions which are robust for men and women in East and West Germany. The effects diminish with the elapsed unemployment duration until a sanction is imposed. The limited use of benefit sanctions can thus be an effective activation tool if they take place not too late in an individual’s unemployment spell. |
| Keywords: | benefit sanctions, unemployment transitions, German labor market reform, ex-post evaluation, propensity score matching, hazard rate model, unobserved heterogeneity |
| JEL: | J64 J65 H31 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3483&r=eec |
| By: | Benoît Mahy (Centre de Recherche Warocqué, Université de Mons-Hainaut, Belgium); Mélanie Volral (Centre de Recherche Warocqué, Université de Mons-Hainaut, Belgium) |
| Abstract: | The objective of this paper is to model and estimate the impact of labour training financed by the firm on labour demand in Belgium, introducing training potential productivity and cost effects. To model this influence, we assume profit maximizing firms producing under a short run monopolistic competition regime. We emphasize that training variables, both qualitative and quantitative, can either increase labour demand through their positive effect on labour physical productivity net from the dropping price required to sell additional production, and that they can decrease labour demand through induced increasing direct labour costs and wages. GMM estimations on a panel of 269 firms observed during the period 1998-2004 show non significant impacts of training variables on labour demand, the productivity and cost effects seeming to offset each other. These results allow us to suggest two scenarios in terms of firms and workers behaviour and that subsidiary training could favour employment under the two assumptions that firms don’t transform training in an increased productivity – wage mark-up, but convert additional productivity in employment, and workers don’t claim for higher wages as a result of additional productivity. |
| Keywords: | Training, Labour Demand,Human capital, Labour Productivity, Panel Data |
| JEL: | C23 J23 J24 M53 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0021&r=eec |