nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2010‒01‒30
ten papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Have labour market reforms at the turn of the millennium changed job durations of the new entrants? A comparative study for Germany and Italy By Gianna Claudia Giannelli; Ursula Jaenichen; Claudia Villosio
  2. Eco-innovation - putting the EU on the path to a resource and energy efficient economy By Bleischwitz, Raimund
  3. Does Immigration Induce ‘Native Flight’ from Public Schools? Evidence from a large scale voucher program By Gerdes, Christer
  4. Recombinant Knowledge and Growth: The Case of ICTs By Cristiano Antonelli; Jackie Krafft; Francesco Quatraro
  5. Unequal Giving: Monetary Gifts to Children Across Countries and Over Time By Julie Zissimopoulos; James P. Smith
  6. Optimal discretion in asylum lawmaking By Jenny Monheim-Helstroffer; Marie Obidzinski
  7. The educational gradient of nonmarital childbearing in Europe: emergence of a pattern of disadvantage? By Brienna Perelli-Harris; Wendy Sigle-Rushton; Michaela Kreyenfeld; Trude Lappegård; Caroline Berghammer; Renske Keizer
  8. A comparison of the scientific performance of the U. S. and the European Union at the turn of the XXI century By Pedro Albarrán; Joan Crespo; Ignacio Ortuño; Javier Ruiz-Castillo
  9. Youth Employment in Europe: Institutions and Social Capital Explain Better than Mainstream Economics By Bruno Contini
  10. Cultural Integration in Europe By Amelie F. Constant; Olga Nottmeyer; Klaus F. Zimmermann

  1. By: Gianna Claudia Giannelli; Ursula Jaenichen; Claudia Villosio
    Abstract: According to the aims of the labour market reforms of the 90s implemented in many European countries, workers may stay at their first job for a shorter time, but should be ble to switch jobs easily. This would generate a trade-off between job opportunities and job stability. This paper addresses this issue using administrative longitudinal data for Germany and Italy, taken as representative examples of continuous and isolated reforms, respectively. The estimated piecewise constant job and employment duration models show that changes in the durations of the first job and employment - measured as the sum of multiple consecutive jobs - are observed in periods of labour market reforms. However, the existence of a trade-off is not confirmed by the results. In Germany, men have experienced an increase in employment stability over time, mated with somewhat longer job durations, while women have not benefitted from an increase in employment durations as a compensation for the marked decrease in their first job durations. In Italy, employment stability of the new entrants of both sexes has not improved after the reforms. The reduction in the duration of the first job has not been counterbalanced by an increase in the opportunity to find rapidly another job. These results suggest that the objective of increasing job opportunities by means of labour market deregulation has not been fully achieved.
    Keywords: employment duration, work career, tenure, precarious jobs, labour market reforms, mixed proportional hazard.
    JEL: J62 J64 J68 K31 C41
    Date: 2009
  2. By: Bleischwitz, Raimund
    Abstract: The objective of this study is to support the European Parliament’s ITRE Committee in its work on the EU's industrial and energy policy and to give advice on the following issues: Why is the issue of resource scarcity back on the agenda? What are the strategic conclusions for the EU? What can the EU expect from eco-innovation in a large range of industrial sectors? Are existing measures meeting the EU aims and expectations, and what new policy initiatives should be set forward? To meet these objectives, this study is structured as follows: Chapter 2 will give an overview on resource scarcities. Chapter 3 elaborates on ecoinnovation, including trends, barriers and driving forces. Chapter 4 outlines proposals for future EU policies. Chapter 5 sketches out a possible vision for the future. Chapter 2 reveals recent findings on resource scarcity: Global extraction of natural resource is steadily increasing. Since 1980, global extraction of abiotic (fossil fuels, minerals) and biotic (agriculture, forestry, fishing) resources has augmented from 40 to 58 billion tonnes in 2005. Scenarios anticipate a total resource extraction of around 80 billion tonnes in 2020 (200 % of the 1980-value), necessary to sustain the worldwide economic growth. On average, a European consumes per year around three times the amount of resources of a citizen in the emerging countries while producing twice as much. Analysis on patterns of current resource use (direct and indirect use) is still in its infancy and shows data gaps. Based on country studies, however, one can arrive at tentative conclusions. A recent study on Germany reveals that ten production sectors account for more than 50 % of German Total Material Requirements (TMR). Industries of three areas are of strategic importance because here a huge number of technological interactions among production sectors take place: • Stones, construction, and housing = housing • Metals and car manufacturing = mobility • Agriculture, food and nutrition = food. The rapidly increasing demand for resources has led to an unprecedented boost in resource prices, especially during the last five years until the breakout of the financial crisis in Fall 2008. The EU is the world region that outsources the biggest part of resource extraction. In comparison to the overall global growth rate (45 % over the last 25 years), Europe’s resource extraction grew only by 3 %, but studies show that these domestic raw materials are increasingly substituted by imports from other world regions. World reserves in fossil fuels and metals are unevenly distributed across the world regions. Additionally, for various commodities, the peak of extraction has already been reached or is currently about to be reached. Not only for oil and gas, but also for critical metals such as Antimon, Gallium, Indium, Platinum and others the supply for European industry is at risk. Natural gas cannot replace oil as main energy source, once the latter is depleted. From this, the following main conclusions are derived: • The European economy is increasingly dependent on resource imports from other world regions. • Scarcity of ‘Critical metals’ will affect the European economy more subtle, but furtherreaching. High-tech industries, in particular the electronic industry, will be affected by deWuppertal Institute et al. Eco-Innovation iv clining availability of precious metals. Also the development of new eco-technologies, such as photovoltaic electricity generation, could be slowed down by resource scarcity. • It can be expected that worldwide competition for these resources will significantly increase in the near future, potentially leading to serious conflicts related to the access to resource reserves. • In order to deal with this increased scarcity of natural resources, a significant reduction of the worldwide resource use will be necessary. Chapter 3 gives a definition of eco-innovation as well as an overview of different types of eco-innovation and deals with measurement issues. Furthermore, it illustrates selected ecoinnovations in key areas, and highlights also trends, drivers and barriers analysed for these examples and illustrated by fishbone diagrams. The scrutinised eco-innovations and the regarding key conclusions are (1) In the area of housing a. “Deep Renovation”, which enables a minimisation of negative impacts on environment and health by system design and choice of components and is possible in nearly every building, though standardisation is limited, and b. “Smart Metering”, for which there is worldwide evidence that giving consumers appropriate, relevant information on their energy and water use is an important basis for additional measures leading to a reduction in this use and thus in GHG emissions. (2) In the area of mobility a. the “Green Electric Car” and b. “Car sharing”; (3) In the area of food and drink (a) the “Community Supported Agriculture” (CSA) and (b) “Sustainable Sourcing of Retailers”. The chapter concludes that eco-innovation has a crucial role to play in putting the EU on the path to a resource and energy efficient economy and thus significantly reducing the environmental impacts in each of the areas, housing, mobility and food and drink. Experts estimate that this is likely to become an $800 billion market worldwide by 2015 and a $ trillion market afterwards. Overcoming the barriers and building up eco-industries for energy and resource efficiency however calls for an active European Union. It requires the engagement of many different actors in society, and strategies should be implemented from many different sides. For an ecoinnovation to be fully accepted and diffused into wider society, a concerted effort must be made to engage people and target the emotional and psychological aspects required to reinforce its uptake. Chapter 4 (How to speed up eco-innovation in the EU) undertakes an attempt to analyse existing EU policies and initiatives; selected member states’ efforts are also considered. This is done via a comparative methodology with a joint format. The annex to this study contains three further briefing notes on this issue written by other authors. The following policies, initiatives and instruments are considered in this study: • The Eco-design Directive (2005/32/EU) – focuses on energy use for a number of products and neglects other environmental dimensions, functional innovation and system innovation are not yet covered; Wuppertal Institute et al. Eco-Innovation v • The Competitiveness and Innovation Framework Programme (CIP) – first experience suggests a bias in favour of recycling technologies and energy along existing technology trajectories, less visibility of resource efficiency and new pathways; • The Seventh Framework Programme for research and technological development (FP7); • The Environmental Technology Action Plan (ETAP) – Despite many achievements, environmental technologies still remain a niche market; further green procurement, greater financial investments, the establishment of technology verification and performance targets systems, and focussing on sectors with high gains is needed; • The Directive on the energy performance of buildings (EPBD) – good ambitions, but a lack of implementation in many Member states, implementation requires both a speeding up and a scaling up, addressing the resource efficiency of buildings is desirable; • The European Union Action Plan on Sustainable Consumption and Production and Sustainable Industrial Policy • The European Directive on Waste from Electrical and Electronic Equipment (WEEE) • The UK Aggregates Levy and Aggregates Levy Sustainability Fund (ALSF) • Environment-driven Business Development in Sweden • The European Union Energy Label. The analysis identifies specific gaps in the areas of entrepreneurship, pre-commercialisation and mass market development; in addition, the opportunities to refurbish buildings in Europe have not fully been deployed yet (see Figure 1). Based on this and supported by an expert workshop conducted by the ITRE on 12 November 08, the study formulates proposals that could support the EU to speed up eco-innovation. They promote market-based incentives and the reform of existing initiatives; in addition, new proposals are presented that address specific gaps in the areas of entrepreneurship, pre-commercialisation as well as the opportunities to refurbish buildings in Europe. Bearing in mind the importance of construction as a driving forces of resource use, the relevance of the construction industry in the EU Lead market Strategy and current deficits, and the overall success of market-based instruments, this study proposes to extend the existing eco-tax base in Europe by establishing a minimum tax directive on construction minerals. It is expected to drive up eco-innovation because it gives incentives to improve resource efficiency and to refurbish old buildings. In addition, it generates revenues, which can be utilized for specific eco-innovation programmes. A greening of the EU budget would be the material basis for speeding up eco-innovation beyond 2009. This would have to follow two strategic lines: on the one hand unsustainable spending would have to be cut, on the other hand the money saved by this activity could be shifted to support investments in structural eco-innovation. A budgetary strategy could include the following elements: • Further redirecting CAP from direct payments towards integrated rural development schemes, which support eco-innovation in the area of sustainable production of highquality food and biomass. These integrated rural development schemes should include integrated logistical, economic and technological strategies for adapted sustainable natural resource management in the landscape (food, water, soil, biodiversity and closed-loop biomass production and use). These strategies would have to be highly adapted to local economies and landscape conditions thus inducing local eco-innovation and employment schemes. Wuppertal Institute et al. Eco-Innovation vi • Rigorous environmental appraisal and reduction of Regional Policy schemes for large infrastructure projects which could support long-term unsustainable development paths, shifting towards funding for eco-innovation e.g. in the area of decentralized electricity grids (supporting green electric cars and renewable energies) and lighthouse projects on resource efficient construction and resource recovery. • Redirection of Regional Funds from end-of-pipe technologies towards integrated solutions and eco-innovation (e.g. decentralized water treatment) • More advanced schemes for improving energy and material productivity of economies would require an implementation of the CREST guidelines for improved coordination between Structural Funds, the Research Framework Program and the Competitiveness and Innovation Programme (CIP). Only such a concentration of forces could achieve a measurable improvement of resource productivity in Europe by means of regional eco-innovation clusters and a European network of regional resource efficiency agencies. • Integration spending of the European Investment Bank (EIB) for improved cofinancing of eco-innovation Figure 1: Gaps of current EU programmes on eco-innovation Engaging industry in developing eco innovation for sustainable ways of living is considered to be essential. The study identifies six strategy areas where industry can act: 1. Strategy Area 1: Creating and satisfying demand for green and fair products 2. Strategy Area 2: Communicating for low impact product use 3. Strategy Area 3: Innovative after sales services 4. Strategy Area 4: Product and service innovations Wuppertal Institute et al. Eco-Innovation vii 5. Strategy Area 5: Service-oriented business models 6. Strategy Area 6: Leadership for social change and socially responsible business The study formulates proposals to strengthen the SCP Action Plan accordingly, with a special focus on a framework for smarter consumption and leaner production. green public procurement and international processes. Following the gaps identified above, the study also proposes to establish three new initiatives: • A European Trust Funds for Eco-Entrepreneurship, intended to support system innovation driven by new companies; • A Technology Platform for Resource-light industries, intended to develop new markets for European manufacturing industries; • A Programme to foster energy and resource efficiency in the building sector, intended to foster • The deployment of existing opportunities in that area. Finally, a few thoughts are given to the international dimension of eco-innovation and a possible vision of an eco-innovative Europe.
    Keywords: Eco-Inovation; Energy efficiency; EU Policy
    JEL: Q55
    Date: 2009–03
  3. By: Gerdes, Christer (Stockholm University Linnaeus Center for Integration Studies - SULCIS)
    Abstract: Recent studies point to a positive correlation between ethnic heterogeneity due to immigration and the propensity of opting out from public schools for private alternatives. However, immigration across regions is hardly exogenous, which obstructs attempts to reveal causal mechanisms. This paper explores changes in the immigrant population in Danish municipalities 1992-2004, a period marked by a substantial influx of refugees, where a state-sponsored placement policy restricted their initial choice of residence. Besides such demographic changes, for more than hundred years Denmark has allowed parents to enroll their children into so called ‘free schools’, i.e. schools that are privately operated. Taken together, this provides a unique opportunity to determine if there has been ‘native flight’ from public schools to free schools. Results from this study indicate an increase in native Danes propensity to enroll their children in free schools as the share of children with immigrant background becomes larger in their municipality of residence. The effect is most pronounced in small and medium sized municipalities, while it seems absent in larger municipalities. One explanation for the latter holds that residential segregation within larger municipalities makes a choice of private alternatives less attractive.
    Keywords: school choice; immigration; private schools
    JEL: H70 I28 J15 J78 R50
    Date: 2010–01–22
  4. By: Cristiano Antonelli (Department of Economics, University of Turin - University of Turin); Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis); Francesco Quatraro (Department of Economics, University of Turin - University of Turin, GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis)
    Abstract: The economics of recombinant knowledge is a promising field of investigation. New technological systems emerge when strong cores of complementary knowledge consolidate and feed an array of coherent applications and implementations. However, diminishing returns to recombination eventually emerge, and the rates of growth of technological systems gradually decline. Empirical evidence based on analysis of the co-occurrence of technological classes within two or more patent applications, allows the identification and measurement of the dynamics of knowledge recombination. Our analysis focus on patent applications to the European Patent Office, in the period 1981-2003, and provides empirical evidence on the emergence of the new technological system based upon information and communication technologies (ICTs) and their wide scope of applications as the result of a process of knowledge recombination. The empirical investigation confirms that the recombination process has been more effective in countries characterized by higher levels of coherence and specialization of their knowledge space. Countries better able to master the recombinant generation of new technological knowledge have experienced higher rates of increase of national multifactor productivity growth.
    Date: 2010
  5. By: Julie Zissimopoulos; James P. Smith
    Abstract: Money parents give their adult children may be important for the financing of a child's education or a first home, relaxing binding credit constraints or responding to a transitory income shock. Financial transfers however, may extend economic disparities across generations if the wealthy transfer considerable resources to their children while middle class and poor households do not. In this paper, the authors first examine annual gifts of money from parents to adult children in the United States and ten European countries using the 2004 waves of the Health and Retirement Study (HRS) and Survey of Health, Ageing and Retirement in Europe (SHARE). Second, utilizing the long panel of the HRS, the authors study the long-run behavior of parental monetary giving to children across families and within a family. This paper found that in all countries, some parents gave money to children, many did not, the amount was low, about 500 Euros annually per child, and varied by parental socio-economic status and public social expenditures. In the short-term parents in the U.S. gave money to a child to compensate for low earnings or satisfy an immediate need such as schooling. Over sixteen years, parents gave an average of about $38,000 to all their children, five percent gave over $140,000 and gave persistently. With time, the amount of money children in the same family received became more equal and a child's level of education was one of the few remaining sources of differences in money given to children. Overall, the annual amount of money parents gave adult children in any country was not enough to affect the distribution of resources within or between families in the next generation although the timing of transfers for schooling or housing may have a significant impact on an individual child. Annual parental transfers for college age children in school in the U.S. were substantially higher than average transfers to all children. The effect of parental transfers for higher education on intergenerational mobility in the U.S. will depend in part upon whether this financing is essential in the schooling decision.
    JEL: D31 D1 J26
    Date: 2009–12
  6. By: Jenny Monheim-Helstroffer (CREA - Center for Research in Economic Analysis - Université du Luxembourg); Marie Obidzinski (CRESE - Centre de REcherches sur les Stratégies Economiques - Université de Franche-Comté : EA)
    Abstract: This paper develops a regulatory competition model to study whether and how refugee law should be centralized, and what are the consequences for refugees and for host countries. Varying refugee flows across countries lead some destinations to adopt strict measures. The resulting externality leads to a generalized “race to the bottom” of asylum law. Neither fixed nor minimum standard harmonization are found to be in the interest of both host countries. Especially the most popular destinations like EU border countries would suffer from losing discretion. However, minimum standards would benefit refugees and less popular destinations.
    Keywords: Competition in law making ; Asylum law ; European law ; Flexible law ; Human rights
    Date: 2010–03
  7. By: Brienna Perelli-Harris (Max Planck Institute for Demographic Research, Rostock, Germany); Wendy Sigle-Rushton; Michaela Kreyenfeld (Max Planck Institute for Demographic Research, Rostock, Germany); Trude Lappegård; Caroline Berghammer (Max Planck Institute for Demographic Research, Rostock, Germany); Renske Keizer
    Abstract: Nearly every European country has experienced some increase in nonmarital childbearing, largely due to increasing births within cohabitation. Relatively few studies in Europe, however, investigate the educational gradient of childbearing within cohabitation or how it changed over time. Using retrospective union and fertility histories, we employ competing risk hazard models to examine the educational gradient of childbearing in cohabitation in 8 countries across Europe. In all countries studied, birth risks within cohabitation demonstrated a negative educational gradient. When directly comparing cohabiting fertility with marital fertility, the negative educational gradient persists in all countries except Italy, although differences were not significant in Austria, France, and Germany. These findings suggest that childbearing within cohabitation largely follows a Pattern of Disadvantage. We argue that the Pattern of Disadvantage developed due to: 1) feminist and social movements that liberalized attitudes towards nonmarital childbearing, and 2) globalization and economic uncertainty that led to job insecurity and relationship instability. This explanation provides an alternative to the Second Demographic Transition theory, for which we find little evidence.
    Keywords: Europe, UN, childbearing, cohabitation, family formation, fertility, unmarried mothers
    JEL: J1 Z0
    Date: 2010–01
  8. By: Pedro Albarrán; Joan Crespo; Ignacio Ortuño; Javier Ruiz-Castillo
    Abstract: In this paper, scientific performance is identified with the impact journal articles achieve through the citations they receive. The empirical exercise refers to 3.6 million articles published in 1998-2002 in 22 scientific fields, and the more than 47 million citations they receive in 1998-2007. The first finding is that a failure to exclude co-authorship among member countries within the EU (European Union) may lead to a serious upward bias in the assignment of articles to this geographical area. In the second place, standard indicators, such as normalized mean citation ratios, are silent about what takes place in different parts of the citation distribution. Consequently, this paper compares the publication shares of the U.S. and the EU at every percentile of the world citation distribution in each field. In 15 disciplines, as well as in all sciences as a whole, the EU share of total publications is greater than that of the U.S. one. But as soon as the citations received by these publications are taken into account the picture is completely reversed. The mean citation rate in the U.S. is greater than in the EU in every one of the 22 fields. In seven fields, the initial gap between the U.S. and the EU widens up as we advance towards the more cited articles, while in the remaining 15 fields –except for Agricultural Sciences– the U.S. always surpasses the EU when it counts, namely, at the upper tail of citation distributions. For all sciences as a whole, the U.S publication share becomes greater than that of the EU one for the top 50% of the most highly cited articles.
    Date: 2009–07
  9. By: Bruno Contini
    Abstract: Why did employment growth - high in the last decade– take place at the expense of young workers in the countries of Central and Southern Europe ? This is the question addressed in this paper. Youth unemployment has approached or exceeded 20% despite a variety of factors, common to most EU countries. According to neo-classical economics all would be expected to exert a positive impact on its evolution: population ageing and the demographic decline, low labor cost of young workers, flexibility of working arrangements, higher educational attainment, low unionization of young workers, early retirement practices of workers 50+. But neither seems to provide a convincing explanation. Historically based institutions and political tradition, cultural values, social capital – factors that go beyond the standard explanation of economic theory – provide a more satisfying interpretation.
    Keywords: youth employment, unemployment, social capital, institutions.
    JEL: J J0 J1 J6
    Date: 2009
  10. By: Amelie F. Constant; Olga Nottmeyer; Klaus F. Zimmermann
    Abstract: This chapter investigates the integration processes of immigrants in Germany by comparing certain immigrant groups to natives differentiating by gender and immigrant generation. Indicators which are supposed to capture cultural integration of immigrants are differences in marital behavior as well as language abilities, ethnic identification and religious distribution. A special feature of the available data is information about overall life satisfaction, risk aversion and political interest. These indicators are also presented. All of these indicators are depicted in comparison between natives and immigrants differentiated by ethnic origin, gender and generation. This allows visualization of differences by ethnic groups and development over time. Statements about the cultural integration processes of immigrants are thus possible. Furthermore, economic integration in terms of female labor force participation is presented as an additional feature. Empirical findings suggest that differences among immigrants and between immigrants and Germans do exist and differ significantly by ethnic origin, gender and generation. But differences seem to diminish when we consider the second generations. This indicates greater adaption to German norms and habits, and thus better cultural, socio-economic and political integration of second generation immigrants in Germany.
    Date: 2009

This nep-eur issue is ©2010 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.