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on European Economics |
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Issue of 2008‒12‒07
twenty-one papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Axel Börsch-Supan (MEA Mannheim Research Institute for the Economics of Aging, University of Mannheim); Enrica Croda (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | This paper uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement. We provide evidence on the extent of “unused capacity” in labor force, on pathways to retirement and on the relationship between actual health status and disability take up. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role. |
| Keywords: | Aging, employment, retirement, health, disability, social security institutions, SHARE |
| JEL: | J14 J18 J26 J68 I12 C81 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:44_2008&r=eec |
| By: | Jarno Hoekman (Urban & Regional research centre Utrecht (URU), Utrecht University - The Netherlands); Koen Frenken (Urban & Regional research centre Utrecht (URU), Utrecht University - The Netherlands); Frank van Oort (Netherlands Institute for Spatial Research (RPB)- The Netherlands) |
| Abstract: | The geography of innovation traditionally concentrates on localised knowledge spillovers, yet neglects collaboration networks as a means to access knowledge outside the region. Using publication and patent data for 1316 regions in the EU27 plus Norway and Switzerland, we find that both localised knowledge spillovers and the knowledge spillovers stemming from collaboration affect the innovative performance of regions. The results provide support for EU policies aimed at creating European collaboration networks. |
| Keywords: | Knowledge Production Function, Spillovers, Collaboration, Networks, European Research Area, Publication, Patent, Public Good |
| JEL: | C21 O30 O33 O52 R11 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp222&r=eec |
| By: | Claude Lopez; David H. Papell |
| Abstract: | While panel unit root tests have been used to investigate a wide range of macroeconomic issues, the tests suffer from low power to reject the unit root null in panels of stationary series if the panels consist of highly persistent series, contain a small number of series, and/or have series with a limited length. We propose a new procedure to increase the power of panel unit root tests when used to study convergence by testing for stationarity between a group of series and their cross-sectional means. Although each differential has non-zero mean, the group of differentials has a cross-sectional average of zero for each time period by construction, and we incorporate this constraint for estimation and when generating finite sample critical values. This procedure leads to significant power gains for the panel unit root test. We apply our new approach to study inflation convergence within the Euro Area countries for the post 1979 period. The results show strong evidence of convergence soon after the implementation of the Maastricht treaty. Furthermore, median unbiased estimates of the half life for the period before and after the Euro show a dramatic decrease in the persistence of the differential after the occurrence of the single currency. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cin:ucecwp:2008-10&r=eec |
| By: | Sonja Peterson; Gernot Klepper |
| Abstract: | To show global leadership and to foster the international negotiations for a long term international climate regime the EU has decided to reduce its GHG emissions by 20% relative to 1990 until the year 2020. These reductions will even rise to 30% “if there is an international agreement committing other developed countries to comparable emission reductions and economically more advanced developing countries to contributing adequately according to their responsibilities and respective capabilities”. At the same time, the European council started in 2000 the so-called Lisbon process which established the issue of competitiveness as a priority area for EU policy and there is some concern about the competitiveness effects of EU climate policy. We use the multi-sector, multi-region computable general equilibrium model DART to assess the impacts of the recent EU climate policy proposals for the competitiveness of the European economies and specific sectors. There are three general insights. First, the effects of EU climate policies on competitiveness are relatively small if one leaves out the fossil fuels themselves the consumption of which is supposed to be reduced anyway. The losses of the energy intensive industries are compensated by gains in other manufacturing sectors. Secondly, there is no uniform effect across the member states of the EU. It is the special circumstances in side the different sectors within the member states that determine whether a sector wins or looses competitiveness. And finally, the changes in competitiveness are strongly influenced by the choice of the particular policy design. A more efficient instrument choice not only reduces the competitiveness effects it also distributes the burden more equally |
| Keywords: | Post Kyoto, EU, emission trading, competitiveness |
| JEL: | D58 Q48 Q54 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1464&r=eec |
| By: | Matthieu Darracq Pariès (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Alessandro Notarpietro (Università Bocconi, Via Sarfatti 25, I-20136 Milano, Italy.) |
| Abstract: | We estimate a two-country Dynamic Stochastic General Equilibrium model for the US and the euro area including relevant housing market features and examine the monetary policy implications of housing-related disturbances. In particular, we derive the optimal monetary policy cooperation consistent with the structural specification of the model. Our estimation results reinforce the existing evidence on the role of housing and mortgage markets for the US and provide new evidence on the importance of the collateral channel in the euro area. Moreover, we document the various implications of credit frictions for the propagation of macroeconomic disturbances and the conduct of monetary policy. We find that allowing for some degree of monetary policy response to fluctuations in the price of residential goods improves the empirical fit of the model and is consistent with the main features of optimal monetary policy response to housing-related shocks. JEL Classification: E4, E5, F4. |
| Keywords: | Housing, credit frictions, optimal monetary policy, new open economy macroeconomics, Bayesian estimation. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080972&r=eec |
| By: | Rosario Crinò (Bocconi University, Milan - Italy) |
| Abstract: | Using comparable industry-level data for nine Western European countries, this paper finds that the international relocation of service activities (service offshoring) exerts positive and economically large effects on domestic productivity. A one percentage point increase in the proxy for service offshoring (i.e., the share of imported private services in total non-energy input purchases) is found to raise Total Factor Productivity by about 0.5%. |
| Keywords: | Service Offshoring; Total Factor Productivity |
| JEL: | F1 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp220&r=eec |
| By: | Michaud, Pierre-Carl (RAND); Tatsiramos, Konstantinos (IZA) |
| Abstract: | We investigate the direct and long-run effects of fertility on employment in Europe estimating dynamic models of labor supply under different assumptions regarding the exogeneity of fertility and modeling assumptions related to initial conditions, unobserved heterogeneity and serial correlation in the error terms. We find overall large direct and long-run effects of giving birth on employment probabilities, and these effects differ considerably across countries. We find that within countries the results are sensitive to the statistical assumption made on initial conditions, the inclusion of serial correlation and the assumption of strict exogeneity of children. However, the pattern across countries is robust to these assumptions. We show that such patterns are largely consistent with prevailing institutional differences related to the flexibility of the labor markets and family policies. |
| Keywords: | intertemporal labor supply, female employment, fertility, dynamic binary choice models, initial conditions |
| JEL: | C23 C25 D91 J22 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3853&r=eec |
| By: | Adrien De Hauteclocque (ADIS - Analyse des Dynamiques Industrielles et Sociales - Université Paris Sud - Paris XI); Vincent Rious (SUPELEC-Campus Gif - SUPELEC) |
| Abstract: | This paper evaluates regulatory uncertainty and inefficiency that may prevent merchant transmission investors from committing in Europe, in particular when they are dominant generators. We argue that market players may perceive regulatory uncertainty to acquire exemption on merchant line mainly because of the discretion given for the application of Art. 7 of the Regulation 1228/2003 on cross-border exchanges. However we show that an emerging strategy of the European Commission for granting exemption on merchant transmission line can be eventually derived from recent legal and regulatory proceedings. It mainly consists in relying on TSOs to build merchant lines. We demonstrate that this strategy is neither a first best nor a second best given imperfect unbundling and the current flows in the allocation of regulatory powers. Indeed, it prevents merchant line investment by dominant generators with low generation cost while they have currently more incentive than TSOs to build merchant lines. Since unregulated merchant transmission investment by generators would be problematic, we show eventually that the current strategy of the application of Regulation can easily be fine-tuned to reach this second-best optimum. |
| Keywords: | Regulatory Uncertainty and Inefficiency for the Development of Merchant Lines in Europe |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00338296_v1&r=eec |
| By: | Langot, François (University of Le Mans); Quintero Rojas, Coralia (University of Le Mans) |
| Abstract: | Europeans have worked less than Americans since the 1970s. In this paper, we quantify the relative importance of the extensive and intensive margins of aggregate hours of market work on the observed differences. Our counterfactual exercises show that the two dimensions of the extensive margin, the employment rate and the participation rate, explain the most of the total-hours-gap between regions. Moreover, both ratios have similar weight. Conversely, the intensive margin, measured by the number of hours worked per employee, has the smallest role. |
| Keywords: | hours of market work, participation, employment, intensive and extensive margins |
| JEL: | E2 J2 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3846&r=eec |
| By: | António Afonso (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Pedro Gomes (London School of Economics & Political Science; STICERD – Suntory and Toyota InternationalCentres for Economics and Related Disciplines, Houghton Street, London WC2A 2AE, U.K..) |
| Abstract: | We analyse the interactions between public and private sector wages per employee in OECD countries. We motivate the analysis with a dynamic labour market equilibrium model with search and matching frictions to study the effects of public sector employment and wages on the labour market, particularly on private sector wages. Our empirical evidence shows that the growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate, hours per worker, and inflation, are also important determinants of private sector wage growth. With respect to public sector wage growth, we find that, in addition to some market related variables, it is also influenced by fiscal conditions. JEL Classification: E24, E62, H50. |
| Keywords: | public wages, private wages, employment. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080971&r=eec |
| By: | Andrew E. Clark; Claudia Senik |
| Abstract: | This paper provides unprecedented direct evidence on the intensity and direction of income comparisons. Income comparisons are considered to be important by a considerable majority of Europeans. They are associated with both lower levels of self-reported satisfaction and a greater demand for income redistribution. Colleagues are the most frequently-cited reference group, and the most innocuous one; comparisons to friends are both less widespread and much more toxic for satisfaction. This set of findings is consistent with information effects, as professional reference groups may represent a source of information about one's future prospects rather than a simple benchmark for comparisons. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-65&r=eec |
| By: | Machin, Stephen (University College London); Pelkonen, Panu (London School of Economics); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration) |
| Abstract: | We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobility, is likely to be due to differences in levels of education in the respective regions. |
| Keywords: | labour market, mobility, education |
| JEL: | I28 J24 J61 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3845&r=eec |
| By: | Balazs Egert; Dubravko Mihaljek |
| Abstract: | This paper studies the determinants of house prices in eight transition economies of Central and Eastern Europe (CEE) and 19 OECD countries. The main question addressed is whether the conventional fundamental determinants of house prices, such as GDP per capita, real interest rates, housing credit and demographic factors, have driven observed house prices in CEE. We show that house prices in CEE are determined to a large extent by the underlying conventional fundamentals and some transition-specific factors, in particular institutional development of housing markets and housing finance and quality effects. |
| Keywords: | Central and Eastern Europe, house prices, housing market, OECD countries, transition economies. |
| JEL: | E20 E39 P25 R21 R31 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2008/1&r=eec |
| By: | Franck Tétard; Nicola Villa; Joanna Carlsson; Erkki Patokorpi; Milena Casagranda (DISA, Faculty of Economics, Trento University); Sara Tomasini |
| Abstract: | When young people drop out of school they are in great danger of being marginalized in society. Immigrants are another group of people who for several reasons often find it difficult to become integrated into their new home country. In both cases some less formal way of learning might help these groups avoid social exclusion. Well thoughtout development and application of new advanced technologies would be likely to level the way for continued education, communication and democratic participation in society. The term e-inclusion refers to these electronic means and how they could be applied to hindering social exclusion. This study compares the situation of school drop-outs and immigrants in Finland and Italy in the light of statistical data. It paves the way for a European research and development project whose aim is to study problems of e-inclusion in Finland and Italy empirically as well as develop technological and pedagogical solutions to them. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:trt:disawp:0810&r=eec |
| By: | Catherine Locatelli (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | Russia and its main gas company Gazprom, essential suppliers for the European gas market, are today at the centre of the debate surrounding the security of the European Union's gas supply. A variety of factors have focussed interest on the question of Gazprom's industrial strategies and more precisely :the Gazprom's ability to meet its future contractual commitments. The gas market liberalisation in Europe is bringing about some significant changes in the relations (especially contractual ones) that the EU had established with its main natural gas suppliers. The aim of this paper is to throw some light on how European gas market liberalisation is affecting and changing the strategies of one of the EU's essential gas suppliers, namely Russia. The export policies developed by Gazprom are however largely conditioned by the particular characteristics (essentially institutional) of its domestic market, not only in terms of supply and demand but also prices". It is important to take into account this aspect in order to understand the Russian gas export strategy. |
| Keywords: | EXPORTATION ; NATURAL GAS ; RUSSIA ; GAZPROM ; CONTRACT |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00341660_v1&r=eec |
| By: | Theodore Panagiotidis (Department of Economics, University of Macedonia) |
| Abstract: | The behaviour of an emerging market, the Athens Stock Exchange (ASE), after the introduction of the euro is investigated. The latter would make its returns easier to compare; reduce uncertainty; eliminate the exchange rate risk and as a result we expect the new currency to strengthen the argument, in favour of the EMH. The General ASE Composite Index and the FTSE/ASE 20, which consists of “high capitalisation” companies, are used. Five statistical tests are employed to test the residuals of the random walk model: the BDS, McLeod-Li, Engle LM, Tsay and Bicovariance test. Bootstrap and asymptotic values of these tests are estimated. Alternative models from the GARCH family (GARCH, EGARCH and TGARCH) are also presented in order to investigate the behaviour of the series. Lastly, linear, asymmetric and non-linear error correction models are estimated and compared. The preferred model (TGARCH) suggests that leverage effects are present and the news impact curve is asymmetric. |
| Keywords: | Non-Linearity, Market Efficiency, Random Walk, GARCH, non-linear error correction. |
| JEL: | C22 C52 G10 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mcd:mcddps:2008_14&r=eec |
| By: | Clausen, Jens (AKF, Danish Institute of Governmental Research); Heinesen, Eskil (AKF, Danish Institute of Governmental Research); Hummelgaard, Hans (AKF, Danish Institute of Governmental Research); Husted, Leif (AKF, Danish Institute of Governmental Research); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | We analyse the effect of active labour-market programmes on the hazard rate into regular employment for newly arrived immigrants using the timing-of-events duration model. We take account of language course participation and progression in destination country language skills. We use rich administrative data from Denmark. We find substantial lock-in effects of participation in active labour-market programmes. Post programme effects on the hazard rate to regular employment are significantly positive for wage subsidy programmes, but not for other types of programmes. For language course participants, improvement in language proficiency has significant and substantial positive effects on the hazard rate to employment. |
| Keywords: | programme evaluation, duration analysis, language skills |
| JEL: | J64 J24 J68 J61 C41 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3849&r=eec |
| By: | Gregor Bäuerle (University of Bern); Tobias Menz (University of Bern and Study Center Gerzensee) |
| Abstract: | We study the transmission of monetary shocks and monetary policy with a behavioral model, corrected for potential misspecification using the DSGE-VAR framework elaborated by DelNegro and Schorfheide (2004). In particular, we investigate if the central bank should react to movements in the nominal exchange rate. We contribute to the empirical literature as we use Swiss data, which is very rarely used in that context. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:szg:worpap:0803&r=eec |
| By: | Steve Bradley; Jim Taylor |
| Abstract: | This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasimarket following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use panel data for all state-funded secondary schools in England over 1992-2006. Using a panel of schools for all state-funded secondary schools in England (1992-2006), we find that about one-third of the improvement in school exam scores is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005802&r=eec |
| By: | Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Franco Peracchi (University of Rome “Tor Vergata”) |
| Abstract: | This paper shows that the “lump of labor” assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate of the young. Hence both vary with the business cycle. In order to overcome endogeneity problems in explaining unemployment of the young, we resort to a simulated variable: “the inducement to retire”, which is constructed by simulating the social security benefits. We related the unemployment rate of the young to this incentive measure and find that a higher inducement to retire is associated to a higher unemployment rate – quite the opposite of the “young-in-old-out” story. |
| Keywords: | lump of labour, youth unemployment, early retirement |
| JEL: | H3 J2 J6 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:45_2008&r=eec |
| By: | Vogel, Alexander (University of Lüneburg); Wagner, Joachim (University of Lüneburg) |
| Abstract: | This paper uses a newly available comprehensive panel data set for manufacturing enterprises from 2001 to 2005 to document the first empirical results on the relationship between imports and productivity for Germany, a leading actor on the world market for goods. Furthermore, for the first time the direction of causality in this relationship is investigated systematically by testing for self-selection of more productive firms into importing, and for productivity-enhancing effects of imports ('learning-by-importing'). We find a positive link between importing and productivity. From an empirical model with fixed enterprise effects that controls for firm size, industry, and unobservable firm heterogeneity we see that the premia for trading internationally are about the same in West and East Germany. Compared to firms that do not trade at all two-way traders do have the highest premia, followed by firms that only export, while firms that only import have the smallest estimated premia. We find evidence for a positive impact of productivity on importing, pointing to self-selection of more productive enterprises into imports, but no evidence for positive effects of importing on productivity due to learning-by-importing. |
| Keywords: | imports, exports, productivity, enterprise panel data, Germany |
| JEL: | F14 D21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3854&r=eec |